Claim No. CFI-044-2018

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

GRAND VALLEY GENERAL TRADING LLC

Claimant

and

GGICO SUNTECK LIMITED

First Defendant

and

SUNTECK LIFESTYLES LIMITED

Second Defendant

ORDER OF JUDICIAL OFFICER NASSIR AL NASSER

UPON the Application No. CFI-044-2018/5 dated 2 January 2020 filed by Clyde & Co pursuant to Rule 37.11 of the Rules of the DIFC Courts to come off the record as the Second Defendants’ legal representative in these proceedings (the “Application”)

IT IS HEREBY ORDERED BY THAT:

1. Clyde & Co has ceased to be the legal representative of the Second Defendant in the proceedings.

2. Clyde & Co shall provide to the Registry, by no later than 4pm on Thursday, 9 January 2020, contact details belonging to the Second Defendant.

3. The Second Defendant shall pay the costs of this Application.

Issued by:
Ayesha Bin Kalban
Assistant Registrar
Date of issue: 6 January 2020
At: 11am

Claim No. CFI-067-2018

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

SKY NEWS ARABIA FZ-LLC

Claimant

and

KASSAB MEDIA FZ (LLC)

Defendant

JUDGMENT OF JUSTICE SIR RICHARD FIELD

ORDER

UPON the Claimant’s claim submitted on 30 September 2018

AND UPON the Claimant’s Application seeking an Order striking out the defence

AND UPON hearing Counsel for the Claimant at the Hearingheld on 11 December 2019

AND UPON considering the Witness Statement of Kelvin Barker made under oath at the Hearingof 11 December 2019

AND UPON considering the Auditors Report by Mr Shahab Haida dated 18 July 2019

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

IT IS HERBEY ORDERED THAT:

1. The Defendant shall pay the Claimant the principal of USD 4,776,668 with interest of USD1,634,319.67 calculated to the said date of 11 December 2019.

2. The Defendant shall pay the Claimant’s costs on account in the sum of AED 900,000 within 14 days of the date of this Judgment.

3. The balance of the Claimant’s costs shall be assessed by the Registrar, if not agreed.

Issued by:
Ayesha Bin Kalban
Assistant Registrar
Date of Issue: 6 January 2020
At: 9am

SCHEDULE OF REASONS

1. This is the trial of a claim for USD 4,576,668, plus interest, averred to be due under a contract styled “Agreement for the Supply of Advertising Sponsorship Sales Representation”, dated 1 July 2013, made between the Claimant and the Defendant (“the Contract”).

2. The Defendant was given notice of an order of this Court that the trial would proceed today, starting at 2pm.A day or so previously, the lawyers representing the Defendant applied to the Court for permission to come off the record.The Defendant has not appeared today to defend the claim.

3. Counsel for the Claimant, Mr Killen, applied to strike out the Defendant’s Defence and then to prove the Claimant’s claim.In making that application, he had in mind an overriding submission the Claimant advances to deal with the principal pleaded defence. That defence is that the provision in the Contract that obliged the Defendant to make a minimum payment when the revenue generated from the Defendant’s activities under the Contract was less than the stipulated minimum payment was unenforceable because the obligation was not supported by “cause” as required by UAE law or because it was a penalty.

4. The Claimant contends that the sums claimed all represent the stipulated share of the revenue actually earned under the Contract which in every quarter of the relevant period exceeded what would be due under the minimum payment obligation. It followed, it was submitted, that the minimum payment obligation formed no part of the Claimant’s Claim and accordingly there were no legal defences to the Claim, and thus the Defence should be struck out and the Claimant be permitted to prove its claim by reference to the terms Contract apart from the minimum payment obligation.

5. In the exercise of my discretion, I refused the application to strike out the Defence. The Defence pleads a counterclaim for sums paid under the minimum payment obligation and there were such sums paid by the Defendant prior to the period relevant to the Claimant’s Claim. In my judgment, in these circumstances,the interests of justice are better served if the Court considers and pronounces upon the pleaded defences.

6. The Claimant called one witness, Mr Kelvin Barker, who at the relevant time was the Chief Operating Officer of the Claimant. He took the oath and confirmed the contents of his witness statement. His evidence in chief was therefore admitted unopposed by the Defendant. He told the Court he no longer holds that position, and he gave a contact address in substitution for the address given in his witness statement, which was the address of the Claimant.

7. The Claimant also relied on a report from an independent accountant called Mr Haida. Parts of this report are inadmissible to the extent that Mr Haida describes the operation of the Contract but, in my judgment, that part of his report where he verifies the sums which are due to the Claimant by reference to his own examination of the relevant documentation is admissible. He was due to give evidence tomorrow in accordance with the timetable that had been agreed between the parties. He is not here today, in the expectation that he would only be required tomorrow. In my judgment, in the current circumstances where the Defendant has failed to appear, Mr Haida’s statement can come in as hearsay evidence pursuant to RDC 29.13 (2). It is a signed statement, and the Court can have regard to what Mr Haida says as to his authentication and verification of the sums due.

8. I turn to the Contract. By clause 3.1, the Defendant was appointed by the Claimant for the term of the agreement as the exclusive media representative for the Claimant in the defined territory, responsible for selling all advertising and sponsorship on the Claimant’s channel, website and mobile services. From that exclusivity there was a carve-out contained in clause 3.2 which reserved to the Claimant itself the entitlement to sell advertising and sponsorship in the territory to: (i) certain identified clients as to which no payment would have to be made by the Claimant to the Defendant;and (ii) other identified clients called“Direct Clients” in respect of which the Claimant was obliged to pay to the Defendant 7.5 per cent of the revenue resulting from such dealings.

9. Clause 9.1 provided that, subject to payment of the minimum guaranteed sum, the net revenues from the advertising business generated by the Defendant would be divided between the Claimant and the Defendant as provided for in a table which set out the percentages payable to the Claimant and the Defendant in the following six years under the Contract. These percentages are 65%/35% for the first two years, 70%/30%for the next two years and 75%/25% per cent for the final two years.

