Claim No: CFI 012/2014

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai

IN THE COURT OF FIRST INSTANCE

BEFORE H.E. JUSTICE ALI AL MADHANI

BETWEEN

PIERRE-ERIC DANIEL BERNARD LYS 

                                                                                                                            Claimant

and

ELESCO LIMITED

Defendant

Hearing:                        8-11 June 2015

Counsel:                       Bushra Ahmed (KBH Kaanuun) for the Claimant.

Zeeshan Dhar (Al Tamimi & Co) for the Defendant.

Closing Submissions:    15 July 2015, 20 July 2015, 30 July 2015, 2 August 2016

Judgment:                    14 July 2016

JUDGMENT OF H.E. JUSTICE ALI AL MADHANI

Summary of Judgment

 This summary is not part of the Judgment and should not be cited as such 

JUDGMENT

UPON hearing the Claimant and the Defendant

AND UPON reading the submissions and evidence filed and recorded on the Court file

IT IS HEREBY ORDERED THAT:

With regard to The Claimant’s Claim:

It is found that the Claimant was terminated without cause and accordingly, is awarded the following:

1.EUR 3,270.85 for unpaid salary from 1 February 2014 to 11 February 2014, inclusively, at the daily rate of EUR 297.35;

2. EUR 108,535 for the unpaid bonus for 2013;

3. EUR 48,468.05 for end of service gratuity;

4. EUR 1,189.40 in lieu of 4 days’ notice, from 12 to 15 February 2015, at the daily rate of EUR 297.35;

5. AED 6,562.50 as reimbursement for residential rental accommodation for 10 days from 5 to 15 February 2014, at the daily rate of AED 656.25;

6. Reimbursement for business expenses up to the date of 11 Feb 2014, excluding all sums previously paid, related to cash withdrawal, the Claimant’s wife’s air fare and the company car. The value is to be agreed between the parties accordingly, failing which, the Court shall determine them in a detailed assessment;

7. USD 408 as reimbursement for petty cash amounts;

8. EUR 8,920.50 in lieu of vacation leave;

9. USD 3,000 as travel allowance for 2014;

10. A penalty for the Defendant’s failure to pay wages and other amounts owing to the Claimant at the required time, to be calculated at the rate of the Claimant’s daily wage, EUR 297.35, for each day that the Defendant is in arrears;

11. Interest on the above-mentioned sums, accruing at an annual rate of 1%.

With regard to the Defendant’s Counterclaim:

12. The Counterclaim for overpaid vacation and expenses is dismissed in full.

With regard to costs:

13. The Defendant shall pay the Claimants costs, to be assessed by the Registrar if not agreed.

Issued by:

Mark Beer

Registrar

Date of issue: 14 July 2016

At: 4pm

REASONING

Parties

1.The Claimant, Pierre-Eric Daniel Bernard Lys, is a French national residing in Dubai and the former Chief Financial Officer of Elseco Limited, the Defendant.

2. The Defendant, Elseco Limited, is a company engaged in insurance intermediation and management, incorporated in the DIFC.

The Claim

3. The Claimant and Mr Laurent Lemaire, the CEO of the Defendant, founded the Defendant Company in 2007. The Claimant alleges that on or around 7 May 2007, the Claimant and Defendant entered into an employment contract (the “Contract”) and the Claimant thereafter appointed Chief Financial Officer (“CFO”) of the Defendant as well as a Director of the Board. The Claimant was also employed as the Chairman of the Board on 1 June 2007.

4. In January 2009 the Claimant and Mr Lemaire jointly purchased the entire shareholding of the Defendant. On 13 June 2011 the Claimant, by the terms of a Sale and Cooperation Agreement (“SCA”) agreed to sell his 50% shareholding to Mr Lemaire. The purchase price was calculated by reference to the Retained Earnings (as defined), for each of the four accounting years from 2010 to 2013, inclusively.

5. Pursuant to Clause 8.2 of the SCA, the Claimant in his capacity as Director and Chairman retained a right to veto any decision made by the CEO which may negatively impact the execution of the SCA.

6. It is the Claimant’s case that his employment as CFO was terminated without good cause or notice on 11 February 2014. By virtue of Article 59(2) of the DIFC Employment Law No. 4 of 2005, as amended; the Claimant contends, therefore, that his employment ended 90 days later.

7. The termination was communicated via email on 11 February 2014 and confirmed by way of letter dated 12 February 2014. On 17 April 2014 a subsequent letter confirming the reasons for termination was sent to the Claimant.

8. The Claimant asserts that the reasons given by the Defendant for the termination of the Claimant’s employment do not constitute ‘cause’ as defined in Article 59(A) of the DIFC Employment Law and that, therefore, he should be entitled to the following remedies:

(a) EUR 3,270.85 for unpaid salary from 1 February 2014 to 11 February 2014, inclusively;

(b) EUR 26,761.50 in lieu of 90 days’ notice;

(c) EUR 48,468.05 for end of service gratuity;

(d) EUR 8,920.50 in lieu of vacation leave;

(e) USD 40,556 as reimbursement for business expenses detailed in the spreadsheet submitted by the Claimant to the Defendant on or around 16 January 2013;

(f) USD 29,183 as reimbursement for business expenses detailed in the spreadsheet submitted by the Claimant to the Defendant on or around 30 December 2013;

(g) USD 4,063 as reimbursement for business expenses incurred since 1 January 2014;

(h) USD 408 as reimbursement for petty cash amounts;

(i) The value of his accrued pension rights in a sum to be determined or alternatively EUR 29,770 as reimbursement for his pension contributions;

(j) AED 2,860 for unpaid insurance premiums;

(k) EUR 35,975 as reimbursement for school fees paid from 2011 – 2014, inclusively;

(l) EUR 6,596 as travel allowance for 2011 – 2014, inclusively;

(m) AED 236,250 as reimbursement for residential rental accommodation from 4 April 2014 – 12 May 2014;

(n) EUR 108,535 for the unpaid bonus for the year 2013;

(o) An amount to be determined as a penalty for the Defendant’s failure to pay wages or any other amount owing to the Claimant at the required time;

(p) Interest at an annual rate of 8% on the sums claimed above, accruing from the date on which the Claimant became entitled to such sums;

(q) Costs, including legal costs, up to the date of service of the Claim Form of USD 32,000, plus all legal costs incurred in these proceedings; and

(r) Such further relief as the Court may deem fit and proper in the circumstances.

The Defence and Counterclaim

9.The Defendant denies entering into any contract of employment with the Claimant other than the SCA.

10. The Defendant submits that in addition to other reasons, the Claimant was dismissed as he attempted to inflate the 2013 revenue figures to increase the sums payable under the terms of the SCA.

11. The accounting methodology for calculating the Retained Earnings figure was to be the same as the method applied in respect of the 2010 and following years’ financial statements. The Defendant asserts that Mr Lemaire expressed concerns to the Claimant regarding the potential conflict of interest that the Claimant would face in preparing the 2013 accounts due to his vested financial interest under the SCA and asked the Claimant for complete transparency in finalising the 2013 accounts.

12. In January 2013 the Claimant supervised the Defendant’s accounts team whilst they prepared the 2013 accounts for audit by the Defendant’s appointed auditors, PricewaterhouseCoopers (“PwC”). The Defendant asserts that the Claimant had been holding meetings with PwC in the absence of Mr Lemaire and the Defendant’s accounts team and that the Claimant had sought to increase the 2013 Retained Earnings figure by USD 5.2 million and had forwarded the revised calculations and inflated revenue figure to PwC directly, without consulting Mr Lemaire.

13. The Defendant submits, therefore, that the Claimant caused the accounts to be prepared applying a method which is inconsistent with that used for previous accounts and in breach of the SCA. The Claimant is accused of causing the accounts to be prepared in a manner which accelerated the accounting of 2014 revenues into the financial year of 2013, resulting in a non-compliant inflation of 2013 Retained Earnings for his own personal benefit.

14. In a meeting held on 11 February 2014 between the Claimant, Mr Lemaire, the Defendant, the Defendant’s accounts team and PwC, the Claimant denied manipulating the 2013 accounts and was asked by Mr Lemaire to leave the meeting. Thereafter, the Claimant was accused of leaving the premises with valuable property and data belonging to the Defendant as well as soliciting business from the Defendant’s customers.

15. In light of the above, the Defendant submits that the Claimant was in breach of his duties as CFO, Director and employee of the Defendant and, therefore, his employment was terminated with cause and with immediate effect in accordance with Article 59(A) of DIFC Law No. 4 of 2005, as amended. Accordingly, the Defendant contends that notice or payment in lieu of notice and end of service gratuity is not due to the Claimant.

16. The Defendant admits liability with respect to the Claimant’s unpaid salary from 1 February 2014 to 11 February 2014 and in respect of petty cash expenses but only accepts it is liable for some of the business expenses claimed. The Defendant also accepts that the Claimant is entitled to a bonus for the calendar year of 2013 but states that no specific date for payment is provided for under the SCA.

17. The Defendant denies that any other amounts are owing to the Claimant and counterclaims the following (the “Counterclaim”):

(a) EUR 15,462.20 for overpaid vacation;

(b) USD 9,216.86 for overpaid expenses;

(c) Interest at an annual rate of 8% on the sums claimed above, accruing from the date on which the overpayments were made to the Claimant;

(d) Costs, including legal costs, up to the date of service of the Defence and Counterclaim plus all legal costs incurred in these proceedings; and

(e) Such further relief as the Court may deem fit and proper in the circumstances.

History of Proceedings

18. On 26 November 2014 Justice Sir David Steel dismissed the Defendant’s application to strike out some of the heads of claim. It was also determined that jurisdiction was not in issue and that in any event, by virtue of Rule 12.4 of the Rules of the DIFC courts, an application disputing the court’s jurisdiction should have been made within 14 days of an acknowledgement of service being filed. No good grounds were put forward for extending this deadline and no such application was made.

19. Following a hearing on 5 May 2015, H.E. Justice Ali Al Madhani granted the Claimant permission to adduce expert evidence on the matter of accountancy and auditing in order to assist the Court in understanding whether the approach to revenue recognition proposed by the Claimant inflated revenue in the draft of 2013 accounts and whether that approach was consistent with the previous accounting years and international accounting standards.

Discussion

20. The central issue in this case is that of unfair dismissal. The Claimant’s case is that his summary termination was unwarranted and unreasonable in the circumstances. The Defendant submits that the Claimant was properly dismissed as he attempted to inflate the 2013 revenue figures to increase the sums payable under the terms of the SCA. The Claimant denies the Defendant’s accusation and argues that he was merely alerting PwC to the amount of “deferred income” which had not yet been recognised as revenue in the 2013 Draft Financials.

21. Following consideration of whether the Claimant’s termination constituted unfair dismissal, I will address each element of the claim and counterclaim in turn.

The Termination

22. In this part of the Judgment I shall consider whether the Claimant’s termination constituted unfair dismissal by addressing each reason given by the Defendant for the termination.

23. The Defendant’s pleaded allegations of misconduct by the Claimant, warranting termination are;

(a) Attempts to inflate the accounts by USD 5.2 million;

(b) Taking company property;

(c) Contacting the Defendant’s customers.

24. The Defendant further relies on the following minor reasons for termination;

(a) Refusing to leave the room when he was asked to do so during the meeting with PwC on 11th February 2014;

(b) Self-proclaiming to staff that he had been fired when he had not;

(c) Refusing to allow Mr Lemaire to see the contents of a box of items that he took from the Defendant, and;

(d) Informing Mr Lemaire that he would send an email to all of the Defendant’s clients regarding his exit from the company.

25. The purpose of my examination of the above mentioned reasons given by the Defendant shall be to determine whether any or all of them would justify the termination in accordance with the meaning of Article 59(A) of the DIFC Employment Law.

Attempt to inflate the companies’ accounts

26. First, the Court shall examine the reason for termination put forth by the Defendant that the Claimant attempted to inflate the company’s accounts by USD 5.2 million.

27. The Defendant’s case is that during the audit process and without the knowledge of and prior consultation with management, the Claimant in his capacity as Director, CFO and Chairman, bound by a duty of good faith and fair dealing, sent emails to PwC seeking to increase the 2013 revenue figure by approximately USD 5.2 million; this increase reflected the recognition of revenue in respect of future launches for which the balance of the premium had not yet been received and therefore, would not ordinarily increase the monies payable to him under the terms of the SCA.

28. The Defendant states that the Claimant, as former CFO of the Defendant, knows full well that within the insurance market, an insurance premium is attached to the risk involved and only proportional revenue is recorded, on a cash basis, once the premium is received.

29. The Defendant asserts that the Claimant, based on his conduct, was proposing a fundamental change to the way in which revenue was recognised, against the accounting standards and methods used in previous years (2010-2013). As such, and bearing in mind the need for absolute transparency and the potential for a conflict of interest to arise in respect of the Claimant’s financial interests under the SCA, a proposal was put forward, requiring the management of the Defendant to be consulted before any calculations and figures were communicated to PwC.

30. Furthermore, the Defendant made the following submissions in relation to the Claimant’s conduct surrounding the Defendant’s accounts;

“(a) The Claimant’s actions (by failing to consult Mr Lemaire prior to proposing a change in revenue recognition methodology) lacked transparency;

(b) The Claimant’s actions created at the very least the potential if not actual conflict of interest between his role as CFO and his personal financial interest under the SCA;

(c) The Claimant’s explanation that his approach to revenue recognition was consistent with IFRS was untrue and/or did not justify a proposed revenue figure of at least $4million USD which, on any view, should not have been recognised;

(d) he Claimant’s conduct was improper and wholly inconsistent with the relationship of trust and confidence between him and his employer such that he acted in bad faith and/or breach of the implied term of mutual trust and confidence.”

31. The Claimant denies the Defendant’s allegations, arguing that he was dismissed on 11 February 2014 after a meeting with Mr Lemaire and PwC. The dismissal was confirmed by email dated 12 February 2014 but the Claimant’s position is that the Defendant did not follow any of the disciplinary procedures set out in its Staff Handbook and that the reasons for the Claimant’s dismissal were only provided much later by letter dated 17 April 2014. That letter of dismissal sets out that the Claimant was dismissed for dishonestly and fraudulently seeking to falsely inflate the 2013 revenue figures for personal gain.

32. The Claimant contends that summary dismissal based on the account inflation issue was unwarranted and unreasonable in the circumstances for a number of reasons, which are outlined in the coming paragraphs.

33. Firstly, the Claimant’s submission is that he did not at any stage attempt to have any additional revenues included in the 2013 Draft Financials, which had already been submitted by the Defendant’s Account’s Officer to PwC on 26 January 2014. The Claimant states that he had merely alerted PwC to the amount of “deferred income” which had as yet not been recognised as revenue in the 2013 Draft Financials, and that his email of 28 January 2014 merely highlighted the impact that unrecognised deferred revenue would have on the pattern of the Defendant’s annual revenues.

34. Secondly, contrary to the assertions of the Defendant, the Claimant alleges that the emails relied on do not show that he encouraged or even suggested that the revenues ought to be recognised in the 2013 Accounts. The Claimant’s position is that he was merely asking PwC to opine and advise on whether or not, in light of the criteria for revenue recognition in the International Financial Reporting Standards, the unrecorded/deferred revenues or any part thereof should be included in the 2013 Accounts. The Claimant was not in any way attempting to conceal any facts from the auditors or the Accounts Team.

35. Thirdly, the Claimant relies on his expert’s report which he argues confirms that there was nothing unusual or out of the ordinary about the Claimant’s communications with PwC as part of the audit process and that such communications are to be expected between auditors and the CFO of a company.

36. Lastly, the Claimant contends that there is clearly a divergence of opinion between the Claimant’s expert and the Defendant’s expert regarding whether the recognition of deferred revenue for launches should be postponed or whether those due to take place in 2014 ought to be included in the 2013 Accounts. The fact that that approach to revenue recognition is not a matter of debate between the experts supports, in the Claimant’s view, the legitimacy of the Claimant’s conduct in seeking guidance from PwC on revenue recognition.

37. It is therefore concluded by the Claimant that, in the circumstances, there was no act of gross misconduct and his termination was unreasonable.

38. The Claimant further argues that certain revenues were recognised even though they were due or received in the following accounting year. This is demonstrated by the Double Total Loss contracts for Yahsat 1A and 1B which accounted for more than 15% of the total basic commission in 2010, even though most of the commission was received after 2010.

39. The Claimant refers to emails sent by Mr Lemaire to PwC on 13 February 2013 to evidence that he was seeking guidance from PwC about whether or not the payment, which had been reimbursed in relation to the Amazonas contracts, ought to be recognised as revenue for 2013.

40. The Claimant also advances an argument that in the letter of dismissal dated 17 April 2014, the Defendant confirmed the reason for terminating the Claimant’s employment as being his alleged dishonest attempt to defraud the Company, but there has been a complete and fundamental change to the reasoning for dismissing the Claimant. The Claimant believes that this fact supports his contention that Mr Lemaire was trying to dismiss him in bad faith but is now arguing that the principal reason for the dismissal was his alleged failure to consult with management prior to corresponding with PwC, which in the Claimant’s view is not a legitimate ground or dismissal.

41. Finally, the Claimant asserts that the issue before the Court is whether or not the Claimant’s conduct in corresponding with the auditors, with a view to seeking their opinion, warranted his dismissal. He also asserts that it is not necessary for the Court to opine or reach a view on the correct approach to revenue recognition.

Finding

42. Before determining the issue of the inflation of the revenue figure, It is important to bear in mind that in its Defence and Counterclaim and the rest of its submissions before the Court, the Defendant relies on the following factual allegations in support of its principal reason for dismissal:

(a) Sending revised calculations and an “Inflated Revenue Figure” to PwC without consulting Mr Lemaire;

(b) Following completion of the preliminary audit by PwC, failing to draw to the attention of Mr Lemaire and the Elseco Account Team an email from PwC which included the “Inflated Revenue Figure”;

(c) Causing the 2013 accounts to be prepared in a manner which accelerated the accounting of 2014 revenues into the financial year of 2013, resulting in a non-compliant inflation of 2013 accounts; and

(d) Preparing accounts which did not show a true and fair view of the profit and loss of the Defendant.

43. The first two points, (a) and (b), relate to the fact that the Claimant’s actions were taken without consulting with the Management or Mr Lemaire which, in my view, is central to the Defendant’s arguments. Points (c) and (d), relate to the argument that the Claimant’s conduct resulted in the account inflation, which I deem to be less crucial.

44. In my opinion the Claimant’s conduct has never gone beyond being transparent suggestions to the Defendant, accountants, auditors and management to recognise revenues which have not yet been recognised. This is in circumstances where the majority of work has been completed in a project, with very little or no additional work being needed before its launch; which has led to the non-recognition of revenues which would have otherwise been recognised were it not for the delays in a considerable number of launches in a year.

45. I reach my conclusion based on the following evidence;

(a) The email sent on 27 January 2014 by the Claimant to his Accounts Officer Rolando Caypuno, copying in Mr Lemaire, Leatitia Tollon (Mr Lemaire’s wife) and Anne Marie Chong, stating that the “recognition of revenues for launches postponed from 2013 to 2014” relating to the Audit were “Items Under Review”. This demonstrated that the Claimant was proposing to discuss the revenues of the postponed launches.

(b) The spreadsheet of revenues attached to the email dated 28 January 2014, in which the Claimant provided the data requested and highlighted what he believed to be the effect on revenues if revenue from postponed launches remained unrecognised, without actually adding those ‘postponed’ revenues to the equation or final revenues figure.

(c) On 29 January 2014 the Claimant provided PwC (copying the Defendant’s accountants) with a recalculated figure in respect of unrecognised revenue relating to commissions from planned launches amounting to USD 5.2 million. The email reads:

“Preeti, Anjana,

I refer to my email of yesterday related to the deferred revenues which have not yet been shown in any of our accounts and for which you are doing a research on IFRS rules. I have recalculated amounts. As discussed, the unrecorded revenues come mostly from commissions committed in signed contracts for which the launch is to occur after 31st December 2013.”

This demonstrated to me that until the date of this email, revenues hadn’t found their way into the Defendant’s accounts.

(d) On 2 February 2013, PwC sent the Claimant, Mr Lemaire, his wife, Anne Marie Chong and Roland Caypuno an email entitled “Status Elseco as per first phase of Audit”. The email reads:

“FYI. Kindly update the list if I have missed something.

Thank you for all your help and support. Hopefully will see you soon for the second phase.”

The attachment to the email contained a list of topics intended to be the subject of “Further Discussions” during the “Second Phase” of the audit. One of the topics for further discussion included the “Proportional Revenue Recognition”. The relevant section of the attachment reads as follows:

“Further Discussions

Premium Tax Adjustment….

Proportional Revenue Recognition

5.2 m of Revenue which has not been recognized coz it has not hit 95% mark yet, however work is completed and no additional/or very less work is needed before the launch. This is due to delays in a considerable number of launches in the year.”

This evidences that the matter does not go beyond discussion, which Mr Lemaire confirms during his testimony before this Court;

“Mr Dhar: That is a topic for further discussion, is it not?

Mr Lemaire: Yes. So that is a further discussion to recognise it.

Mr Dhar: Or not recognise it, as the case may be?

Mr Lemaire: Yes, you’re right. So for recognising it or not recognising it.”

“Mr Dhar: Okay. Even if Mr Lys wanted to have it that way, do you accept that he, even on your case – and this is not accepted by us – he had put it up there for further discussion? He had put it up there as an open item.

Mr Lemaire: Correct.

Mr Dhar: You accept that he did not at any stage force the auditors to include it? He could not have, could he?

Mr Lemaire: No, he hasn’t forced them, no.

HE Justice Al Madhani: Can he force them?

Mr Lemaire: No, I don’t think he could…”

(e) During his cross examination, Mr Lemaire confirmed in relation to the Claimant’s email to PwC, that there was no instruction to PwC to include unrecorded revenues in 2013 and that the email was no more than an invitation to PwC to opine on whether or not recognising deferred revenues would be compliant with the IFRS. Further evidencing that the Claimant’s actions did not result in any actual inflation or harm to the Defendant’s accounts. More importantly, Mr Lemaire conceded that there was nothing wrong with PwC being asked to research how IFRS would apply to revenues due from 2014:

“Mr Dhar: They are a big auditor. I think we can agree on that. But they are being instructed to research the question of whether or not or how the IFRS would apply to these unrecognised revenues.

Mr Lemaire: Correct. Correct.

Mr Dhar: What is wrong with that?

Mr Lemaire: Nothing.”

Mr Dhar: Right. So, Mr. Lys, as CFO, if he is not sure about something, he is entitled to defer to the good sense of the auditors, is he not?

Mr Lemaire: I think if he’s not sure of something, he should speak to management and to the auditor, yes.

Mr Dhar: Well is it your complaint that he did not speak to you and tell you that he was going to invite PwC to do some research?

Mr Lemaire: No, No. He can ask PwC to do some research, but I think clearly it was important point, and I think it’s important to mention that to the management, I think.

Mr Dhar: So that is his crime, he did not mention that he wanted PwC to do some research on IFRS? That is his crime, is it?

Mr Lemaire: The fact that he is asking a question is not a crime. I think it’s a good thing that he does it. So I’m very happy for anyone in my company to ask questions, especially during audits.

Mr Dhar: So what is the crime in this email?

Mr Lemaire: Now, when you got questions which are directed and which are the wrong title for purpose? That’s the problem.

HE Justice Al Madhani: But what are you saying? He is not allowed to deal with PwC directly and ask them for research or suggest anything?

Mr Lemaire: No, he’s allowed to do. No, I think he’s obviously allowed to speak to PwC and ask for research, so there’s no problem with that at all.

HE Justice Al Madhani: So he is allowed to do anything and then it is for you to approve it or not at a later stage, is that right?

Mr Lemaire: Correct. Correct.”

(f) Furthermore, the fact that the Claimant’s actions did not constitute serious misconduct and were done with the knowledge of the company’s management is strongly supported by the evidence of Mr. Roland Caypuno, who during his evidence stated that:

“Mr Dhār: You say your reason for doing nothing about it is because you are too busy.

Mr Caypuno: Yes, and one thing more, since it was during the audit and addressed to the people you see, that I left the case with the people you see who are going to resolve the issue because I know the process of the audit. The auditor would have an issue on this one, they had to come to me or I go to the management to discuss the issue. So I think I don’t see any issue on this one.

HE Justice Al Madhani: Let me ask you this question. So you were thinking this would never go through. Is that what you were thinking? This proposal would never go through. It could be stopped somewhere.

Mr Caypuno: Yes.”

(g) The expert appointed by the Claimant concluded that the email exchanges between the Claimant and PwC were “Standard in the context of an Audit” (paragraph 60 of the report). The Claimant contends that this conclusion remains unchallenged by any other expert evidence. It is submitted that in any event, such a conclusion is incontestable as the correspondence speaks for itself.

