Commercial Bank of Dubai v Alyazji [2025] ADGMCFI 0008: enforcing legacy Al Reem Island mortgages under the ADGM Real Property Regulations 2024 – implied foreclosure rights, section 72(3) and the primacy of the equity of redemption

Catchwords: Real property – mortgages – enforcement on default – transitional law – enforcement of legacy Al Reem Island mortgages migrated from the DMT to the ADGM Register – foreclosure (ADGM Real Property Regulations 2024, s 78) – sale in lieu of foreclosure (s 72(1)(a)) – equity of redemption (s 68(2)) – mortgagee’s powers and the 30-day remedy notice (s 72(3)) – court-order requirement for pre-2025 Al Reem Island mortgages (s 72(3)(b)) – implication of a foreclosure term into a mortgage made under Abu Dhabi law – application of English equity (ADGM Application of English Law Regulations 2015, ss 1(1) and 3(1)) – Ijarah home finance – Al Reem Island, Abu Dhabi.

In short – In what appears to be the first reported ADGM decision addressing the enforcement of a legacy Al Reem Island mortgage, the Court of First Instance in ADGM Case No. 162/2024, [2025] ADGMCFI 0008 provided important guidance on the transitional regime governing mortgages migrated from mainland Abu Dhabi to the ADGM property framework. The Court held that a mortgage created under pre-2025 Abu Dhabi law and transferred to the ADGM Register on 1 January 2025 remains enforceable under the ADGM Real Property Regulations 2024. Although the mortgage instrument did not expressly grant a right of foreclosure, the Court found that such a right could be implied from the legal regime under which the mortgage was originally created. Nevertheless, enforcement remained subject to the statutory safeguards in section 72(3), including the requirement for a court order under section 72(3)(b) and the service of a 30-day remedy notice under section 72(3)(a).

In considering the appropriate remedy, the Court treated the mortgagor’s equity of redemption under section 68(2) as the starting point of its analysis, drawing on English equitable principles through the Application of English Law Regulations 2015. The Court emphasised that foreclosure under section 78 permanently extinguishes the equity of redemption and allows the mortgagee to retain any surplus value in the property. As there was no current valuation demonstrating the absence of surplus value, the Court declined to order foreclosure and instead directed a judicial sale pursuant to section 72(1)(a).

Background – an Al Reem Island home, financed and mortgaged

The dispute concerned a single residential apartment on Al Reem Island, Abu Dhabi (Plot No. C13, Building No. 1, Floor No. M3, Property No. 304, Sector RR2). Mr Mohammed Z A Alyazji bought the unit from its developer under a sale and purchase agreement (SPA) dated 20 September 2015 for AED 1,600,000, financing the balance through the Commercial Bank of Dubai (PSC) (the “Bank”). Of the price, AED 640,000 was paid as a down payment, leaving a facility of AED 960,000, advanced under an Islamic “Ijarah Muntahia Bittamleek” (lease-to-own) home finance over a 25-year term; the “profit” element was accepted by both sides to be the equivalent of interest.

Although the financing was arranged in 2017–2018, the Mortgage itself was executed on 10 November 2022, by which time the title had been transferred into Mr Alyazji’s name. It was a first-ranking (“first degree”) mortgage securing AED 960,000 plus profit, repayable between 2022 and 2043. Mr Alyazji fell into default, which the Bank dated from 3 October 2023 and treated as accelerating the obligation to repay in full – a right that was not disputed.

The proceedings then met a change in the law of the place where the Property sits. Under UAE Cabinet Resolution No. 41 of 2023 (in force from 24 April 2023), ADGM jurisdiction was extended to Al Reem Island. Mainland Abu Dhabi property law continued to apply on the island until 31 December 2024; from 1 January 2025 the ADGM Real Property Regulations 2024 (the “Real Property Regulations 2024”) applied to property within the ADGM. Title and Mortgage, originally registered with the Abu Dhabi Department of Municipalities and Transport (the “DMT”), were re-registered on the ADGM “Register”, which records Mr Alyazji as owner and the Bank as sole mortgagee.