10. Clause 32.1 provided that, save in respect of certain particularised circumstances, the agreement was to be the entire agreement made between the parties.

11. Clause 38.1 provided that the governing law was to be the laws of the United Arab Emirates as applicable in the Emirate of Abu Dhabi, and the Dubai International Financial Centre Courts were to have exclusive jurisdiction. Although at an earlier stage in the proceedings there was some dispute as to the impact of clause 38.1, it is common ground that the governing law of the Contract is the law of the UAE.

12. The Defendant in its pleadings admits the Contract and does not deny that under the terms thereof it should have made the payments that are sued for.

13. As mentioned earlier, there are two defences. The first defence is founded on Article 318 of the UAE Civil Code which states in its English translation:

“No person may take the property of another without lawful cause and if he takes it, he must return it.”

14. The Defendant pleads that the minimum guaranteed payments (“the MG payments”) it made under the Contract were made without lawful cause because, in substance, the contract was not an exclusive contract under which the Defendant was entitled to expect the Claimant, as a fully established and functioning company, to run a successful business that would produce revenues in excess of the MG payments. Instead, it is pleaded in paragraph 3.3 of the Defence that the exclusive nature of the appointment of the Defendant was substantially reduced under clause 3.2 of the agreement to which I have already referred. In paragraphs 3.4 and 3.5 of the Defence, it is pleaded that the commercial relationship set out in the agreement was largely collaborative built around the annual series of meetings to be held in November each year and this non-exclusive and collaborative relationship for the start-up was inconsistent with the concept of MG payments.

15. The Defendant further pleads that the minimum guaranteed payments cannot be justified on commercial grounds for the following reasons. (1) The Defendant has only limited exclusivity. (2) The Claimant is a start-up endeavour which has largely failed to achieve satisfactory results in procuring advertising by its own efforts. (3) The importance to success with the procurement of advertisements and ratings was dependent entirely on the Claimant’s programming and content, and there was no mechanism in the agreement for adjustment of the MG payments in the light of the actual performance of the Claimant. (4) The revenue to be shared in respect of net revenues in excess of the MG payments was substantially in favour of the Claimant.

16. The Defendant has not pleaded out a counterclaim in the ordinary and proper way. However, on a generous interpretation of the Defence, what is pleaded here is a set-off whereby the Defendant seeks to set off against the sums now claimed from it the MG payments that it paid prior to the determination of the Contract.

17. The second defence proceeds on the basis that the MG payments are a penalty and are unenforceable under Article 390 of the UAE Civil Code which provides:

“(1) The contracting parties may fix the amount of compensation in advance by making a provision in the contract or by later agreement subject to the provisions of the law.

(2) The court may, on the application of either party, vary such agreement so as to make the compensation equal to the loss and any agreement to the contrary shall be void.”

18. Article 318 of the UAE Civil Code has been referred to and explained in at least two cases decided by the Dubai Court of Cassation “the DBC”). In case 216/2009, the DBC said:

“The effect of article 318 of the Civil Code as clarified in the commentary is that the basic presumption is that a property of a person may not be transferred to another save in one or two cases. They are the agreement of those two persons to such transfer or if the law dictates that such transfer take place. If there is [not] a transfer of property in either, it must be returned to its owner.That is the rule of unjust enrichment. The owner of property who alleges that it has been transferred to another person otherwise than in the two circumstances aforesaid has the burden of proving his allegation in that he has to produce evidence firstly that his property was transferred to another and, secondly that the transfer of the property to that person took place without lawful cause. Whether that has happened is a matter of fact in the trial court. There is no scope for the application of the principle of unjust enrichment in a case where there is a contract governing the relationship between two parties. In a case where there is no contract, the action can be brought on the basis of unjust enrichment if the conditions therefor are made out.”

19. In case 234/2009, the DBC said:

“This rule [relating to unjust enrichment under Article 318 of the Civil Code] has its origin in non-contractual obligation, because if there is a contractual relationship between the parties or an agreement governing the relationship between them, the criterion for the application of this rule will be negated, as it will be the agreement that is the determining factor in deciding the rights and obligations of each of the parties towards the other. The person alleging that his opponent has used unlawful means in the transaction between the parties lies on the person who asserts it.”

20. In my judgment, on the basis of these two authorities and having regard to the wording of Article318 itself, the MG payments do not give rise to a cause of action in unjust enrichment. The Defendant freely agreed to pay the minimum guaranteed payments; indeed, in the early negotiations that led finally to the executed agreement, the Defendant offered to make such payments. As I saybelow when dealing with the penalty defence, there was “cause” i.e. legal cause for the minimum guarantee. True it is that full, exclusive exclusivity within the territory was not granted. Nonetheless, such exclusivity that was granted was a valuable consideration in exchange for the Contract. To have such exclusivity within the territoryplainly constituted a considerable benefit to the Defendant for which it was prepared to agree to make the MG payments.

21. It follows, in my judgment, that unquestionably the MG payments that have been made over the course of the Contract are not recoverable as unjust enrichment. They were paid pursuant to the Contract for good, lawful cause and the Article 318 defence fails.

22. I turn to the plea of penalty under Article 390 of the Civil Code. In my judgment, the minimum guarantee was not a stipulation designed to compensate the claimant should there be a breach of contract on behalf of the Defendant. Instead, the MG payment obligation, as I have said, was the consideration paid by the Defendant for a the limited exclusivity it was granted under the Contract.