(h) The Claimant’s willingness to attend the meeting to discuss issues surrounding the company’s accounts and Deferred Revenues with the auditors and the management including Mr. Lemaire, further demonstrates that the Claimant was acting in transparent way before the final steps of the accounting process.

46. I am satisfied that the Claimant’s actions amount to no more than an enquiry to the auditors, accountants and management, which is permissible and did not result in any actual inflation in the company’s accounts and was, in any event, done in a transparent way in accordance with the company’s procedures.

47. It is also obvious from Mr Lemaire’s own evidence that he haphazardly concluded that the Claimant was acting fraudulently based primarily on an unjustified and arbitrary presumption of guilt. The relevant sections of his testimony are as follows:

“Mr. Lemaire: I think it’s the addition of many evidence.

Mr. Dhar: Which in particular?

Mr. Lemaire: I mean first of all, I think, if I may, a bit of context. Knowing someone for eight years and knowing their very well. Far, far better than you know your client, I take it, okay? So I knew when something happened, when you deal with someone and you are 2.5 metres from him, you know very, very well what’s his intention.

Mr. Dhar: So you presumed his intention, did you, on an arbitrary basis?

Mr. Lemaire: At that point. Yes.

Mr. Dhar: That is interesting.

Mr. Lemaire: Yes\

Mr. Dhar – –

Mr. Lemaire: That’s the beauty of a company…..They know you, you know them. Just by looking at it, you know? And I think the same thing with family. When you see your mum, all right, even if you are ten metres, she will tell you if you’re sick or not, okay? She doesn’t have to be there and ask you the question. She knows it.”

48. I accept the Defendant’s expert’s conclusion which made the observation that if the Claimant’s proposal was successful, it would go against the previous years’ accounting methods and inflate the Defendant’s revenues in the 2013 financial year. However, the way the Claimant posed his questions to the Company’s accountants, auditors and management did not reach the threshold of gross misconduct and the transparency in the Claimant’s approach suggests he acted in good faith.

Company property

49. The Defendant contends, in its second reason for termination, that the Claimant took a laptop from the company containing “all the information relevant to [his] case” with the express purpose of supporting his claim against his employer. It was submitted that the laptop contained confidential information such as customer details and information relating to the Defendant’s business, customers, finances and other affairs. Furthermore, that the confidential information has not been used by the Claimant for legitimate business purposes to assist the Defendant but for personal reasons, to support litigation against the Defendant.

50. The Defendant describes the Claimant’s conduct as wholly inconsistent with both the Claimant’s express and/or implied duty of good faith/fair dealing while he remained an employee, to act in the best interests of the Defendant and the implied term of mutual trust and confidence. Therefore, this misconduct is relied on as a ground to terminate the Claimant’s employment.

51. The Defendant submits that the Claimant’s email to Benjamin Davey on 8 May 2014 is an example of confidential information belonging to the Defendant being used for personal gain.

52. The Defendant relies on the following principle from the judgment of Mr Justice Jack in Bandeaux Advisers (UK) Ltd v Chadwick [2010] EWHC 3241 (QB) to support the proposition that an employee who retains confidential information for the purposes of pursuing a claim against their employer is nonetheless acting in breach of their duty of good faith and fair dealing:

“…I am doubtful if the possibility of litigation with an employer could ever justify an employee in transferring or copying specific confidential documents for his own retention, which might be relevant to such a dispute. If such a dispute arises, in the ordinary course the employee must rely on the court’s disclosure processes to provide the relevant documents: even if the employee is distrustful whether the employer will willingly meet its disclosure obligations, he must rely on the court to ensure that the employer does.”

53. On the other hand, the Claimant’s justification for retaining the laptop and data is that when he was leaving the premises of the Defendant, he had already been implicitly accused of attempting to defraud the company. Furthermore, on a previous occasion during the audit, Mr Lemaire had alleged that the Claimant had acted wrongly in relation to Insurance Premium Tax and had attempted to manipulate and/or force staff to act against their wishes. In addition, the Claimant submits he had been deliberately excluded from a meeting with PwC which would have had implications for the calculation of revenue and therefore, Retained Earnings figures. It is also submitted that Mr Lemaire had not at any stage sought to speak with the Claimant or afford him an opportunity to comment on his correspondence with PwC.

54. The Claimant added that there had been no investigation of misconduct whatsoever prior to the termination. During the audit period, hundreds of emails had passed between him, PwC, Mr Lemaire and the Accounts Team and Mr Lemaire had conducted himself in a manner which caused the Claimant not to trust him by this stage.

55. Furthermore, the Claimant contends that he was concerned by the capricious and irrational manner in which Mr Lemaire was making injudicious allegations concerning his role in the preparation of accounts in previous years. As a consequence, he was naturally concerned that any evidence which vindicated his actions and/or shed light on any dealings he had with members of the Accounts Team, Mr Lemaire and/or PwC were preserved.

56. The Claimant puts forward evidence to support the fact that he was genuinely concerned about the destruction of emails which supported and/or vindicated his conduct. An example is an email sent to the Claimant from Mr Lemaire on 11 February 2014, which reads:

“You have told me that you did not want to give me your computer based on the fact that you did not want elseco personnel to delete your emails. I understand your concern and told you that this was a reciprocal concern.”

57. As regards to the Bandeaux Case, the Claimant submits that Mr Justice Jack’s reasoning is of no relevance to these proceedings. The disclosure obligations imposed by Part 31 of the English Civil Procedure Rules (“CPR”) are far more demanding and expansive than those imposed by the Rules of the DIFC Courts (“RDC”). The CPR requires a party to disclose those documents that “adversely affects” its own case.

58. Therefore, in England and Wales there is no practical necessity for an employee to retain those confidential documents that would assist in a claim against their former employer as they can be safe in the knowledge that the disclosure obligations imposed by the CPR will ensure the disclosure of these documents in advance of trial. It is argued that the position is very different in the DIFC where RDC 28.15 only requires a party to produce those documents “on which it relies”.

59. It is also submitted that in the context of the DIFC, it is wholly legitimate for an employee to retain information (confidential or otherwise) that is to be used (or is potentially to be used) in a claim against their employer. If this were not correct, an employee would be unfairly hampered from adequately pursuing a claim against their employer. Given the imbalance of power between an employer and an employee, the prejudice caused by this would be all the more acute. While the RDC entitles an employee to make an application to the Court to compel an employer to produce relevant documents both prior to and during proceedings, this does not adequately redress the issue for the following reasons:

(a) Cost;

(b) Time;

(c) No guarantee of success in making the application;

(d) Imposes a burden than does not exist in England and Wales.

60. The primary rationale for imposing a duty of confidentiality on an employee is to prevent them from disclosing commercially sensitive information to third parties that would have the effect of damaging the employer’s commercial interests, therefore, retention of confidential information by an employee for the purposes of using it in a legal dispute clearly falls outside of this rationale and cannot constitute a breach of any duty relating to confidentiality.

61. With respect to arguments relating to the email sent to Benjamin Davey, the Claimant insist that the Defendant failed to provide any evidence to support the following facts;

(a) that this email came from an Elseco database;

(b) that Mr Davey was an existing client of Elseco;

(c) why the contact details of Mr Davey were confidential and/or the property of Elseco; or

(d) whether Mr Davey’s contact details were known to the Claimant through Elseco or Elseco related work.

62. It is my view that in normal circumstances, the taking of a company laptop with sensitive data on it would be very serious misconduct as it goes to the heart of an employment relationship and would typically warrant termination, as in the case of Bandeaux where Mr Justice Jack said:

“I am doubtful if the possibility of litigation with an employer could ever justify an employee in transferring or copying specific confidential documents for his own retention”

63. However, the wording of Article 59(A) of the Employment Law suggests that a test of reasonableness is to be used in any case to satisfy the question of whether or not the employee’s conduct warrants termination;

“59A Termination for cause

An employer or an employee may terminate an employee’s employment for cause in circumstances where the conduct of one party warrants termination and where a reasonable employer or employee would have terminated the employment.”

64. The reasonableness test would definitely require the Court to take into account all circumstances and factors surrounding the employee’s conduct and employer’s reaction at the time of the termination in order to answer the question of what a reasonable employer would do.

65. As mentioned above, the Claimant’s retention of company property (laptop) and data is serious and may ordinarily justify instant termination by his employer. However, after a careful analysis of the facts in this particular case, I am inclined to accept the Claimant’s submissions that his conduct was not so serious to warrant his immediate termination on the basis that the employer could no longer continue to work with the employee.

66. I rely on the following facts and circumstances to support my conclusion:

(a) The employment relationship in this case is not an ordinary one. The Claimant, apart from being CFO, Board Member and Co-Founder of the company, along with Mr Lemaire, had a special interest in the company’s final accounting year, in which he was to receive a percentage of the company’s profit as final payment against the sale of his share in the company to Mr Lemaire in accordance with the SCA.

(b) The retention of company property and data was at all material times a secondary reason relied on by the Defendant for termination, demonstrated in the evidence of Mr Lemaire himself, when answering the question put to him by the Claimant’s counsel regarding the weight he gave to reasons for termination, other than the attempt to inflate the company’s revenues; the transcript reads as follows:

“Mr Dhar: “Would you agree that that summarises at the time your principal reason for dismissing the Claimant?

Mr Lemaire: I think that reason we thought kind of overweighted the other one. So yes.”

(c) The mutually agreed date of departure of the Claimant from the Defendant is only 4 days after the termination. Had the Defendant not terminated his employment on the termination date (11 February 2014), the Claimant’s employment would have terminated on 15 Feb 2014.

(d) Following the meeting of 11 February 2014, Mr Lemaire had not at any stage sought to afford the Claimant with an opportunity to comment on his correspondence with PwC. The Claimant had been excluded from a meeting with PwC and in the absence of a proper investigation, I am inclined to find that the employer’s conduct was unreasonable, which might have genuinely led the Claimant to be concerned about the destruction of hundreds of emails which had passed between him, PwC, Mr Lemaire and the Accounts Team which supported and/or vindicated his conduct. This is confirmed by an email from Mr Lemaire to the Claimant at 16:30 on 11 February 2014, which reads:

“You have told me that you did not want to give me your computer based on the fact that you did not want elseco personnel to delete your emails. I understand your concern and told you that this was a reciprocal concern.”

67. For all of the above-mentioned reasons, I find that the Claimant’s conduct was not serious enough to go to the heart of the employment relationship on the basis that the employer could no longer continue to work with the employee for four more days (after which the Claimant was due to leave in any event). As a result, I dismiss the Defendant’s attempt to rely on such conduct as grounds for instantly terminating the employment of the Claimant.

Post termination conduct

68. In this part of the judgment I shall address the fresh allegations made by the Defendant on 20 July 2014 regarding the Claimant’s behaviour, which were not relied upon previously; either on 11 February or thereafter on 17 April during the termination:

(a) Solicitation;

(b) Working on UXCo/iCompanion

69. The Defendant sought to rely on an allegation not known of at the time of his dismissal. The Defendant refers to the decision in Boston Deep Sea Fishing v Ansell (1888) 39 Ch D 339, which provides that dismissal may be justified by reliance on facts not known to the employer at the time of the dismissal.

70. Firstly, in this context the Defendant contends that the Claimant sought to ‘breach his obligations as an employee, CFO and director’ by soliciting business from clients of the Defendant by advertising his products and services. The allegation is that the Defendant discovered emails sent from the Claimant on 20 January 2014, demonstrating that the Claimant had approached an existing client of the company, Es’hailSat, plainly offering his own consultancy in the field of space insurance. The Defendant considered the sending of the email to be equivalent to carrying on business similar to the business of Elseco which, therefore, required prior written agreement from Mr Lemaire before being sent; and as no written permission was obtained, this act amounted to a breach of Clause 10.2(a) of the SCA.

71. Secondly, the Defendant sought to rely on an allegation that the Claimant had devoted time during his normal working hours to his own business in breach of his obligations. The Defendant asserted that devoting any time during his normal working hours, when he is paid to work for the Defendant, on marketing and setting up his own business is a further act of misconduct warranting termination.

72. The Defendant submits that it had come to their attention that the Claimant had begun devoting time during his normal hours to set up and market his own business called UXCo/ iCompanion.

73. The Defendant refers to the email of 22 January 2014, sent from the Claimant to Mr Lemaire, and submits that the Claimant admitted the following:

“With respect to iCompanion, I agree that I might have occasionally received some phone calls or organised some meetings. As you know, I’ve actually recently requested your authorisation to do so”.

74. The Defendant then argues that by the time of the Claimant’s termination, iCompanion had grown from being the Claimant’s idea to being ready for launch.

75. Finally, the Defendant submits that the allegations against the Claimant in this connection are consistent with the wider narrative of:

(a) The Claimant’s willingness to use confidential information for his own personal purposes; and

(b) The Claimant’s apparent willingness to further his own personal interests above those of the Defendant in the run up to and after his agreed termination date.

76. The Claimant’s defence to the events discovered post termination is, according to Article 59A of the Employment Law, that the decision of the reasonable employer is to be assessed at the time the decision to dismiss is taken, and for the reasons relied upon at the time.

77. The DIFC Employment Law approach is to focus on the reasons and circumstances operating on the mind of the actual employer at the point of dismissal, and then to assess whether a hypothetically reasonable employer would have dismissed the employee and that the provision does not appear to enable an employer to terminate employment summarily, or at all, for reasons which it was not aware of at the point of termination.

78. For the Claimant, neither the DIFC Employment Law nor the Claimant’s contract of employment contain any provisions allowing termination to be justified by reference to conduct discovered after termination. Therefore, the argument is that the principle in Boston has no application in the DIFC. The Claimant relies on Ithmar Capital v 8 Investments Inc CFI/8/2007 to establish that the dicta does not allow for the open importation of new concepts that are not already codified in the applicable DIFC Laws. As Justice Sir Anthony Coleman stated:

“…in construing the applicable codified provisions of that law it is appropriate to add flesh to the concise bones of these legislative provisions by looking to the manner in which the Common Law courts of England and elsewhere have given effect to similar principles. Whereas the ruling principles are those laid down in the DIFC codes, the manner of application can properly be informed by reference to English law not as a default system but as an aid to construction and application”

79. The Claimant also argues that even if the Defendant has identified the conduct that it relies upon, which was discovered post termination, it has failed once again to articulate the express or implied term which has been breached by the said conduct.

80. The Claimant then argues that if the principle in Boston is applicable in the DIFC, the incidents referred to by the Defendant, working on UXCo/iCompanion, was very well known to the Defendant at the time of termination.

81. As for the Es’hailSat emails, the Claimant’s case is that there is no non-solicitation agreement clause in the Claimant’s contract of employment. Accordingly, the Defendant can only rely on an undisclosed implied term in order to advance this allegation. In the event that the Defendant is seeking to rely on a breach of Clause 10.2 of the SCA, the Claimant submits that this Court lacks jurisdiction to deal with Clauses 9.1 and 9.2 of the SCA, therefore, the Court ought to decline to determine whether there has been a breach of Clause 10.2 of the SCA.

82. Finally in regards of the Es’hailSat email, the Claimant submits that there is no solicitation contained in the wording of that email, instead the email was sent on the recommendation of Mr Lemaire so as to attempt to secure further work from Es’hailSat through the Claimant after his departure.

Does the Claimant’s conduct (work for UXCo/iCompanion) warrant termination?

83. In my view, the work carried out by the Claimant during his employment relationship with the Defendant for his personal business, UXCo/iCompanion, was well known to the Defendant and it was even accommodated by Mr Lemaire. My view is based on the Claimant’s evidence in such regards and the answers given by Mr. Lemaire during his cross examination:

“Mr Dhar:  He says in the third sentence, “It is now time for me to dedicate more time towards them”.  So you were aware that he was dedicating time towards iCompanion whilst employed at Elseco?

Mr Lemaire:  I was aware that he did set up iCompanion and was working on it while he was an employee of Elseco.  So, yeah, I knew that he did start he did some work on it, yeah.

Mr Dhar:  Can I suggest to you that Mr Lys was comfortable and confident, you would agree as a logical conclusion to draw, with having the meeting in the offices because you had no problem with him dealing with iCompanion matters during work time?

Mr Lemaire: As long as it was reasonable and as long as the, you know, the interests of Elseco wasn’t impaired, I think, yeah, I was fine. I was fairly flexible in trying to help Mr Lys to get his new life so, yeah, I was accommodating.”

84. I conclude that the work for UXCo/iCompanion was well known to the Defendant and particularly Mr Lemaire who accommodated it according to his evidence. Accordingly, I don’t consider this behaviour to justify the Claimant’s instant dismissal, nor is it capable of being relied upon post dismissal, as the Defendant seeks to do.

Does the Claimant’s conduct (Es’hailSat email) warrant termination?

85. In this regard, the wording of the email itself does not clearly suggest that the Claimant was soliciting the Defendant’s client:

“Although I do not intend to create any venture in the field of space risk or space insurance, some local space insurance expertise might be valuable to Es’hailSat at some point.  I would be delighted to provide this type of support to your venture on an ad hoc basis and the purpose of this message is to inform you of that personally.

I know you are currently conducting a tender for selecting your broker to help you on the risk management side, but I think you might be interested to get some independent view.”

86. Furthermore, the evidence of Mr Lemaire during his cross examination led me to believe there was no solicitation at all, or at the very least, to doubt what he tries to contend:

“Mr Dhar:  If it is right that Mr Lys was only going to provide assistance or advice on the selection of the broker, then he is not competing with you, is he?

Mr Lemaire:  I think, you know, you know, some local space insurance expertise may be valuable to Es’hailSat, so space insurance expertise, I mean, it’s not just selecting a broker.  It’s.

Mr Dhar:  No, no, my question to you was: if it was just I know

Mr Lemaire:  If it was just selection of a broker, yeah, I don’t I wouldn’t see it as competition. I would find it a bit strange that someone who has a non-compete clause, because that’s what we’re talking about, speaks to my clients and as such I would like to know, but at the end of the day I wouldn’t I wouldn’t see it as a competition.

Mr Dhar:  It is right, is it not, that Mr Lys never provided any advice on the selection of brokers or any other advice to Es’hailSat as far as you are aware after the termination of his employment?

Mr Lemaire:  As far as I’m aware, no, but I don’t know.”

87. In summary, with respect to the Claimant’s post termination conduct, the Defendant, for the above-mentioned reasons, has failed to satisfy this Court that the ‘solicitation’ or work done on UXCo/iCompanion could be relied upon to justify the termination of the Claimant’s employment.

Other reasons for termination

88. In addition to the reasons or causes for termination discussed above, the Defendant sought to rely on less serious causes than the alleged attempt to inflate financial accounts as a second tier of reasons; the retention of the laptop and companies’ data, in addition to solicitation and working on UXCo/iCompanion.

89. The Defendant submits that during the meeting of 11 February 2014, the Claimant committed the following acts, on which they rely to justify the Claimant’s termination;

(a) The Claimant was insubordinate when he refused to leave the first phase of the meeting with PwC;

(b) The Claimant’s statement to staff that he had been fired “I have been fired, can you believe it?”;

(c) Refusing to allow Mr Lemaire to see the contents of the box, and refusing to do so in front of other staff was insubordinate and suspicious given that the box evidently contained company property;

(d) Informing Mr Lemaire that he was going to send an email to the Defendant’s clients that would be out with the proposed draft email, contrary to the best interests of the Defendant and further undermining trust and confidence;

90. The Claimant on the other hand, denies the Defendant’s allegations and submits that they cannot stand as cause to terminate his employment.

91. The Claimant submits that there is no reason why Mr Lemaire would want to have a general discussion regarding the accounts without his CFO, prior to the submission of audited accounts. The Claimant contends that when he insisted that PwC apply the IFRS principles to the recognition of revenue, Mr Lemaire interrupted and demanded that he have a private discussion with PwC. When the Claimant then asked why it would need to take place without him, Mr Lemaire said that he could ask the Claimant to leave and that he could also fire him.

92. With regards to his leaving statement, the Claimant submits that he meant that in light of the way he had been treated, he would not be making leaving statements expressing adoration for the Defendant. It was substantially different to the one which had been drafted and/or reviewed by Mr Lemaire. The Claimant asserts that the principal difference was the removal of any statement mentioning how great it was to have worked for the Defendant. This was not meant as a threat to the Defendant.

93. The Claimant further argues that the Defendant was breaching the terms of the SCA by preventing the Claimant, as CFO, from having any say in the calculation of and assessment of the revenues figure, which he was entitled to do under the terms of the SCA.

94. Finally, the Claimant contends that in any event, it is not open to the Defendant to criticise or dismiss him for making such a statement in circumstances where the Defendant’s own conduct provoked such a statement.

95. In my view none of the reasons provided by the Defendant in paragraph 88 of this judgment amount to gross misconduct qualifying as cause for a reasonable employer to terminate an employee just four days before the employee’s scheduled last day of employment.

96. I do take the view that the Claimant in his capacity as Chief Financial Officer, Board member and co-founder of the company, with a special interest in the company’s final accounting year, was entitled to attend the meeting between Mr Lemaire and PwC at least to the end of the accounts discussion which was a controversial issue between them.

97. The Claimant’s behaviour might not be what the Defendant was expecting but it is in no way, in my opinion, actions that strike at the heart of the employment relationship that was already to come to an end in a few days.

98. Thus, the above-mentioned reasoning and discussion take us to the conclusion that the Defendant has failed to satisfy this Court that as a reasonable employer, immediate termination of the employment relationship was warranted due to the employee’s misconduct, which must be so serious as to strike at the heart of employment relationship such that the employer can no longer continue to work with the employee, owing to the employee’s unjustified conduct.

99. Therefore, the termination was not for cause and accordingly, not in compliance with Article 59A Of the DIFC Employment law.

Amounts claimed by the Claimant

Unpaid salary

100. The Claimant’s case is that he has not been paid his basic salary for the period 1 to 11 February 2014 and is therefore owed EUR 3,270.85. This part of the claim is admitted by the Defendant as in their Amended Particulars of Defence and Counterclaim, paragraph 9.

Bonus

101. The Claimant sought EUR 108,535 as an unpaid Bonus pursuant to Clause 2.1 of Appendix 2 of the SCA which reads “minimum payment by way of bonus of 10% of profit commissions up to a maximum of 100% of his salary”, which the Defendant failed to pay for Calendar year 2013.

102. The Defendant admitted the Claimant’s entitlement but argued that it is not payable until June 2015 once it has finally determined the paid profit commission for the 2013 underwriting year. The Defendant maintains that it cannot determine the final figure until the value of insurance claim by O3b is known.

103. Until 2 August 2015, when the Defendant submitted its second written closing submission, the Defendant failed to update the Court with respect to the exact value of the bonus. By the Defendant’s own admission, this figure should have been known to them by June 2015, or an alternative figure contrary to what the Claimant sought ought to have been proposed. Therefore, the Defendant shall pay the Claimant his bonus in the sum of EUR 108,535.

Gratuity

104. The Claimant submits that he is entitled to EUR 48,468.05 based on his length of service of 6 years and 346 days and in accordance with Article 62(2) of the DIFC Employment Law.

105. The only defence put by the Defendant is that the Claimant’s employment was terminated for cause and that he is therefore not entitled to gratuity by virtue of Article 62(4) of the DIFC Employment Law.

106. The Court has concluded that the dismissal was without cause; accordingly, the Claimant shall be paid the sum of EUR 48,468.05 by the Defendant as gratuity.

Payment in lieu of Notice

107. The Claimant is seeking payment in lieu of notice, equivalent to 90 days salary, pursuant to Article 59(4) and (5) of DIFC Employment Law, amounting to EUR 26,761.50 on the basis that had he not been dismissed, he would have remained employed until the completion of the audit which appears to have been completed on or around 16 June 2014, when PwC wrote to the directors of Elseco setting out their provisional report on the accounts.

108. The Defendant, on the other hand, contends that the Claimant was terminated for cause and is therefore not entitled to such payment. The Defendant alternatively argues that if the Claimant was not terminated for cause, his employment would have come to an end by agreement three days later on 15 February 2014. Therefore, the correct measure of loss is three days’ pay only.

109. Although Article 59 of DIFC Employment Law provides that either party may terminate the employment by giving 90 days’ notice if the period of the employment is five years or more, the law is completely silent as to the situation where the remaining period of the employment is shorter than the required notice.

110. The right for notice exists in order to give parties the option of exiting an employment contract at a low cost and with a degree of warning, providing for monetary compensation in the event that the employment is ended sooner than anticipated in order to create a stable employment environment. If the notice was to be extended beyond the actual initial agreed last day of employment, then it would defeat the above principle of a low cost exit.

111. The correct approach is that the minimum notice required by Article 59 must not be extended beyond the actual final employment date if it is agreed upon and falls short of what would have been the end of the minimum notice period.

