The Ministry of Justice may be considering amendments to the Civil Procedures Law or even drafting a new one, according to senior lawyers here. Early this year, the Ministry of Justice asked leading legal firms to provide their comments on the Civil Procedures Law and possible changes to it, said Husam Hourani, partner at Al Tamimi & Co.

"This could be with a view to bring in changes to the law through amendments or even frame new laws. This could be in line with similar revisions being considered or conducted with regard to the Commercial Companies Law and the Banking Law."

One of the issues governing the Civil Procedures Law relates to the legal process involved in a default on a mortgage. According to Rima Fahl-Murphy, senior legal consultant with Al Tamimi & Co, a circular was issued by the Dubai Courts late last year allowing the creditor to approach the execution division of the courts directly in the event of a default.

Through Order 10/1999 issued by the Chief Justice of Dubai Courts, any creditor holding a mortgage over assets could proceed directly to execution court ex parte to request the sale of the mortgaged asset. This request would then be given an execution number.

Upon review and approval of the court, the mortgagee can proceed with the execution. This is applicable only in Dubai. "This effectively allows the creditor to sidestep the two-year legal process that would have been required otherwise in case of defaults on commercial and land mortgages. To get the process initiated with the execution division, the creditor must give a seven-day notice.

If the debts are still not cleared by the end of the period, the execution courts can order the sale of the mortgaged property through a public auction. Earlier, under Article 172 of the UAE Commercial Transaction Law No. 18 of 1993, the mortgagee was required to file a civil action in the courts to obtain a judgement which could then be executed.

"This procedure is not only costly for the mortgagee, but could take a few years before a judgement is finally obtained." But even now, the debtor could file an application for a freeze on any action to be taken by the execution court by contending that there is a legitimate reason for the payment defaults.

"If the defaulter does so and wins a stay, it could bring the whole process to a standstill. There is no mechanism now by which the creditor can push for a fast-track solution to the impasse," said Hourani.

"This is an issue that needs to be addressed. Any benefit the creditor may have by getting the legal process through the execution courts will be wasted. There is wastage of time and it becomes more expensive for the creditor." Al Tamimi & Co yesterday held a seminar on "Creating, Perfecting and Enforcing Securities in the UAE".