UAE Civil Procedures Law introduces changes to litigation in UAE Courts.

In May 2020, the UAE Civil Procedures Law was amended, with the introduction of the UAE Ministerial Decree No. 33 of 2020, pertaining to the amendments of the Ministerial Decree No.57 of 2018, concerning Federal Law No.11 of 1992 on the Civil Procedures Law. These amendments have introduced important changes to the litigation procedures that have been followed in the UAE Courts.

The benefits of these amendments to the UAE Civil Procedures Law, for creditors include:

1. Enforceable verdict within 3 days

Following the application of these changes, the UAE Civil Procedures Law has widened the scope of expedited payment orders, which in turn, facilitates the process for immediate judgments. Creditors can now claim their confirmed and outstanding debt swiftly, and the court must issue the order within 3 business days according to article 63, clause 4.

2. Limited paperwork to file claims

Pursuing judicial recovery now only requires a document detailing the confirmed and outstanding debt. i.e. A written acknowledgment or email from the debtor clearly stating to make the payment on a specific date but due to unexpected circumstances, has defaulted. As such, the lengthy list of paperwork and documentation once required, is no longer applicable.

Additional information on the UAE Civil Procedures Law

The main highlights include changes to Payment Order procedures, which are now streamlined and express judgments are issued by the courts should the creditor have a valid financial instrument to prove the outstanding debts. The amendments to the law also permit creditors to claim interest or compensation on outstanding debts, and the filing of Payment Orders can be done in courts other than that of the debtor’s place of residence. Lastly, creditors can file an objection, based on the claim amount.

Here are the highlights and details of the amendments on the UAE Civil Procedures Law

1. Payment Order procedures

Payment Order procedures have been changed, based on the Ministerial Decree No.33 of 2020; they now allow for requesting interest and compensation. When the debt is evidenced in writing, is due, and all that is being demanded is a specified amount of money or an ascertained asset, the applying for a Payment Order is the procedure the claimant/creditor should follow. The primary advantages of Payment Orders are speed and simplicity. Courts are required to issue a decision within three days from the application date.

Payment Orders may be applied for by a creditor holding a financial instrument and a confirmed claim for a defined sum of money. These financial instruments include settlements, cheques, acknowledgment and/or any written confirmed debt. In such a case, the creditor’s right must be due and payable.

Moreover, the steps for initiating legal action have been amended, according to the law. Creditors are required to issue a legal notice to the debtor demanding the claim amount and provide a 5 day notice period. Should a response not be received after the 5 day duration, a Payment Order claim can be made demanding the outstanding debt to be settled, and submitted to the UAE Court according to article 63 from the Ministerial Decree No. 33 of 2020. Subsequently, the court’s decision on the Payment Order claim should be issued within 3 days of the claim submission. The notified debtor with a Payment Order is then given 15 days to appeal, according to Article 66 from the Ministerial Decree No. 33 of 2020. Should the debtor not appeal the claim, the Payment Order is considered final and will be enforced.

2. Demand interest or compensation through Payment Order procedures

A key improvement this amendment brings pertains to article 62 of the Ministerial Decree No.33 of 2020. The amended article now allows creditors to demand interest or compensation through Payment Orders procedures; an option not previously available and necessitated pursuing lengthy litigation instead.

3. Filing application of Payment Order in other courts

According to article 63 of Ministerial Decree No. 33 of 2020 of 2020 paragraph 1, the application of the Payment Order can now be filed not only at the local courts at the debtor’s place of residence, but also in the courts that the parties have agreed on, or within the jurisdiction that the action took place in.

4. Ability to file an objection based on claim amount

In addition to the above, the amendments to article 66 of Ministerial Decree No. 33 of 2020, now grants the debtor the ability to file an objection if the claim amount is less than AED 50,000.00. This grants the debtor an opportunity, as well as an additional stage, to support their defense. Should the claim amount be over AED 50,000.00, the debtor may file an appeal to the Court of Appeal, and should a dispute be raised, the court will investigate the details of the case.

For more information on the new amendments to the UAE Civil Procedures Law, please contact Aws Abu Saqer on a.abusaker@recoveryadvisers.com