112. Thus, as in this case, the termination took place on 11 February 2014 and the agreed final employment date is just four days later on 15 February 2014, the Claimant is accordingly entitled to minimum notice only up to the actual agreed final day of employment which is four days.

113. The Claimant’s statement that he would have remained employed until the completion of the audit on or around 16 June 2014 is not supported by evidence that he would keep working with the Defendant in the usual way before 15 February 2014 and there was nothing in the PwC letter, referred to by the Claimant in support of his argument, to show that he would be required to do any extra work beyond 15 February 2014.

114. Therefore, the Claimant’s entitlement of notice is that from 12 to 15 February 2015 in the sum of EUR 1,189.40 at the daily rate of EUR 297.35.

Accommodation

115. The Claimant in this part of the claim is seeking reimbursement of rent for accommodation for the period of 5 April to 12 May 2014. The Claimant in fact is seeking this sum during, what he believe should be, the notice period that he is entitled to.

116. The Claimant submits that the Defendant has not pleaded that there is an implied term in the employment contract and/or the SCA to the effect that this would be paid on a monthly pro rata basis, and he therefore submits that the full amount of AED 236,250 should be awarded as was done in the year of 2013.

117. The Defendant argues that the Claimant is entitled to such benefit up until the termination date only.

118. As I have concluded that the Claimant’s notice period extends to 15 February 2014 only, the Court grants the Claimant accommodation fees from 5 to 15 February 2014 (10 days) on a pro-rated basis, equivalent to the sum of AED 6,562.50 at the daily rate of AED 656.25.

School fees

119. The Claimant submits that pursuant to Clause 2 of Appendix 2 of the SCA, he was entitled to the educational costs of his son’s university education. He argues that he submitted claims in January and December 2013 in the sum of EUR 8,110 for the cost of his son’s education between September 2012 and June 2013 but has not been reimbursed for these to date.

120. The Claimant further submits that there is no provision in the SCA that requires receipts to be submitted and no such provision has been relied upon by the Defendant in its Amended Defence and Counterclaim.

121. Finally the Claimant argues, in reply to the Defendant’s submission that these fees are for school education but not university, it would have little merit considering he was reimbursed EUR 7,820 in June 2010 for his son’s medical university fees as pleaded in his first witness statement. Accordingly, the Claimant submits that he is entitled to the full amount of USD 35,975 claimed.

122. The Defendant counters the Claimant’s demand for school fees by arguing that any sensible reading of Appendix 2 of the SCA is that the entitlement is to “School Fees” and not university fees, otherwise it would have said so. Alternatively, the Defendant contends that no documentation has been provided by the Claimant to support the sum claimed.

123. It is evident that pursuant to Clause 2 of Appendix 2 of the SCA, the Claimant is entitled to “School Fees” for his son, however, in his Claim the Claimant is seeking reimbursement of university fees. The Claimant failed to establish that the definition of school fees shall cover the university fees, and also failed to provide documentary evidence that the Defendant has paid him university fees as an established practice. Therefore, I am not satisfied that the Claimant is entitled to such fees and no such amount shall be paid by the Defendant to the Claimant.

Insurance premium until 12 May 2014

124. The Claimant submits that he was entitled to health insurance which the Defendant terminated on 28 February 2014, and he insists that the insurance coverage should have continued until the last effective date of the employment which is the end of the three months’ notice, 12 May 2014. The Claimant is seeking AED 2,860.

125. As I have concluded that the Claimant’s notice extends only to 15 February 2014 as the last effective date of the employment, there is no basis on which the Claimant’s health insurance should extend beyond that date.

Pension contribution

126. The Claimant alleged that during the course of his employment he has made annual pension contribution from 2009 to 12 May 2014, the end of the notice period, in the sum of EUR 29,770, and he is now seeking for either the Defendant to pay the accrued pension amount or to reimburse him.

127. The Claimant contends that these contributions were not maintained by the Defendant as the new employer, despite the agreement between him and Mr Lemaire. The Claimant made reference to Appendix 2 of the SCA to support his entitlement to social security contributions: “Health Insurance & Pension – As per current contract”.

128. From 2009 onwards, the Claimant asserts that he did not receive payments as per his contract at the time, even though such payments are shown in the sample pay slips which have been provided and identified in the Claimant’s witness statement.

129. The Defendant’s response to the pension claim is that there was no contractual entitlement to contributions to a personal pension plan. It continued to make other social security contributions to Caisse des Francais de L’Etranger.

130. The Defendant invites the Court to have regard to the conduct of the parties subsequent to the conclusion of the contract when interpreting the Claimant’s contract of employment as Article 49 and 51(c) of the DIFC Contract Law provides. The Claimant, former CFO and originally Chairman, never questioned his pension at any stage during his employment. The contractual entitlement to pension contributions was to those made by the Defendant without any protest by the Claimant to Caisse des Français de L’Etranger.

131. The Defendant contends that there is no contractual entitlement to contributions over and above those that were in fact made from 2009 with reference to Clause 7.4.2 of the undated expatriation letter in French which was varied on or around 2009.

132. Although the Claimant has managed to establish before this court that according to the SCA he is entitled to pension contributions as per his current contract. The Claimant further established that, in his current contract of employment at the time of signing the SCA, he used to receive pension contributions with reference to his salary slips with SPACECO.

133. However, the Defendant’s position is that it’s conduct of not paying the pension contribution since 2009 and the Claimant’s silence on this point, evidences that the pension entitlement is no more. I consider this to be a very strong argument. The Claimant has not provided any reason why it’s not been claimed or the non-payment of pension contributions have not been protested by him since then. The Claimant in his position as CFO and Board member should have claimed such entitlement before now if he believed he was still eligible.

134. This leads me to accept the Defendant’s arguments and evidence that such entitlement has been waived by the Claimant and the Defendant is therefore not required to make any such payments to the Claimant.

Expenses & petty cash

135. The Claimant contends that during the course of his employment with the Defendant he incurred expenses which he claimed through a spread sheets as follows;

(a) USD 40,556 for the year of 2012;

(b) USD 29,183 for the year of 2013;

(c) USD 3,655 for the year of 2014.

136. The Defendant on the other hand, relies on the following reasons for denying various items in the expense claims made by the Claimant:

(a) Claims were not made in an expense reimbursement summary form (“ERS form”);

(b) Claims were not made before the 25th of each month or within the 3 month extension provided to the Claimant for the submission of expenses;

(c) Business entertainment claims did not provide the name of the clients, the actual individuals’ names and also the reason for entertaining;

(d) No pre-approval was obtained for business and travel expenses to be paid using the corporate credit card;

(e) Travel expense claims did not provide the reason for travelling.

137. The Claimant, in response to the Defendant’s points above, submits that the requirements of the Staff Handbook were varied and/or waived by custom and practice. The Claimant directly responds to each submission in the preceding paragraph as follows:

(a) Expense claims have not historically been made by the Claimant or Mr Lemaire by way of the ERS form, but rather by way of spread sheets itemising expenses. No objection has been made to this method of claiming expenses and the Defendant has admitted certain amounts claimed in this manner in its Amended Defence and Counterclaim;

(b) Claims were regularly made by the Claimant and Mr Lemaire and reimbursed outside of the 3 month period specified in the Staff Handbook;

(c) In practice, there was no need for such information as business meetings of this kind were normally arranged by Lucy Gilchrist on behalf of the Defendant and therefore such information was already in the Defendant’s possession. Furthermore, Mr Lemaire did not provide this information in many of his own claims for business entertainment expenses, which were nevertheless reimbursed;

(d) In practice, no pre-approval was required for business and travel expenses to be paid using the corporate credit card. This is demonstrated by the fact that the Defendant is now willing to reimburse for business expenses incurred upon receipt of certain information, which they would not do if pre-approval is a mandatory requirement;

(e) As in sub-paragraph (c) above, such travel arrangements were usually arranged by LG of the Claimant and there was in practice no need for such information to be provided as it was already in the Defendant’s possession

138. Having reviewing both parties evidence in this regards, I am of the view that the requirements set out in the Staff Handbook were varied and/or waived in practice. The Claimant’s evidence is in line with the fact that the Defendant did not ask the Claimant to comply with such requirements, nor did it reject his submission with written reasons at the time of submission.

139. Accordingly, the Claimant is entitled to all expenses submitted up to the date of 11 Feb 2014 as the final day of employment, excluding all sums that have been paid previously, sums related to cash withdrawal, sums related to the Claimant’s wife’s air fare and sums related to the company car.

140. Expenses are to be agreed between the parties in accordance with my finding in the previous paragraph; failing which, the Court shall determine them in a detailed assessment. The Claimant is to prepare a new schedule of the expenses being claimed, to be presented to the Defendant for response.

141. The Claimant is also to be paid USD 408 with respect to his admitted petty cash entitlement.

Travel allowance

142. The Claimant asserts that Clause 5, together with Appendix 2 of the SCA, entitles him to a travel allowance of EUR 3,000 per year. He contends that he agreed with Mr Lemaire in October 2010 that EUR 3,000 would be paid irrespective of the way it was utilised in personal travel and that it was never agreed that these sums would only be paid on submission of expenses.

143. The Claimant seeks payment of the remaining travel allowance from the year 2011 up to 2014, in the sum of USD 6,596.

144. The Defendant insists that the claim should be dismissed in its entirety, he contends that the burden is on the Claimant to prove his entitlement and he has failed to provide any evidence at all in support of the amounts claimed. The Defendant made reference to Ms Tollon’s evidence and stated it should be accepted as proof of the facts that:

(a) In 2011 the Claimant was reimbursed more than double his yearly allowance;

(b) In 2012 – 2013 the Claimant was reimbursed using the company credit card;

(c) In 2014 no claim was ever made.

145. In my view the sum related to travel is an allowance and not business related expenses. Nothing in the Agreement requires the Claimant to submit claims to the Defendant in order to receive it. I must accept the evidence of Ms Tollon only to the extent that the Travel Allowance for the years from 2011 to 2013 is paid and even over paid, where this evidence is not challenged by the Claimant.

146. I reject what Ms Tollon’s evidence says with respect to the year 2014 as no submission is made yet, and I order the travel allowance for the year 2014 to be paid in the sum of USD 3,000.

Payment in lieu of vacation and Counterclaim

147. The Claimant has claimed for 30 days of untaken holidays in 2012 and 2013 in the sum of EUR 8,920.50 pursuant to Article 28 of the DIFC Employment Law.

148. The Defendant alleged that no such amount is payable and, in fact, money is owed to them because the Claimant took annual leave totalling 79 days, exceeding his entitlement during the following periods:

(a) 2 June 2012 – 28 August 2012;

(b) 2 June – 22 August 2013;

(c) 27 August 2013 – 12 September 2013; and

(d) 22 December 2013 – 31 December 2013.

149. In defending the Counter Claim, the Claimant submits that no such annual leave exceeding his entitlement was taken and that he was working remotely during said periods. The Claimant contends that it’s a common practice to work remotely.

150. At paragraph 228 of his first witness statement, the Claimant has included the following table of emails sent during the period said to be vacation to demonstrate that he was working during that time, he also presented screenshots of his email account evidencing the number of emails sent:

(a) During the period 2 June 2012 – 28 August 2012 he sent (696) emails;

(b) During the period 2 June – 22 August 2013 sent (341) emails;

(c) During the period 27 August 2013 – 12 September 2013 he sent (91) emails;

(d) During the period 22 December 2013 – 31 December 2013 he sent (21) emails.

151. The Claimant, although insisting he worked full time and more, refers to the evidence given by Mr Lemaire during the trial, whereby he observed that the Claimant was working part time during the holidays, with his knowledge;

“Mr Lemaire: I’m not — I’m not going to deny the fact that he worked from distance. He did work, you know.

Mr Dhar: I am sorry to stop you, Mr Lemaire, where is it that you say Mr Lys says he never took any holiday? He accepts he took holidays. The question is whether or not during the 79 days you say he was out of the office he was working or not working.

Mr Lemaire: No. To me he was part-time working. He was in between holidays —

Mr Dhar: Was that with your knowledge and consent?

Mr Lemaire: Sorry?

Mr Dhar: Was that with your knowledge?

Mr Lemaire: Yes.

Mr Dhar: Thank you.”

152. It’s evident to me that the Defendant failed to challenge the Claimant’s evidence that he was sending hundreds of emails during what the Defendant claimed was over taken vacation, particularly in light of the fact that Mr Lemaire admitted during cross examination that he knew that the Claimant was working during the counter claimed vacation.

153. Furthermore, the Defendant failed to provide a formal and efficient record of the Claimant’s vacations, leading me to take the view that the Defendant failed to prove that the Claimant has exhausted all of his vacation entitlement, therefore the Claimant is entitled to the sum of EUR 8,920.50 and the Counterclaim with respect to vacation must be dismissed.

Counterclaim / overpaid expenses

154. The Defendant’s Counterclaim submits that on 25 January 2013 the Claimant claimed the sum of USD 9,216.86 in respect of expenses he alleged occurred in 2011. In 2014, after the termination of the Claimant, an investigation was carried out in relation to the Claimant’s payment records, it appears that the amount was paid to the Claimant along with other expenses but was not justified because it’s either a) not supported by evidence of the amounts actually incurred as required by the company’s policy; or b) already paid by the company’s corporate credit card; or c) not actually incurred.

155. The only evidence the Defendant submits to support to this Counterclaim is the witness statement of Laetitia Tollon when she refers to some figures as unjustified, unsupported or never occurring. However, in her witness statement, she has not said that any of the figures claimed in the Counterclaim have been paid twice and she has not explained how the figures have been paid and who approved them.

156. It is difficult now after years have passed to say that wrongly justified payments were made, having already collected the documentation relating to such payments/expenses, this leaves the other party handicapped. The Claimant is entitled to rely on the Defendant’s past approval of these expenses.

157. Ms Tollon has said that the payment was unjustified, unsupported or never incurred, this statement is itself a confusing one and she should have elaborated on the reasoning behind each figure that was reimbursed and supported it with evidence rather than putting her comments in such general terms.

158. In light of the Claimant’s denial of this part of the Claim, I take the view that the overpaid expenses Counterclaim is not clearly particularised and supported by evidence reflecting what has been said in the Counterclaim. Accordingly this part of the case must be dismissed.

Penalty

Defendant’s arguments on Article 18 of the DIFC Employment Law

159. In its interpretation of the ‘penalty clause’ the Defendant asks the Court to keep in mind that its purpose is to protect employees from unscrupulous employers who do not pay wages on termination and to apply the golden rule of interpretation (the “Golden Rule”).

160. The Defendant submits that a literal interpretation of the penalty clause would lead to the following absurd results:-

(a) An employee who is owed AED 1 on termination is entitled to a daily penalty that is equivalent to wages that would have been payable had the employee’s employment not been terminated;

(b) There is a six year limitation period for bringing an employment claim in the DIFC Courts. Consequently, a penalty award could easily exceed an amount equivalent to a year’s salary;

(c) In the Claimant’s penalty would be equivalent to: EUR 143,322.70 or USD 156,542.78 which is 15 times greater than the admitted arrears), this is absurd and grossly disproportionate;

(d) An employee will, therefore, be financially rewarded for failing to bring a claim for wages promptly since they would receive a greater penalty with every day of delay, so prejudicing the expedient administration of justice;

(e) An employee will be financially rewarded for delay in litigating their claim since they would receive a greater penalty with every day of delay, so prejudicing the administration of justice;

(f) An employee will be financially rewarded for failing to settle their dispute before trial because they would receive a greater penalty by running the claim for wages to trial, so defeating proportionate and cost efficient dispute resolution in the DIFC;

(g) An employer who lawfully terminates for cause is financially penalised if any monies are withheld on termination. This is unjust.

161. Accordingly, the Defendant invites the Court to imply a judicial discretion into Article 18 as to whether a penalty should be ordered on the facts of a particular case and the value of any such penalty. The Defendant’s primary position is that no penalty should be awarded on the facts of this case as the Claimant was lawfully terminated for cause, the Claimant made a late admission that he has wrongfully claimed for expenses in 2012 when such expenses (at the very least in part) had been reimbursed in 2011, if no discretion is exercised the Claimant will receive a windfall for failing to articulate his case consistently as to the amount he is owed. The Claimant, as former CFO, Director and joint shareholder of the Defendant has already received vast sums of money from the Defendant and it would not be consistent with the underlying purpose of Article 18 to award him any additional monies to that which is owed.

162. Alternatively, the Defendant invites the Court to exercise discretion to award a small penalty that is proportionate to the admitted arrears (excluding the bonus which is not yet contractually due and therefore is not in “arrears”).

Claimant’s response

163. The Claimant seeks to recover a statutory penalty payment from the Defendant pursuant to Article 18(2) of the DIFC Employment Law, accruing at a daily rate of EUR 297.35 as the Defendant has failed to pay the amounts owing to the Claimant within 14 days of 11 February 2014, as required.

164. The Claimant seeks to recover a statutory penalty payment from the Defendant pursuant to Article 18(2) of DIFC Employment Law and dismisses the Defendant’s arguments regarding hypothetical scenarios resulting in harsh results as a weak approach as Article 18(2) is intended to penalise.

165. It is also submitted that although the meaning of words may be modified in the interpretation of legislation, the courts are not entitled to go any further than this (i.e. they cannot simply disapply a word or words altogether). Therefore, the Defendant’s suggested interpretation of Article 18(2) ought to be rejected by the Court and the Claimant should be entitled to a statutory penalty payment in the sum sought.

Finding

166. In my view the wording of Article 18.2 of the Employment Law can lead to absurd and harsh consequences, especially where the conflict between parties reach the courts, this is made even worse if the dispute itself is over wages.

167. However, the question of whether the Golden Rule can cure this kind of absurdity or the Court should use its discretion in a way to minimise the absurdity caused is something to be dealt with carefully.

168. In the Article 18.2, only the word “shall” can be subject to the Golden Rule. There is no ambiguity in the rest of the wording.

169. The Defendant would like for the word “shall” to be interpreted and read as “may” where the court can retain discretion and apply the penalty when appropriate, taking into consideration all circumstances surrounding the employment relationship.

170. In my opinion, the late insertion or introduction of the penalty into DIFC Employment Law, the frequent uses of the word “shall” in Article 18(1); “An employer shall pay all wages and any other amount owing to an employee within fourteen (14) days” and the clear wording of the Article which imposes certain calculation “penalty equivalent to the last daily wage for each day the employer is in arrears” all suggest that the legislative authority was aiming for the penalty to be definite as if they have used the word “must” instead of “shall”.

171. As mentioned above, there might be absurdity in the consequences of the application of Article 18 but there is no absurdity or inconsistency in Article 18 or the Employment Law itself that justifies the application of the Golden Rule.

172. Therefore, if this Court were to accept the Defendant’s argument, it would take away from the certainty of the Law; the Court cannot go further or beyond the aims of the legislator. Accordingly, the Defendant’s suggested interpretation of Article 18(2) is rejected and I find that the Claimant is entitled to a statutory penalty payment equivalent to the rate of the Claimant’s daily wage for each day that the Defendant is in arrears.

Interest

173. Interest is to be awarded on the sums awarded to the Claimant at the annual rate of 1%.

Costs

174. Costs are awarded in favour of the Claimant, being successful in the majority of his Claim.

Issued by:

Mark Beer

Registrar

Date of issue: 14 July 2016

At: 4pm

The post CFI 012/2014 Pierre-Eric Daniel Bernard Lys v Elesco Limited appeared first on DIFC Courts.

Claim No: CFI-043-2014

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BEFORE H.E. JUSTICE ALI AL MADHANI

BETWEEN

DNB BANK ASA

Claimant

and

(1) GULF EYADAH CORPORATION

(2) GULF NAVIGATION HOLDING PJSC

Defendants

 ORDER OF H.E JUSTICE ALI AL MADHANI

UPON reviewing the Claim Form filed on 1 December 2014

AND UPON reviewing the judgment of H.E. Justice Al Madhani in the Court of First Instance dated 16 March 2015

AND UPON reviewing the judgment of the Court of Appeal dated 25 February 2016

AND UPON reviewing the Order with Reasons of H.E. Justice Al Madhani in the Court of First Instance dated 24 May 2016

AND UPON reviewing the parties’ submissions on costs and interest

IT IS HEREBY ORDERED THAT

1.The Commercial Court Order issued by the English Commercial Court on 30 September 2014 is recognised and enforced.

2. The Defendants shall pay to the Claimant the sums of:

236. USD 8,730,236.09; and

GBP 8,281.84.

3. The Defendants pay to the Claimant interest of 1% over EIBOR from the date of this order.

4. The Defendants pay the Claimant’s costs of these proceedings, to be assessed by the Registrar if not agreed.

5. The Defendants make a payment on account of costs to the Claimant in the sum of USD 25,000, payable within 14 days of this Order.

6. All obligations of the Defendants are joint and several.

Issued by:

Mark Beer

Registrar

Date of issue: 18 July 2016

At: 4pm

The post CFI 043/2014 DNB Bank ASA v (1) Gulf Eyadah Corporation (2) Gulf Navigation Holding Pjsc appeared first on DIFC Courts.

Claim No: CFI 006/2016

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS 

IN THE COURT OF FIRST INSTANCE

BETWEEN

GHAZALA ABBAS

                                                                                          Appellant

and

STANDARD CHARTERED BANK

Respondent

  CONSENT ORDER

UPON the Parties having informed the Courts that they have reached an amicable resolution of all disputes between them;

AND UPON the parties having informed the Courts that they have entered into a binding settlement agreement reflecting the terms of the settlement;

IT IS HEREBY ORDERED BY CONSENT THAT:

1. The Claimant’s claim against the Defendant be discontinued.
2. The Claimant is to file a Notice of Discontinuance with the Court by 4pm on Thursday, 21 July 2016.
3. There be no order as to costs.

Issued by:

Mark Beer

Registrar

Date of issue: 20 July 2016

At: 12pm

The post CFI 006/2016 Ghazala Abbas v Standard Chartered Bank appeared first on DIFC Courts.

• Claim No. CFI 037/2015

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

WILLIAM DANIEL MILLIGAN

     Claimant

and

AL MOJIL INVESTMENT LIMITED

First Defendant

MOHAMMED AL-MOJIL GROUP

                                                                          Second Defendant

CONSENT ORDER

UPON the Claimant having informed the Court that he has reached a mutual agreement with the Second Defendant to discontinue his claim against the Second Defendant

AND UPON the Claimant filing a notice of discontinuance on 18 July 2016

IT IS HEREBY ORDERED BY CONSENT THAT:

1. The Claimant’s claim against the Second Defendant shall be discontinued.
2. Each party shall bear its own costs, save that if the Claimant recommences his claim against the Second Defendant and subsequently fails in that claim, the costs incurred by the Second Defendant to date may be included in those claimed against him.

Issued by:

Mark Beer

Registrar

Date of Issue: 20 July 2016
At: 12pm

The post CFI 037/2015 William Daniel Milligan v (1) Al Mojil Investment Limited (2) Mohammed Al-Mojil Group appeared first on DIFC Courts.

Claim No: CFI 015/2014

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BEFORE JUSTICE ROGER GILES

BETWEEN

ASIF HAKIM ADIL

                                                                                          Claimant

and

FRONTLINE DEVELOPMENT PARTNERS LIMITED

Defendant

  ORDER OF JUSTICE ROGER GILES

UPON the Judgment of Justice Roger Giles dated 3 April 2016

AND UPON reviewing the parties’ submissions on costs

IT IS HEREBY ORDERED THAT:

1.The Defendant pay the Claimant’s costs of the proceedings, to be assessed by the Registrar if not agreed.

2. The Defendant pay interest on costs and disbursements paid by the Claimant from the date(s) of payment.

3. The Defendant forthwith pay the Claimant AED 800,000 on account of costs pending their assessment.

Issued by:

Natasha Bakirci

Assistant Registrar

Date of issue: 24 July 2016

At: 4pm

SCHEDULE OF REASONS

1.The judgment in these proceedings was issued on 3 April 2016. Paragraph 343 of the judgment read –

“343. Although not on all heads of claim, Mr Adil has been dominantly successful in the proceedings.  Subject to any further submissions, if made, my present view is that Frontline should pay Mr Adil’s costs of the proceedings (including of the without prejudice privilege application, which should be formally dismissed).”

2. Directions were given for draft orders, including in relation to any submissions on costs. Orders were made in late May 2016, reserving consideration of costs.

3. These are my reasons for the costs orders hereafter set out.

Procedural matters

4. The Claimant’s draft orders of 18 April 2016 proposed that the Defendant’s Chairman, Mr Suresh Chaturvedi, be added as a defendant for the purposes of costs, and that the Defendant and Mr Chaturvedi be jointly liable to pay “the Claimant’s costs occasioned by these proceedings”. Reasons for making Mr Chaturvedi liable for costs were outlined; understandably in the light of para 343 of the judgment, the Claimant did not expand on a costs order against the Defendant.

