On December 26, 2024, the Abu Dhabi Court of Cassation issued a significant ruling in the Commercial case, addressing pivotal issues concerning property rights and the jurisdictional authority of the execution judge. This ruling underscores critical principles in property-related disputes within the UAE legal framework.

Case Background

The dispute originated from the enforcement of a judgment obliging the second respondent to pay AED 2,914,280, along with a delay penalty capped at AED 300,000, as per Execution Case No. Abu Dhabi. As part of the enforcement, the execution judge ordered the seizure of various assets, including a property owned by the appellant, a third party unrelated to the execution proceedings.

The appellant contested the seizure, asserting ownership of the property through a validly registered sale and purchase agreement with Abu Dhabi Municipality. Consequently, the execution judge annulled the seizure on October 3, 2024.

The first respondent, dissatisfied with this decision, filed an appeal, leading to the Court of Appeal overturning the execution judge’s ruling and declaring the execution judge lacked jurisdiction over the matter. This decision prompted the appellant to seek relief through the Abu Dhabi Court of Cassation.

Core Legal Issues

• Jurisdiction of the Execution Judge

The appellant argued that her request to annul the seizure of her property fell within the jurisdiction of the execution judge. The appellant contended that the request did not amount to a claim of ownership but rather challenged the validity of the seizure, asserting that she had lawfully purchased and registered the property.

The Court of Appeal, however, interpreted the appellant’s request as a property claim, categorizing it as a substantive dispute outside the scope of the execution judge’s authority.

The Court of Cassation upheld the appellate court’s reasoning, emphasizing that property claims (or “claims of entitlement”) fall under the general jurisdiction of civil courts as stipulated by Articles 207, 239, and 302 of the UAE Civil Procedure Code. Such claims require adjudication through standard litigation procedures, involving evidence of ownership or possession rights.

• Substantive Disputes in Execution Cases

The court highlighted that execution judges are exclusively competent to handle disputes related to the execution process, such as suspension or annulment of execution actions. However, substantive claims, including challenges to ownership of seized assets, are explicitly excluded from the execution judge’s jurisdiction.

Article 302 of the Civil Procedure Code mandates that third parties asserting ownership must initiate a separate substantive claim, rather than contest the execution directly before the execution judge.

Court’s Reasoning and Decision

The court meticulously reviewed the legal framework and the facts of the case. It concluded that the appellant’s request, when assessed in light of applicable laws and the evidence presented, constituted a property claim.

The appellant failed to file a substantive claim in the competent civil court, opting instead to file successive motions before the execution judge—a procedural error.

The Court of Cassation affirmed that the appellate court correctly identified the procedural flaw and acted within its mandate to overturn the execution judge’s decision. Accordingly, the Court dismissed the appellant’s petition, imposing legal costs, including AED 1,000 as attorney’s fees, and ordered the forfeiture of the appellant’s security deposit.

Key Takeaways from the Judgment

• Distinction Between Execution Disputes and Substantive Claims

The judgment reinforces the principle that execution disputes are limited to procedural aspects of enforcement, while substantive claims regarding property ownership require adjudication under general civil court jurisdiction.

• Obligations of Third-Party Claimants

Third parties asserting ownership rights over seized assets must adhere to the formal requirements of Article 302, including filing a detailed claim accompanied by evidentiary documentation and depositing a security amount. Failure to comply with these procedural requirements undermines their legal position.

• Judicial Interpretation of Procedural Provision

The ruling underscores the judiciary’s obligation to accurately classify claims based on their substantive nature, irrespective of how they are framed by the parties involved.

Implications for Property Owners and Legal Practitioners

This case serves as a critical reminder for property owners to ensure proper registration and documentation of ownership to protect their rights. Legal practitioners must advise clients to follow the correct procedural channels, especially when dealing with disputes involving execution proceedings.

The decision also highlights the necessity for precision in drafting motions and petitions to avoid procedural setbacks.

This landmark ruling from the Abu Dhabi Court of Cassation elucidates fundamental aspects of UAE property law, offering valuable guidance to litigants and legal professionals navigating property-related disputes.