The Bank commenced its claim in 2024 and, by an application notice dated 4 September 2024 (the “Foreclosure Application”), sought foreclosure, sale of the Property at public auction with the proceeds applied to the debt, and costs – relief originally framed under the mainland mortgage law in force when the application was made. Mr Alyazji, by then outside the UAE, did not enter an appearance; his wife, Ms Lana Khader, responded under a general power of attorney and opposed foreclosure.

The questions before the Court

Determining the Foreclosure Application required the Court to work through, in substance:

1. what amount was due under the Mortgage;
2. which legal regime now governed enforcement, given Al Reem Island’s move into the ADGM;
3. whether the Mortgage, made under mainland Abu Dhabi law and since migrated to the ADGM Register, carried a right to foreclose – expressly or by implication – so that the enforcement provisions of the Real Property Regulations 2024 would respond to it;
4. whether a valid notice of breach had been served, as a precondition to enforcement; and
5. what relief the Court should grant – an order for sale under section 72(1)(a) or foreclosure under section 78.

Amount at stake

The Bank’s mortgage debt as at 8 April 2025 was accepted at AED 911,188.79 (principal AED 827,006.91, accrued interest AED 82,025 and penal interest AED 2,158.88). The main evidential dispute was whether payments made on Mr Alyazji’s behalf – eight payments totalling AED 98,750 between April 2023 and April 2025 – had been credited promptly. The Bank’s evidence was that they were received through his current account but applied only in part to the mortgage, because unpaid life-insurance premiums repeatedly left that account in deficit, and that the late fees incurred reflected the intermittent pattern of payment rather than any delay by the Bank. With the calculation otherwise unchallenged, the Court accepted the debt as claimed. Against the 2015 price of AED 1,600,000, the choice of remedy also carried a potential surplus: the Court calculated that, if the Property were still worth close to what Mr Alyazji had paid, foreclosure could leave the Bank with a windfall of roughly AED 690,000 above its debt.

A transitional-law problem: from mainland law to the ADGM regime

When the Foreclosure Application was made, it rested on Articles 53, 54 and 57 of the Abu Dhabi mortgage law (Title 6 of Abu Dhabi Law No. 3 of 2015), which contemplate foreclosure, sale at public auction, a written notice giving the mortgagor at least 30 days to settle, and the registered mortgage as a writ of execution. By the time the matter was decided, the Property sat within the ADGM, so enforcement fell to be determined under the Real Property Regulations 2024. The claim proceeded under Rule 30 of the ADGM Court Procedure Rules 2016 – the procedure for a question unlikely to involve a substantial dispute of fact. That shift created a genuine transitional-law problem, and the judgment is best read as resolving it: how is a mortgage created and registered under mainland Abu Dhabi law to be treated, and enforced, once Al Reem Island property falls under the ADGM Real Property Regulations 2024?

The headline transitional holding: implying the right to foreclose into a legacy mortgage

The Regulations establish several threshold requirements for mortgage enforcement. Section 1(g) defines a “mortgage” as a security interest that entitles the mortgagee, upon default, to foreclose “pursuant to the terms and conditions of the mortgage instrument”, while section 67 prescribes the information that a registrable mortgage must contain, including details of the property, the secured interest, the debt, and the maturity date. The Court found that the Mortgage satisfied each of these statutory requirements. The difficulty, however, was that the Mortgage contained no express foreclosure clause, notwithstanding a definition that appears to assume the existence of such a right.

Applying the UK Supreme Court’s approach to implied terms in Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742, which rejected the broader formulation adopted in Attorney-General of Belize v Belize Telecom Ltd [2009] 2 All ER 1127, the Court held that a right to seek foreclosure should be implied into the Mortgage. When the parties entered into the Mortgage in 2022, Abu Dhabi law governed the transaction and recognised foreclosure as an available remedy. In those circumstances, neither party would have considered it necessary to expressly restate a right already supplied by the governing law. The Court therefore implied a term permitting the mortgagee to apply for foreclosure, bringing the Mortgage within the enforcement framework of the Regulations.

