Hadef in the Courts: Garnishment Applications - Security and Recovery from Third Parties
Type
E-journal
Date
14 Apr 2016
Jurisdiction
United Arab Emirates
Taxonomy
Lending & Security, General Civil Procedure & Administration of Justice
Copyright
LexisNexis
Relevant company
Hadef & Partners
Legal reference
Article 257 of Federal Law No. 11/1992
Analysis
In the UAE's globally connected marketplace, it is not uncommon to do business with an entity that has no presence in the UAE or has limited, if any, assets in the UAE. In the event of a claim against it can be difficult to recover amounts owed. It may also be that any potentially available can be liquidated, transferred out of the country, or otherwise hidden from potential judgment creditors. As a result, it is possible to achieve a court judgment in respect of an outstanding obligation but with no immediate or easy way to recover.
There is, however, a legal mechanism for recovering funds due to the debtor from third parties. This is provided for in the UAE Federal Law No. 11/1992 promulgating the Civil Procedures Law (the “CPL”) in the form of garnishment applications.
Specifically, Article 257(1) of the CPL states that any creditor may apply to the concerned court or to the emergency judge for the garnishment of chattels and debts even if they are deferred or conditional. Such an order is subject to certain requirements defined in the CPL.