Enforcement

Procedure

The Enforcement of Judgments and Orders of the DIFC Courts

Disclaimer: The information provided in this fact sheet is intended as an overview only, and should not be used as a substitute for the comprehensive provisions detailed in the Rules of the DIFC Courts. Parties seeking to enforce judgments through the procedures below are strongly advised to consult the Rules of the DIFC Courts thoroughly and to seek independent legal advice.

This fact sheet summarises the relevant Parts, namely Parts 45 to 50, of the Rules of the DIFC Courts (hereinafter “RDC”) in the process of enforcement of judgments and orders issued out of the DIFC Courts.

Enforcement Steps and General Rules about Enforcement

Pursuant to Part 45 of the RDC

  1. After receiving a judgment or order for the payment of money in the DIFC Courts, the judgment creditor is entitled to the amount payable under the judgment or order within the compliance time stipulated in the judgment or order. If the judgment debt is paid by the judgment debtor within the correct time period, no enforcement action will be warranted.
  2. If the judgment debt is not satisfied by the judgment debtor within the time period stipulated by a judgment or order, or an incomplete amount is paid, the judgment creditor may apply to the DIFC Court for enforcement action.
  3. Please note that the following steps are subject to the DFSA’s Laws and Regulations relating to insolvency, which may affect enforcement. It is recommended to obtain legal advice as to solvency ramifications before attempting to enforce judgment.
  4. The judgment creditor may apply to the Court for enforcement against the judgment debtor by any of the following methods:
    • Affixing a charge over property;
    • Attachment of assets or earnings (whether present or future);
    • Execution against assets;
    • The appointment of a receiver.

One or more of the above enforcement methods may be applied as available, either at the same time or one after the other.

Where a judgment or order is made with respect to a non-party to the proceedings, it may be applied using the same enforcement methods applicable to those that are parties.

Where an award or decision is made by a court, tribunal, body or person other than the Court, the enforcement of that award by the Court may be made by filing an application in Form P45/01.

For every enforcement option, the relevant application must be completed and submitted to the Court as detailed in the following steps:

Affixing a charge over property

Pursuant to Part 46 of the RDC

Charging orders

A successful application for this enforcement method affixes a charge over property owned by the judgment debtor.

To apply for this enforcement order, you must complete an application notice prescribed in Form P46/01 and submit this to the Court Registry.

This application can be made without notice to the debtorThe application will be heard by the Registrar, following which an interim order may be made and a date for final orders will be fixed, or the application will be dismissed. The interim order must be served upon the judgment debtor and other relevant parties as dictated by RDC 46.10. The interim order serves to restrain the judgment debtor from disposing of his interest in any securities subject to the order.

The judgment debtor can contest the interim order. Contested or otherwise, the interim order will then be re-examined and final orders handed down, or the application dismissed.

The order will then dictate that the judgment debtor deliver the property to the judgment creditor within a certain time period and that the judgment creditor may execute power of sale in the amount of the judgment debt, plus costs of the enforcement hearing, and interest at a rate the Court determines will be payable to the judgment creditor.

The Court may discharge or vary a charging order. To apply for this order, you must complete a general Application Notice prescribed in Form P23/01 and submit this to the Court Registry.

Stop orders

A stop order refers to an order of the Court not to take action in relation to funds in Court or securities, as dictated by RDC 46.33.

The Court may make a stop order relating to funds in the Court or relating to securities other than those held in Court on any person who has an interest in the funds or securities. The Court may also discharge or vary the order, on the application of any person claiming to have a beneficial interest in the funds or securities.

A stop order relating to funds in Court must comply with RDC 46.37, and a stop order relating to securities must comply with RDC 46.38 and 46.39.

Stop notices

A stop notice refers to a notice issued by the Court requiring a person or body not to take action in relation to securities specified in the notice, as dictated by RDC 46.33.

A stop notice may be issued on the request of any person claiming to be beneficially entitled to an interest in securities if the Court considers that RDC 46.44 has been complied with.