This is arguably the most significant aspect of the judgment. The Court was required to address a transitional inconsistency between a mortgage drafted under mainland Abu Dhabi law and a subsequent ADGM regime whose definition of “mortgage” presupposes a foreclosure right that many legacy instruments may not expressly contain. Rather than treating that omission as fatal, the Court adopted a commercially and legally coherent approach, holding that the Mortgage remained capable of enforcement under the Regulations because the foreclosure right formed part of the legal context against which the parties contracted. At the same time, the judgment does not signal a relaxation of the stringent Marks & Spencer test. The implication of a foreclosure right was grounded in the specific legal background existing at the time the Mortgage was executed, suggesting that future cases will continue to require a close examination of the instrument and its surrounding legal context before terms are implied.

Notice and the court-order gateway (section 72(3))

A valid notice of breach is a precondition to enforcement under both regimes. The Bank relied on a notice given on 13 February 2024 to satisfy the 30-day requirement in both Article 53 and section 72(3)(a). For Mr Alyazji it was said the notice had been sent by SMS to a deactivated number, at a time when he was in Gaza and could not be contacted; the Court was not satisfied that effective service had been demonstrated, so a fresh section 72(3)(a) notice would be required before any section 72(1) power could be exercised. The Regulations also impose a separate gateway for legacy Al Reem Island mortgages: by section 72(3)(b), a mortgagee of property registered over the island before 1 January 2025 may not exercise a section 72(1) power without first applying to the Court for the right to enforce and obtaining an order – a requirement section 72(1)(e) applies equally to foreclosure.

A roadmap for migrated Al Reem mortgages: three transition principles

Read together, paragraphs 24 to 45 of the judgment provide a practical framework for the treatment and enforcement of mortgages transferred from the Department of Municipalities and Transport (DMT) Register to the ADGM Register on 1 January 2025. Three transition principles emerge from the Court’s reasoning, extending beyond the immediate dispute over foreclosure and sale.

Principle 1 – Continuity of security rights. A mortgage validly registered over Al Reem Island property before 1 January 2025 does not lose its enforceability upon migration to the ADGM Register. Once transferred, the mortgage becomes subject to the enforcement framework established by the ADGM Real Property Regulations 2024, rather than the mainland Abu Dhabi law under which it was originally created or under which proceedings may initially have been framed (paras 24-26, 31 and 37).

Principle 2 – Implication by reference to the former legal regime. Where the ADGM regulatory framework presupposes the existence of a right that is not expressly stated in the mortgage instrument, the Court may imply that right by reference to the legal regime governing the mortgage when it was executed. Applying the stringent test for implied terms in Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742, the Court held that a foreclosure right available under the former Abu Dhabi regime could be implied into the Mortgage, thereby bringing the migrated security within the scope of the Regulations’ enforcement provisions (paras 35-37).

Principle 3 – ADGM procedural safeguards govern enforcement. While pre-2025 mortgages remain enforceable, their post-transfer enforcement must comply with the procedural requirements imposed by the Regulations. Regardless of the remedy sought, a mortgagee must obtain a court order under section 72(3)(b) and serve a 30-day remedy notice under section 72(3)(a). The Court left open the question whether a notice validly served under the former regime could, in principle, satisfy section 72(3)(a). However, because effective service of the earlier notice had not been established on the facts, the Court required a fresh notice before enforcement could proceed (paras 38-44).

Taken together, these principles reflect a judicial preference for continuity rather than disruption. The Court treated the transfer of Al Reem Island properties into the ADGM system as a regulatory transition, not a reset of existing security interests. Rights acquired under the former regime are capable of carrying forward into the new framework, but their exercise is subject to the procedural safeguards and remedial discretion established by the ADGM Real Property Regulations 2024.