23. The Claimant cites a decision of the Union Supreme Court (“the USC”) concerning Article 390, case 370/20, in which the USC said:

“The above provisions [Article 390 (1) & (2)] indicates that incorporating the penalty clause in a contract means that the assessment of harm is decided at the discretionary power of the contracting parties. As such, the creditor is not obliged to prove the same. Rather, it is the debtor that is required to prove that no harm had been inflicted. It is also presumed that the assessment of the agreed compensation should be proportionate, with the harm sustained by the creditor, which requires the judge to comply with and enforce such clause unless the debtor proves that the agreed assessment is exaggerated…”

24. As I have just held, the MG payment obligation was not a provision designed to compensate the Claimant for harm done by the Defendant. The Defendant did not contractually oblige itself to achieve revenue in excess of the minimum guaranteed payment.

25. It follows, in my judgment, that the defence founded on Article 390 in the UAE Civil Codedoes not succeed. The result is that there is no good defence to the Claimant’s claim. The principal sum due, as I mentioned at the beginning of this judgment is USD 4,576,668, which has been authenticated and verified in Mr Haida’s report, which evidence I accept.

26. As to the claim for interest, under the governing law of the Contract (UAE law), there is entitlement to interest where sums due have not been paid at a rate of up to 12 per cent per annum, although it appears that the normal rate awarded under this provision is 9 per cent.

27. Article 17 of the DIFC Law of Damages and Remedies entitles a party which establishes that it has not been paid a sum of money due to it to an award of interest calculated by reference to the average bank short-term lending rate to prime borrowers. The situation, therefore, is that the law of the Contract provides for a particular head of loss, namely interest, and the law of the forum provides by Article 17 of the Dubai Law of Damages and Remedies for an award of interest by way of a remedy for that loss. Mr Killen referred me to a decision of Mr Justice Leggatt, as he then was, sitting in the London Commercial Court in AS LatvijasKrajbanka (In Liquidation) and Vladimir Antonov[2016] EWHC 1679 Comm. In paragraph 7 of his judgment, Mr Justice Leggatt says:

“The proper approach to applying this distinction [i.e. the distinction between matters of substance governed by the lexcausae and matters of procedure governed by the lexfori] has been considered by the House of Lords in Harding and Wealands [2007] 2 AC 1 and by the Supreme Court in Cox and Versicherung AG [2014] AC 1379. Those casesdecide that the question whether a particular head of loss is recoverable is a question of substance governed by the law applicable to the obligation. On the other hand, whether there is a remedy available for any particular item of loss is a procedural question governed by English law as the law of the forum. Applying that distinction to a claim for interest, the Court of Appeal held in Maher vGroupama Grand Est [2010] 1 WLR 1564, para 40, that the existence of a right to recover interest as a head of damage is a matter of substance governed by the applicable law, but that section 35(A) of the 1981 Act is a procedural provision which creates a remedy exercised at the court’s discretion. The Court of Appeal considered that this discretionary remedy is available whether a substantive right to recover interest exists or not, although the factors to be taken into account in exercising the court’s discretion might well include any relevant provisions of the applicable foreign law relating to the recovery of interest.”

28. I propose to adopt this approach articulated by Mr JusticeLeggatt.Accordingly, I find that this Court, in quantifying the interest recoverable, should have regard to the substantive law of the Contractunder which there is entitlement to interest up to 12 per cent but where the normal rate is 9 per cent. The Claimant has undertaken a calculation of interestat the rate of 9% p.a. taking periods of time which are more favourable to the Defendant than to the Claimant. That seems to me to be an entirely reasonable approach about which the Defendant could make no possible complaint. The sum claimed at 9% p.a. in respect of the sums due and over the periods of time I have just referred to is USD1,634,319.67. Accordingly, for the reasons I have given, I give judgment against the Defendant in the principal of USD4,776,668 with interest calculated to today’s date of USD1,634,319.67.

S. 35A of the UK Senior Courts Act provides: Subject to rules of court, in proceedings (whenever instituted) before the High Court for the recovery of a debt or damages there may be included in any sum for which judgment is given simple interest, at such rate as the court thinks fit or as rules of court may provide, on all or any part of the debt or damages in respect of which judgment is given, or payment is made before judgment, for all or any part of the period between the date when the cause of action arose and—(a) in the case of any sum paid before judgment, the date of the payment; and(b) in the case of the sum for which judgment is given, the date of the judgment.

29. Relying on a Costs Schedule showing costs totalling AED 1,341,109.69 the Claimant sought an immediate assessment of costs in that sum pursuant to RDC 38 (30) which provides:

The general rule is that the Court should make an immediate assessment of the costs:

(1) at the conclusion of any hearing, which has lasted no more than one day, in which case the order will deal with the costs of the application or matter to which the hearing related. If this hearing disposes of the claim, the order may deal with the costs of the whole claim; (2) in hearings in the Court of Appeal to which FRDC 44.165 / ARDC 44.140 applies;

unless there is good reason not to do so e.g. where the paying party shows substantial grounds for disputing the sum claimed for costs that cannot be dealt with on the material available or there is insufficient time to carry out an immediate assessment.”

30. In my judgment, there is good reason not to conduct an immediate assessment of the costs of the action. I say this because these proceedings until very recently were fiercely fought and I cannot decide simply on the basis of the Costs Schedule provided whether each of the items set out in the Schedule was reasonably incurred.

31. I can, however, order an interim payment on account of costs which I propose to do in the sum of AED 900,000 which I find to be the minimum sum that would be awarded on a detailed assessment by the Registrar.

Issued by:
Ayesha Bin Kalban
Assistant Registrar
Date of Issue: 6 January 2020
At: 9am

Claim No. CFI-003-2016

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

CATERPILLAR FINANCIAL SERVICES (DUBAI) LIMITED

Claimant

and

(1) ROWDHAT NEAMA TRANSPORTING & GENERAL CONTRACTING ESTABLISHMENT

(2) ALI ABDALLA NASIR ABDALLA BUKALLAH LOUTAH

Defendants

AMENDED DEFAULT JUDGMENT MADE BY JUDICIAL OFFICER NASSIR AL NASSER

UPON the Request for Default Judgment made by the Claimant on 31 May2016 (the “Request”) and in accordance with Rule 13.4 of the Rules of the DIFC Courts (“RDC”), it is found as follows:

(1) The Requests are permitted by RDC 13.4 because the Defendants have failed to file an Acknowledgment of Service or a Defence to the claims (or any part of the claims) with the DIFC Courts and the relevant time for so doing has expired.