The notice will take effect when it is served and will remain in force unless it is withdrawn or discharged. While the stop notice is in force, the person served with the notice must not take any steps restrained by the notice without giving a 14 day notice to the person who obtained the stop notice.

A stop notice may be amended if any securities are incorrectly described, and such an amendment will take effect when it is served. A stop notice may also, if requested, be withdrawn. The Court may, on the application of a person beneficially entitled to an interest in the securities to which a stop notice relates, make an order discharging or varying the notice. . To apply for this order, you must complete a general Application Notice prescribed in Form P23/01 and submit this to the Court Registry.

Attachment of future assets

Pursuant to Part 47 of the RDC

A successful application for this enforcement method orders a third party within the DIFC to pay the sum owed by the judgment debtor to the judgment creditor. These third parties are, most commonly, banks or other financial institutions.

To apply for this enforcement order, you must complete an Application Notice prescribed in Form P47/01 and submit this to the Court Registry.

This application can be made without notice to the debtorThe application will be heard by the Court, following which an interim order may be made and a date for final orders will be fixed, or the application will be dismissed.

In making the interim order, the Court will examine the circumstances of the relationship between the third party and the judgment debtor. The Court has wide powers to command payment beyond any contractual stipulations between the third party and the judgment debtor (notably RDC 47.5). The interim order must be served upon the third party, the judgment debtor and other relevant parties as dictated by RDC 47.16.

The interim order compels third parties to discover all accounts and the credit available held by the judgment debtor and to disclose such information to the Court within 7 days of being served with the order. Third parties are only required to retain money in, and disclose information about, accounts belonging solely to the judgment debtor, and are not required to do so with respect to accounts held by persons other than the debtor.

The judgment debtor is prohibited from withdrawing funds from any account held by the third party. Special conditions may be granted for debtors in hardship.

The judgment debtor can contest the interim order. Contested or otherwise, the interim order will be re-examined and final orders handed down, or the application dismissed.

Attachment of earnings

Pursuant to Part 47 of the RDC

 A successful application of this enforcement method orders a third party to pay the sum owed by the judgment debtor to the judgment creditor. These third parties are, most commonly, banks or other financial institutions.

To apply for this enforcement order, you must complete a general Application Notice prescribed in Form P23/01 and submit this to the Court Registry for stamping.

Notice of the application as well as the form of reply should be served upon the judgment debtorThe judgment debtor is to file a reply within 8 days. The Court may request particulars from the judgment debtor’s employer. Upon receipt of the judgment debtor’s reply, the Court may make an attachment of earnings order (as per the conditions set out in RDC 47.55 – 47.59), which is subject to appeal by the judgment debtor.

If appealed, or if no such preliminary attachment of earnings order is granted, the Court will hear the application and make appropriate orders either dismissing or upholding the application.

Under some circumstances, the failure of the judgment debtor to appear is punishable by committal for contempt of Court, unless proof of good reason why the debtor should not be committed is served by the Court to the debtor no less than 5 days before the hearing.

A committal order may be suspended if the judgment debtor attends the hearing specified in the committal order. If a committal order is suspended, and the debtor fails to attend the specified hearing, a certificate issued by the Court provides sufficient authority for the issue of a warrant of committal.

In calculating the amount subject to the attachment of earnings order, the Court may award the judgment creditor costs of the application and interest awarded in addition to the judgment debt amount. The Court may, at its own initiative, order the discharge or vary an attachment of earnings order as dictated by RDC 47.74 – 47.82.

Execution against assets

Pursuant to Part 48 of the RDC

 This enforcement method will order and empower a duly appointed enforcement officer to carry out a writ of execution against assets held by the judgment debtor.

Where an order for execution against assets is executed, a notice in Form P48/01 informing the debtor of the execution must be delivered by the relevant enforcement officer to either the debtor or the place where execution is levied.

A writ of execution may not be enforced unless a copy of the judgment or order giving rise to the judgment debt has been has been personally served upon the judgment debtor before the expiration of the time within which the debtor was required to act.