Sale or foreclosure: the primacy of the equity of redemption

The substantive choice lay between an order for sale (section 72(1)(a)) and foreclosure (section 78). Foreclosure, derived from English law, vests the mortgagor’s interest in the mortgagee and lets it retain the whole of any later sale proceeds, even a surplus; in effect it ends the right to redeem (section 78(3) preserving leases and other binding interests). The Regulations do not say how the Court is to choose between the two. Justice Heath supplied the governing principle: “to determine the most appropriate remedy, the starting point is the primacy that the law gives to the right of a mortgagor to redeem the mortgage” (para 51).

This is more than a restatement of section 68. Section 68(2) declares that the mortgagor has an equity of redemption which may not be waived by agreement or clogged by the mortgagee; paragraph 51 goes further and tells the Court how to exercise its discretion under sections 72 and 78 – by starting from the mortgagor’s right to redeem. It is arguably a statement of principle for future ADGM enforcement cases: foreclosure is not the default remedy, and a mortgagee who seeks it must show why the mortgagor’s equity should be extinguished. The Court rooted the principle in Noakes & Co Ltd v Rice [1902] AC 24 and Santley v Wilde [1899] 2 Ch 474: redemption is of the essence of a mortgage, and equity will not permit any device or contrivance to prevent or impede it.

Equally significant is how the Court got there. It did not treat the English cases as merely persuasive. It relied on section 1(1) of the ADGM Application of English Law Regulations 2015, under which the common law of England, including the principles and rules of equity, applies in and forms part of the law of the ADGM, and on section 3(1), which requires the ADGM Courts to give equity priority wherever it conflicts with the common law on the same matter (para 54). Section 1(1) applies English equity only so far as it suits the circumstances of the ADGM and subject to the modifications they require; the Court held that the express reference to the equity of redemption in section 68(2) was enough to apply the principle without modification (para 55). The judgment is therefore another example of the ADGM Courts expressly operationalising English equity in the interpretation of ADGM legislation – here, to give content to a statutory discretion that the Regulations leave open.

English authority then showed how the balance is struck. In Silsby v Hollyman [1955] 2 All ER 373, foreclosure was ordered, over the mortgagor’s request for sale, because the mortgagee had judged that foreclosure gave it the better prospect of recovering its debt. Palk v Mortgage Services Funding plc [1993] 2 All ER 481 points the other way. There the property was worth less than the debt; the mortgagee wished to hold and let it, deferring sale in the hope of a market recovery, while the shortfall grew. The Court of Appeal held that the court’s power under section 91(2) of the Law of Property Act 1925 to direct a sale is not fettered by preconditions, and ordered a sale at the mortgagor’s request even though a large part of the debt would remain unsecured. Sir Donald Nicholls V-C noted the traditional practice in foreclosure actions of directing a sale against the mortgagee’s wishes only where its debt was fully secured, but held that the practice did not answer the different problem before the court. Justice Heath drew principally on Sir Michael Kerr’s judgment: the respect to be given to a mortgagee’s choice of remedy arises primarily where there is real doubt that the mortgage debt will be repaid in full (paras 60 and 62). Where, as here, the debt appears amply secured, a mortgagee’s preference for foreclosure carries correspondingly less weight.

The decision

The Court had no evidence of current market value and would not infer that the Al Reem Island market had fallen so far that no surplus could arise. If the 2015 price broadly held, foreclosure would hand the Bank a windfall of roughly AED 690,000 while extinguishing the equity of redemption to the mortgagor; and since the deference owed to a mortgagee’s choice arises chiefly where full repayment is in doubt – not the case here – refusing foreclosure was not unprincipled. Though neither Mr Alyazji nor Ms Khader could presently meet the instalments or repay the debt, it would be wrong to deprive them of any surplus left after the Bank had been paid in full, with all costs of the proceedings and of sale. The Court therefore ordered, in substance, that:

• the Bank is entitled to enforce the Mortgage (section 72(3)(b));
• the Bank must first serve on Mr Alyazji a notice giving him 30 calendar days to remedy the default (section 72(3)(a));
• unless the default is remedied within that period, the Bank may then sell the Property, or any interest in it, by public auction;
• from the proceeds of sale, after payment of all amounts due to the Bank and to third parties under section 76, the Bank must account to Mr Alyazji for any surplus; and
• leave is reserved for the Bank to seek an order for possession under section 72(1)(d), given the existing tenancy of the Property.