(2) The Claimant filed Certificates of Service under RDC 9.43 on6 September 2016.

(3) RDC 13.22(1) provides that a Certificate of Service on the court file is sufficient evidence of service

(4) The Claimants have followed the required procedure for obtaining Default Judgment (RDC 13.7 and 13.8).

(5) The claim is for a specified sum of money and the Requests specify the date by which the whole of the judgment debt is to be paid or the times and rate at which it is to be paid by instalments (RDC 13.9).

(6) The Requestincludesa request for interest pursuant to RDC 13.14 and the Claim Formset out the calculation of interest in the claims.

ACCORDINGLY IT IS HEREBY ORDERED THAT:

1. The Request is granted.

2. The Defendants shall pay to theClaimant the amount of USD 288,720 as repayment of the loan which is the subject of the claim.

3. The Defendants shall pay to the Claimant the prepayment fee of USD 5,774.40, being an amount of 2% of the loan amount outstanding at the time of default.

4. The Defendants shall pay to the Claimant interest at a rate of 1.5% pursuant to Clause 3.3 of the loan agreement entered into between the parties (the “Agreement”) being USD 110.74 calculated from 28 December 2015 to 25 January 2016 and continuing to accrue at a rate of USD 3.96 per day.

5. The title and ownership of the vehicle bearing the registration number 82954 be transferred from the first Defendant to the Claimant, to enable the Claimant to sell the vehicle.

6. The obligations of the Defendants in this order are joint and several.

7. The Defendant shall pay the Claimant their costs of the proceedings, to be assessed if not agreed.

Issued by:
Ayesha Bin Kalban
Assistant Registrar
Date of Issue: 6January2020
At: 10am

Claim No. CFI-084-2018

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

MOHAMMED ZAHID ASLAM

Judgment Creditor

and

SDI CAPITAL LIMITED

Judgment Debtor

ORDER OF H.E JUSTICE SHAMLAN AL SAWALEHI

YOU, MAJDOOD POPAL,MUST OBEY THIS ORDER. IF YOU DO NOT, YOU MAY BE FINED OR COMMITTED TO PRISON FOR CONTEMPT OF COURT

UPON reviewing Judgment Creditor’s Application for an order requiring the Judgment Debtor to provide information for the purpose of enabling the Judgment Creditor to enforce the Court of First Instance judgment dated 20August 2019 (the “Judgment”) against the Judgment Debtor

AND UPON the Order of the Deputy Registrar issued on 19 December 2019

AND UPON reading the documents on the Court file

IT IS HEREBY ORDERED THAT:

1. Pursuant to The Rules of the Dubai International Financial Centre Courts 2014 (“RDC”) 50.2(2), the Judgment Debtor through and in the person of itsChief Executive Officer and/or Managing DirectorMajdood Popal(“Mr Popal”)must attend Court at 10am on Thursday,9January2020 to provide information about the Judgment Debtor’s assets, means and any other information which is required to enforce the Judgment against the Judgment Debtor (the “Judgment”).

2. Pursuant to RDC 50.5(5) and RDC 50.5(6), the Judgment Debtor and Mr Popal shall provide information about the Judgment Debtor’s assets, means and any other information which is required to enforce the Judgment and Consent Orders including the information identified in Schedule A to this order.

3. Pursuant to RDC 50.5(6), the Judgment Debtor and Mr Popalshall produce all documents in the Judgment Debtor’s control that relate to the Judgment Debtor’s means of satisfying the Judgment and Order. The documents produced must include those identified in Schedule A hereto.

4. The Judgment Debtor shall pay the costs of and occasioned by this Application, to be asses by the Registrar if not agreed.

Issued by:
Ayesha Bin Kalban
Assistant Registrar
Date of Issue: 6 January2019
At: 2pm

SCHEDULE A

A. THE INFORMATION REQUESTED

1. You will be required, as an officer of the Judgment Debtor, to disclose full details of:

• the Judgment Debtor’s assets and liabilities; and
• the Judgment Debtor’s income streams and income amounts; and
• the matters referred to in the list as set out below.

B. DOCUMENTS THAT YOU CONTROL

2. You must produce all documents that confirm the information required. If the requested documentation are not in your control, all reasonable efforts and measures must be taken to retrieve such documentation. Confirmation of such efforts may be called upon. These will include:

• All documents relevant to the financial status of the Judgment Debtor including audited financials, bank statements and records and details of all bank accounts held by the Judgment Debtor.
• Contracts of Employment for the current staff employed by Judgment Debtor.
• Certificates of title of all real property owned by the Judgment Debtor worldwide with any mortgage documentation.
• List of all assets owned by the Judgment Debtor with details of any (charge) liens.
• Lease agreements between the Judgment Debtor and third parties, including in relation to leases of the Judgment Debtor’s current physical address and any real property it owns.
• All current contracts between the Judgment Debtor and third parties.
• List and details of companies the Judgment Debtor has an interest in.

Claim No. CFI-014-2019

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

HAZRAT ALI

Claimant

and

ARLOID REAL ESTATE DEVELOPMENT FZ LLC

Defendant

ORDER OF JUDICIAL OFFICER NASSIR AL NASSER

UPON reviewing the Defendant’s Application by way of a letter dated 2 January 2019 seeking a Court Order to amend the Acknowledgment of Service (“AOS”) and set a Case Management Direction (the “Application”)

AND UPON reviewing the case file

IT IS HEREBY ORDERED THAT:

1. The Application is granted.

2. The Defendant shall file their amended AOS by no later than 4pm on Thursday, 9 January 2020.

3. The Defendant shall file and serve their evidence in answer to the Claimant’s claim, which pursuant to 8.32(2), by no later than 4pm on 23 January 2020.