5. In alternative draft orders of 1 May 2016 the Defendant proposed an order that it pay 20 per cent of the Claimant’s costs occasioned by the proceedings, giving brief reasons for that order. Apparently on behalf of Mr Chaturvedi, the Defendant’s lawyers opposed the informal application for a third party costs order.

6. A telephone hearing was held on 18 May 2016 in relation to the draft orders. As earlier noted, in the orders later made consideration of costs was reserved.  Directions were given for submissions on costs, which now encompassed the third party costs order.

7. The application for a third party costs order was later abandoned, and no more need be said of it.

8. The first submissions were to come from the Defendant. In submissions of 8 June 2016 it proposed an order that it pay 50 per cent of the Claimant’s costs.

9. Matters then expanded. In submissions of 16 June 2016, purportedly in reply, the Claimant maintained that he should have the entirety of his costs, but also sought (i) that the costs be on an indemnity basis; (ii) that there be an interim payment on account of costs pending assessment; and (iii) that he receive interest on costs.

10. By letter dated 23 June 2016 the Defendant objected to this expansion, but also made submissions against the additional relief and asked for time further to respond. Time was allowed, and further submissions were made by the Defendant on 7 July 2016.

The questions for consideration

11.The questions thus arising are –

(a) whether the costs order against the Defendant should be for the whole of the Claimant’s costs, or for 50 per cent (or some other percentage) of those costs; and

(b) whether the Claimant should be permitted to seek the additional relief of indemnity costs, interim payment, and interest on costs; and if so –

(i) whether the costs should be assessed on an indemnity basis;

(ii) whether there should be an interim payment on account of costs; and

(iii) whether there should be interest on costs.

Costs against the Defendant

12. The Defendant submitted that the Claimant’s costs should be reduced because he had succeeded only in a relatively small part of his claim, which had been exaggerated and had included “several unreasonable allegations”. It said that he had ultimately succeeded on only about 20 per cent of his claim, apart from the statutory penalty, because the claimed USD 1.77 million (see para 2 of the judgment) had succeeded as to only USD 359,000; that the principal case of employment until resignation on 28 November 2013 had not been accepted; and that a number of heads of claim had not been pursued (for example club membership and “Abusive Dismissal Compensation”) or had not been accepted (for example driver’s charges and out of pocket expenses, see paras 312-314 of the judgment).

13. The submissions overlook that the central issue between the parties was whether Mr Adil’s employment had been effectively terminated for cause on 30 June 2013. The factual investigation to which it gave rise governed the proceedings, and provided the basis for deciding the true occasion for the termination of the employment, which was well in contention as the hearing was conducted, and for deciding the Counterclaim.  The money value of the outcome is not a sound guide to disposal of costs (and the statutory penalty cannot so lightly be ignored).

14. It is correct that in some respects the Claimant did not pursue or was not successful in his pleaded case; the Defendant also did not fully pursue his pleaded case and was egregiously unsuccessful. Costs should be determined on a realistic assessment of success or failure, to reflect the overall justice of the proceedings and without undue parsing into issues; it is commonplace that pleaded cases evolve in the conduct of the trial and that a realistic winner does not succeed on all issues.

15. Having carefully considered the Defendant’s submissions, I remain of the view that the Claimant was dominantly successful in the proceedings; such that in my opinion no reduction is warranted in the costs to be ordered in his favour.

Additional relief

16. It is unfortunate that the Claimant sought the additional relief in the manner he did. However, the consideration of costs was not limited by prior orders or directions, and there is no injustice to the Defendant when it has had the opportunity to make submissions.  The Claimant should be permitted to seek the additional relief.

Indemnity costs

17. Material factors are indicated, non-exhaustively, in Practice Direction No. 5 of 2014. The Claimant submitted that there had been unreasonable conduct on the Defendant’s part in its conduct of the proceedings, and also that it had agreed in principle to a settlement but had reneged; he submitted that these matters warranted an order for indemnity costs.

18. The conduct on which the Claimant relied was the expansive pleading of the Defendant’s case and abandonment of parts of that case, as referred to in the judgment at paras 195-198 in relation to the Defence and paras 278-287 in relation to the Counterclaim; see also generally at para 288. To this he added the attempted reliance on Article 59A of the DIFC Employment Law, Law No. 4 of 2005 (see paras 200-201 of the judgment).  Further, he said, Mr Chaturvedi had been found to be an unsatisfactory witness (reference was made to paras 68, 75 and 119 of the judgment), and as the Defendant’s Managing Director he must have been responsible for the pleaded case.

19. I do not think that these matters, not uncommonly encountered, so take the case out of the ordinary as to warrant indemnity costs. I do not think they reach the level of misconduct in the defence or prosecution of the proceedings.

20. The Claimant put before me, as part of his costs submissions, draft settlement agreements and some correspondence. Perhaps strangely, the Defendant did not object to the disclosure of these materials, and it may be that I should not have regard to them.  However, they show that the settlement discussions were subject to formal agreement, which did not occur, and do not enable me to determine whether failure to achieve a formal agreement was due to manoeuvring or intransigence of one party rather than the other.  I am not satisfied that the Defendant reneged on a settlement.

21. Neither separately nor together do these matters make out a case for indemnity costs.

Interim Costs

22. It is not uncommon to order an interim payment on account of costs, so that the party with the benefit of the costs order is less out of pocket while assessment proceeds; and in particular where the party against which the order is made is of limited worth and expenditure in assessment might produce no return.

23. From a schedule provided by the Claimant, costs and disbursements were invoiced by his current lawyers from March 2015 onwards. The schedule recorded 13 invoices to 26 May 2016, and two draft invoices, for a total sum of AED 2.675 million.  There was no evidence of the costs payable or paid to his previous lawyers.  There was also no evidence of payment of the invoices, but it is unlikely that the lawyers continued to act without payment and the Defendant did not suggest that the Claimant was not out of pocket; I infer that he is out of pocket in a substantial sum.  At least as at 30 June 2013 the Defendant was significantly in the red (see para 68 of the judgment), and in the absence of further evidence I am prepared to proceed on the basis that its resources are limited.  I consider that an order for payment on account is warranted.

24. The Defendant’s submissions did not take issue with the principle of interim payment on account. The submissions were directed to the adequacy of the evidence of costs.  The Defendant submitted that two invoices had not been produced to it, and that it was apparent from invoices produced to it that some fees had “not properly been incurred in relation to the trial”.  The invoices were not put before me.  The Defendant submitted that inadequacy of the Claimant’s disclosure should bring refusal to order an interim payment.

25. The evidence is scant, but in my view the Defendant’s position can be accommodated in the assessment of the interim payment. The Claimant submitted that the order should be for 30 percent of the AED 2.675 million.  I put aside, in the Defendant’s favour, any costs payable or paid to the Claimant’s previous lawyers.  But it is difficult to see that the Claimant would recover on assessment less than 30 per cent of the AED 2.675 million, even allowing for a discount for costs as between the parties and for challenge to whether costs were incurred for the trial; and the Defendant did not support its submissions by putting the invoices before me.  Rounding down, in my view the order should be for AED 800,000.

Interest on costs

26. As I have said, although there was no evidence of payment of costs and disbursements by the Claimant I infer that he is out of pocket. In any event, any order should be in terms that give interest on amounts that have been paid, from the date of payment.

27. The Defendant submitted only that interest “is more appropriately dealt with as part of the assessment process once it has been made clear when the Claimant paid [his lawyers]”. This misses the point.  An order is necessary, it is not part of the assessment process, and if appropriate it should be made now.

28. For proper compensation to the Claimant, the order should be made.

Orders

29. I make the following orders –

4. That the Defendant pay the Claimant’s costs of the proceedings, to be assessed by the Registrar if not agreed.
5. That the Defendant pay interest on costs and disbursements paid by the Claimant from the date(s) of payment.
6. That the Defendant forthwith pay the Claimant AED 800,000 on account of costs pending their assessment.

The post CFI 015/2014 Asif Hakim Adil v Frontline Development Partners Limited appeared first on DIFC Courts.

Claim No: CFI 013/2016

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai

IN THE COURT OF FIRST INSTANCE

BEFORE JUSTICE SIR RICHARD FIELD

BETWEEN

OGER DUBAI LLC 

                                                                                                                            Claimant

and 

DAMAN REAL ESTATE CAPITAL PARTNERS LIMITED

Defendant

Hearing: 6 July 2016

Counsel: Sean Brannigan QC for the Claimant

David Allison QC for the Defendant

Judgment: 6 July 2016

Issue date: 28 July 2016

JUDGMENT OF JUSTICE SIR RICHARD FIELD

JUDGMENT

1.The Defendant submits that any order of this Court requiring it to cease trading is unfair and runs contrary to the intention of Decree 19 of 2016 and the Order of the Acting Chief Justice of the UAE Court of Cassation, who is the President of the judicial body established by that decree. I will call that order (the “ACJ’s Order”).

2. The order that this Court made on 16 June 2016 was premised on the basis that there no longer existed an annulment ground in the Dubai Courts that had a real prospect of success. The Dubai Court of Appeal had rejected the Defendant’s appeal from the decision of the Court of First Instance.  There was a debate between this Court and Counsel for the Defendant at the hearing of the petition to wind up as to what the consequence would be if the Court of Appeal dismissed the Defendant’s appeal. Counsel for the Defendant very properly and frankly accepted that that would produce a situation of which this Court (the winding-up court) would have to take careful account.  I raised the question of an appeal to the Court of Cassation, but no submissions were made as to whether an appeal to that Court lay or what the grounds of such an appeal would be.

3. Accordingly, come 16 June 2016, this Court concluded that the decision of the Dubai Court of Appeal meant that there was now no outstanding case for annulment of sufficient arguability to stand in the way of a winding-up order.  The Court then gave its reasons for concluding that the Claimant was entitled to a winding-up order as distinct from some other form of execution of the judgment enforcing the Award.  The Court expressed concern about how certain matters had proceeded and expressed the view that the sooner a liquidator, who would be an officer of the court, took control of the management of the Defendant, the better.

4. It was in the light of those observations that the Court made its supplementary order that the Defendant should cease trading.

5. A seven-day stay of the winding-up order was granted allowing for an application to the DIFC Court of Appeal to extend the stay pending an appeal. Given that seven-day stay, the Court concluded that justice required that there be a cessation of trading so that the position was held, enabling a winding-up of the company to proceed after the seven-day period with the same outcome as if the winding-up order had been of immediate effect.

6. The cessation of trading order was accordingly a subsidiary order of the court, designed to ensure that, when the Court’s judgment came to be enforced, justice would be secured.

7. I decline to accept the Defendant’s submission that the cessation of trading order is inconsistent with the Decree 19 of 2016 and the ACJ’s Order. In my judgment, the suspension of proceedings contemplated by the Decree and the ACJ’s Order does not require this Court to discharge subsidiary orders so designed that, upon the ultimate enforcement of a final judgment, justice will be done.

8. The cessation of trading order and the prior freezing injunction were designed to hold the ring so that, if a final enforcement order came into effect, it would secure justice for the Claimant. I cannot accept that the ACJ’s Order and the effect of the Decree is to require the DIFC Court to rescind orders that are not final enforcement orders, but a subsidiary in nature designed, on the material before the Court, to do justice.

9. The Defendant has made an application, without prejudice to its principal submission as to the effect of the Decree, for the amendment of the cessation of trading order to ensure its continued viability whilst the question of which court has jurisdiction is pending before the Committee established under the Decree. The Court will order an amendment of the cessation of trading order to allow for the payment of salaries and staff expenses for the period henceforward to 11 August 2016, which marks the end of the 30 working days period in which the Committee must make its determination as to jurisdiction.  The precise sum to be allowed under this amendment is to be agreed between the parties, with liberty to apply if there is any disagreement.

10. The Court is also minded in principle to amend the cessation of trading order to allow for the payment of general and administrative expenses, but declines to do so at the moment because further information is required before there can be a final determination as to the amount to be allowed.

11. The Defendant will have liberty to provide in writing the further information that has been identified by the Court that it requires, the same to be served on the Claimant and the Court; the Defendant will also be permitted to make a short submission in writing. If so advised, the Claimant may serve short reply submissions, and the whole matter will be dealt with on the papers with a written ruling. I should add that the further information the Court requires must be verified by a witness statement, signed by a proper officer of the Defendant company.

12. I have considered the other matters that were put before the Court in support of the application for further amendments to the cessation of trading order. I am not satisfied that these matters show that the viability of the Defendant is in serious doubt for the period that remains unexpired of the 30-working day period for the decision of the Committee.  But the liberty to apply on notice which was granted after the hearing last Wednesday will continue so that if anything arises, which urgently puts in doubt the viability of the company over the period in question, the Defendant may apply on notice to the Claimant and to the Court.

13. I turn now to the question as to whether the Claimants should be required to give a cross-undertaking in respect of the amended cessation of trading order.

14. I explained at the last hearing that, given the issuance of the Decree and the service of the ACJ’s Order, the resulting situation did not require simply the maintenance of the status quo as represented by the orders made on 16 June 2016. Under those orders, there was to be a cessation of trading for seven days.  The relevant stay period is now considerably longer and the Court must recognise that there is a possibility that an order will be made by the Committee in respect of jurisdiction that could ultimately lead to the annulment of the award.

15. The Defendant’s argument for annulment is a highly technical one. I agree with Justice Steel’s characterisation of the point as being one of technicality and wholly at variance with commercial commonsense or commercial merit, but nonetheless the point is there.  If – as seems possible – the point may yet come to be argued, it is plainly a possibility that the point might prevail.

16.In those circumstances, I judge that the Claimants should provide a cross-undertaking in damages in the same terms as the cross-undertaking given in respect of the freezing injunction. The order will run until about 11 August 2016.  Once the Committee has made its decision as to jurisdiction, the whole question as to the applicability of the subsidiary orders that the Court has made and perhaps the final enforcement order for the Defendant to be wound up, will have to be revisited.

Issued by:

Natasha Bakirci

Assistant Registrar

Date of issue: 28 July 2016

At: 5pm

The post CFI 013/2016 Oger Dubai LLC v DAMAN Real Estate Capital Partners Limited appeared first on DIFC Courts.

Claim No: CFI 020/2016

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai

IN THE COURT OF FIRST INSTANCE

BEFORE JUSTICE SIR JEREMY COOKE

BETWEEN

BROOKFIELD MULTIPLEX CONSTRUCTIONS LLC 

                                                                                                                            Claimant

and

(1) DIFC INVESTMENTS LLC

(2) DUBAI INTERNATIONAL FINANCIAL CENTRE AUTHORITY 

Defendants

Hearing: 22 June 2016

Counsel: Steven Thompson QC instructed by Addleshaw Goddard (Middle East) LLP for the Claimant

Tom Montagu-Smith instructed by Al Tamimi & Company for the Defendants

Judgment: 28 July 2016

JUDGMENT OF JUSTICE SIR JEREMY COOKE

Introduction

1.The Claimant (“Brookfield”) brought Part 8 proceedings in the DIFC Courts on 31 May 2016 against DIFC Investments LLC (“DIFCI”) and Dubai International Financial Centre Authority (“DIFCA”) seeking two declarations. Brookfield sought first a declaration that there is a binding arbitration agreement between Brookfield and DIFCA and/or DIFCI. Secondly it sought a declaration that, subject to the arbitration agreement, the DIFC Courts have exclusive jurisdiction over the dispute between it and the two Defendants and that the non-DIFC Courts of Dubai have no such jurisdiction. Brookfield further sought an order that the Defendants be restrained from pursuing proceedings begun in the non-DIFC Court of Dubai of First Instance, namely Lawsuit No. 9/2016/65 (the Lawsuit), in which an order was sought and obtained for the appointment of an expert to investigate and report back on the condition of the building known as The Gate.

2. There is no dispute between the parties as to the existence of a binding arbitration agreement in the construction contract executed on 22 May 2003, under which it is said that Brookfield is liable to DIFCI as the assignee of DIFCA and the Owner of The Gate. That contract was, by Clause 5.1.4, “governed by and construed according to the laws of and applicable in the Emirate of Dubai”. Clause 67.3.1 provided that if there was any dispute or difference between the parties arising out of or in connection with the contract, it should be “submitted to arbitration in the Emirate of Dubai…”. Brookfield’s case is that the pursuit of the Lawsuit in the non-DIFC Court in Dubai constitutes a breach of the arbitration agreement, largely by reason of the terms of the application made to the court and the form of the order made, which went beyond assessing the condition of the building.

3. At the hearing before me, DIFCI offered undertakings not to pursue substantive proceedings in relation to the building contract or in respect of alleged defects in the construction of The Gate. Subject to the Court being satisfied as to the terms of those undertakings, some of the immediate heat has gone out of the dispute. In consequence there should be no need for the first declaration and it is the issue of jurisdiction which is the primary area of dispute between the parties. In the absence of satisfactory undertakings however, I would be prepared to make the first declaration.

4. It is self-evident that this Court should not interfere with the decisions of other courts of competent jurisdiction, particularly those of the non-DIFC courts of Dubai and should not impugn the contents of their judgements. It is only where there is an absence of jurisdiction or where proceedings are vexatious and oppressive that a court is ordinarily prepared to grant an anti-suit injunction. The classic example is where there is an agreement between the parties which excludes the jurisdiction of the court in question from considering or making the decision or order in question. This Court must therefore grapple with issues of jurisdiction and its exercise, particularly where it is asserted that this Court has exclusive jurisdiction in respect of the parties and/or the subject matter of the dispute, which can here now be characterised as the granting of interim relief in relation to an arbitration, since it has now become clear that DIFCI does not intend to pursue substantive proceedings in the Lawsuit but only to preserve evidence and avoid the loss of its rights/remedies by the obtaining of an engineer’s report.

5. On 14 June 2016 the Defendants filed an Acknowledgement of Service in which they stated that they intended to contest the jurisdiction of this Court.

6. On 16 June both Brookfield and the DIFCA issued rival applications. Brookfield applied for an interim injunction “until the conclusion of the trial of this action or until further order” seeking to restrain the Defendants from prosecuting the Lawsuit in the non-DIFC Dubai Courts or commencing any other proceedings before those courts against Brookfield arising out of or in connection with the construction contract, any alleged defects in the Gate Building or the appointment of an engineering expert to investigate such alleged defects or confirm damage caused by Brookfield. That same day DIFCI applied for an order that this Court should declare that it had no jurisdiction to make the orders sought by Brookfield and/or should not exercise any such jurisdiction, and for an order that the claim form or service of it be set aside.

The factual background

7. I can take the facts from the skeleton argument of the Defendants because there is, in reality, little material dispute about them for the purpose of these proceedings. Such factual disputes that arise do not fall for determination at this stage. Brookfield is a Dubai-based construction company. DIFCA is the body which oversees the development, management and administration of the DIFCI. DIFCI is a subsidiary of DIFCA which was established under Dubai Law by Law No. 3 of 2002, which was the law which also established the free zone of the Dubai International Financial Centre. In 2003, DIFCA and Brookfield entered into the Contract for the construction of the Gate Building, DIFC. The architect for the project was Gensler and Associates International Ltd (Dubai Branch) (“Gensler”). The DIFC Courts were established by Law No. 9 of 2004 which repealed and replaced Law No. 3 of 2002, although Article 30 of that 2002 Law had made provision for the Ruler to establish a court and/or arbitration panel to determine lawsuits resulting from and relating to the activities of the Centre’s corporations, including claims between such corporations and claims between them and outside parties.

8. The Defendants asserted that, in 2005, DIFCA’s rights and liabilities were transferred to DIFCI, including those arising under the Contract. This was accepted by Brookfield, at least for the purposes of the hearing, albeit the scope of the transfer is said not to be known. Brookfield’s case, with which the Defendants agreed, was that DIFCI was bound by the arbitration agreement in the construction contract. There is an issue as to the date of handover of the completed building and the exact period when decennial liability ceased thereunder, but it was on 21 October 2015 that a stone slab fell from cladding on the south side of the Gate Building. Subsequent investigation by the Defendants using the engineers ARUP led to the allegation that the incident was caused by defective workmanship which was “common and widespread”. Brookfield denies liability. The Defendants express concern that further stone slabs could fall from the building, constituting a danger to life. The area around the building has been cordoned off.

9. On 11 February 2016, DIFCI wrote to Brookfield and Gensler, attaching the ARUP report and setting out the results of their investigations. On 29 February 2016, DIFCI wrote again, seeking an acknowledgment of liability, proposals for remedying the alleged defects and stating that it intended to apply to the Dubai Courts for the appointment of an expert to inspect and report on the affected parts of the Gate Building. Brookfield’s lawyers say that there followed discussions between the parties as to the appointment of a joint expert. This is disputed but, in any event, no agreement was reached between the parties as to the appointment of such a joint expert.

10. On 8 May 2016, DIFCI commenced the Lawsuit in the non-DIFC Court of Dubai against Brookfield and Gensler. The remedy sought by DIFCI was the appointment of an expert to investigate and report on the defects in the Gate Building. Both Brookfield and Gensler resisted the claim and a hearing took place on 7 June 2016. The Dubai Court granted the relief sought and appointed an expert who was due to inspect on 22 June and to report back on 28 June, although he could seek an extension of time from the Court, if he so chose. The evidence before this Court is that, once the report is issued, the parties will be granted an opportunity to comment on its contents. The Dubai Court will then declare the proceedings concluded. Brookfield has sought to appeal the Dubai Court judgment. DIFCI’s position is that it is out of time to do. Gensler has not appealed.

Overview

11. The parties’ arguments revolved around a number of different elements. The first was the question of the jurisdiction of this Court to grant an anti-suit injunction against the Defendants in respect of the Lawsuit and the obtaining of the expert report which has been ordered by the non-DIFC Court in the Lawsuit. That in turn raised the question of the jurisdiction of the non-DIFC Dubai Court and the location of the seat of the arbitration, namely whether it was in DIFC or in non-DIFC Dubai. Connected with that was the question as to whether the court of the seat of arbitration had exclusive or merely primary jurisdiction to issue supportive orders of the arbitration (as opposed to supervisory orders). Assuming that this Court has the jurisdiction to grant anti-suit injunctions, questions arise as to whether it should do so as a matter of discretion, particularly bearing in mind the unusual relationship between DIFC and the non-DIFC courts, both being separate jurisdictions within the Emirate of Dubai. More fundamentally, however, the question arises as to whether or not the injunctions sought are required to protect Brookfield’s rights in arbitration and whether or not the Lawsuit is inconsistent with the parties’ agreement to arbitrate.

12. As I have come to clear conclusions in relation to the latter points, which are determinative of the need for an interim and final injunction, I need not grapple with the more complicated issues of jurisdiction, nor determine the seat of the arbitration. The matter came before me as a matter of urgency in relation to the grant of the interim injunction but I indicated that I would decide as much as could properly be decided at this stage of the proceedings in relation to the issues which the court might finally have to decide.

The Remedy sought and obtained from the Non-DIFC Dubai Court in the Lawsuit

13. In its claim form in Lawsuit 9/2016/65, DIFCI pleaded the construction contract and the collapse of marble cladding on the south side of the Gate Building, “endangering the safety and lives of workers and visitors. This was due to various material defects in the works performed by the first defendant [Brookfield] and furthermore constitutes negligence and error on the part of the second defendant [Gensler] hired to design and oversee the project”. Furthermore, DIFCI alleged that “the defendants committed irregularities in technical and engineering works which caused substantial damage to the building and endangered the safety of the building and its workers”. These allegations, in my judgment, were part of the narrative giving rise to the claim for relief and do not really affect any issue which arises.

14. DIFC relied on Article 68 of the Law of Proof in Civil and Commercial Transactions which provides that where a person fears that evidence may be lost, he can apply, on notice to other parties, for an inspection by an expert appointed by the court. The Judge of Summary Matters can appoint an expert to inspect and hear witnesses but not on oath. The judge is to then schedule a hearing to allow the parties to comment on the report given by the expert.  It was said that there was an impending risk and urgency in the application because of the effect of delay in repairing the defects and the continued endangerment of the life of DIFC workers and visitors. It was said further that the defects and faults committed by the defendants had to be determined before any new contractor could proceed with repairing the defects. The application concluded in this way:

“…the plaintiff prays the court rule, summarily, that an engineering expert be appointed to review the case documents, inspect and determine the defects and errors committed by the defendants in the Dubai International Financial Centre Gate Building Project, determine the material damage caused by the defendants to the plaintiff, and perform any other tasks the court may consider necessary for the expert to carry out his mandate.”

15. At the hearing on 7 June, Brookfield invoked the arbitration clause, submitted that the court lacked jurisdiction to hear the substantive dispute between the parties, contended that the jurisdiction belonged to the DIFC Courts in relation to the arbitration agreement and submitted that there was no requirement of urgency which necessitated the exercise of the Court’s powers and it has submitted to this Court, that the request was for the expert to determine defects and faults committed by the Defendants and to determine the material damage caused by the Defendants, which went beyond any report that the expert might make in relation to the condition of the building itself and preservation of evidence with regard thereto.