Foreclosure under section 78 was not granted. Costs were to follow the event, but the costs decision was deferred pending submissions, with the Claimant’s costs to be summarily assessed.

Why the case is legally important

The judgment appears to be the first reported ADGM decision to consider the enforcement of legacy Al Reem Island mortgages following their migration to the ADGM Register under the ADGM Real Property Regulations 2024. Its significance extends well beyond the immediate dispute concerning foreclosure and sale. At its core, the decision addresses how pre-existing security interests are to be treated within the new ADGM property regime and provides important guidance on the continuity, interpretation, and enforcement of migrated mortgages. Five key principles emerge.

• First, legacy Al Reem Island mortgages remain enforceable after their transfer to the ADGM Register. The migration of title and security interests into the ADGM framework does not invalidate or diminish rights validly created under the former mainland Abu Dhabi regime.
• Second, where the ADGM framework presupposes a right that is not expressly stated in the mortgage instrument, the Court may imply that right from the legal regime governing the transaction when the mortgage was created. In this case, the Court implied a right to seek foreclosure because that remedy existed under the applicable Abu Dhabi law in 2022 and formed part of the legal background against which the parties contracted.
• Third, section 72(3) establishes mandatory procedural gateways to enforcement. Whether the mortgagee seeks foreclosure or sale, enforcement of a migrated mortgage requires compliance with the statutory prerequisites, including a court order under section 72(3)(b) and a properly served 30-day remedy notice under section 72(3)(a).
• Fourth, the mortgagor’s equity of redemption occupies a central role in the Court’s exercise of discretion under sections 72 and 78. By virtue of section 68(2) and the Application of English Law Regulations 2015, English equitable principles continue to inform the Court’s approach to mortgage enforcement within the ADGM regime.
• Fifth, where the existence of surplus value in the secured property cannot be excluded, the Court may prefer a judicial sale to foreclosure in order to preserve the mortgagor’s equitable interest in that surplus. The judgment suggests that deference to a mortgagee’s preference for foreclosure is most likely where there is real uncertainty as to whether a sale would generate sufficient proceeds to satisfy the secured debt.

Wider significance for Al Reem Island and ADGM mortgage lending

The significance of the judgment extends well beyond the dispute between the parties. With a substantial number of Al Reem Island mortgages having migrated from the DMT Register to the ADGM Register on 1 January 2025, the decision provides the first detailed judicial guidance on how those security interests are to be enforced within the ADGM real-property framework. In doing so, it gives lenders a clear enforcement pathway while simultaneously defining the limits of the remedies available to them.

Most notably, the Court makes clear that foreclosure is not a default mechanism by which a mortgagee may appropriate a borrower’s equity. Where the value of the secured property comfortably exceeds the outstanding debt, the Court is likely to favour a judicial sale over foreclosure in order to preserve any surplus for the mortgagor. The judgment therefore reinforces the centrality of the mortgagor’s equity of redemption within the ADGM mortgage regime and confirms that equitable principles continue to play an important role in the Court’s exercise of discretion.

For lenders, the practical lessons are equally clear. Mortgagees seeking foreclosure should be prepared to place current and reliable valuation evidence before the Court, particularly where the existence of surplus equity is disputed. They should also ensure that statutory notices are served through documented and provable means and take account of the requirement for a court order under section 72(3)(b) when enforcing legacy Al Reem Island mortgages that have migrated to the ADGM Register.

