One Thousand and One Recoveries: Tales of Enforcement in the UAE

Authored by Anwar Darkazally, Managing Partner at Field Intelligence, David Bergreen, Manager at Field Intelligence, and Rodrigo Carè, Senior Counsel at Galadari Advocates & Legal Consultants.

In the 21st century, the UAE has become one of the world’s great commercial hubs.  It is a highly tax efficient jurisdiction and a lifestyle destination; it offers everything.  It is the market of choice for businesses and investors from the US and Europe through India and the Far East.

The UAE has very naturally become a magnet for investors to domicile their businesses, for banking and financial services and for investment in property and high-value tangible assets.  Under Federal legislation the UAE protects an individual’s right to privacy, but not to secrecy when laws are being broken.

While surveillance and snooping are therefore illegal, it remains entirely possible to trace assets concealed from creditors or judgments and awards obtained in other jurisdictions.  However, unlike other major financial centres (and except for the special free zones of the DIFC and ADGM) company registries and land records are generally kept confidential and it is not possible to conduct public searches.  In the context of civil litigation, it is also not uncommon to encounter challenges in effecting service of process due to difficulties in identifying the defendant’s address.  Therefore, the key to identifying and locating persons and assets lies in an investigation using human sources.

“Human source” enquiries are the entirely legal process of speaking to people with knowledge of where assets are hidden.  It is essential that this process is conducted legally.  A disgruntled former employee may know precisely where assets are concealed but such information can only be disclosed if sharing it complies with legal requirements.  The former employee must be beyond the provisions of any confidentiality terms in their employment agreement or not subject to any form of non-disclosure agreement to be free to talk.  They must not share any Material Non-Public Information or other information specifically covered by relevant legislation.

Forensic investigators specialise in identifying individuals who are both legally permitted and willing to provide information.  These may include potential whistle-blowers, unfairly treated competitors or employees dismissed under unjust circumstances.  There is a cast iron rule: sources must not be paid.  Information becomes contaminated when people have an artificial incentive to share.

Information from a source starts as a lead, a piece of information that has yet to be verified.  For example, a former employee states that the subject has undeclared shares in a particular company.  The investigator must then go out and find two other sources who can independently confirm that intelligence.  This process is known as “triangulation” and is essential to the integrity of the investigation.  If a lead cannot be corroborated, it is vital that as investigators we tell the client that it is “single source” and cannot be relied upon in the absence of corroboration.

A single piece of source information can sometimes be the smoking gun that every client wants to find.  It can be the confirmation of a hidden bank account, a yacht registered in a nominee’s name, a share of a real estate project.  If this is the case, then the investigators dig down until they can find the evidence our client needs to win their case.

Once a source has identified a lead, further investigation using open-source research (sometimes called “desktop research”), although somewhat limited in the UAE, can help identify the person or entity holding the asset.

If the source is to become a witness in the case, further considerations must be made.  In one notable example in England, a judge in the Gary Glitter trial (1999) harshly criticised a newspaper’s promise of £25,000 to a witness if it secured a conviction.  Likewise, professional conduct rules for lawyers explicitly forbid giving any benefit to a witness that is contingent on the content of their evidence or the case’s outcome.  That said, reasonable compensation for a witness’s time and expenses may be allowed.  In common law jurisdictions (including the DIFC and ADGM), it is not uncommon – or unlawful – for an employer to pay an employee or even a former employee their normal wages or a modest fee for the time they spend giving evidence, as long as this payment is not tied to the outcome of the case or the substance of their testimony.

If the first rule is to act fully within the law, the second is to provide the client with only the essential information they need, not everything that can be discovered.  Clients do not want a “data dump” of redundant material that offer no new insights.  Field avoids using report templates because each project is unique.  Each project will always begin with the fundamental question: “What will be most useful to the client?” every time.