Where a person fails to act within a time specified in a judgment or order, or disobeys judgment or order requiring them to abstain from an act, the Court may enforce the judgment or order. Such enforcement may be via a writ of sequestration or order of committal. If a Court order requires an act to be done in a different time frame, following a prior order requiring an act to be done in a specified time frame, the above rules shall apply to the second order, that is, the different time frame. An application for a Court order requesting the Court to specify a time frame in which an act is to be done must be completed in Form P23/01.

If a judgment or order requires the delivery of goods, the person liable for execution may alternatively pay the value of the goods unless the Court or the person entitled to enforce the judgment or order, following the submission of an Application Notice Form P23/01, issues an enforceable order requiring the goods to be delivered.

If a mandatory order, injunction, judgment or order for the performance of a contract is not complied with, the Court may direct that the act required be done by either the party intended or any other person of the Court’s choosing at the cost of the disobedient party. Upon completion, expenses may be determined as the Court pleases and the Court may issue the amount determined and costs against the disobedient party.

The Court will not enforce a judgment after 6 years have elapsed from the date the judgment or order was made.

The judgment debtor may apply to the court, by completing and submitting an Application Notice Form P23/01, for a stay of execution and the Court may grant relief, either for a given time period or absolutely, if it becomes clear to the Court that there are valid circumstances preventing the payment of that money. The application must comply with the requirements as dictated by RDC 48.54 – 48.57.

A writ of execution is valid for execution for 12 months from the date of issue, except in cases where the Court, following the submission of an application, orders extension of the writ if the order of execution has not been wholly executed. The applicant is required to inform the relevant enforcement officer, via a P48/06, of the extension of the validity of an order of execution before the extended order can be executed. Such an order shall not be made by the Court to enforce a judgment or order if 6 years have elapsed from when that judgment or order was made.

RDC 48.47 – 48.50 outline the procedures for the renewal of a writ of execution.

The writs of execution available to judgment creditors are as follows:

  • Order for Execution Against Assets
  • Order of Delivery
  • Writ of Possession
  • Writ of Sequestration

(i)      Order for execution against assets

An order used by creditors to take possession of property owned by a judgment debtor. Such property will be sold at a public auction and the proceeds remunerated to the plaintiff in partial or full satisfaction of the judgment.

An order for execution against assets must be in Form P48/02.

(ii)    Order of delivery

 An order used by creditors, when the debtor is in arrears, to recover specific goods that have not been fully paid for. The Writ of Delivery is appropriate where the Claimant wants to recover the goods, rather than receive payment for them.

An order of delivery must be in Form P48/03.

(iii)     Writ of possession

A writ used by judgment creditors to recover land after an Order for Possession has been obtained from the Court.

A writ of possession must be in Form P48/04.

(iv)     Writ of sequestration

A writ used by judgment creditors to seize the property of the judgment debtor. The property is then managed for the purpose of collecting rents or profits.

A writ of sequestration must be in Form P48/05.

Applying for execution against assets

Permission is required to issue a writ of execution where any change has taken place, by death or otherwise, in relation to the party liable to execution, or where the assets against which execution is sought are in control of executors, administrators or receivers.

Permission is also required to issue a writ of sequestration.  In both cases, the judgment creditor must apply to the court by completing and submitting an Application Notice Form P23/01.  This application can be made without notice to the debtor.

For all other writs, the judgment creditor may apply directly with the Court for enforcement of the judgment in the form of a signed informal application. The judgment creditor must also tender the judgment or order seeking enforcement.  The Court may then issue a sealed writ of execution, valid for 12 months.

An application by the judgment creditor, debtor or relevant enforcement order can be made for the sale of goods seized under execution to be made otherwise than by public auction by completing a general Application Notice prescribed in Form P23/01 and submitting this to the Court Registry.

Court’s power to appoint a receiver

Pursuant to Part 49 of the RDC

 Where the judgment debtor is an incorporated entity, this enforcement method will order and empower a receiver to secure and realize the assets of the company and manage the affairs of the company with a view to securing the debt.