16. Brookfield appeared to recognise that the parties’ agreement to arbitrate did not in principle preclude a Judge of Summary Matters from hearing a request for the preservation of evidence unless the parties had agreed to refer such summary request to arbitration but relied upon Article 5(A)(1) of Law No. 12 of 2004 as giving the DIFC exclusive jurisdiction. In other words, Brookfield submitted that this Court was the proper Court to make any order under Article 68 or its equivalent and that what was ordered went beyond what should have been ordered in the light of the Arbitration clause which required matters of liability, causation and damage to be determined in arbitration and not in court or by a court appointed expert.

17. The non-DIFC Dubai Court’s decision was that an expert should be appointed, despite the arbitration clause. The court considered that the appointment of an expert did not affect the substance of the dispute. “The court has rendered a summary judgement, in the presence of litigants, disregarding the pre-calling upon case dismissal in the presence of an arbitration clause, considering that the case appointing the expert does not affect the origin of the dispute.” It appointed an expert to “perform a field inspection of the project, object of the case as referred to in the statement of the case, under its current form in order to prove any such flaws and errors committed by the defendants with respect to the project of DIFC Gate, as well as assess any damages thereto, including value thereof.”  The decision made no reference to the jurisdictional argument put forward by Brookfield.

18. It is not for this Court to impugn the reasoning behind the decision of the non-DIFC Dubai Court nor the substance of the decision itself but if the Court had no jurisdiction to make the order or the pursuit of the proceedings and application for the order amounted to a breach of the arbitration agreement, this Court would be bound to consider whether or not the grant of an injunction was appropriate in accordance with settled authority constituted by the well-known line of cases commencing with the Angelic Grace [1995] 1 Lloyds Rep 87.

Breach of the Arbitration Agreement and the need for an anti-suit injunction

19. Article 68 of Federal Law No. 10 of 1992 concerning Law of Evidence in Civil and Commercial Transactions provides as follows:

“(1) It shall be permissible for a person who fears the loss of factual signs which may become the subject of a dispute before the law, in the presence of the parties concerned and in the normal way, to request the Summary Judge to move in order to observe them.  In this case the preceding rulings shall be abided by.

(2)  The Summary Judge shall be permitted in the aforementioned situation to appoint an expert to move in order to observe and to hear witnesses not under oath.  The judge shall then specify a session for hearing the remarks of the adversaries on the report of the expert and his actions.  The principles stipulated in the Chapter on Expertise shall be applied.”

20. Federal Law No. 11 of 1992 – the Law of Civil Procedures, provides in Article 28 as follows:

“1 – One of the judges of the seat of the court of first instance  shall be deputed to make provisional rulings without prejudice to the [substantive] right in expedited matters where it is feared [that a right will be lost] by the passing of time.

2 – The trial court shall have jurisdiction to hear those matters if they are raised before it as consequential issues.”

21. It is clear that these Articles provide for a procedural remedy in order to avoid the loss of relevant evidence. It is also clear from their terms and from the matters recited earlier as to the procedure adopted, that the substantive rights of the parties are to be unaffected by the provision of the report. Whilst, in many countries, the report of a court-appointed expert can be determinative of the issues in dispute between the parties, this is not the case in non-DIFC Dubai, as decided authorities in that jurisdiction make clear.

22. Two decisions of the Dubai Court of Cassation were cited to me, namely Civil Appeal No. 274-1993 of 29 January 1994 and Civil Appeals 340, 343 of 2009, Principle No. (54) of 25 April 2010. In the first of these decisions, it was decided that a receivership action which is the domain of “summary jurisdiction” by the Summary Judge was not a substantive action which enquired into the merits of the dispute but an action to avert an impending risk to the disputed property remaining in the hands of the possessor. The relief took the form of an interim provisional measure to protect the property whilst leaving those in dispute to fight out the case and the fundamental issues between them before the trial court. In the second decision, the first instance court appointed an engineering expert and the Court of Cassation decided that such an action for determination of facts, whether a summary or substantive action, was a precautionary action which anticipated a dispute with respect to material facts whose features might be lost, or for which evidence might be lost, or where reasons would be incapable of being identified at a later stage. It highlighted the fact that the court’s role in an action for determination of facts ended once an expert was appointed and filed a report and the parties had filed comments on that report. The parties were then left to fight out the fundamental issues during the course of the substantive action filed by those concerned as the ruling made in the action for determination of facts did not determine the controversy or touch the merits.

23. Despite therefore the terms of the order made which, on its face, requires the expert to determine issues of liability, causation and damage, none of such findings are binding for the purpose of determining the substantive dispute. If the matter came before a court subsequently, no doubt the court would have regard to the findings and weigh them against other evidence in the case. So far as arbitrators are concerned, it would be a matter for them as to whether or not all of the report was properly admissible or whether it usurped their functions in some respects and required redaction.

24. It is worth drawing attention to the terms of the arbitration agreement contained in the construction contract. Under Article 67.3.2, it was provided that “the arbitration shall be conducted in the English language and in accordance with such procedures as the arbitrator agrees provided that no such procedures shall be contrary to any laws (as the latter are described in Clause 5 above) [the laws of and applicable in the Emirate of Dubai] for the time being in force or applicable in the Emirate of Dubai”. It is thus plain that the arbitrators can control their own procedures but could not view the expert’s findings as being determinative of the issues which fell to them for decision, because the law of Dubai provides that such expert determination is not to affect the substantive rights of the parties.

25. DIFC Law No. 1 of 2008, the Arbitration Law, contains provisions relating to interim measures. Article 33 provides that, unless otherwise agreed by the parties, the Arbitral Tribunal may appoint one or more experts to report to it on specific issues to be determined by the tribunal and may require a party to give the expert any relevant information or to produce relevant documents or property for inspection by that expert. The expert may also, in such circumstances, participate in a hearing where the parties have the opportunity to put questions to him and to present expert witnesses in relation to points at issue. If arbitrators were appointed under the arbitration agreement in the construction contract, they would have such powers but at the time when the non-DIFC Court appointed an expert, there had been no reference to arbitration by either party, although the existence of the dispute was clear. Article 15 provides that “it is not incompatible within the Arbitration Agreement for a party to request, before or during arbitral proceedings, from a Court an interim measure of protection and for a Court to grant such measures”. By the terms of Article 7, this provision applies whether the Seat of the Arbitration is in the DIFC or outside it. Article 24(3), as construed by the DIFC Courts give power to the Court to issue interim measures in relation to arbitration proceedings, in the same way as it could for court proceedings, but only where the seat of the arbitration is in the DIFC. 

26. The DIFC Court’s power to grant interim remedies arises primarily under Article 22 of the DIFC Court Law No. 10 of 2004 which provides that “The Court of First Instance may order an injunction restraining a person from engaging in conduct or requiring a person to do an act or thing or other order the court considers appropriate” and Article 32 of the same Law which also grants the DIFC Court the power to make injunctions. Particular provision for interim remedies is given in Article 36 of DIFC Law No. 7 of 2005, the Law of Damages and Remedies, which provides that interim injunctions and declarations may be given and an order made for the detention, custody or preservation of relevant property and that the Court may make other orders of a like nature.

27. It is clear from the above that there is no inconsistency in seeking an order from the Court for the appointment of an expert to inspect the property where there is an agreement to arbitrate any dispute which relates to the condition of that property. No substantive determination is made by the Court or the expert and there is therefore no impingement on the functions of the arbitrators. Brookfield’s concern however is that the expert’s remit is not simply to report on the condition of the property and thus preserve the evidence but is also to “prove any such flaws and errors committed by the defendants with respect to the project, as well as assess any damages thereto including value thereof.” The expert, if following this remit, will express his conclusions as to the deficiencies in the work of Brookfield and the loss and damage attributable thereto. This, it is said, impinges upon the functions of the arbitrators. Furthermore, the Court chose an expert from its roster of expert engineers, without regard to any particular expertise required in relation to the cladding which is the subject of dispute and the parties had no say in the choice of the expert at all.

28. It does not seem to me that any of these matters individually or taken together cumulatively can result in the pursuit of the proceedings before the non-DIFC Dubai Court for the appointment of an expert being seen as a breach of the arbitration agreement.

(a) The arbitrators have the power to control their own procedures and are in a position to admit the evidence of the court-appointed expert, in part or in whole. If there are conclusions of the expert which usurp the functions of the arbitrators, they can rule such parts inadmissible and admit into evidence only a redacted report.

(b) Because, under Article 67.3.2 of the construction contract, the procedures adopted by the arbitrators cannot be contrary to the laws of the Emirate of Dubai, the report cannot have substantive effect, even if the conclusions about fault, causation and damages are admitted. These merely form part of the evidence for consideration by the arbitrators and the parties will doubtless be free to produce their own expert evidence on the subject matter.

(c) It is often the case that experts opine on issues of fault and negligence and stray into areas which are the province of the ultimate decision making body, whether it be arbitrator or judge. The line between the giving of expert evidence, on the one hand, as to the deficiencies in a building and the cause thereof, and issues of law, on the other, in relation to the establishment of negligence, breach of contract and the like is not always easy to draw and often boils down to little more than the form in which the opinions are expressed.

(d) It is now clear, even if it was not necessarily the case beforehand, that DIFCI will not pursue court proceedings to determine substantive liability unless the arbitration agreement should subsequently prove to be void or inoperative. If the dispute cannot be resolved, it will go to arbitration and the arbitrators will have to determine the matters on the basis of all the evidence available, including, to the extent that they admit it, any report from the court-appointed expert.

29. Counsel for DIFCI pointed out that the report would inevitably be made in any event since Gensler, although objecting on 7 June to the appointment of an expert by the Court, has accepted that decision and has not appealed against it. Furthermore, it appears that some of the features of the report to which Brookfield take exception will not form part of the report in fact. Whilst maintaining that DIFCI had no control over the contents of the report, counsel for DIFCI informed this Court, at the hearing, that the report would not deal with quantum and, at least as it appeared to me, implied that the report would do no more than deal with the deficiencies in the cladding arrangement without apportioning blame to Brookfield or Gensler, or apportioning any liability for the deficiencies as between them.

30. The only injunction that this Court might therefore be able to make in support of the arbitration agreement between Brookfield and DIFCI, would not prevent the report being made, but would prevent the pursuit of the Lawsuit against Brookfield. An injunction which in some way sought to prevent the report being used in the context of the dispute between Brookfield and DIFCI would be beyond the scope of any order this Court could properly make. The use of the report is a matter for the arbitrators, not a matter for this Court because of the arbitration agreement itself. It will be for the arbitrators to decide the extent to which any of the report is admissible in any arbitration between Brookfield and DIFCI and this would be the position if I granted an injunction to prevent the pursuit of the non-DIFC Lawsuit against Brookfield, since the report would be in existence as between Gensler and DIFCI in any event and it would be open to DIFCI to seek to adduce it in evidence in the arbitration.

31. I have therefore come to the clear conclusion that it cannot be said that DIFCI are in breach of the arbitration agreement in the construction contract and in those circumstances there is not only no need, but no basis for any anti-suit injunction to be granted preventing the pursuit of the Lawsuit.

The Issue of Jurisdiction

32. DIFCA is a DIFC Body, as defined by the Judicial Authority Law (No 12 of 2004).  It was established by Dubai law No. 3 of 2002 with its existence confirmed by Article 3 of the Dubai Law No. 9 of 2004, which repealed the earlier law.  DIFCI is a DIFC entity, as defined by the Judicial Authority Law and was established in May 2006.  These matters were undisputed.  Under Article 5(A)(1) of the Judicial Authority Law this Court, the DIFC Court of First Instance “shall have exclusive jurisdiction to hear and determine, in so far as relevant:

“(a) Civil or commercial claims and actions to which the DIFC or any DIFC Body, DIFC Establishment or Licensed DIFC Establishment is a party.

(b) Civil or commercial claims and actions arising out of or relating to a contract…Whether partly or wholly concluded, finalised or performed within DIFC.

(c) Civil or commercial claims and actions arising out of or relating to any incident or transaction which has been wholly or partly performed within DIFC and is related to DIFC activities…”

33. In consequence, there can be no doubt that this Court has jurisdiction in respect of the parties and the subject matter of their dispute, subject to the arbitration agreement contained in the construction contract. The Court has therefore jurisdiction to make the declarations and injunction sought, should it consider it just and convenient to do so. The decisions in Dhir v Waterfront Property Investment Ltd [CFI 011/2009] and Corinth Pipeworks v Barclays Bank [CA 002/2011] put beyond argument the proposition that this Court has jurisdiction in any civil or commercial claim to which a DIFC Body or Entity is a party.  Given the contents of the construction contract, the Court is also given jurisdiction by Article 5 (A)(1)(b) and (c). The Protocol of 7/12/09 signed between the DIFC Courts and Dubai Courts is wholly consistent with this.

34. The DIFC Arbitration Law No 1 of 2008 provides that the court should not intervene in arbitration except to the extent provided by the statute itself, but gives powers to the DIFC Court. I have already referred to Article 15, which provides “that it is not incompatible with an Arbitration Agreement for a party to request, before or during arbitral proceedings, from a court, an interim measure of protection and for a court to grant such measure”. Although the Law gives wide powers to the Arbitrators to make interim orders, no Arbitrators have yet been appointed. Article 24 gives power to the Arbitral Tribunal to order interim measures including orders to preserve evidence that may be relevant and material to the resolution of the dispute and Article 33 provides that an expert can be appointed by the Arbitral Tribunal to report to it on specific issues as determined by the tribunal.

35. So far as concerns the Courts, Article 24 (3) provides that the DIFC Court “shall have the same power of issuing an interim measure in relation to arbitration proceedings…as it has in relation to proceedings in courts. The DIFC Court shall exercise such power in accordance with its own procedures”. As construed by these Courts, the DIFC Court could therefore have granted an order for the preservation of evidence if an application had been made to it, instead of the non-DIFC Dubai Court where DIFCI filed the Lawsuit, if the DIFC was the seat of the arbitration, but not where the seat was non-DIFC Dubai.

36. What is sought here is however an injunction to protect Brookfield’s negative right – its right not to be sued in a Court because of the agreement to arbitrate. It was contended by DIFCI that such an injunction could only be granted by the court of the seat of the arbitration and not by the court of any other seat. In reliance on the English Court’s decision in Nomihold Securities Inc v Mobile Telesystems Finance SA [2012] 1 Lloyd’s Rep 442 at paragraphs 44-52 (Andrew Smith J), it was submitted that an anti-suit injunction was only issued as part of the Court’s supervisory jurisdiction and thus was only granted when the seat of the Arbitration was in the jurisdiction of the court.  I do not accept this submission in the light of the decision of Blair J in U&M Mining Zambia Ltd v Konkola Copper Mines PLC [2013] 2 Lloyds Rep 218, and the decision of the Supreme Court in AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889.

37. The effect of those decisions is that the power of the English court to grant such injunctions derives from Section 37 of the Supreme Court Act 1981 (the equivalent of Article 32 of the DIFC Court Law No. 10 of 2004), rather than the powers given by the Arbitration Act and that the negative aspect of an arbitration agreement is a right enforceable independently of the existence of any arbitral proceedings. An anti-suit injunction is not “for the purposes of and in relation to arbitral proceedings”, but for the purposes of and in relation to the negative promise contained in the arbitration agreement not to bring foreign proceedings. There is a distinction to be drawn, therefore between orders made by the court in exercise of its supervisory jurisdiction, on the one hand, and orders made, on the other hand, in support of the right of a party to insist on arbitration rather than litigation where that has been agreed (see the judgment of Lord Mance at paragraphs 25-28 and 48 in particular). The decision of Blair J, which preceded the decision of the Supreme Court in 2013 drew a distinction between a supportive jurisdiction and a supervisory jurisdiction. He considered that, where the seat of the arbitration is abroad, the court was in a position to grant an anti-suit injunction but would need a very good reason to do so, such as the inability of the court of the seat to grant such an injunction or the practical ineffectiveness of any such remedy.

38. I do not therefore accept that, even if the seat of the arbitration is non-DIFC Dubai, the Court has no jurisdiction to grant an anti-suit injunction but it would be an unusual and exceptional case where the Court did so, particularly bearing in mind the appropriate respect that the courts of the two different systems in the Emirate of Dubai must have for each other. This is a point which has been emphasised in the past by Justice Sir John Chadwick in Taaleem v National Bonds Corporation [CFI-014-2010] at paragraph 18 and by Justice Omar Al Muhairi in Azzam v Deyaar Developments [CFI-024-2015] at paragraph 26.

39. It is clear to me that, if non-DIFC Dubai is the seat of the arbitration, this Court would not interfere with an order made by that court because of the existence of an arbitration agreement. When making the order that it did on 7 June, the non-DIFC Dubai Court was fully aware of the arbitration agreement and decided that it did not prevent the Court from making the order it did. If that court had jurisdiction to make the order which it did, this Court could not and would not impugn it.

40. Although the DIFC Courts are given exclusive jurisdiction over DIFC Bodies and Entities both generally and in relation to transactions of the character of the construction contract between the parties so that it has jurisdiction, in its own eyes, to enforce the arbitration agreement in that contract, regardless of the seat of the arbitration and the implied choice of the parties of the courts of the seat as the supervisory courts, the DIFC Court would not in practice do so, save in exceptional circumstances. Its jurisdiction cannot be ousted by the parties’ choice of the seat and supervisory jurisdiction, but comity would militate against the exercise of that jurisdiction when the courts of the seat can not only supervise the arbitration but are in a position to grant any injunction necessary and to ensure that the arbitration agreement is not breached by pursuit of remedies in that court.

41. If the seat of the Arbitration is DIFC however, the position is different, because the primary responsibility for the enforcement of the arbitration agreement would lie on the courts of the seat, if relief was sought. This Court would then be concerned, first, to protect its own exclusive jurisdiction under the Judicial Authority Law and, secondly, as the Court of the seat, to protect the agreement of the parties to refer their disputes to the determination of arbitrators, if there was some infringement of the parties right to arbitrate their disputes.

The Seat of the Arbitration

42. A novel point arises here because of the terms of the choice of law and arbitration clause in the construction contract. The applicable law was that of the Emirate of Dubai and Article 5.1.4 went on to say that “such laws include, without limitation, any ordinance, rule, decree, regulation or order of any governmental authority or agency of the Government of Dubai or the United Arab Emirates”. Article 67.3.1 provided that disputes or differences should be “submitted to arbitration in the Emirate of Dubai as set forth below”. Article 67.3.1.1 provided for each party to appoint an arbitrator and for the two so appointed to appoint a third arbitrator but if any party failed to appoint an arbitrator or the two appointed could not agree upon the appointment of the third, the appointment was to be made on application by a party to the Committee for Conciliation and Arbitration of the Dubai Chamber of Commerce and Industry, which I was told no longer exists.

43. At the time when the construction contract was concluded in May 2003, the DIFC Courts did not exist, although the DIFC had been set up in 2002 as a free zone and Article 30 anticipated the possibility of the establishment of a court to regulate the activities of corporations set up within the zone. DIFCI submitted that, in such circumstances, there was no DIFC Court, no DIFC law and no possibility therefore of the parties’ choice of law and seat of the arbitration being anything other than that of non-DIFC Dubai. The simplicity of that argument is attractive but not, in my judgment conclusive. Although I have been referred to various authorities where the DIFC Courts have grappled with similar wording, with no distinction being drawn in the wording between the DIFC and non-DIFC Dubai, in each case the contract in question was concluded when both court systems were in existence. DIFCI placed reliance upon the decision in Dhir v Waterfront Properties [CFI-011-2009] at paragraphs 85-87, 90 and 92 and the approval of that decision in IGPL v Standard Chartered Bank [CA-004-2015] at paragraphs 132-136. An arbitration agreement cannot designate both the DIFC and non-DIFC Dubai as the seat of the arbitration. It must refer to one seat or the other. That seat then has exclusive supervisory jurisdiction.

44. Particular reliance was placed by DIFCI on the judgment of the Court of Appeal in the Taaleem case to which I have earlier referred [CA 001/2011]. At paragraph 39 the following appears:

“It can, therefore, be inferred with reasonable confidence that where at the moment of contracting the parties select the Laws of Dubai as the governing law they intend to select either Civil Law Dubai Law, as applied in the non-DIFC Courts, or Common Law Dubai Law, as applied in the DIFC Courts.  The one selection which, in our judgment, it can confidently be asserted would not have been made by either party would have been such body of law as was applied in such Court as was accorded jurisdiction over a given future dispute by the general laws of the Emirate of Dubai, depending on whether the dispute fell inside or outside Article 5(A)(1) of Law No. 12 of 2004.  The assumption that in a clause such as this the parties could have mutually intended to disassociate the body of law governing the contract from the court upon which they conferred jurisdiction is, in our view, although theoretically possible, distinctly implausible.  Their selection of one body of law can thus be assumed to reflect their agreement to confer jurisdiction on the Courts of that one place where that body of law will be applied.  Since their selection of a body of law must be immutable unless the contract is subsequently varied, there must be the very strongest inference that their selection of a Court applying that body of law is also intended to be immutable.”

45. This does not seem to me however to conclude the argument. Whilst at the time of concluding the contract, there was only one system of law and courts in existence, namely non-DIFC Dubai, it was the law of the Emirate of Dubai which was chosen as the governing law. Under the terms of that law, jurisdiction was then parcelled out between the DIFC and the non-DIFC Courts in 2004. From that point on, particular types of case were allocated to the DIFC and fell within the jurisdiction of that system, as opposed to that of the non-DIFC Courts. From that point on therefore, where, subject to the arbitration agreement, the DIFC Court had jurisdiction over the parties and/or contract in question, by reason of the terms of Article 5(A) of the Judicial Authority Law of 2004, the logic of the position would dictate that DIFC became the seat of the arbitration.

46. Inexact analogies can be drawn with cases where the law and jurisdiction of a particular country is chosen by the parties but that country subsequently fragments into two different states, which may either be known by different names or where one retains the same name as the original state whose jurisdiction was chosen by the parties. Which country’s law then applies to the contract and which country is then the seat of the arbitration? Here there is no fragmentation of a state but a deliberate decision on the part of the state to allocate jurisdiction between two different systems within it. The application of that state’s law to the question of jurisdiction would result in DIFC becoming the seat of the arbitration from the point at which the Judicial Authority Law came into force, even though prior to that time non-DIFC Dubai would inevitably constitute the seat of the arbitration with its applicable law.

47. I do not need to decide this point because there is no basis for the anti-suit injunction, but I reach this provisional conclusion even without the benefit of any evidence of matrix surrounding the conclusion of the construction contract in 2003, when it may well be the position that the parties anticipated the establishment of the DIFC Courts and legal system. I was in fact urged by Brookfield not to decide the question of seat of the arbitration because of the need for such matrix evidence. It is unnecessary that I should do so and I reach no final conclusion on the point.

Conclusion

48. There is a binding arbitration agreement between Brookfield and DIFCI and this is not disputed. If appropriate undertakings are not given, I will make a declaration to that effect. I refuse the interim anti-suit injunction sought by Brookfield for the reasons which I have given. Such reasons would apply with even greater force to the claim for a permanent injunction.

49. This Court does have jurisdiction to grant an anti-suit injunction, even if the seat of the arbitration is not in the DIFC. It would require an exceptional case for the Court to exercise it in those circumstances and in this case it would refuse to do so, whether or not the seat was in the DIFC, for the reasons which appear earlier in this judgment. The seat of the arbitration will have exclusive jurisdiction to supervise the arbitration itself but the powers of the court to make an anti-suit injunction exist where the courts are not the Courts of the seat, albeit that the exercise of those powers would be exceptional. In consequence there is however no exclusive jurisdiction for the making of an anti-suit injunction.

50. The parties may be able to agree upon the orders which should be made in consequence of my decision in relation to the various orders sought. In essence DIFCI have successfully resisted the granting of an interim anti-suit injunction but did not succeed on all the points it argued and Brookfield has succeeded in establishing that there is a binding arbitration agreement to which DIFCI will adhere, which only became clear in the run up to the hearing and at the hearing itself.

51. There is, in reality, nothing further to be argued about because a final injunction would in these circumstances never be granted so that the points which I have not finally decided at this stage will never fall for decision in this case. The issue of the seat of the arbitration will await another day. The lion’s share of costs should, in my judgment, subject to any peculiarities of which I am not aware, fall to be paid by Brookfield.

52. Having heard the parties’ submissions on the consequences of my findings, my decision thereon is reflected in the order made.

Issued by:

Natasha Bakirci

Assistant Registrar

Date of issue: 28 July 2016

At: 9am

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• Dubai-based commercial courts saw 48 percent increase in total claim values in H1 2016
• Total value of Small Claims Tribunal cases increases

Dubai, United Arab Emirates; 31 July 2016: The DIFC Courts’ position as the region’s preeminent English-language business courts was reinforced in the first half of 2016, with the number and total value of cases continuing to increase strongly. The period was also notable for a significant increase in the number of enforcement cases, indicating the confidence business has in the DIFC Courts as an efficient and effective conduit to reclaim money owed to them.