For borrowers, the decision confirms that the transition to the ADGM framework has not diluted traditional equitable protections. The equity of redemption survives migration to the ADGM Register and remains a central consideration in the Court’s assessment of enforcement remedies. The judgment thus provides reassurance that the move from the mainland regime to the ADGM system was intended to facilitate continuity of rights, not to curtail existing protections.

More broadly, the decision represents another important step in the development of the ADGM’s emerging real-property jurisprudence for Al Reem Island. Read alongside Federal Properties Ltd v Ibrahim & Ors [2025] ADGMCFI 0013, [AB1] [BJ2] which addressed issues relating to indefeasibility of title, the present judgment begins to establish a coherent body of authority governing the operation of the ADGM real estate regime following the island’s transition from the mainland registration system. Together, these decisions provide increasing certainty to lenders, property owners and investors navigating the post-transition landscape.

 ATB Legal’s guide to the transition of Al Reem Island real estate to the ADGM sets out the register migration in detail.

Where the case turned

With the debt likely to be recovered in full and no current valuation before the Court, the pivotal point was as much evidential as doctrinal. Because a surplus on sale could not be excluded, the primacy of the equity of redemption, viewed against Sir Michael Kerr’s observation in Palk that substantial weight is ordinarily accorded to a mortgagee’s choice of remedy where there is real doubt that the debt will be repaid in full, tipped the discretion towards sale. The other decisive development, and the one of most enduring significance for legacy Al Reem mortgages, came earlier: in the absence of an express foreclosure clause, the Court first had to imply a right to foreclose by reference to the mainland law in force when the Mortgage was executed and the Marks & Spencer approach to implied terms.

Authorities established by the decision

This judgment provides authority for the propositions that:

(1)  A mortgage registered over Al Reem Island property before 1 January 2025 may be enforced under the ADGM Real Property Regulations 2024 notwithstanding that it was created under the former Abu Dhabi regime (paras 25–26, 31, 37 and 65(a)).

(2)  A right available under the former Abu Dhabi Mortgage Law – here, the right to apply for foreclosure – may be implied into the mortgage where the parties relied on the general law rather than an express term, so that the migrated security operates consistently with the ADGM framework; the implication is governed by the Marks & Spencer test (paras 35–37).

(3)  Compliance with section 72(3) is a mandatory precondition to enforcement of legacy Al Reem mortgages: the mortgagee must obtain a court order under section 72(3)(b) and serve a 30-day remedy notice under section 72(3)(a), whether the remedy sought is sale or foreclosure (paras 38–44).

(4)  The equity of redemption occupies a central place in the exercise of judicial discretion under sections 72 and 78: the starting point is the primacy that the law gives to the mortgagor’s right to redeem (paras 50–55).

(5)  Foreclosure is not the default enforcement remedy and may be refused where a surplus on sale cannot be excluded – the Court acting to avoid the possibility, “whether likely or remote”, that the mortgagor’s right to a surplus is lost; respect for the mortgagee’s choice of remedy arises primarily where there is real doubt that the debt will be repaid in full (paras 61–64).

(6)  English equitable principles apply in the ADGM through sections 1(1) and 3(1) of the Application of English Law Regulations 2015 and play an important role in interpreting ADGM real property legislation; where the Regulations expressly adopt an equitable concept, as section 68(2) does, it may be applied without modification (paras 54–55).

Paragraph references are to the sealed judgment of 1 May 2025.

Why it matters (at a glance)

• This appears to be the first reported ADGM decision on enforcing a legacy Al Reem mortgage migrated to the ADGM Register – read it as a transitional-law roadmap, not only as a foreclosure case.
• For mortgages registered over Al Reem Island property before 1 January 2025, a court order under section 72(3)(b) is required before any enforcement step.
• A 30-day remedy notice (section 72(3)(a)) is a hard precondition – and service by SMS to a deactivated number is not effective.
• Foreclosure (section 78) is discretionary and disfavoured where a surplus may exist; an order for sale (section 72(1)(a)) with surplus accounting is the likely outcome where the debt will be recovered.
• The equity of redemption (section 68(2)) cannot be waived or clogged, and equity prevails in the ADGM under sections 1(1) and 3(1) of the Application of English Law Regulations 2015; it is the starting point of the Court’s discretion on remedy.
• A right to foreclose can be implied into a mortgage executed before the 2024 regime where the then-applicable law supplied that remedy – legacy mortgages are not defective merely because they were drafted under a different legal regime.
• Lenders pressing for foreclosure should put current valuation evidence before the Court.