Litigators at Galadari Advocates especially appreciate this focused approach.  A massive data dump not only fails to add value, it can actively hinder a case.  It increases legal costs and consumes precious time as lawyers sift through extraneous material, and it risks disclosing irrelevant or sensitive information that could even harm the client’s position.  Effective litigators recognise the value of collaborating with investigators who understand the purpose and objectives of the investigation and the client’s ultimate goals.  These investigators tailor their work to meet the client’s specific needs.  In complex cases, there is rarely time to sift through large volumes of raw data, making an experienced investigator who provides actionable intelligence, rather than just data, an essential asset to the legal team.

This alignment between investigative intelligence and legal strategy is especially crucial in cross-border enforcement scenarios.  In today’s global enforcement landscape, routine international arbitration awards and court judgments will often remain unpaid without proactive measures.  It is estimated that national courts give effect to roughly 90% of international arbitral awards voluntarily, yet the remaining percentage – typically the largest ones – require a coordinated recovery strategy.  Successful recovery frequently demands a blend of legal tactics and intelligence-led asset tracing on a global scale.  Put simply, lawyers and investigators need to collaborate closely across different jurisdictions to track down assets and exert pressure via the legal system.

A particularly difficult arena is the enforcement of awards and judgments against sovereign states or state-owned entities.  Geopolitical factors can present formidable obstacles.  For example, investor–state arbitration awards between EU nationals and EU member states have become practically unenforceable within the EU due to the European legal stance following the Achmea decision.  The Court of Justice of the EU held in Achmea (2018) that intra-EU bilateral investment treaty arbitrations are incompatible with EU law and as a result, EU courts will refuse to recognise or execute such awards.

On the other hand, Russian courts have issued anti-suit injunctions to block Russian parties from participating in foreign proceedings (for instance, invoking Article 248 of Russia’s Arbitrazh Procedure Code to claim exclusive jurisdiction over disputes involving sanctioned Russians) and the EU has responded with measures to thwart such tactics.  Recent EU sanctions packages include “no-claim” provisions that prohibit satisfying claims by designated Russian individuals or entities, effectively barring investor-state claims by sanctioned Russian parties and making enforcement of any resulting award or judgment a legal dead end within the EU.  In short, due to political friction, certain awards that would ordinarily be enforceable are now frozen in limbo.

When faced with these impasses, creative judgment creditors are increasingly looking elsewhere.  For example, in the wake of Achmea, many award creditors holding renewable energy awards have turned to courts in the United States or other non-EU jurisdictions to seek enforcement.  However, one set of jurisdictions that appears to be under-utilised in these scenarios is the Gulf region, including the UAE.  To our knowledge, there have been no reported instances to date of investors trying to enforce intra-EU awards in the UAE or nearby countries, despite the probable presence of debtor assets.  This is likely due to unfamiliarity with the region and language obstacles.

The GCC region, and particularly the UAE, should not be overlooked.  In recent years, geopolitical factors have seen substantial assets shifted to the UAE.  Consequently, award creditors who expand their enforcement strategies to include the UAE may find opportunities that others have missed.  This is supported by trends showing the UAE as a leading destination for high-net-worth individuals and capital migration.

Naturally, entering a new jurisdiction demands knowledge of how to locate and access assets within that territory.  The same human-source approach outlined earlier therefore becomes essential when pursuing sovereign or private assets in this region, as it can uncover crucial information that is often not publicly available, supporting effective asset tracing and recovery efforts.

A well-connected investigator who can navigate the language and business culture can discover, for example, that a debtor’s luxury real estate or investment holdings have been transferred to a UAE holding company or nominee.  With those leads in hand, the legal team can then take action through the courts.

The UAE is fully capable of handling complex, high-stakes recovery claims.  Recent legal reforms and court decisions underscore that the UAE’s system is more sophisticated and creditor-friendly than many assume.  For instance, the onshore UAE courts (under the Federal Civil Procedure Code, as amended by Federal Decree-Law No. 42 of 2022) now provide a clearer path to recognising and enforcing foreign court judgments.  Meanwhile, the English-language common law courts of the DIFC and ADGM have demonstrated a strong willingness to assist with cross-border enforcement.