Between January and June 2016, the total value of Court of First Instance (CFI) cases, including arbitration-related cases and counter claims, and enforcement cases, handled by Dubai’s established English-language, commercial common law judicial system was approximately AED 3.44 billion. This compares with AED 2.33 billion in the same period of last year, a 48 percent year-on-year increase.

Driving growth was a significant increase in the number of enforcement cases before the DIFC Courts. While the total number of CFI and arbitration cases grew by 35 percent during the period, from 17 to 23, the total number of enforcement cases grew by 194 percent, from 17 to 50.

The average claim value of enforcement cases also grew significantly during the period, from AED 6 million in the first half of 2015 to AED 31 million this year, a fourfold increase. Meanwhile, the average claim value of CFI and arbitration-related cases fell from AED 132 million to AED 82 million, suggesting the main courts’ workload is maturing to include a broad mix of both high value and moderate value commercial disputes. Overall, the average value of claims filed with the DIFC Courts in the first half of 2016 increased by 38 percent from AED 16.5 million to AED 22.7 million.

The DIFC Courts began the year by setting out an ambitious five-year plan setting out their aspiration to be one of the world’s leading commercial courts by 2021. It focuses on four key qualities: innovation and continuing to set regional and international firsts; judicial excellence and offering a uniquely international and experienced bench of judges; service excellence and the implementation of benchmark local and global standards; and connectivity and building the world’s strongest enforcement regime.

Mark Beer, OBE, DIFC Courts CEO & Registrar, said: “The DIFC Courts’ performance in the first half of 2016 highlights the progress we are making in our mission to become one of the world’s leading commercial courts. It is particularly pleasing to see the work we have done to be one of the world’s most connected courts leading directly to a record number of businesses turning to the DIFC Courts to enforce monies owed to them.”

Graham Lovett, a Partner at Gibson, Dunn & Crutcher LLP, said: “The DIFC Courts have proved to be a popular choice for a number of businesses and for a variety of reasons, whether it is a greater familiarity of that business with a common law court system, or the perception that the DIFC Courts offer a wider range of procedural options, such as quick judgments, injunctions, active case management or an ability to recover a larger proportion of legal costs.”

The workload of the DIFC Courts’ Small Claims Tribunal (SCT), fell in the first half of 2016, from 108 cases to 79. However, the total value of claims increased from AED 7 million to AED 9 million year-on-year, suggesting the claimants are responding to the new higher AED 1 million threshold for case values.

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Claim No: CFI 026/2014

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai

IN THE COURT OF FIRST INSTANCE

BEFORE THE DEPUTY CHIEF JUSTICE SIR DAVID STEEL

BETWEEN

STANDARD CHARTERED BANK 

                                                                                                                            Claimant

And

INVESTMENT GROUP PRIVATE LIMITED 

Defendant

Hearing: 28 July 2016

Counsel: Mr James Barratt and Mr Alain Farhad, instructed by Squire Patton Boggs for the Claimant

Mr James Abbot and Mr Shane Jury, instructed by Clifford Chance LLP for the Defendant

Judgment: 28 July 2016

Issued on: 1 August 2016

JUDGMENT OF THE DEPUTY CHIEF JUSTICE SIR DAVID STEEL

1.This is an application for a stay by the Defendants, Investment Group Private Limited. The application is pursuant to Article 60 of Federal Law 10 of 1973, which might be called, for short, the Union Supreme Court Law.

2. The Federal Law 10 sets out in Article 33 the jurisdiction of the Union Supreme Court. One of the matters for which jurisdiction had been allocated to the Supreme Court is set out in sub-article 10:  a jurisdiction dispute between a judicial authority in an emirate and a judicial authority in another emirate, or among judicial authorities in one emirate.  It is perhaps worth noting in passing that what are being focused upon are disputes between judicial authorities.

3. There is no issue that the present potential dispute as the judicial authority known as the Dubai International Financial Centre Court (DIFCC) and the Dubai Courts falls within the sub-article. There is no requirement for the dispute to be between judicial authorities of two different emirates.

4. Article 60 reads as follows:

“In the event of a conflict of jurisdiction between two or more of the judicial authorities referred to in article 33(9) and (10), that these authorities would not abandon the hearing of the action, that all of these authorities have abandoned the hearing the same, or issued contradictory judgments thereon, the petition for designation of the competent court shall be submitted to the Supreme Court by virtue of a petition based on the demand of one of the litigants or the public prosecutor.”

5. It then goes on to deal with the form of the petition and also to deal with the outcome in the event that there is a stay of execution of contradictory judgments until an enforceable judgment is determined.

6. The focus of the submissions made on behalf of the Defendants, who are the applicants in the present proceedings, is that there is a conflict of jurisdiction between two or more judicial authorities because proceedings have been issued in the DIFC and parallel proceedings have been issued in the Dubai courts, and the Claimants have not abandoned the hearing of those claims.

7. The principal response of the Claimants is that that constitutes a wholly unreal construction of the Federal Law. It is submitted that any purposive construction of Article 60 requires the identification of a conflicting stance adopted by two or more judicial authorities, and not a reliance upon the conflicting stance adopted by the parties to the proceedings brought before those judicial authorities.

8. The chronology of these proceedings is somewhat instructive. It is a very substantial claim: a claim on two loan agreements totalling US$184 million.  There is a cross-claim which is fairly minor in comparison, whereby the Defendants assert there has been a miscalculation of the interest due on the loans and that a sum of something in the region of AED 200 million is owed by way of damages.

9. The claim was issued in the DIFCC on 6 August 2014, and that prompted a challenge to the jurisdiction of the DIFCC by the Defendant on 21 September. A few months later on 12 January 2015, the Defendants issued proceedings in Sharjah, pursuing what I have indicated to be their primary case, namely a miscalculation of interest and a claim in respect of damages.  A few days later, the application made to the DIFCC by way of challenge to its jurisdiction failed at first instance.

10. On 31 May 2015, the Sharjah Court rejected jurisdiction. That decision was approved by the Sharjah Court of Appeal on 15 September.  In turn an appeal to the DIFC Court of Appeal was dismissed on 19 November.  The Defendants went to the Court of Cassation in Sharjah.  That appeal failed on 29 December.

11. At last, substantive proceedings in the DIFC got underway. On 10 February 2016 the points of claim were served, on 6 April there was a defence, and on 18 May a reply, together with an application by the Claimants for immediate judgment.

12. In the meantime, the Defendants instituted proceedings before the Amicable Dispute Centre in Dubai. This in fact was then transferred to the Dubai Courts on 30 May 2016. The claim advanced was precisely the same as that which had been pursued in Sharjah but which the Sharjah Court at all three levels had refused to entertain.

13. On 6 June 2016 the Defendants made an application to the Union Supreme Court for the determination of the alleged conflict of jurisdiction and for a stay. On 9 June the Defendants issued the present application in the DIFCC, this time for a stay under Article 60.  Coincident with that application, Decree 19 of 2016 was issued in Dubai, which constituted a judicial authority to which I must return.

14. On 24 July 2016 an application under Article 60 was also preferred in Dubai. Today is 28 July.  The hearing is being undertaken before me by way of video link with Dubai.  This was also anticipated by the Defendants to be the day on which the Dubai Courts would rule on jurisdiction.  But there has apparently been an adjournment of that ruling until at least 18 August.  I say “at least” because it appears that the adjournment was prompted by an application by the Defendants to allow them to re- open the pleadings in order to put forward what is described as an essential (and presumably new) defence.

15. The first issue that arises before me is the question whether the effect of the new Decree is to eliminate the jurisdiction of the USC to determine conflicts of jurisdiction between the judicial authorities of Dubai. What the Claimants say is that it does and that it has retroactive effect, and that accordingly this Court has in effect no jurisdiction to entertain this application under Article 60; the Court should refuse to entertain the application and leave matters to be decided by the committee.

16. The Defendants agree, as I understand it, that the effect of the Decree is to effectively amend the jurisdiction of the USC, but they say that is of no immediate consequence because the Decree does not have retroactive effect, and accordingly matters have to be considered by reference to Article 60 and not by reference to the Decree.

17. The Decree does indeed afford to the judicial authority – the formation and constitution of which is set out in Article 1 – responsibility and jurisdiction to determine conflicts of jurisdiction between the Dubai Courts and the DIFC Courts. Once its competence is engaged, then the conflicting claims will be stayed until the judicial authority issues a resolution that has to be produced very promptly.  As I have indicated from the chronology, the Decree was issued on 9 June 2016, that is to say three days after the application to the Union Supreme Court was made and on the same day as the present application.

18. As regards the issues in regard to the effect of the Decree and its retroactive effect, I have had the particular advantage of assistance from two very distinguished jurists from Dubai who have prepared extensive reports. Dr Ahmed bin Hazeem has filed a report and opinion on behalf of the Defendants, and Dr Habib Al Mulla likewise for the Claimants.  I must express grateful thanks for the clarity and quality of the reports that have been produced.

19. As I have indicated, as regards the first point, ie the impact of the Decree on the USC law, they are in fact agreed, namely that the impact of the Decree is to eliminate the jurisdiction of the Union Supreme Court in respect of conflicts of jurisdiction between the courts of Dubai.  I hope they will allow me to approach that agreement with some degree of caution.  This is a very new decree which is not without controversy.  It has attracted a fair bit of academic discussion, including on the very topic that we are considering at this moment, namely the relationship between the Decree and the USC law.

20. The issue is, it seems to me, of some high level of importance from the perspective of both the Dubai Courts and the DIFC on the one hand and the judicial authority on the other. One cannot help expecting that issues may arise as to whether, as a matter of constitutionality, a decree of the Emirates of Dubai can override, indeed amend, a federal law.  If I can, I would be minded to reserve my view on this topic, not least because it no doubt arises in a number of other cases.  I accordingly will only return to it if I conclude that the issue arises in the present case i.e. if there is indeed a conflict of jurisdiction.

21. As to the issue of retroactive effect, there is a dispute between the experts. Dr Mulla relies upon the federal CPC in support of his opinion that it is retroactive being a procedural matter.  Dr Hazeem prefers the view that it is not a procedural matter and the federal CPC is of no application.  Furthermore it is contended that even if the federal CPC was pertinent, there is an exception in respect of permitting procedural matters to have retroactive effect where the pleadings are closed, as indeed they are, in the DIFCC action.

22. Again, I hope the experts will forgive me if I exercise caution and seek to reserve my view on this dispute, which again arises in a number of cases. I am not sure the point is entirely easy.  Again I consider the appropriate way forward is for me to consider whether there is in fact a conflict of jurisdiction and, only if I was to conclude there was, return to the issues of the retroactivity and the impact of the Decree.

23. Accordingly, I turn to the principal issue in this case as to whether Article 60 is engaged. The Claimants assert that absent any inconsistent positive decisions by both the Dubai Courts and the DIFC Courts adopting, confirming or rejecting jurisdiction, there is no relevant conflict.  The Defendants contend that it is sufficient for jurisdiction to have been invoked by each party and not abandoned, and, once that invocation in two different jurisdictions is established, there is a conflict.

24. I have already drawn attention to the terms of Article 60, which seems to me to provide a strong measure of support for the Claimant’s position, given that it is directed at conflicts between two judicial authorities and not conflicts between parties as to which of the jurisdictions they prefer. In short, at first blush, the article does require more than invocation of jurisdiction.  Furthermore I would shy away from allowing such to create a conflict of jurisdiction.  It would occur without any input from the relevant judicial authority and would allow a reluctant defendant to dispatch into the long grass a good, valid claim by the simple device of issuing proceedings in another emirate and then claiming that there is a conflict of jurisdiction.  This on the Defendants’ case would create the need for a stay so as to await a decision of the Supreme Court, which no doubt would take a considerable period of time to emerge.

25. The starting point in considering whether these first impressions are correct is to look at the decisions of the Supreme Court itself. Two decisions have been brought to my attention.  First, an unnamed decision called Challenge No. 10 of the Year 28, a hearing which took place on 5 May 2002 before the Supreme Federal Court.  The headnote to the decision is of some interest.  Against, “International jurisdiction” it reads:

“Disputed jurisdiction, Supreme Court.  Jurisdiction of the Supreme Federal Court to decide in the disputed jurisdiction between two final judgments shall be restricted to the disputed jurisdiction between federal judicial authority and the judicial authorities in the emirates, or between judicial authority in an emirate and judicial authority in another emirate.  It shall not be expanded to include dispute foreign judgment and a judgment issued by the national judicial authority.  It is based, its effect, judgment should be passed not to accept the case.”

26. That reference to two final judgments re-emerged in due course in two decisions of the DIFCC which I will come to in a moment, but in the body of the judgment – I am reading from page 134 of the translation – there is this passage. Having referred to Article 60 and to Article 33, the court went on:

“The meaning of these texts is that the state of the disputed jurisdiction does not exist, unless jurisdiction is disputed between a federal judicial authority and the judicial authority in another emirate, or between the judicial authority in an emirate between them, where each of them claims its jurisdiction to hear the case or give up its hearing or each of them issues judgment in the case that contradicts the other.”

27. At the heart of the Defendant’s submissions to me, the emphasis is placed upon what is said to constitute three separate circumstances in which a conflict of jurisdiction may emerge: (1) that the authorities have not abandoned the hearing; (2) that the authorities have abandoned the hearing; or (3) the authorities have issued contradictory judgments. As I read the decision in Challenge No. 10 of the Year 28, the emphasis is upon what the judicial authority in the individual emirate is claiming.  The judicial authority claims jurisdiction or gives up jurisdiction or issues a judgment.  There is no indication whatsoever that it is sufficient simply for a party to invoke jurisdiction and thus effectively preclude the need for any decision by the judicial authority.

28. It may be surprising that there could be an insistence on an assertion or decision by the relevant judicial authority not to abandon the hearing of an action, a decision that might usually form a judgment, when there is already reference to a situation in which there are contradictory judgments. I am minded to accept the submission made on behalf of the Claimants that, be that as it may, that does not detract from the requirement for a positive assertion or abandonment by the relevant judicial authority.  It may be that the reference to contradictory judgments in contrast to decisions not to abandon jurisdiction is designed to deal with a circumstance in which an issue of jurisdiction is dealt with in the course of a judgment on the merits rather than at an interlocutory stage.

29. The other decision of the Supreme Court is in Meydan v Banyan, a decision dated 23 December 2015. There are in fact two translations of the relevant passage in the judgment.  I am not sure that the difference between them is particularly significant.  The passage in the agreed bundle reads as follows:

“Turning to the merits of the challenge action, the Federal Supreme Court has held that a negative conflict of jurisdiction would arise when two judicial bodies before whom the claim is brought in respect of same such a matter decide that the matter falls outside their remit and accordingly decline jurisdiction.”

That is not this case, but one has to emphasise the verb “decide”.  The passage goes on:

“A positive conflict of jurisdiction arises when two judicial authorities before whom a dispute is brought in respect to the same subject matter assert jurisdiction based on their remit.  Neither body gives up jurisdiction, which justifies recourse to the Challenge Court to determine the matter by designating the competent court.  This requires that a case be simultaneously pending before both disputed bodies where they are both asserting their jurisdiction over the matter and did not decline jurisdiction when the matter was referred to the authority entrusted with designating the court competent to hear and decide it.”

30. The present case is a good example of an alleged positive conflict of interest, but in my judgment this requires that both disputant bodies, ie the DIFCC and the Dubai Courts, both assert – and I emphasise that verb – their jurisdiction over the matter and do not decline jurisdiction when the matter is referred to it. This seems to me to confirm the requirement that there be a positive assertion or decision by the relevant authorities to exercise jurisdiction.

31. The alternative translation to that passage separates out the last phrase, and that reads:

“Thus justifying an application to a court on matters of conflict of jurisdiction for determining the competent forum.”

That is not this case.  The only court that has asserted jurisdiction to exercise jurisdiction is the DIFCC.  The Dubai Courts have made no observation on the topic at all.

32. In those circumstances, I am unable to accept the proposition advanced on behalf of the Defendants, which is set out in their skeleton as follows:

“What is required is that there be simultaneous proceedings where jurisdiction has been asserted in each.  Given that article 60 can be engaged if the disputed judicial authorities have not issued judgments because of the not-abandoned hearing of the action, then the question is what does asserting jurisdiction mean if, as it is, it must be something other than rendering a judgment on jurisdiction?  The defendant submits that this must mean the court’s jurisdiction has been invoked and the case had not been abandoned.  This argument is consistent with the fact that the way in which the court gives effect to a positive decision to assert jurisdiction is to pass a judgment.  Accordingly, to give meaning to the third limb of article 60, it must refer to something other than passing a judgment.  The plain and ordinary meaning is that the jurisdiction has been invoked and has not been abandoned.”

33. I regret I am quite unable to accept that on the plain and ordinary meaning of the Article it is sufficient for the jurisdiction to be invoked, leaving aside the rather remarkable implications that would bring in its train if it was right. Even the expert called who attended on behalf of the Defendants falls shy of proposing that the invocation of jurisdiction by itself is sufficient.  He identifies the requirement of a “clear indication” from the court.  But here the Dubai Courts have given no indication whatsoever, let alone a clear one.

34. The Claimants also relied upon two decisions of the DIFCC. Firstly Allianz, in which His Excellency Judge Al Madhani gave the judgment of the Court.  He made reference to the decision of No. 10 of 28, where his interpretation of the decision was to the effect:

“This principle states the USC shall exercise its jurisdiction to determine a conflict of jurisdiction between two final judgments of a federal and local judicial authority or between two local judicial authorities in the UAE.”

35. That passage was adopted by the Court of Appeal in the present proceedings. It is not easy, I confess, to identify precisely from where that quote is derived, given the translations that are before the Court, but the principle that there has to be a decision, an assertion by each individual authority, and a final one, seems to me to be entirely correct.  Otherwise, there is nothing to require the invocation of assistance from the Supreme Court in order to resolve the conflict.

36. Furthermore, it strikes me that, regardless of the accuracy or otherwise of that citation, I am bound by the decision in IGPL v Standard Chartered Bank, the alleged distinction as a matter of fact between that case and the present case, namely that in the present case a petition to the USC has actually been issued is not in my view a material distinction.

37. Accordingly, I have reached the firm view that this application must be refused on the grounds that there is no conflict of jurisdiction engaging Article 60. I reach that conclusion with some relief because it renders it unnecessary for me to determine the issues of the impact of the Decree on the federal law and the issue as to the retroactivity or otherwise of the Decree.  By the same token, I reach this conclusion willingly.  The Defendants have pursued almost every avenue to avoid the jurisdiction of this Court and the determination of this very substantial claim.  They have expended substantial costs in three courts in Sharjah, two courts in the DIFC and two courts in Dubai to no avail.  Now the Union Supreme Court is invoked on grounds which appear hopeless.  This application is refused.

Issued by:

Natasha Bakirci

Assistant Registrar

Date of issue: 1 August 2016

At: 2pm

The post CFI 026/2014 Standard Chartered Bank v Investment Group Private Limited appeared first on DIFC Courts.

Claim No. CFI 007/2016

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

 BETWEEN 

SKY NEWS ARABIA FZ-LLC

                                                                                                                    Claimant/Respondent

and

KASSAB MEDIA FZ (LLC)

Defendant/Appellant

ORDER OF H.E. JUSTICE ALI AL MADHANI

UPON reviewing the Appeal Notice, the Grounds of Appeal, and the Skeleton Argument filed on 10 July 2016 by the Defendant for the purposes of obtaining permission to appeal the Judgment of H.E. Justice Shamlan Al Sawalehi dated 21 June 2016

AND UPON reviewing all relevant material in the case file

AND in accordance with Part 44 of the Rules of the DIFC Courts (“RDC”);

IT IS HEREBY ORDERED THAT permission to appeal be granted as the requirements of RDC 44.8 have been met on the grounds that the appeal would have a real prospect of success and/or there is a compelling reason why the appeal should be heard.

Issued by:

Natasha Bakirci

Assistant Registrar

Date of issue: 3 August 2016

At: 8am

The post CFI 007/2016 Sky News Arabia Fz-LLC v Kassab Media Fz (LLC) appeared first on DIFC Courts.

Claim No. CFI 037/2015    

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

WILLIAM DANIEL MILLIGAN

            Claimant

and 

AL MOJIL INVESTMENT LIMITED

                                                                        Defendant

CASE MANAGEMENT ORDER OF H.E. JUSTICE ALI AL MADHANI

UPON hearing Counsel for the Claimant and Counsel for the Defendant at the Case Management Conference on 1 August 2016

AND UPON reading the relevant documents on the Court file,

IT IS HEREBY ORDERED THAT:           

Applications

1.The Claimant’s Application to Amend (Application Notice Number CFI-037-2015/3) (“Application to Amend”) and the Defendant’s Application to Strike Out and for Judgment on the Claimant’s Admission (Application Notice Number CFI-037-2015/2) (“Strike Out Application”) are to be determined without a hearing unless the Court directs otherwise, following a request by the Defendant in accordance with paragraph 3 of these directions.

2. The Claimant is to file and serve any further proposed amended statement of case (which is to be the subject of the Application to Amend) by no later than 4pm on Tuesday, 9 August 2016.

3. If the Defendant considers that the Application to Amend and the Strike Out Application should be determined by way of hearing, the Defendant is to notify the Claimant and the Court of the Defendant’s request for a hearing of the applications by no later than 4pm on Thursday, 11 August 2016.

4. By no later than 4pm on Monday, 22 August 2016, the Defendant is to file a response to the Application to Amend, and the Claimant is to file a response to the Strike Out Application in any event.

5. By no later than 4pm on Monday, 29 August 2016, the Claimant is to file a reply to the Defendant’s response to the Application to Amend, and the Defendant is to file a reply to the Claimant’s response to the Strike Out Application in any event.

6. The Court shall issue its decision in respect of the Application to Amend and the Strike Out Application by no later than 4pm on Monday, 5 September 2016.

Standard Production

7.Standard production of documents to be made by the Parties by 4pm on Sunday, 2 October 2016 [RDC 28.15].

8. The Parties to file and serve any Request to Produce (“RTP”) by 4pm on Sunday 9 October 2016 [RDC 28.16].

9. Objections to the RTPs[1] (if any) shall be filed and served by the Parties by 4pm on Sunday, 16 October 2016 [RDC 28. 26].

10. Where there are no objections to a particular Request contained in a RTP, the Parties are to produce documents responsive to that request by 4pm on Wednesday, 19 October 2016 (with copies) [RDC 28.20].

11. Where objections to any RTPs[2] have been made, the Court will determine those objections and will make any Document Production Order by 4pm on Thursday, 20 October 2016 [RDC 28.36].

12. The Parties shall comply with the terms of any disclosure order by 4pm on Tuesday, 25 October 2016 [RDC 28.39].

Witness Statements

13. Signed statements of witnesses of fact, and hearsay notices where required [by RDC 29.2 and 29.103 to 29.105 inclusive] to be filed and served by the Parties by 4pm on Tuesday, 1 November 2016.

14. Any Witness Statement evidence in reply to be filed and served by 4pm on Tuesday, 15 November 2016.

15. Unless otherwise ordered, Witness Statements are to stand as evidence in chief of the witness at trial.

Progress Monitoring Information Sheet

16. The parties are to file and serve a Progress Monitoring Information Sheet by 4pm on Tuesday, 22 November 2016.

Trial Bundles

17. Agreed trial bundles to be completed in accordance with Part 35 of the RDC and lodged by not later than 14 days before trial [RDC 35.33].

Reading List

18. A single reading list approved by all Parties’ legal representatives for trial to be lodged with the Registry not later than 2 days before fixed trial date, together with an estimate of time required for reading [RDC 35.50].

Skeleton Argument, Opening Statements and Chronology

19. Skeleton Arguments and Written Opening Statements to be served on all other Parties and lodged with the Court in accordance with any directions given at any Pre-Trial Review, or, in the absence of specific directions, by 1.00 pm two clear days before the start of trial for the Claimant and by 1.00 pm one clear day before the start of trial for the First Defendant [RDC 35.62].

20. Parties to prepare a Chronology of significant events cross-referenced to significant documents, pleadings and witness statements to be agreed, insofar as possible, and to be filed 7 days before trial [RDC 35.63].

Trial

21. The trial of this matter is to take place on Monday, 12 December 2016 and Tuesday, 13 December 2016, and the Court will reserve Wednesday, 14 December 2016 in the event a third day is required for a hearing.

22. Costs of the CMC in the case.

23. Liberty to apply.

Issued by:

Natasha Bakirci

Assistant Registrar

Date of issue: 3 August 2016

At: 4pm

The post CFI 037/2015 William Daniel Milligan v Al Mojil Investment Limited appeared first on DIFC Courts.