Frequently asked questions

Are mortgages registered over Al Reem Island before 1 January 2025 still enforceable in the ADGM?

Yes. In Commercial Bank of Dubai v Alyazji the Court enforced, under the ADGM Real Property Regulations 2024, a mortgage made under mainland Abu Dhabi law in 2022 and later migrated to the ADGM Register. Although the instrument lacked the express foreclosure right that the ADGM definition of “mortgage” presupposes, the Court implied one, because the Abu Dhabi Mortgage Law in force when the mortgage was made supplied that remedy. Enforcement must still follow the ADGM procedure in section 72(3): a court order and a 30-day remedy notice.

Can a bank foreclose on an Al Reem Island property under the ADGM Real Property Regulations 2024?

In principle yes – section 78 lets the Court, on a mortgagee’s application, make a foreclosure order. But it is discretionary: because foreclosure wipes out the mortgagor’s equity of redemption and lets the mortgagee keep any surplus, the Court will not order it where the borrower would possibly lose a surplus.

When will the ADGM Court order sale instead of foreclosure?

The ADGM Court is more likely to order sale instead of foreclosure where the debt is likely to be repaid in full and the mortgagor’s right to receive a surplus on sale cannot be excluded. The starting point is the equity of redemption; a mortgagee’s preference for foreclosure weighs most where there is real doubt the debt will be recovered.

Does a mortgagee need a court order to enforce a mortgage registered over Al Reem Island before 1 January 2025?

Yes. Section 72(3)(b) requires such a mortgagee to apply to the ADGM Court for the right to enforce and to obtain an order before exercising any section 72(1) power – and section 72(1)(e) extends that requirement to foreclosure.

What notice must a mortgagee give before enforcing under section 72 of the ADGM Real Property Regulations 2024?

Before enforcing under section 72 of the ADGM Real Property Regulations 2024, a mortgagee must give a notice giving the mortgagor 30 calendar days to remedy the default (section 72(3)(a)), served on the mortgagor, any guarantor or surety, and any other registered mortgagee or chargee (section 72(4)). If the default is remedied in time, the power may not be exercised for it. Service must be by a means that can be shown to be effective.

What is the equity of redemption, and can it be waived in the ADGM?

The equity of redemption is the mortgagor’s equitable right to redeem the mortgaged property by satisfying the secured debt and applicable obligations. Section 68(2) of the ADGM Real Property Regulations 2024 protects that right against contractual waiver or improper restrictions. Where the property is sold in enforcement, the mortgagor may also be entitled to any surplus remaining after the secured obligations and applicable costs have been discharged.

Which law governs a mortgage over an Al Reem Island property after 1 January 2025?

The ADGM Real Property Regulations 2024. Al Reem Island entered ADGM jurisdiction under Cabinet Resolution No. 41 of 2023 (from 24 April 2023); mainland Abu Dhabi law applied until 31 December 2024, and from 1 January 2025 the Regulations apply to property within the ADGM, with interests moving onto the ADGM Register subject to the transitional provisions in Part 23.

About this note

Written by Asha Treesa Bejoy, ATB Legal. ATB Legal acted for the Commercial Bank of Dubai (PSC) in these proceedings. This note is general information about a reported, public judgment; it is not legal advice and does not create a lawyer–client relationship. ADGM rules and case law develop over time and your specific circumstances may require specific advice. The official sealed judgment by the ADGM Courts is published here.

Part of ATB Legal’s Dispute Resolution practice.