To apply for this enforcement order, you must complete a general Application Notice prescribed in Form P23/01 and submit this to the Court Registry for stamping.

This application can be made without notice to the debtorThe application requires explanation of reasons why the appointment is necessary, significant details of the property and its value, the likely income, the proposed receiver and proof of that person’s consent, and the circumstances surrounding the judgment debtor’s default of payment of the judgment debt (for exact requirements please refer to RDC 49.10).

Upon the success of the application, the Court may order the appointment of a receiver. The order may compel the receiver to prepare and serve accounts and may authorize the receiver to carry on a certain activity or incur a certain expense.

If the receiver is to be remunerated, the Court may determine the receiver’s remuneration, and the receiver may not recover remuneration without such determination. The conditions for remuneration do not apply to expenses incurred by a receiver when carrying out his functions. The order appointing the receiver must be served by the judgment creditor to both the person appointed as receiver and every other party to the proceedings.

The receiver may apply to the Court at any time for directions to assist him in carrying out his function as a receiver. Such applications may be made by filing an application in Form P23/01 or by letter in cases where the directions are unlikely to be contentious or important to the parties

The appointment of the receiver can be challenged by any party by application for discharge of the receiver through completing a general Application Notice prescribed in Form P23/01. The Application Notice must be sealed in the Court Registry and served upon the same parties as were served with the appointment order.

If a receiver fails to comply with Rules, Practice Direction or direction of the Court, the Court may order him to explain his non-compliance at a hearing, following which the Court may make any order it considers appropriate as dictated by RDC 49.47 – 49.48.

An order discharging or terminating the appointment of a receiver must be served on the person who was required to be served with the order of appointing the receiver. The order may require him to pay into Court any money held by him, specify who he must pay any money or transfer assets to, and make provision for the discharge of any guarantee given by the receiver as security.

Orders to obtain information from judgment debtors

Pursuant to Part 50 of the RDC

 A successful application for this enforcement method requires a judgment debtor to attend the Court to provide information, enabling a judgment creditor to enforce a judgment or order against him.

To apply for this enforcement order, a judgment creditor can apply for an order requiring a judgment debtor as an individual, or an officer of the company or corporation if the judgment debtor is a company or corporation, to attend Court and provide information to enforce a judgment or order.

The application must be made by filing an application notice in Form P50/01 if the application is to question a judgment debtor or Form P50/02 if the application is to question an officer of a company or corporation.

Questioning hearings are held before the Registrar, but the judgment creditor may request the judgment debtor to be questioned before a Judge.

An order to attend Court must be served to the person ordered to attend court 14 days before the hearing, and the service must be carried out by the judgment creditor who must inform the courts 7 days before the date of the hearing if he is unable to serve the order to attend Court.

A judgment debtor may ask the judgment creditor within 7 days of being served a sum reasonably sufficient to cover his travelling expense.

A judgment creditor must file an affidavit or affidavits of how he served the order on the judgment debtor, and must state the requests of the judgment debtor. The affidavit must either be produced at the hearing or filed no less than 2 days before the hearing.

A person ordered to attend the Court will be questioned on oath, and such questioning shall be carried out by the Registrar unless the Court orders the hearing to occur before a Judge. The Registrar will ask a standard series of questions as dictated in Schedule A and B to Part 50 of the RDC. If the hearing is to take place before a Judge, the creditor or his legal representative must attend and conduct the questioning themselves, and the standard questions in Schedules A and B will not be used.

The judgment creditor or representative may attend Court and ask questions or may request the Registrar to ask additional questions which are to be attached to his application notice.

The Registrar will record the evidence, either in written or tape form, read the evidence to the person being questioned, and ask him to sign it and, should he refuse, such refusal shall be noted on the record of evidence. Where the hearing is to take place before a Judge, the proceedings will be tape recorded and no written record of evidence will be taken.

A judgment debtor must obey the order to attend Court. If he fails to attend, refuses to take the oath, fails to answer any question or otherwise fails to comply with the order, he may be fined or committed to prison for contempt of Court.