4. The Claimant shall (if any) file their response to the Defendant evidence in answer by no later than 4pm on 6 February 2020.

Issued by:
Ayesha Bin Kalban
Assistant Registrar
Date of issue: 7 January 2020
At: 1pm

Claim No: CFI-037-2017

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

ILYAS GAFFAR SABOOWALA

Claimant

and

(1) SOMAN KUNIYATH NAIR
(2) MINI SOMAN THORUVIL VELUTHEDATH
(3) RAG FOODSTUFF TRADING LLC

Defendants

ORDER OF JUDICIAL OFFICER NASSIR AL NASSER

FURTHER TO the Case Management Order of Judicial Officer Nassir Al Nasser dated 5 September 2019

AND UPON reviewing the Defendants’ Request to Produce dated 21 November 2019 made pursuant to Rule 28.16 of the Rules of the DIFC Courts (the “Defendants’ Request”)

AND UPON reviewing the Claimant’s objections to the Defendants’ Request to Produce dated 6 January 2020

AND UPON reviewing the Claimant’s Request to Produce dated 24 November 2019 made pursuant to RDC 28.16 (the “Claimant’s Request”)

AND UPON reviewing the Defendant’s objection to the Claimant’s Request to Produce dated 5 January 2020

IT IS HEREBY ORDERED THAT:

1. The Claimant shall produce Request 2 and 3 of the Defendants’ Request by no later than 4pm on Thursday, 6 February 2020.

2. The Claimant shall provide a witness statement for Request No. 1 and 4 in the Defendants’ Request.

3. The Defendant shall produce Requests 5, 7, 15 and 16 of the Claimant’s Request by no later than 4pm on Thursday, 6 February 2020.

4. The Claimant’s Requests 1, 4, 6, 8, 9, 10, 11, 12, 13, 14, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28 and 29 of the Claimant’s Request are denied pursuant to RDC 28.28.

5. The Defendant shall provide a witness statement for Request No. 2 and 3 in the Claimant’s Request.

6. The parties shall have liberty to apply.

7. Costs shall be costs in the case.

Issued by:
Ayesha Bin Kalban
Assistant Registrar
Date of issue: 8 January 2020
At: 9am

Claim No. CFI-033-2017

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

BANKMED (SAL) TRADING IN THE DIFC UNDER THE TRADE NAME BANKMED (DUBAI)

Claimant

and

(1) FAST TELECOM GENERAL TRADING LLC
(2) ALI MOHAMMED SALEM ABU ADAS
(3) MOHAMMED JAWDAT AYESH MUSTAFA AL BARGUTHI
(4) SAIF SAEED SULAIMAN MOHAMED AL MAZROUEI
(5) IBRAHIM SAIF HORMODI
(6) AHMED ABDEL KADER HAMDAN ZAHRAN

Defendants

ORDER OF JUDICIAL OFFICER NASSIR AL NASSER

UPON reviewing the Application Notice filed on 14 January 2020 by Abdulla AlOmran Advocates & Legal Consultants pursuant to Part 37 of the Rules of the DIFC Courts to come off record as the Second Defendant’s legal representative in these proceedings

AND UPON considering the First Witness Statement of Abdulla AlOmran filed on 14 January 2020

IT IS HEREBY ORDERED THAT:

Abdulla AlOmran Advocates & Legal Consultants has ceased to be the legal representative of the Second Defendant in the proceedings.

Issued by:
Nour Hineidi
Deputy Registrar
Date of issue: 15 January 2020
Time: 3pm

Claim No. CFI-027-2018

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

1) AMIRA C FOODS INTERNATIONAL DMCC
2) A K GLOBAL BUSINESS FZE

Claimants

and

IDBI BANK LIMITED

Defendant

KARAN A CHANANA

Third Party

ORDER WITH REASONS OF JUSTICE ROGER GILES

UPON Paragraph 7 of the Order of Justice Roger Giles dated 7 October 2019 requesting the parties to provide agreed directions for determination of the questions of the cheques, interest and costs.

AND UPON the parties providing the agreed timetable for submissions on 28 October 2019

AND UPON reviewing the submissions and all relevant materials on the case file

IT IS HEREBY ORDERED THAT:

1. Allen & Overy LLP shall continue to hold the cheques subject to the direction of the Court.

2. The judgment sum to include simple interest from 30 September 2018 to the date of judgment at the rate from time to time charged by the IDBI Bank Limited (the “Bank”) to commercial customers of good standing.

3. Liberty to apply in relation to ascertaining the rate of interest.

4. The Bank to pay 95% of the costs of the proceedings of Amira C Foods International DMCC and Mr. Karan A Chanana.

5. The costs ordered to be paid by Amira on 7 October 2019 to be set off against the costs payable pursuant to the order set out in paragraph 4 of this order (“Order 4”).

6. The Bank to pay USD 410,500 within 21 days on account of the costs payable pursuant to Order 4.

Issued by:
Nour Hineidi
Deputy Registrar
Date of issue: 22 January 2020
At:12pm

SCHEDULE OF REASONS

1. The substantive judgment was issued on 7 October 2019. A figure was to be agreed and added to the judgment sum, and there remained for determination the questions of the cheques, interest and costs. Written submissions on those matters were received, on a timetable agreed by the parties.

2. On the Bank’s application, permission to appeal was granted on 11 December 2019. The parties have agreed on a stay of the order for payment of the judgment sum.

The Agreed Figure

3. Amira accepts a figure of USD 14,443.61. That sum should be added to the judgment sum.

The Cheques

4. The cheques were held by the Bank as security for the credit facilities. In the Claim Form, Amira claimed an injunction restraining the Bank from presenting them on the basis that it was not in default and so the Bank was not entitled to present them. After receiving the Claim Form and with notice of the claim, the Bank presented the cheques. Unsurprisingly, the Judge ordered on an interlocutory basis that the cheques be held by the Bank’s lawyers to the direction of the Court.