Claim No:  CFI 020/2016

          THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

BROOKFIELD MULTIPLEX CONSTRUCTIONS LLC

                                                                                                                                     Claimant

and

(1) DIFC INVESTMENTS LLC

(2) DUBAI INTERNATIONAL FINANCIAL CENTRE AUTHORITY

Defendants

CONSENT ORDER

UPON reading the correspondence from the parties’ legal representatives

AND UPON the parties having agreed the terms detailed in this Order

IT IS HEREBY ORDERED BY CONSENT THAT:

1.All further proceedings in this action be stayed upon the terms set out in the Schedule, except for the purpose of enforcing those terms and the terms of the costs order dated 30 June 2016 (the “Costs Order”).

2. Each party shall have permission to apply to the Court to enforce the terms of the Schedule and the Defendants shall have permission to apply to enforce the terms of the Costs Order without the need to bring a new claim.

3. Save for the Costs Order, there shall be no order as to costs.

Issued by:

Natasha Bakirci

Assistant Registrar

Date: 4 August 2016

At: 2pm

The post CFI 020/2016 Brookfield Multiplex Constructions LLC v (1) DIFC Investments LLC (2) Dubai International Financial Centre Authority appeared first on DIFC Courts.

Claim No: XXXX

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai

IN THE SMALL CLAIMS TRIBUNAL

BEFORE SCT JUDGE NATASHA BAKIRCI

BETWEEN

GERVAIS  

Claimant 

And

GIACINTA  

Defendant 

Hearing:          2 August 2016

Judgment:       7 August 2016

JUDGMENT OF SCT JUDGE NATASHA BAKIRCI

UPON hearing the Claimant and the Defendant’s representative

AND UPON reading the submissions and evidence filed and recorded on the Court file

IT IS HEREBY ORDERED THAT:

1.The Defendant shall pay the Claimant AED 5,000 in full and final settlement of the Claim.

2. Additionally, the Defendant shall pay the Claimant AED 367.50 in reimbursement of the DIFC Courts’ fee.

THE REASONS

Parties

3. The Claimant is Gervais, the former tenant of Tower in the DIFC (the “Premises”).

4. The Defendant is Giacinta, the owner of the Premises and the Claimant’s former landlord.

Background and the Preceding History

5. The Claimant and Defendant entered into a “Tenancy Contract” for the period of 25 May 2013 until 24 May 2014 with a rental amount of AED 100,000 for the year. The parties then entered into a “Renewed Tenancy Contract” for the period of 25 May 2014 until 24 May 2015 with a rental amount of AED 105,000 for the year. The Renewed Tenancy Contract followed the same provisions as the Tenancy Contract.

6. The Tenancy Contract incorporates a document entitled “Addendums” which states in Section 9 that the Claimant will pay a 5% deposit to the Defendant “which will be returned to the tenant providing the property is in good condition upon departure.” Section 7 of the Addendums states that the “Landlord shall, during validity of contract, be liable for handling major maintenance of property and shall rectify any defects or faults that affect tenant’s use of the premises” [sic]. Section 2 of the Addendums states that the “Tenant shall be obliged, upon expiry of tenancy, to return the premises to landlord in the same condition as handed over to the Tenant (s)at the time of contracting except, normal wear and tear” [sic].

7. Upon expiration of the Renewed Tenancy Contract, the parties could not agree on a new rental amount for the following year. Ultimately, the dispute as to the renewed rental amount came before the DIFC Courts Small Claims Tribunal with the landlord (the Defendant in this case) suing the tenant (the Claimant in this case) for eviction and overstay rent. This dispute ultimately resulted in a Judgment on the matter, issued by H.E. Justice Shamlan Al Sawalehi on 3 March 2016 (“Previous SCT Judgment”). The Previous SCT Judgment required that the tenant (the Claimant in this case) move out of the Premises and pay pro rata rent for his overstay period.

8. Furthermore, the Previous SCT Judgment, at Paragraph 4, required that the landlord (the Defendant in this case) “return the appropriate security deposit amount upon documented inspection of the property within thirty days of the tenant’s departure.” The Previous SCT Judgment elaborates at Paragraph 41, stating that “with regard to the security deposit of AED 5,000 which the [tenant] paid to the [landlord], the [landlord] shall be responsible to return the appropriate amount upon documented inspection of the Premises after the [tenant] has departed. If there are any damages or expenses appropriately deducted from the security deposit, the [landlord] can deduct them before reimbursing the [tenant]. Such reimbursement must occur within thirty days of the [tenant’s] departure from the Premises.”

9. The Claimant vacated the Premises by 6 March 2016, in compliance with the Previous SCT Judgment. The Defendant did communicate with the Claimant regarding the security deposit within the thirty-day period outlined in the Previous SCT Judgment as detailed by a 23 March 2016 email from Real Estate attaching the quotation for items to be repaired. The Claimant contends that this communication was outside the required method of communication which was for the Defendant to copy the SCT Registry.

10. On 19 April 2016 the Claimant emailed the Defendant and the SCT Registry, alleging the Defendant’s failure to comply with the Previous SCT Judgment as regards the security deposit. The Defendant responded by forwarding a quotation for repairs to show the repair work done on the Premises after the Claimant vacated.

11. The SCT Registry, in an email dated 24 April 2016, directed the parties to submit any communication between them regarding the security deposit including the inspection report documenting the required repairs to the Premises. The Defendant forwarded communications with Real Estate copying the same quotation already submitted.

12. On 26 April 2016, the SCT Registry informed the parties that any unsatisfied party could file an Enforcement Proceeding in order to compel compliance with a DIFC Courts Judgment.

13. No further communication was received by the SCT Registry until 22 June 2016, when the Claimant attempted to settle the dispute without further legal action. The Defendant claimed that the damage repaired in the Premises was beyond “wear and tear” and thus refused to settle.

14. The Claimant then filed a claim with the DIFC Courts Small Claims Tribunal on 7 July 2016 seeking reimbursement of his full AED 5,000 security deposit as well as reimbursement of his Court Fees.

15. The parties attended a Consultation before SCT Officer Mahika Hart on 21 July 2016 but were unable to reach a settlement. Thus, a Hearing was scheduled before SCT Judge Natasha Bakirci on 2 August 2016.

16. Prior to the Hearing, the Defendant further submitted the sales invoice and bank transfer slip from ToolRaid for the initial work done amounting to AED 5,365 along with the invoices and account statement from another maintenance company for additional work amounting to AED 2,225.

Particulars and Defence

17. The Claimant argues that the Defendant failed to comply with Paragraphs 4 and 41 of the Previous SCT Judgment and furthermore that he is not required to pay for the listed repairs pursuant to the Tenancy Contract and Addendums.

18. First, the Claimant maintains that the Defendant did not properly communicate regarding the security deposit within the thirty day period required by the Previous SCT Judgment. Moreover, even when communication was finally received, it did not include proof of a “documented inspection” detailing the work necessary. Instead, all that was provided was an invoice and quotation without further proof that such work was necessary and beyond normal wear and tear.

19. Second, the Claimant argues that the work charged in the sales invoice and quotation constitutes “normal wear and tear” as per Section 2 of the Addendums to the Tenancy Contract. Therefore, the landlord is responsible to pay for these repairs.

20. In sum, the Claimant contends that the Defendant’s failure to comply with the Previous SCT Judgment caused him to forfeit his right to keep any part of the security deposit. Further, the Claimant argues that the items charged against the security deposit fall within the scope of “normal wear and tear” and should therefore be covered by the Defendant as the landlord.

21. The Defendant argues that he has paid substantially more than AED 5,000 in repair of the Premises and therefore is not required to reimburse the Claimant for any of the deposit. The Defendant did not address his failure to comply with the timeline and documentation requirements of the Previous SCT Judgment.

22. In support of his arguments, the Defendant has submitted a “Sales – Quote” provided by ToolRaid for AED 5,365 as regards Tower. The Defendant also provided a “Sales – Invoice” detailing the same charges and proof of payment of AED 5,365 to ToolRaid for maintenance work in Tower. The Defendant further provided a “Statement of Account” from Real Estate showing further repairs costing AED 2,225 for Unit 4815. This Statement of Account is supported by further invoices for washing machine repair, hood repair and cleaning.

23. The initial “Sales – Quote” is dated 6 March 2016, the same day that the Claimant moved out of the Premises, and the “Sales – Invoice” is dated 22 March 2016, within the thirty day period required by the Previous SCT Judgment. The other documentation submitted by the Defendant is all dated after 19 April 2016, the date on which the Claimant emailed the Defendant and the SCT Registry alleging the Defendant’s failure to comply with the Previous SCT Judgment.

Finding

24. First and foremost, the relevant Tenancy Contract falls under DIFC Courts’ jurisdiction as it concerns the Premises which are located within the DIFC. While the Addendums at Section 2 state that disputes shall be referred to the “Renal Committee,” such a provision does not preclude DIFC Courts’ jurisdiction regarding property within the DIFC. Therefore, it is clear and undisputed that the DIFC Courts have jurisdiction to decide this matter. As the claim value is less than AED 500,000, this claim is properly before the Small Claims Tribunal of the DIFC Courts.

25. There is just one issue in this dispute, the Claimant’s security deposit and the repairs which the Defendant can and cannot deduct against that deposit. This same issue has recently been the subject of another SCT Judgment, Gottlieb LLC v Graca issued on 26 May 2016.

26. In Gottlieb LLC v Graca, the landlord/claimant sued the tenant/defendant for overstay rent and for certain charges for repairs against the defendant’s security deposit. The relevant tenancy agreement stated that “[i]f the Unit(s) is not returned to the Landlord in the same condition that it was received by the Tenant on the Commencement Date, including the garden and landscaping, save and except for reasonable wear and tear, the Managing Agent and/or Landlord has the right to deduct the necessary amount from the Security Deposit” (Gottlieb LLC v Graca, Paragraph 32, emphasis in original).

27. In Gottlieb LLC v Graca a key issue was which repairs could be claimed under the scope of “reasonable wear and tear.” The defendant had argued that many of the charges were outside of the “reasonable wear and tear” standard while the claimant contended that all the charged repairs were appropriate. The Judgment stated that in a security deposit dispute of this nature, “the Court is tasked with reviewing the evidence provided to determine whether the charges being made against the security deposit are repairs that lie within or outside of ‘reasonable wear and tear’” (Gottlieb LLC v Graca, Paragraph 34).

28. The Judgment in Gottlieb LLC v Graca goes on to state that the “Claimant, as the applicant in this case, bears the burden of proving that each repair is within its right to deduct. This means that the Claimant must both prove that the item is damaged, requiring repair, and that the damage lies outside of ‘reasonable wear and tear.’ It is for the Court to assess whether the Claimant has met this burden of proof on each deduction from the security deposit” (Gottlieb LLC v Graca, Paragraph 34).

29. In this case, the Claimant is the tenant rather than the landlord. The burden of proof typically lies with the Claimant to prove his case in concordance with the applicable legal standard. However, in this case, there is a Previous SCT Judgment requiring that the Defendant provide “documented inspection of the property” in order to make appropriate deductions from the security deposit. This requirement effectively shifts the burden of proof from the Claimant to the Defendant to prove that each charge deducted against the security deposit is appropriate. Furthermore, as is typical in landlord/tenant disputes, the landlord is in a position of power with regard to documenting any repairs charged against the security deposit and may therefore be required to prove such charges are appropriate.

30. In support of the charges against the security deposit, the Defendant has provided some sales quotes, invoices and proof of payment detailing items that were repaired. While there is no allegation that such documentation is false, there has been no further submission from the Defendant containing the “documented inspection” as required by the Previous SCT Judgment, in spite of numerous reminders from the SCT Registry to submit such documentation. Typically, such reports include photographs from the premises to prove damage beyond normal wear and tear.

31. Thus, as the burden of proof has been effectively shifted from the Claimant to the Defendant pursuant to the Previous SCT Judgment and the circumstances at hand, the Defendant is required to prove that any repairs charged against the security deposit fall outside of “normal wear and tear.”

32. Therefore, as in the case of Gottlieb LLC v Graca, the Court is required to assess each charge in order to determine whether the burden of proof has been met.

33. First, I will address the second set of charges detailed in the Statement of Account provided from Pulse Real Estate. This statement details charges for “Washing Machine Repair,” “Hood Filter Replacement,” “Apartment Cleaning,” and “Access Card” totalling AED 2,225. The statement was issued on 31 July 2016 and the items listed are dated 18 May 2016. As these dates are both well outside of the thirty day period allowed for in the Previous SCT Judgment, they cannot be deducted from the Claimant’s security deposit. As the Claimant vacated the premises on 6 March 2016, all documentation of the repair charges were to be collected and submitted by 6 April 2016. The further supporting invoices provided by the Defendant to document these charges are dated 9 May 2016, 26 May 2016 and 19 May 2016, similarly outside of the time period allowed. Therefore, none of the charges listed on the Statement of Account provided by the Defendant can be deducted against the Claimant’s security deposit.

34. Next, I will address the remaining items listed in the Sales – Quote and Sales – Invoice. These two documents list the same repairs and there is no question that the Defendant did in fact pay ToolRaid for the repairs in Tower, as detailed in the bank transfer documents submitted by the Defendant. Moreover, these two documents were issued on 6 March 2016 and 22 March 2016 respectively, well within the period allowed for in the Previous SCT Judgment. However, the Defendant has failed to provide the “documented inspection” as required by the Previous SCT Judgment. The Defendant has not provided detailed descriptions of the damage listed nor photographic evidence as would be expected from any landlord. Instead, the Sales – Quote and Sales – Invoice are the only two documents evidencing what was repaired in the Premises.

35. Therefore, the Defendant has failed to establish that the repairs listed fall outside of “normal wear and tear,” especially considering that the Claimant lived in the apartment for nearly three years and some damage is to be expected. In fact, some of the listed items seem, on their face, to fall within “normal wear and tear” such as repainting, which was found to lie within the expected scope of normal wear and tear as per the judgment in Gottlieb LLC v Graca, Paragraph 37-38, unless further proof of the extent of damage to the walls is shown by the landlord.

36. Therefore, the Defendant has not documented his inspection of the Premises and has failed to comply with the timeline provided for in the Previous SCT Judgment. Furthermore, the Defendant was given numerous opportunities to submit “documented inspection” in advance of the Hearing. Thus, it is not appropriate for the Defendant to deduct the listed expenses from the Claimant’s security deposit. The Defendant must return the full AED 5,000 security deposit to the Claimant.

37. The Defendant shall also pay the Claimant AED 367.50 as reimbursement of the Claimant’s court fee.

Issued by:

Natasha Bakirci

SCT Judge

Date of issue: 7 August 2016

At: 5 pm

The post Gervais v Giacinta appeared first on DIFC Courts.

laim No: XXXX

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai

IN THE SMALL CLAIMS TRIBUNAL

BEFORE SCT JUDGE NATASHA BAKIRCI

BETWEEN 

GAMILA 

Claimant

and

GAEL 

Defendant

Hearing:          2 August 2016

Judgment:       7 August 2016

JUDGMENT OF SCT JUDGE NATASHA BAKIRCI

UPON hearing the Claimant and the Defendant’s representative

AND UPON reading the submissions and evidence filed and recorded on the Court file

IT IS HEREBY ORDERED THAT:

1. The Defendant shall pay the Claimant AED 5,000 in full and final settlement of the Claim.

2. Additionally, the Defendant shall pay the Claimant AED 367.50 in reimbursement of the DIFC Courts’ fee.

THE REASONS

Parties

3. The Claimant is Gamila, the former tenant of Unit of Tower in the DIFC (the “Premises”).

4. The Defendant is Gael, the owner of the Premises and the Claimant’s former landlord.

Background and the Preceding History

5. The Claimant and Defendant entered into a “Tenancy Contract” for the period of 25 May 2013 until 24 May 2014 with a rental amount of AED 100,000 for the year. The parties then entered into a “Renewed Tenancy Contract” for the period of 25 May 2014 until 24 May 2015 with a rental amount of AED 105,000 for the year. The Renewed Tenancy Contract followed the same provisions as the Tenancy Contract.

6. The Tenancy Contract incorporates a document entitled “Addendums” which states in Section 9 that the Claimant will pay a 5% deposit to the Defendant “which will be returned to the tenant providing the property is in good condition upon departure.” Section 7 of the Addendums states that the “Landlord shall, during validity of contract, be liable for handling major maintenance of property ,and shall rectify any defects or faults that affect tenant’s use of the premises” [sic]. Section 2 of the Addendums states that the “Tenant shall be obliged, upon expiry of tenancy, to return the premises to landlord in the same condition as handed over to the Tenant (s)at the time of contracting except, normal wear and tear” [sic].

7. Upon expiration of the Renewed Tenancy Contract, the parties could not agree on a new rental amount for the following year. Ultimately, the dispute as to the renewed rental amount came before the DIFC Courts Small Claims Tribunal with the landlord (the Defendant in this case) suing the tenant (the Claimant in this case) for eviction and overstay rent. This dispute ultimately resulted in a Judgment on the matter, issued by H.E. Justice Shamlan Al Sawalehi on 3 March 2016 (“Previous SCT Judgment”). The Previous SCT Judgment required that the tenant (the Claimant in this case) move out of the Premises and pay pro rata rent for his overstay period.

8. Furthermore, the Previous SCT Judgment, at Paragraph 4, required that the landlord (the Defendant in this case) “return the appropriate security deposit amount upon documented inspection of the property within thirty days of the tenant’s departure.” The Previous SCT Judgment elaborates at Paragraph 41, stating that “with regard to the security deposit of AED 5,000 which the [tenant] paid to the [landlord], the [landlord] shall be responsible to return the appropriate amount upon documented inspection of the Premises after the [tenant] has departed. If there are any damages or expenses appropriately deducted from the security deposit, the [landlord] can deduct them before reimbursing the [tenant]. Such reimbursement must occur within thirty days of the [tenant’s] departure from the Premises.”

9. The Claimant vacated the Premises by 6 March 2016, in compliance with the Previous SCT Judgment. The Defendant did communicate with the Claimant regarding the security deposit within the thirty day period outlined in the Previous SCT Judgment as detailed by a 23 March 2016 email from Real Estate attaching the quotation for items to be repaired. The Claimant contends that this communication was outside the required method of communication which was for the Defendant to copy the SCT Registry.

10. On 19 April 2016 the Claimant emailed the Defendant and the SCT Registry, alleging the Defendant’s failure to comply with the Previous SCT Judgment as regards the security deposit. The Defendant responded by forwarding a quotation for repairs to show the repair work done on the Premises after the Claimant vacated.

11. The SCT Registry, in an email dated 24 April 2016, directed the parties to submit any communication between them regarding the security deposit including the inspection report documenting the required repairs to the Premises. The Defendant forwarded communications with Real Estate copying the same quotation already submitted.

12. On 26 April 2016, the SCT Registry informed the parties that any unsatisfied party could file an Enforcement Proceeding in order to compel compliance with a DIFC Courts Judgment.

13. No further communication was received by the SCT Registry until 22 June 2016, when the Claimant attempted to settle the dispute without further legal action. The Defendant claimed that the damage repaired in the Premises was beyond “wear and tear” and thus refused to settle.

14. The Claimant then filed a claim with the DIFC Courts Small Claims Tribunal on 7 July 2016 seeking reimbursement of his full AED 5,000 security deposit as well as reimbursement of his Court Fees.

15. The parties attended a Consultation before SCT Officer Mahika Hart on 21 July 2016 but were unable to reach a settlement. Thus, a Hearing was scheduled before SCT Judge Natasha Bakirci on 2 August 2016.

16. Prior to the Hearing, the Defendant further submitted the sales invoice and bank transfer slip from Maintenance LLC for the initial work done amounting to AED 5,365 along with the invoices and account statement from another maintenance company for additional work amounting to AED 2,225.

Particulars and Defence

17. The Claimant argues that the Defendant failed to comply with Paragraphs 4 and 41 of the Previous SCT Judgment and furthermore that he is not required to pay for the listed repairs pursuant to the Tenancy Contract and Addendums.

18. First, the Claimant maintains that the Defendant did not properly communicate regarding the security deposit within the thirty day period required by the Previous SCT Judgment. Moreover, even when communication was finally received, it did not include proof of a “documented inspection” detailing the work necessary. Instead, all that was provided was an invoice and quotation without further proof that such work was necessary and beyond normal wear and tear.

19. Second, the Claimant argues that the work charged in the sales invoice and quotation constitutes “normal wear and tear” as per Section 2 of the Addendums to the Tenancy Contract. Therefore, the landlord is responsible to pay for these repairs.

20. In sum, the Claimant contends that the Defendant’s failure to comply with the Previous SCT Judgment caused him to forfeit his right to keep any part of the security deposit. Further, the Claimant argues that the items charged against the security deposit fall within the scope of “normal wear and tear” and should therefore be covered by the Defendant as the landlord.

21. The Defendant argues that he has paid substantially more than AED 5,000 in repair of the Premises and therefore is not required to reimburse the Claimant for any of the deposit. The Defendant did not address his failure to comply with the timeline and documentation requirements of the Previous SCT Judgment.

22. In support of his arguments, the Defendant has submitted a “Sales – Quote” provided by Maintenance LLC for AED 5,365 as regards Unit of Tower. The Defendant also provided a “Sales – Invoice” detailing the same charges and proof of payment of AED 5,365 to Maintenance LLC for maintenance work in Unit of Tower. The Defendant further provided a “Statement of Account” from Real Estate showing further repairs costing AED 2,225 for Unit. This Statement of Account is supported by further invoices for washing machine repair, hood repair and cleaning.

23. The initial “Sales – Quote” is dated 6 March 2016, the same day that the Claimant moved out of the Premises, and the “Sales – Invoice” is dated 22 March 2016, within the thirty day period required by the Previous SCT Judgment. The other documentation submitted by the Defendant is all dated after 19 April 2016, the date on which the Claimant emailed the Defendant and the SCT Registry alleging the Defendant’s failure to comply with the Previous SCT Judgment.

Finding

24. First and foremost, the relevant Tenancy Contract falls under DIFC Courts’ jurisdiction as it concerns the Premises which are located within the DIFC. While the Addendums at Section 2 state that disputes shall be referred to the “Renal Committee,” such a provision does not preclude DIFC Courts’ jurisdiction regarding property within the DIFC. Therefore, it is clear and undisputed that the DIFC Courts have jurisdiction to decide this matter. As the claim value is less than AED 500,000, this claim is properly before the Small Claims Tribunal of the DIFC Courts.

25. There is just one issue in this dispute, the Claimant’s security deposit and the repairs which the Defendant can and cannot deduct against that deposit. This same issue has recently been the subject of another SCT Judgment, Gottlieb LLC v Graca issued on 26 May 2016.

26. In Gottlieb LLC v Graca, the landlord/claimant sued the tenant/defendant for overstay rent and for certain charges for repairs against the defendant’s security deposit. The relevant tenancy agreement stated that “[i]f the Unit(s) is not returned to the Landlord in the same condition that it was received by the Tenant on the Commencement Date, including the garden and landscaping, save and except for reasonable wear and tear, the Managing Agent and/or Landlord has the right to deduct the necessary amount from the Security Deposit” (Gottlieb LLC v Graca, Paragraph 32, emphasis in original).

27. In Gottlieb LLC v Graca a key issue was which repairs could be claimed under the scope of “reasonable wear and tear.” The defendant had argued that many of the charges were outside of the “reasonable wear and tear” standard while the claimant contended that all the charged repairs were appropriate. The Judgment stated that in a security deposit dispute of this nature, “the Court is tasked with reviewing the evidence provided to determine whether the charges being made against the security deposit are repairs that lie within or outside of ‘reasonable wear and tear’” (Gottlieb LLC v Graca, Paragraph 34).

28.The Judgment in Gottlieb LLC v Graca goes on to state that the “Claimant, as the applicant in this case, bears the burden of proving that each repair is within its right to deduct. This means that the Claimant must both prove that the item is damaged, requiring repair, and that the damage lies outside of ‘reasonable wear and tear.’ It is for the Court to assess whether the Claimant has met this burden of proof on each deduction from the security deposit” (Gottlieb LLC v Graca, Paragraph 34).

29. In this case, the Claimant is the tenant rather than the landlord. The burden of proof typically lies with the Claimant to prove his case in concordance with the applicable legal standard. However, in this case, there is a Previous SCT Judgment requiring that the Defendant provide “documented inspection of the property” in order to make appropriate deductions from the security deposit. This requirement effectively shifts the burden of proof from the Claimant to the Defendant to prove that each charge deducted against the security deposit is appropriate. Furthermore, as is typical in landlord/tenant disputes, the landlord is in a position of power with regard to documenting any repairs charged against the security deposit and may therefore be required to prove such charges are appropriate.

