The Court of Session recently considered the issue of enforcing judgments from outside the UK in the case of Papel Payment Services Provider LLC v Monitox Limited [2025] CSOH 41. In her latest article, Debbie Brogan - senior associate in MFMac’s Dispute Litigation team and an accredited Debt and Asset Recovery specialist - discusses the Court’s decision and highlights the key takeaways for anyone navigating cross-border enforcement.
The facts
Papel Payment Services Provider LLC ("Papel"), a Dubai based company, entered into a supply of services contract with Monitox Limited ("Monitox") a Scottish registered company, for the provision of various services including human resources, finance, technological and legal services. The contract between the companies was governed by the law of the United Arab Emirates ("UAE") and the Courts of the Emirate of Dubai had exclusive jurisdiction to settle all disputes or claims arising out of the contract.
The relationship between Papel and Monitox deteriorated, leading Papel to terminate their supply of services contract. Subsequently, Papel issued two invoices to Monitox for payment. When Monitox failed to pay the invoices, Papel sought to recover the outstanding amounts by applying for a payment order and obtaining a judgment from the Dubai Commercial Court of First Instance.
Papel subsequently sought an order, known as "decree conform," from the Court to enforce the judgment from Dubai against Monitox in Scotland. For a Court action for decree conform to be successful, the Court needs to be convinced that the original judgment was not obtained by fraud and that the initial Court action leading to the foreign judgment was properly served. A Court action for decree conform can be contested even if the original action was not defended, and other common law defences, often based on public policy, are available and will be evaluated by the Court on their merits.
The issue the Court had to consider in this case, was whether the judgment obtained by Papel would offend against Scots law principles of natural justice, because Monitox argued that it had not had an effective opportunity to challenge the payment order which led to the judgment being granted. The Court heard evidence from both parties and a lawyer based in the UAE who gave expert evidence about the law of the UAE.
In reaching its decision, the Court considered the process under the law of the UAE as it applied in this case. The Court heard evidence that the process used by Papel was introduced by UAE law to provide a "swift and efficient" mechanism for creditors to recover undisputed debts. The following conditions must be met to allow creditors to use that process:
- the debt must be for a fixed amount and must have been unequivocally acknowledged by the debtor;
- a demand for payment must be served on the debtor specifying exactly what is due to be paid and allowing a period of five days for the debtor to make payment. Service of this notice is to be by an official server of documents in the UAE, Tableegh and whilst the notice is in Arabic, it may be translated if Arabic is not the recipient's first language. Service may be made by a variety of means, including by email; and
- if no payment is made within the five days, the creditor can apply to the Court for a payment order against the debtor, and this is to be granted by the Court within three days. The application for the payment order is written in Arabic, is not translated and is not required to be served on the debtor.
The demand for payment was served on Monitox by Tableegh via email, which included a telephone number and was in Arabic. The email contained a PDF version of the demand along with its English translation. Although the email was received by a Monitox employee, the Court of Session accepted evidence that the employee did not open the PDF file and therefore did not read the demand.
The debt remained unpaid and Papel applied to the Dubai Commercial Court of First Instance for a payment order, which was granted by the Court three days later. Papel emailed the payment order to Monitox on 5 and 13 October 2023. The second email contained a partial English translation. However, the translation stated the sum awarded by the Court to be considerably more than what had been awarded by the Court in the payment order. There was no English translation of the part of the order that informed Monitox of its right to file a grievance or appeal. The order was also advertised in a local newspaper, in Arabic.
It was Papel's position that the Court should grant an order to enable it to enforce the judgment against Monitox in Scotland. In support of this, Papel likened the fast-track debt recovery process in the UAE to the summary diligence process available exclusively in Scotland, whereby creditors can carry out diligence on the back of deeds / contracts registered for execution in the Books of Council and Session, without firstly having to obtain a decree (Court judgment) from the Court. Papel argued that Monitox had ample opportunity to deny the debt but had failed to do so. Papel's position was that the procedure invoked in Dubai to obtain the payment order was not unfair and so the order
should be granted in Scotland.
It was Monitox's position that it had not been given sufficient notice of proceedings against it before the payment order was granted by the Court in the UAE and so a breach of natural justice had occurred such that the order sought by Papel in the Scottish Courts should not be granted.
The decision
The Court agreed with Monitox, finding that there had been a breach of natural justice due to the way in which the payment order, which was now unchallengeable in the UAE, was obtained by Papel. Whilst, on the face of it, Monitox was given notice of the payment order three times by Papel, the first notice was written entirely in Arabic. The second notice was, to a limited extent, in English, however, the amount ordered to be paid by the payment order was incorrect and there was no mention, in English, of the right to appeal and the timeframes by which to do so. Further, the newspaper advertisement was wholly in Arabic and published in a newspaper that was unlikely to be seen by anyone connected to Monitox. Service of the payment order on Monitox by Papel in October 2023 was therefore inadequate.
The Court decided that as Monitox was not given any real opportunity to present its defence in the UAE, a breach of natural justice had occurred. Papel was therefore not entitled to the order sought and the action against Monitox was disposed of by the Court.
Lessons learned?
The Court was clear that the decision is "not a general critique of the fairness of the payment order regime in the United Arab Emirates Civil Code, or whether those provisions are contrary to natural justice". The concept of "justice" was acknowledged. However, there was criticism regarding the method through which the payment order was communicated to Monitox by Papel. This led to Papel being unaware of the deadline for appealing the payment order.
The case demonstrates the need to be careful when considering the enforcement of foreign judgments in Scotland. Just because an order is obtained in another jurisdiction does not necessarily mean that it can or should be enforced in Scotland - it may be open to challenge by the debtor, or require further procedure, thereby resulting in additional costs being incurred for all parties. Creditors with foreign judgements they want to enforce in Scotland should be made aware of the risks - and costs - that might be involved. There is also a risk that the original judgment becomes time barred such that recovery becomes impossible, as was the case in Papel v Monitox.