5. It follows from the judgment that the Bank was not entitled to present the cheques.

6. Amira submitted that the cheques were its property, although in the Bank’s possession as security, and that in presenting them without entitlement the Bank “breached an essential term of the security interest” such that Amira could recover the cheques in conversion. I do not agree. The presentation of the cheques did not terminate the Facilities Agreement, or the relationship of debtor and creditor or the holding of security by the Bank. The wrongful presentation has been effectively negated, but if there be other default entitling the Bank to resort to its security, the cheques remain available to it.

7. For that reason also, I do not accept Amira’s fall-back submission that there should be a final injunction restraining presentation.

8. However, I do not accept the Bank’s submission that the cheques should now be returned to it. The presentation of the cheques with notice of Amira’s claim, together with the circumstances of the shabby treatment described in the judgment, make it appropriate that the cheques remain at the direction of the Court. On one outcome of the appeal, the Bank may be immediately entitled to present the cheques. Alternatively, the Bank may claim that subsequent default entitles it to present them. The cheques should remain under the Court’s control, and their fate should await the disposal of the appeal or prior application by the Bank.

Pre-judgment interest

9. Pursuant to Article 18 of the Law of Damages and Remedies, being DIFC Law No 7 of 2005 (the “Law”), interest runs from the date of the Bank’s breach. Article 17(2) of the Law specifies the rate applicable to a failure to pay a debt, but no rate is specified for damages.

10. Amira submitted that the debt rate should be applied by analogy, being “the average bank short-term lending rate to prime borrowers prevailing for the currency of payment at the place of payment”. In the absence of a published prime rate in relation to USD in the DIFC, it took the prime rate for non-bank borrowers in New York. The Bank submitted that the rate should be EIBOR (3 month) + 1%, as had been taken in GFH Capital Ltd v Haigh [2014] DIFC CFI 020 (4 July 2018). In Al Khorafi v Bank Sarasin- Alpen (ME) Ltd [2009] DIFC CFI 026 (7 October 2015) (“Al Khorafi”) a different rate again was taken, being the rate from time to time charged by Bank Sarasin to commercial customers of good standing. In neither case was there discussion of arriving at the rate.

11. The purpose of pre-judgment interest is to compensate the successful claimant for loss of use of the amount awarded as damages. No one rate fits all occasions, although a conventional rate may be used if a rate is not found to fit the particular occasion.

12. There is no evidence of how Amira might have used the amount awarded to it. I do not think Amira’s proposal is appropriate to payment of damages in the DIFC. EIBOR is an inter-bank rate, and while EIBOR plus a factor can provide a suitable rate, in the present case a more measured rate is available. The Bank claims in the order of USD 7.3 million from Amira; that will include interest, and it can fairly be taken that Amira would have used the amount to pay down the Bank and avoid interest. The damages exceed the USD 7.3 million, making the Bank’s non-default rate in fact chargeable to Amira inappropriate across the board , and the better course in my view, emulating Justice Sir John Chadwick in Al Khorafi, is the rate from time to time charged by the Bank to commercial customers of good standing.

13. It should be recognised that Amira did not suffer its loss immediately, but over a period after the Bank’s breach. Rather than adjust the principal or the rate, interest will run from 30 September 2018. As did Sir John Chadwick, I will give liberty to apply in the event of difficulty in ascertaining the rate.

Post-judgment interest

14. PD 4 of 2017 provides for interest at 9%. As the Bank correctly submitted, the Court retains a discretion to order interest at a lesser rate (see Article 39 of the DIFC Court Law, being DIFC Law No. 10 of 2004). The Bank submitted that 9% “is excessive in the circumstances of this case” and that a lower rate should be ordered. It did not amplify or further support the submission. No reason has been shown to order a lower rate.

Costs

15. I go first to costs as between Amira and the Bank. Amira enjoyed substantial success. The Bank submitted, however, that it recovered significantly less than the amount claimed, and that costs should follow an issues-based approach. It said that Amira should pay the Bank’s costs of the issue of lost profit on a soybean meal transaction (on which Amira failed), and that there should be no order for costs of the issue as to loss of value of its business (on which it recovered much less than the claim).

16. I do not agree. The soybean meal transaction was insignificant in respect of costs, and Amira established significant loss from reputational damage although not in the amount claimed. Subject to the questions of Mr Chanana’s costs and the experts’ reports, see below, in my view Amira is entitled to all its costs even though it did not succeed on every point or to the full extent claimed.

17. I go then to costs as between Mr Chanana and the Bank. The Bank’s claim against Mr Chanana and Mr Chanana’s claim against the Bank both failed. The Bank’s claim against Mr Chanana followed the event of its claim against Amira and did not materially add to costs. Mr Chanana’s claim against the Bank was a substantial claim, but it did not add greatly to the conduct of the proceedings. Given the joint representation of Amira, and Mr Chanana, the failure of the claim is accommodated by a small discount applied to the joint costs of Amira and Mr Chanana.

18. The Bank sought a special order in relation to the evidence of Messrs Peters and Fritzsche. Amira applied for and obtained permission to call expert evidence. The Bank‘s then position was that expert evidence was unnecessary. It submitted that it had been vindicated, in that I considered that there was limited occasion for the expertise, and that Amira should be ordered to pay its costs incurred “in dealing with the expert evidence”.

19. I do not agree. The Bank chose to respond to the evidence of Mr Peters with the evidence of Mr Fritzsche: and more, through his evidence, it sought to make out a positive case of assessment of damages. The expert reports were not an idle exercise, enlightening the claim to damages via the fall in value of ANFI’s shares, and the limitation in resort to them lay in their dependence on factual findings, which once made left calculation. I do not think that a special order is warranted.

