Supreme Court of the United States

When will I get the money? (After a DIFC based arbitration…)

This is the usual first question once we inform clients about a positive arbitration award.

The answer bears a huge ‘depends’: (1) depends on whether or not the award debtor pays after the release of the award; (2) further depends on the process to obtain  the ratification and enforcement of the award; and (3) ultimately depends on the existence and location of assets to be forcibly enforced. 

Answer (1) we are able to obtain shortly after the Award. Some Parties have policy to comply with arbitral awards as soon as they are released. They may negotiate a chunk off not to fight the execution of the award but this option is cleared within 15 to 45 days from the issuance of the award. 

Answer (2) we lawyers should have known long before the issuance. Every step in an arbitration should be geared towards obtaining a final award enforceable in the place of likely existence of assets. In this case, our aim was to obtain execution in Dubai mainland. 

Answer (3) may rise surprises once liaising with authorities and the courts at the place of enforcement.

This Article will concentrate on what we can answer to a client who has just obtained a positive award under a Dubai International Financial Centre (‘DIFC’) based arbitration and asks you how soon will he/she get his monies. 

Of course Step Number 1 will be to offer the award debtor the opportunity to settle the award. On occasion we know that this will be of no use but it does not hurt as we need a little bit of time to do translations in the United Arab Emirates. This is because most arbitrations are held in the English language and the local courts.

Step Number 2 will be to see the ratification of the Award before the DIFC Courts, which can be done using a Part 8 claim form. It will be required to add an original of the award and the arbitration agreement or certified copies thereof. Reference in this respect to Article 42 of the DIFC Arbitration Law. 

Step Number 3 will be to seek the enforcement of the Award out of the DIFC Courts which can be done using Form 45/01 of the DIFC Courts in reliance of Articles 45.18-45.21 and Article 7.2 and 7.3 of the Judicial Authority Law.  

When requesting the enforcement outside of the DIFC parties should request the DIFC Court to affix the executory formula on the ratified award following the prescribed form. 

The application should also request the Court to issue an execution letter addressed to the Chief Justice of the Court of First Instance of the Dubai Courts.

The requirements to obtain the executory formula are the following:

–       Ratified award needs to be final;

–       Ratified award is translated into Arabic language.

The application needs to be accompanied by:

–       A copy of the ratified award;

–       The order ratifying the award;

–       A draft of an execution letter;

–       Arabic translations of the above; and

–       A statement that the award is final and executory. 

Step Number 4 will take place before the Dubai Courts of First Instance. 

The beauty of having an execution order by the DIFC is that the Dubai Courts have no jurisdiction to review the merits of an order by the DIFC Courts hence the process to get to the assets should be clear of procedural barriers. Evidently, how soon will ultimately depend on the existence of sufficient assets. 

In such case it would be possible to exert pressure on the individual or company debtor as non-payment of dues in the UAE can lead to incarceration. In parallel options to enforce could be sought internationally. All these options will be topic of new articles. Stay tuned!