An amendment to the Executive Regulations of the Civil Procedures Law, is likely to, eliminate the risk of in admissibility in case of Payment Order Cases

On 30 August 2021, A Cabinet Resolution no. 75 of 2021 was issued to amend some provisions of Cabinet Resolution no. 57 of 2018 concerning the Executive Regulations of Federal Law no. 11 of 1992 on the Civil Procedure Law (the “New Cabinet Resolution”). On 2 September 2021, the New Cabinet Resolution was published on the Official Gazette. It shall come into force starting from 3 September 2021.

Among many other issues, the New Cabinet Resolution has introduced Article 68 (bis) which provides that “As an exception to the provisions of this chapter [Payment Order Chapter], if the case, which is being tried before the Court, is satisfying the conditions for issue of a payment order, the court shall dispose of it pursuant to the rules and procedures of disposing of cases” [emphases added] (the “Article 68”).

Based on our first reading, we believe that Article 68 will likely eliminate the risk of having cases deemed inadmissible because they were filed to the Courts of First Instance (“CFI”) as substantive actions instead of being filed to the Payment Order Judge (“POJ”). Indeed, Article 68 obliges the CFI to continue hearing cases, which satisfy payment order conditions, and disposes of them in a normal way as any other case.

This new amendment will certainly stabilize the judicial process in commercial litigation before the UAE Courts after several commercial cases that have been ordered inadmissible for not being filed to the POJ as an exceptional route of proceedings. The matter which has cost several claimants considerable amount of time and expense to re-litigate their cases after having, or almost having, their cases finally decided by the Courts of Appeal. In the legal community, we have also experienced conflicting judgments and confusing interpretations of the law which we believe now, by this Article 68, would be successfully avoided.

The claimants, in commercial litigation and especially those operating within the banking sector, should now be allowed to file their cases to the CFI pursuant to the normal way of proceedings, even if they are in doubt as to whether their cases satisfy the payment order conditions. However, they will still have the option to file a petition to the POJ seeking a payment order, in the expedited way of proceedings, if they are certain that their cases satisfy the payment order conditions, otherwise such petition could be dismissed, fully or partially, by the POJ.

If you are having any queries as to the implications of Article 68 or any other Article of the New Cabinet Resolution on any of your litigation cases, please feel free to contact us.