20. The Bank should pay 95% of the costs of Amira and Mr Chanana.

21. Two matters remain. First, Amira submitted that the costs of a pre-trial application payable by it to the Bank should be set off against the costs payable by the Bank. The Bank said nothing against this, and it should be so ordered. Secondly, Amira submitted that the Bank should be ordered to make a payment on account, pursuant to RDC 38.13, and provided a costs schedule in a total sum of USD 864,258.19. Again, the Bank said nothing against this, or as to the amount, and again it should be so ordered.

ORDERS

I make the following orders:

1. Allen & Overy LLP shall continue to hold the cheques subject to the direction of the Court.

2. The judgment sum to include simple interest from 30 September 2018 to the date of judgment at the rate from time to time charged by the Bank to commercial customers of good standing.

3. Liberty to apply in relation to ascertaining the rate of interest.

4. The Bank to pay 95% of the costs of the proceedings of Amira and Mr Chanana.

5. The costs ordered to be paid by Amira on 7 October 2019 to be set off against the costs payable pursuant to Order 4.

6. The Bank to pay USD 410,500 within 21 days on account of the costs payable pursuant to Order 4.

Claim No. CFI-033-2017

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

BANKMED (SAL) TRADING IN THE DIFC UNDER THE TRADE NAME BANKMED (DUBAI)

Claimant

and

1) Fast Telecom General Trading Llc
2) Ali Mohammed Salem Abu Adas
3) Mohammed Jawdat Ayesh Mustafa Al Barguthi

4) Saif Saeed Sulaiman Mohamed Al Mazrouei
5) Ibrahim Saif Hormodi
6) Ahmed Abdel Kader Hamdan Zahran

Defendants

ORDER WITH REASONS OF H.E. JUSTICE OMAR AL MUHAIRI

UPON reviewing the application filed on 24 May 2018 by Mohammed Jawdat Ayesh Mustafa Al Barguthi (the “Applicant” or “Third Defendant”) and supporting documents (the “Application”)

AND UPON reviewing Bankmed (SAL) Trading in the DIFC under the trade name Bankmed (Dubai)’s (the “Respondent” or the “Claimant”) submissions in response

AND UPON hearing the parties’ submissions at a hearing on 27 November 2019

AND UPON considering all other documents on the case file

IT IS HEREBY ORDERED THAT:

The Application is dismissed

The Third Defendant shall pay the Claimant’s costs of the Application on a standard basis, to be assessed by a Registrar if not agreed.

Issued by:
Nour Hineidi
Deputy Registrar
Date of issue: 22 January 2020
Time: 12pm

SCHEDULE OF REASONS

Introduction

1. This is a strange application. I am asked to decide on a matter which has already been the subject of judicial consideration in these Courts; not in the context of the application itself, but before then, in an appeal in which the appellants, being the Applicant and the Second Defendant, appealed from a decision that did not involve the former and that was in favour of the latter; or more precisely, and even more strangely, from certain obiter dicta in that decision. With that said, however, this Court has no jurisdiction over such peculiarities. The application will be decided on the usual bases.

2. To proceed, the Applicant made the Application under Article 13 of the DIFC Arbitration Law, Law No.1 of 2008 as amended (“Article 13”; the “Arbitration Law”), for an order dismissing or staying the claim brought against him by the Respondent on the ground that the claim is subject to a valid and binding arbitration agreement for arbitration under the rules of the DIFC-LCIA Arbitration Centre.

3. To expand, the Third Defendant’s case is that the claim against him is alleged to arise under a guarantee contained in two documents – a facility agreement dated 22 December 2015 (the “Facility Agreement”) and a first demand personal guarantee also dated 22 December 2015 (the “Personal Guarantee”). He says that those documents must be read and interpreted together. Crucially, the Facility Agreement contains an arbitration agreement (the “Arbitration Agreement”) while the Personal Guarantee does not. The Claimant says that the claim against the Third Defendant is made under the Personal Guarantee. But the Third Defendant submits, further, that when interpreting a dispute resolution clause, the following presumption should be applied: the parties intended that “any dispute arising out of the relationship into which they have entered or purported to enter [should] be decided by the same tribunal” (Fiona Trust & Holding Corp v Privalov [2007] UKHL 40; [2007] 4 All ER 951 at [13]). Accordingly, the Third Defendant submits, correctly interpreted, and having regard to this presumption, a dispute under the Personal Guarantee is in any case covered by the Arbitration Agreement in the Facility Agreement. In conclusion, the Third Defendant submits that this Court shall dismiss or stay the action under Article 13.

Background and Procedural History

4. Orders and judgments in the matter of Bankmed (Dubai) v Fast Telecom General Trading LLC and others (2017) CFI-033 are by now prolific and so I do not need to spend time recounting the background and procedural history of the case again. My order with reasons issued on 16 July 2019 can be referred to for these. As far as the present decision is concerned, the below outline will suffice.

5. The Facility Agreement is stated to be made between the Claimant as lender, the First Defendant, Fast Telecom General Trading LLC, as borrower, and the Second and Third Defendants as guarantors. It was a term of the Facility Agreement that no funds could be drawn down until specified finance and security documents had been provided. Those documents included personal guarantees. The Second to Sixth Defendants provided the personal guarantees for the facilities (the “Personal Guarantees”).

6. To move swiftly forward, and to focus on the Third Defendant specifically, the Claim Form which began these proceedings was issued on 23 July 2017 (and amended on 24 August 2017), but as it happened, the first that the Third Defendant knew about the proceedings was when he was informed on 30 October 2017 of the default judgment dated 29 October 2017 that had been obtained against him. The Claimant had obtained default judgment on the basis that the Third Defendant had acknowledged service but had failed to serve a defence. In fact, the acknowledgment of service had been filed by lawyers purporting to act on the Third Defendant’s behalf but without any authority or instructions to do so. The lawyers had then failed to take any adequate steps in relation to the litigation.