In a landmark case, Carmon Reestrutura (2024), the DIFC Court of Appeal confirmed that it has jurisdiction to grant freezing injunctions in support of foreign proceedings even if those proceedings remain pending abroad.  Indeed, all the familiar tools of asset recovery that common law practitioners know, such as freezing orders, proprietary injunctions, disclosure orders against third parties (for example, Norwich Pharmacal orders or Bankers Trust orders requiring banks or nominees to divulge information), and even orders to examine witnesses under oath or depose them, are available in principle in the DIFC and ADGM courts.  In appropriate cases, these courts can also issue interim measures like Chabra orders (freezing injunctions against third-party facilitators who are holding assets on behalf of the main debtor).  In short, a well-advised creditor can deploy in the UAE virtually the same arsenal of legal weapons that they could in London or New York.

When it comes to sovereign assets, it remains true that the doctrine of state immunity can pose a final hurdle, in any jurisdiction.  In Border Timbers Ltd v. Republic of Zimbabwe [2024] EWHC 58 (Comm), for example, the English court allowed an ICSID arbitration award against Zimbabwe to be registered as a judgment but acknowledged that Zimbabwe’s state immunity could still be raised at the execution stage to shield its property.  Similarly, in UK P&I Club NV v. Republica Bolivariana de Venezuela [2023] EWCA Civ 1497, the English Court of Appeal reaffirmed that courts cannot issue an injunction against a foreign state due to the absolute bar in the State Immunity Act, underscoring that some remedies are simply not available against a sovereign.  In the EU, as noted, enforcing intra-EU investor-state awards has become virtually impossible after Achmea; and the EU’s sanctions regime now expressly blocks certain claims by sanctioned persons.

The UAE is an interesting and potentially advantageous forum in this regard.  The UAE often hosts substantial sovereign-related assets.  Importantly, the legal infrastructure in the UAE (especially via DIFC/ADGM) is arbitration-friendly and enforcement-ready.  The DIFC Courts have already shown their readiness to deal with disputes involving states or quasi-state entities.  In the well-known Pearl Petroleum case, the DIFC Court recognised and enforced arbitral awards against the Kurdistan Regional Government of Iraq, overcoming objections of sovereign immunity by pointing to an arbitration clause and waiver that the KRG had agreed to.

These examples illustrate a wider trend: the UAE is no longer simply seen as a “sunny place for shady people” or a jurisdiction known for opacity.  It has evolved into an enforcement-driven, compliance-oriented environment.  Notably, the UAE was recently removed from the Financial Action Task Force (FATF) “grey list” of jurisdictions under increased monitoring, following significant improvements in anti-money-laundering and financial oversight.  The EU likewise acknowledged the UAE’s strides by moving to adjust its own lists in recognition of the UAE’s progress. All of this bolsters the UAE’s reputation as a credible and efficient venue, not only for conducting business but also for pursuing complex cross-border legal remedies.

In conclusion, effective cross-border enforcement in today’s environment demands both enhanced intelligence-gathering and strategic forum selection.  A collaborative effort between investigators and lawyers ensures focus on actions that genuinely recover value for the client, avoiding overload of data or pursuing unproductive paths.

The UAE stands out as a jurisdiction where, with the right expertise and legal strategy, creditors can break through barriers and recover assets that remain inaccessible elsewhere.  In a world where traditional enforcement routes are sometimes obstructed by politics or secrecy, bold, unconventional thinking can be the decisive factor between an unpaid claim and a successful recovery for the client.

For further advice on enforcement in the UAE, please contact Rodrigo Carè, Senior Counsel at Galadari Advocates and Legal Consultants, at rodrigo.care@galadarilaw.com

Rodrigo Carè Senior Counsel rodrigo.care@galadarilaw.com