Al Tamimi & Company Wins on Appeal Overturning Enforcement of English Judgment on Public Policy Grounds in $450 million Superyacht case

Al Tamimi & Company has successfully defended the registered owner of the $450 million superyacht known as “MV Luna” and obtained a first of its kind judgment from the Dubai Court of Cassation in relation to the application of public policy principles to the enforcement of foreign judgments.

The Dubai Court of Cassation affirmed the Court of Appeal judgment which overturned an earlier decision of the Execution Judge of the Dubai Court of First Instance which enforced an English High Court judgment arising out of England’s largest divorce award pursuant to Cabinet Decision no. 57 of 2018 (“Cabinet Decision”). This is the first known English judgment enforcement case to be tried under the Cabinet Decision which introduced new provisions for the enforcement of foreign judgments and arbitral awards in the UAE in February 2019.

Whilst a number of appeal grounds were advanced on behalf of our client, including as to reciprocity and exclusive jurisdiction principles, the Dubai Court of Cassation held that the English judgment violated Sharia law, and therefore UAE Public Policy, which prohibits the application of financial sharing principles in relation to matrimonial wealth as between spouses. Accordingly, the Court of Cassation dismissed the Cassation Appeal filed against the judgment of the Court of Appeal which overturned the enforcement order and declined enforcement of the English judgment together with its related and ancillary orders on the grounds that the English judgment sought to be enforced is contrary to UAE public policy.

Whilst the claim relating to the enforcement of the English judgment has now been finally decided by the Court of Cassation, there is currently before the Dubai Court of First Instance a nearly US$100 million damages claim against the Claimant and her litigation funder. The claim is made pursuant to the undertaking as to damages provided in relation to the grant of a precautionary attachment order which had the effect of “arresting” MV Luna in Dubai on the basis of the English judgment that has now been held to be in conflict with the UAE public policy. Following the handing down of the earlier Court of Appeal judgment the precautionary attachment order was lifted.

Interestingly the Claimant had first filed recognition and enforcement proceedings in the DIFC courts in respect of the English High Court judgment and obtained an ex parte freezing order in the DIFC Courts against the First and Second Defendants. The Second Defendant’s superyacht MV Luna was in Dubai at that time and the Claimant secured an attachment order over the yacht through the Dubai Courts based on the DIFC freezing order. We succeeded in our appeal to the DIFC Court of Appeal to discharge the DIFC Court injunction originally granted by the DIFC Courts. Thereafter, the Joint Judicial Committee issued a ruling that the Dubai Courts have exclusive jurisdiction to hear and determine any actions concerning MV Luna and the enforcement of the English Court judgment.

Implications

This Judgment reinforces the importance of public policy as embodied in Sharia Law in the examination of a foreign court judgment for which enforcement is sought in the UAE. More specifically it indicates that foreign judgments issued in relation to divorce proceedings will be scrutinised, on public policy grounds, if they are brought to the UAE for enforcement.

Whilst this ruling declined the enforcement of an English judgment on specific public policy grounds, the effect of amendments introduced by the Cabinet Decision is to allow the swift and expedient determination of applications for enforcement of a foreign court judgment or arbitral award in the UAE directly by the relevant UAE Execution Court and to relax the conditions for enforcement. This represents a new and significantly improved approach which we expect to see continue in future cases.

The lead team from our Litigation and International Litigation Group acting in the Dubai Courts and DIFC Courts comprised Hassan Arab, Ahmed Allouz, Rita Jaballah, Mohammad Al Muhtaseb, Mosaab Aly and Peter Smith.

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