30. In support of the charges against the security deposit, the Defendant has provided some sales quotes, invoices and proof of payment detailing items that were repaired. While there is no allegation that such documentation is false, there has been no further submission from the Defendant containing the “documented inspection” as required by the Previous SCT Judgment, in spite of numerous reminders from the SCT Registry to submit such documentation. Typically, such reports include photographs from the premises to prove damage beyond normal wear and tear.

31. Thus, as the burden of proof has been effectively shifted from the Claimant to the Defendant pursuant to the Previous SCT Judgment and the circumstances at hand, the Defendant is required to prove that any repairs charged against the security deposit fall outside of “normal wear and tear.”

32. Therefore, as in the case of Gottlieb LLC v Graca, the Court is required to assess each charge in order to determine whether the burden of proof has been met.

33. First, I will address the second set of charges detailed in the Statement of Account provided from Real Estate. This statement details charges for “Washing Machine Repair,” “Hood Filter Replacement,” “Apartment Cleaning,” and “Access Card” totalling AED 2,225. The statement was issued on 31 July 2016 and the items listed are dated 18 May 2016. As these dates are both well outside of the thirty day period allowed for in the Previous SCT Judgment, they cannot be deducted from the Claimant’s security deposit. As the Claimant vacated the premises on 6 March 2016, all documentation of the repair charges were to be collected and submitted by 6 April 2016. The further supporting invoices provided by the Defendant to document these charges are dated 9 May 2016, 26 May 2016 and 19 May 2016, similarly outside of the time period allowed. Therefore, none of the charges listed on the Statement of Account provided by the Defendant can be deducted against the Claimant’s security deposit.

34. Next, I will address the remaining items listed in the Sales – Quote and Sales – Invoice. These two documents list the same repairs and there is no question that the Defendant did in fact pay Maintenance LLC for the repairs in Unit of Tower, as detailed in the bank transfer documents submitted by the Defendant. Moreover, these two documents were issued on 6 March 2016 and 22 March 2016 respectively, well within the period allowed for in the Previous SCT Judgment. However, the Defendant has failed to provide the “documented inspection” as required by the Previous SCT Judgment. The Defendant has not provided detailed descriptions of the damage listed nor photographic evidence as would be expected from any landlord. Instead, the Sales – Quote and Sales – Invoice are the only two documents evidencing what was repaired in the Premises.

35. Therefore, the Defendant has failed to establish that the repairs listed fall outside of “normal wear and tear,” especially considering that the Claimant lived in the apartment for nearly three years and some damage is to be expected. In fact, some of the listed items seem, on their face, to fall within “normal wear and tear” such as repainting, which was found to lie within the expected scope of normal wear and tear as per the judgment in Gottlieb LLC v Graca, Paragraph 37-38, unless further proof of the extent of damage to the walls is shown by the landlord.

36. Therefore, the Defendant has not documented his inspection of the Premises and has failed to comply with the timeline provided for in the Previous SCT Judgment. Furthermore, the Defendant was given numerous opportunities to submit “documented inspection” in advance of the Hearing. Thus, it is not appropriate for the Defendant to deduct the listed expenses from the Claimant’s security deposit. The Defendant must return the full AED 5,000 security deposit to the Claimant.

37. The Defendant shall also pay the Claimant AED 367.50 as reimbursement of the Claimant’s court fee.

Issued by:

Natasha Bakirci

SCT Judge

Date of issue: 7 August 2016

At: 5 pm

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Claim No:XXXX

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai

IN THE SMALL CLAIMS TRIBUNAL

BEFORE SCT JUDGE MARK BEER

BETWEEN 

GERVOIS

Claimant 

and

(1) GITTANA LLC

(2) GACINTA LLC  

Defendants 

Hearing:          12 July 2016

Judgment:       8 August 2016

JUDGMENT OF SCT JUDGE MARK BEER

UPON this claim having been called for consultation on 22 June 2016 before SCT Officer Mahika Hart;

UPON the parties not having reached settlement;

UPON hearing the Claimant’s representative and the Defendants’ representatives;

AND UPON reading the submissions and evidence filed and recorded on the Court’s file and reviewing the judgment in Earlene v Earl dated 20 July 2014;

IT IS HEREBY ORDERED THAT:

1. The Claimant’s claim seeking renewal of the Lease Agreement under the same terms and conditions as the previous year(s) is dismissed.

2. Each party shall bear their own costs.

THE REASONS

Parties:

3. The Claimant, Gervois, is a tenant and a partner of a law firm in Dubai. His associate is a lawyer in the same firm and was appointed as his personal representative for the hearing.

4. The Defendants are Gittana LLC (the “First Defendant”) and Gacinta LLC (the “Second Defendant”). The Second Defendant is the Claimant’s landlord and the First Defendant is the Second Defendant’s managing agent. The submissions made on behalf of each Defendant during the hearing were said to be made on the behalf of both Defendants.

Background:

5. On 10 July 2010, the Claimant entered into a Lease Agreement with Gacinta LLC for the rent of apartment in DIFC.

6. It is common ground that from 10 July 2010 until the current dispute arose, the Lease Agreement has been renewed annually substantially on the same terms and conditions.

7. By email dated 30 March 2016 the First Defendant (acting as agent for the Second Defendant) informed the Claimant that “Your current period of tenancy expires on 09 July 16 for unit ”. The email stated that the Claimant should vacate the apartment on 9 July 2016 and went on to say “If you would like to sign new lease agreement [sic] with the Landlord for the same unit, please do be informed that the rental value will be 140,000 for the period from 10 July 16 to 09 July 2017”. It is common ground that the proposed new rent was expressed in UAE Dirhams.

8. A meeting appears to have taken place between the Claimant’s representative and the First Defendant’s representative in April 2016, which was followed by an email from the Claimant dated 25 April 2016 in which it was written “This is to confirm that I am happy to renew the Tenancy Agreement under the same terms and conditions as the previous year, including the applicable rental price.” The letter went on to refer to the RERA Rental Increase Calculator, as provided for in Decree No. 43 of 2013. It is common ground that the RERA calculator applies to properties located in the DIFC.

9. The proposed rental rate of AED 140,000 represented a 45% increase in rent from the lease for the year to 9 July 2016. It is common ground that such an increase was not in accordance with the RERA calculator, which would not have permitted any rental increase.

10.By email dated 2 May 2016, the First Defendant referred to its email of 30 March 2016 as an “eviction notice” and reiterated the requirement for the Claimant to vacate the premises. Further correspondence was exchanged, leading to a “without prejudice” letter addressed to the Defendants from Law Firm dated 23 May 2016 and a subsequent letter from Law Firm dated 7 June 2016 in which it was said that the Claimant had “decided to file a claim against you before the DIFC Court.”

The Claim:

11. On 9 June 2016, the Claimant lodged a claim with the DIFC Courts’ Small Claims Tribunal (SCT) against the Defendants, in which he claimed that the Unit is not eligible for an increase in rent for renewal pursuant to Decree No. 13 of 2013.

12. The Claimant’s submissions in the claim form focused on the impact of the Second Defendant being allowed to use the termination of the Lease as a mechanism to “circumvent the provisions of the applicable laws, including but not limited to the Decree [No. 13 of 2013]”. The claim form suggested that “If this unlawful behavior by the landlord is permitted, then the purpose of enacting the Decree, which is to prohibit landlords from abusively increasing the rent prices, is completely defeated.” The claim form went on to suggest that the “conduct of the Defendant . . . is contributing in creating an imbalance in the market prices particularly that the Defendant is a large corporation that owns a significant number of properties in the building. This further means that the Defendant has the power to directly manipulate the market prices in the building and the area thus creating market instability that the government authorities are combating.” During the hearing, this submission became known as the “Policy Claim”. That is, the DIFC Courts should prevent a landlord from being able to rely on termination provisions within a lease as a guise to increase the rent beyond that prescribed using the RERA calculator described in Decree No. 13 of 2013.

13. During the hearing, additional matters were raised by the Claimant and addressed by the Defendants. The first was seen on the wording in Clause 5.1 of the Lease which stated that “… Both Parties agree that should Landlord decide not to sell the property to a third party purchaser as aforesaid, then the Tenancy Agreement will be renewed solely upon mutual agreement between parties and to such a period as then mutually agreed.” It is common ground that the Landlord had not agreed to sell the apartment to a third party purchaser. The Claimant submitted that there had been “mutual agreement” to renew the Lease (see the emails of 30 March 2016 and 25 April 2016, in particular the wording “This is to confirm that I am happy to renew the Tenancy Agreement under the same terms and conditions as the previous year, including the applicable rental price.”). It was argued that by his email of 25 April 2016 the Lease had been renewed because at that point the only point of difference between the landlord and the tenant was the price which, it was agreed, could not be increased under the terms of the RERA Calculator. That is, because the rental amount was not negotiable, and all other terms had been offered and accepted, the Lease was renewed for the period from 10 July 2016 to 9 July 2017 at a rate fixed at AED 140,000. I call this the “Offer and Acceptance Claim”.

14. The Claimant also claimed that the parties had agreed to incorporate Dubai Law No. 26 of 2007 (Law Regulating Relationship between Landlords and Tenants in the Emirate of Dubai) into the Lease through a reference to it in Clause 4.10 of the Lease. Although it was accepted that reference to that law was limited to Article (4)2 regarding registration, the Claimant submitted that such a reference was sufficient to impute a broader application of that law, including the restrictions on lease termination provided for therein. Other arguments were put forward to suggest that Dubai Law No. 26 of 2007 applied to the Lease, including that the Landlord had given 90 days’ notice of eviction. It was common ground that if Dubai Law No. 26 of 2007 applied to the Lease, then the Landlord had not given effective notice to vacate the apartment. I call this the “Legislative Incorporation Claim”.

The Defence:

15. Regarding the Policy Claim, the Defendants argue that:

(a) this case relates to matters of law and contractual interpretation, and not of public policy;

(b) the applicable laws in DIFC, along with the Lease itself, allow the Second Defendant to terminate the Lease and, simultaneously, to offer a new contract with a higher rent than would otherwise be permitted by the RERA Calculator; and

(c) the Courts do not need to consider public policy because tenants in DIFC could obtain the same or similar protections to those enshrined in Dubai Law No. 26 of 2007 by way of incorporating detailed notice and termination provisions into their tenancy contracts.

16. Regarding the Offer and Acceptance Claim, the Defendants submit that their email of 5 June 2016 in response to the Claimant’s letter (sent on his behalf by Law Firm) of 23 May 2016 rejected the Claimant’s letter in its entirety by stating that they have “no intention to renew the tenancy contract” and that “the Landlord does not wish, and is not obliged to, renew the Tenancy Agreement.” The Defendants therefore do not consider the suggestion made in the email on 30 March 2016 to sign a new Lease Agreement as a mutual agreement for the renewal of the agreement (see paragraph 11 above). In any event, the Defendants do not accept that they ever accepted an offer to renew the Lease at the same rental amount as in the year to 9 July 2016.

17. Regarding the Legislative Incorporation Claim, the Defendants submitted that reference to Dubai Law No. 26 of 2007 in the Lease was a mistake. The referenced clause referred to registration of the Lease which was not applicable to the Lease because it was in respect of an apartment in DIFC. It was submitted that if the Courts do not accept that submission, the Defendants argue that only the referenced clause, being Clause 4(2) of Dubai Law No. 26 of 2007, should be incorporated into the Lease, and not any additional provisions.

Finding:

19. Firstly, in relation to the Policy Claim, I am persuaded that the Claimant, a practicing lawyer, had the opportunity to consider termination when the Lease was being negotiated initially, on renewal each year. He had the opportunity to request contractual protection and the legal knowledge to know that Dubai Law No. 26 of 2007 does not apply in the DIFC. If he had required a similar notice period to that set out in Dubai Law No. 26 of 2007 he could have requested that such notice period be provided in the Lease. I do not, therefore, side with the Claimant in suggesting that the Courts should step in to fill a void. There is no such void. Tenants of properties in DIFC are free to contract in accordance with applicable laws in the DIFC, including negotiating such termination terms as are mutually agreeable between the landlord and tenant.

20. Regarding the Offer and Acceptance Claim, whilst it is an interesting legal argument, and perhaps the most persuasive of those put forward by the Claimant, on balance I cannot find that the Claimant and Second Defendant were ad idem despite the email of 30 March 2016 and the Claimant’s response on 25 April 2016. As such, I do not find that there was the mutual agreement required by Clause 5.1 of the Lease. The parties were not ad idem at that time because the Defendants’ view of the rental amount was higher than that of the Claimant. Although not pertinent to this determination, I was not persuaded by the suggestion of the Defendants that if the Claimant had agreed to the proposed rent of AED 140,000 that would have constituted a new lease, as opposed to a renewal.

21. Regarding the Legislative Incorporation Claim, I do not find that reference to Dubai Law No. 26 of 2007 in Clause 4.10 of the Lease is sufficient to incorporate that law in its entirety into the Lease. I accept that its inclusion in the Lease was a mistake and that the referenced provision of that law has no bearing on this claim.

Issued by:

Mark Beer

SCT Judge

Date of issue: 8 August 2016

At: 4 pm

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Claim No. CFI 020/2014

CA 002/2016

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF APPEAL

BETWEEN

GFH CAPITAL LIMITED

Claimant/Respondent

and

DAVID LAWRENCE HAIGH

Defendant/Appellant

ORDER OF CHIEF JUSTICE MICHAEL HWANG

UPON reviewing the Registry’s email of 18 February 2016 which granted permission to the Appellant, David Haigh, to proceed with four appeals (the “Four Appeals”) made against various orders issued by Justice Sir David Steel (as he then was), subject to the condition that the Appellant’s Skeleton Arguments pursuant to his applications be filed within one month from the date of the Order (i.e. by 17 March 2016)

AND UPON reviewing the Order of the Court dated 27 June 2016 granting a further extension of time to 24 July 2016 for the Appellant’s Skeleton Arguments to be filed, and the Registry’s accompanying letter of the same date issuing directions for the future conduct of the case

AND UPON reviewing the Appellant’s letter dated 17 July 2016 and accompanying Medical Report seeking, among other things, an adjournment and/or stay of the proceedings and a request for funding from the Court in order to engage lawyers to assist with the Four Appeals (which request has been treated as an application for funding the legal fees and expenses of the Four Appeals in accordance with RDC 38.92 and pursuant to which the Signatories of the Pro Bono Account have agreed to release a sum of up to AED 130,000 for such purpose)

AND WHEREAS the Appellant’s Skeleton Arguments have not been filed

AND WHEREAS the Court is not persuaded that the Appellant’s medical condition is such as to prevent him from instructing lawyers and/or attending a hearing if he wishes to do so

IT IS HEREBY ORDERED THAT:

1.The Four Appeals and Immediate Judgment application dated 17 March 2016 will proceed subject to the directions below.

2. Amount(s) up to AED 130,000 in the aggregate will be released from the Pro Bono Account to a legal representative appointed by the Appellant for the purpose of arguing the Four Appeals before the DIFC Courts. These funds will only be released to the legal representative, not the Appellant himself, and will only be released after a review of bills rendered by the legal representative.

3. The Four Appeals will be divided into two classes:

(a) the appeal against the Orders relating to the amendment of the Freezing Orders, which can be further subdivided into:

(i) the appeal that some of the frozen funds should be released to fund the various court actions in which the Appellant is involved, particularly those involving the Respondent (the “Releasing Funds Appeal”); and

(ii) the appeal that the Appellant should be granted larger sums of maintenance (the “Maintenance Appeal”)

(b) the appeal against the then Justice Sir David Steel’s refusal to recuse himself from all future proceedings in this case (the “Recusal Appeal”)

4. The Releasing Funds Appeal will be heard before the Maintenance Appeal and the Recusal Appeal.

5. The Releasing Fund Appeal will proceed for hearing on Sunday 18 September 2016 as scheduled. It will take place at 10am Dubai time in the event that the Appellant instructs counsel to appear before the judge in Dubai. Should the Appellant remain a litigant in person, and intend to appear by way of video link, the hearing will commence at 12pm Dubai time to take into consideration the time difference between Dubai and the UK.

6. The Appellant will be allowed further time to file his Skeleton Argument, given the fact that he may wish to avail himself of the AED 130,000 subsidy to instruct lawyers to argue the appeals.

7. The Skeleton Arguments for the Releasing Funds Appeal must be filed by no later than 2pm on Thursday 1 September 2016. This will enable that appeal hearing to proceed on Sunday 18 September 2016 as scheduled, with sufficient time in advance of the appeal for the Respondent to review and respond to the Appellant’s Skeleton Argument. Failure to meet this deadline will result in the striking out of the Releasing Funds Appeal.

8. The Maintenance Appeal and the Recusal Appeal will be heard on 11 and 12 December 2016, but will be heard independently of the Immediate Judgment Application, and will therefore not need to take place in advance of that application being heard.

9. The Skeleton Arguments for the Maintenance Appeal and the Recusal Appeal must be filed by 4pm on 11 November 2016 and any failure to do so will result in the relevant appeal being struck out.

10. The Immediate Judgment Application will proceed between 16 and 18 October 2016 (inclusive), at such time and for such duration as the Registry directs. In the absence of any indication to the contrary by 4pm on 17 August 2016, it will be assumed that both Parties will be available on these dates.

Issued by:

Mark Beer

Registrar

Date of Issue: 10 August 2016

At: 4pm

The post CFI 020/2014 GFH Capital Limited v David Lawrence Haigh appeared first on DIFC Courts.

Claim No: CFI 019/2016

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

SEAN SHAHROKH ETTEHADIEH 

                                                                                          Claimant

and

GOLD HOLDING LIMITED

Defendant

  ORDER OF H.E. JUSTICE ALI AL MADHANI

UPON reviewing the Claimant’s Application Notice CFI-019-2016/1 dated 11 August 2016 seeking permission to add a Defendant to these proceedings

AND UPON reviewing Part 20 of the Rules of the DIFC Courts (“RDC”)

AND UPON reviewing the evidence recorded on the case file

IT IS HEREBY ORDERED THAT:

1. The company ‘Gold AE DMCC’ be added as a party to these proceedings as the Second Defendant.

2. The Claimant shall, within 14 days of the date of this order, amend the claim form and particulars of claim, pursuant to RDC 20.22(1).

3. The Claimant shall, within 14 days of the date of this order, serve a copy of this order on all parties to the proceedings and any other person affected by it, pursuant to RDC 20.22(2).

4. The Claimant shall, within 14 days of the date of this Order, serve a copy of the following documents on all the Defendants to these proceedings pursuant to RDC 20.22(3):

(a) The amended particulars of claim

(b) The amended claim form

(c) Forms for admitting, defending and acknowledging the claim

(d) Copies of the statements of case and any other documents referred to in any statements of case.

5. The Claimant shall, within 7 days of the date of service of documents listed in paragraph 4 above, file a Certificate of Service for each Defendant.

6. The company ‘Gold AE DMCC’ shall become a party to the proceedings once served with an amended claim form, as per RDC 20.23.

Issued by:

Mark Beer

Registrar

Date of issue: 28 August 2016

At: 4pm

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Claim No. CFI 037/2015

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

WILLIAM DANIEL MILLIGAN

     Claimant

and

AL MOJIL INVESTMENT LIMITED

Defendant

CONSENT ORDER

UPON the Claimant reaching agreement with the Defendant on the terms of the discontinuance by which the Defendant shall discontinue its counterclaim against the Claimant

IT IS HEREBY ORDERED BY CONSENT THAT:

1.The Defendant shall discontinue its counterclaim against the Claimant;

2. The Defendant shall file a Notice of Discontinuance with the Court by 10am on Tuesday, 30 August 2016;

3. The costs of and incidental to the counterclaim be reserved.

Issued by:

Natasha Bakirci

Assistant Registrar

Date of Issue: 29 August 2016
At: 4pm

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Claim No. CFI 012/2014 

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE 

BETWEEN 

MR PIERRE-ERIC DANIEL BERNARD LYS 

Claimant

and

ELSECO LIMITED 

Defendant

CONSENT ORDER

UPON the judgment of H.E. Justice Ali Al Madhani dated 14 July 2016 ordering the Defendant to pay the Claimant’s costs, to be assessed by the Registrar if not agreed

AND UPON the Claimant filing his Application Notice CFI-012-2014/6 dated 18 August 2016 for a payment on account of his costs dated 18 August 2016

IT IS HEREBY ORDERED THAT:

1.The Defendant shall, within 14 days of the date of this Order, make a payment on account of the Claimant’s costs in the amount of USD 255,500 to the Claimant, pending an agreement between the parties on the Claimant’s costs or final assessment in respect of the Claimant’s costs, and without prejudice to any appeal proceedings.

2. There shall be no order as to costs in respect of Application Notice CFI-012-2014/6. 

Issued by:

Natasha Bakirci

Assistant Registrar

Date of Issue: 29 August 2016

At: 10am

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Claim No:  CFI 016-2015

          THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BEFORE H.E. JUSTICE ALI ALMADHANI

BETWEEN

(1) MOHAMMAD ABU AL HAJ

(2) ABU AL HAJ HOLDING

Claimants 

and 

(1) SHEIK SULTAN KHALIFA SULTAN AL NEHAYAN IN HIS CAPACITY AS DIRECTOR OF GOLD HOLDING LTD.

(2) SHEIK SULTAN KHALIFA SULTAN AL NEHAYAN

Defendants

CASE MANAGEMENT ORDER OF H.E. JUSTICE ALI AL MADHANI

UPON reviewing the relevant documents on the Court file

AND UPON hearing the first Claimant and Counsel for the Defendants at the Case Management Conference held on 17 August 2016.

IT IS HEREBY ORDERED THAT:

1.The Defendants’ Application Notice CFI-016-2015/4 dated 22 October 2015 be granted as agreed for costs only against the Claimants, to be assessed if not agreed.

2. The Second Defendant shall file an amended Defence and Counterclaim by no later than 4pm on Thursday 15 September 2016.

Production of Documents

3. Standard production of documents shall be made by each party by no later than 4pm on Thursday 22 September 2016. [RDC 20141 Rule 28.15]

4. The parties shall file and serve any Request to Produce[1] by no later than 4pm on Thursday 6 October 2016. [RDC 28.16]

5. Objections to Requests to Produce (if any) shall be filed and served within five days thereafter and in any event by no later than 4pm on Thursday 13 October 2016. [RDC 28.26]

6. Where objections to any Requests to Produce[2] have been made, the Court will determine those objections and will make any disclosure order within the following five days and in any event no later than 4pm on Thursday 20 October 2016. [RDC 28.38]

7. The parties shall comply with the terms of any disclosure order within five days thereafter and in any event by no later than 4pm on Thursday 27 October 2016. [RDC 28.42]

8. Where there are no objections to a particular Request contained in a Request to Produce, documents responsive to that request shall be produced within ten days from the date of the Request to Produce and in any event by no later than 4pm on Sunday 16 October 2016. [RDC 28.20]

Witness Statements

9. Signed statements of witnesses of fact, and hearsay notices where required by RDC 29.2 and 29.103 to 29.105 inclusive shall be exchanged in any event not later than 4pm on Thursday 13 October 2016.

10. Any Witness Statement evidence in reply to be filed and served within two weeks thereafter and in any event not later than 4pm on Thursday 27 October 2016.

11. Unless otherwise ordered, Witness Statements are to stand as evidence in chief of the witness at trial. The opposing party shall have the right to cross-examine the witness at trial.

Expert Reports

12. No expert reports shall be filed.

Progress Monitoring Hearing

13. The Progress Monitoring Hearing shall take place at 10am on Tuesday 1 November 2016.

14. The parties shall send to the Registry (with copy to all other parties) a Progress Monitoring Information Sheet at least 3 clear days before progress monitoring hearing and in any event by no later than 4pm on Wednesday 26 October 2016. [RDC 26.57].

Trial Bundles

15. Agreed trial bundles shall be completed in accordance with Part 35 of the RDC and lodged no later than 2 weeks before trial [RDC 35.34].

Reading List

16. A single reading list approved by all parties’ legal representatives for trial shall be lodged with the Registry not later than 2 clear days before the trial date, together with an estimate of time required for reading. [RDC 35.51].

Skeleton Argument, Opening Statements and Chronology

17. Skeleton Arguments and Written Opening Statements shall be served on all other parties and lodged with the Court two clear days before the start of trial for the Claimants and one clear day before the start of trial for the Defendants. [RDC 35.62]

18. Parties to prepare a Chronology of significant events cross-referenced to significant documents, pleadings and witness statements to be agreed, insofar as possible, and to be filed 1 week before trial. [RDC 35.64].

Trial

19. The trial of this matter is to take place in the week of 4 December 2016 with an estimated duration of two days.

20. Costs in the Case to be determine by the trial judge.

21. Liberty to apply.

Issued by:

Natasha Bakirci

Assistant Registrar

Date of issue: 31 August 2016

At: 1pm

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