7. As a result, the Third Defendant applied to set aside the default judgment. The application was made on the ground of non-service but reference was also made of the Third Defendant’s position that the claim was subject to an arbitration agreement.

8. The application was successful. My order dated 22 April 2018 set aside the default judgment. The order directed the Claimant to file and serve its statement of case and particulars of claim within 14 days and directed the Third Defendant to file and serve its defence within 28 days after service of the particulars of claim.

9. The Particulars of Claim as against the Third Defendant were served on 2 May 2018. The Third Defendant’s application under Article 13 was issued on 23 May 2018. There were various activities in the matter thereafter – including the appeal mentioned at the start of this judgment – but ultimately the Article 13 Application was heard on 27 November 2019. This is my decision on that application.

The Article 13 Application

10. Article 13 provides as follows:

13. Arbitration agreement and substantive claim before a Court

(1) If an action is brought before the DIFC Court in a matter which is the subject of an Arbitration Agreement, the DIFC Court shall, if a party so requests not later than when submitting his first statement on the substance of the dispute, dismiss or stay such action unless it finds that the Arbitration Agreement is null and void, inoperative or incapable of being performed.

(2) Where an action referred to in paragraph (1) of this Article has been brought, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the DIFC Court.

11. For Article 13 to apply, then, firstly, the matter brought before this Court must be the subject of an arbitration agreement, secondly, a party to the matter must request for the action to be dismissed or stayed no later than when submitting his first statement on the substance of the dispute and thirdly, the arbitration agreement must not be null and void, inoperative or incapable of being performed. To start with the last requirement first, neither of the parties have contested the validity of the arbitration agreement in question. Disagreement only regards the Arbitration Agreement’s scope and in particular whether the present matter is within that scope. Regarding the second requirement, I am satisfied that the Third Defendant did request at the earliest opportunity for the action to be dismissed or stayed, namely in his application of 23 May 2018 for dismissal or stay of the claim under Article 13. It is correct that the Third Defendant had previously submitted a statement on the substance of the dispute. However, that was after default judgment had been entered against him and so it was not possible for him to request that the action, which had effectively come to an end, be dismissed or stayed. In that statement, dated 26 March 2018, the Third Defendant appropriately sought that the default judgment against him be set aside. I do not think that the draftsman of Article 13 intended to catch out those against whom default judgment was entered and who, therefore, would not be in a position to request that the action be dismissed or stayed in their first statement on the substance of the dispute. With that said, and in any case, I regard that, and given the nature of the Third Defendant’s first submission – being, again, an application for the default judgment to be set aside – the Third Defendant sufficiently gestured towards the second requirement of Article 13 when he said in that submission, “the Third Defendant [further] intends to show that the DIFC Courts do not have jurisdiction over this claim as it is subject to a valid and binding arbitration agreement.” The consequence of a valid and binding arbitration agreement, and so the implication of the Third Defendant’s submission, is that the action in these Courts should be dismissed or stayed. Accordingly, again, I am satisfied that the Third Defendant satisfied the second requirement of Article 13. As such, the question before me now is whether or not the first requirement of Article 13 has also been satisfied, that is, whether the matter before me is the subject of an arbitration agreement and should, therefore, be dismissed or stayed.

12. As stated above, the Arbitration Agreement is contained in the Facility Agreement, not the Personal Guarantee. The Third Defendant says that the Arbitration Agreement nevertheless includes the Personal Guarantee in its scope. To support this conclusion, the Third Defendant deploys two lines of argument. The first is that the Claimant makes its claim under a guarantee in the Facility Agreement as well as under the Personal Guarantee. The second is that the Facility Agreement and the Personal Guarantee are for all intents and purposes inseparable and should be read together. I will discuss each in turn now.

Claim under both the Facility Agreement and the Personal Guarantee

13. The Third Defendant submits that the Claimant makes its claim against him under the guarantee in the Facility Agreement and under the Personal Guarantee and that this is of significance in determining whether the claim is covered by the Arbitration Agreement contained in the Facility Agreement as the court must consider and interpret the contractual arrangements between the parties to identify how the parties intended that any dispute arising under them should be dealt with. In particular, the Third Defendant makes reference to the Claimant’s letter of demand dated 13 April 2017 (the “Letter of Demand”) and its Particulars of Claim Against the Third Defendant dated 2 May 2018 which, the Third Defendant contends, demonstrate that the Claimant makes its claim under both documents.

14. It is correct that the Letter of Demand is expressed to be made under both documents: “we refer to the above mentioned Facility Agreement and more particularly clause 18 thereof, in addition to the First Demand Limited Personal Guarantee dated 21 November 2016” and “we hereby come to exercise our rights under clause 18 of the Facility and clause 2 of the First Demand Limited Personal Guarantee…” Moreover, the Particulars of Claim Against the Third Defendant also refers to both documents; indeed, the Claimant spent more time in the statement discussing the Facility Agreement and the guarantee within that document than it did the Personal Guarantee. However, nowhere in either the Letter of Demand or the Particulars of Claim Against the Third Defendant did the Claimant state that it relied on the guarantees in the Facility Agreement and – in the sense of ‘in conjunction with’ – the Personal Guarantee; the Personal Guarantee simply features in both as an additional document under which liability arose. For me, the sense is very much and in the sense of ‘additionally.’ By way of example, we saw above that the Letter of Demand stated, “we refer to the above mentioned Facility Agreement and more particularly clause 18 thereof, in addition [emphasis added] to the First Demand Limited Personal Guarantee.” The amended Claim Form of 23 July 2017 states, “the Claimant has suffered losses and damages in respect of the Defendants [sic] non-payment of amounts due and payable to the Claimant under the Facility Agreement or [emphasis added] the First Demand Personal Guarantees.” In the Particulars of Claim Against the Third Defendant we find: “despite the joint and severable obligations under Clauses 18.2, 18.7 (Facility Agreement) and Clause 3 [(Personal Guarantee)], the Third Defendant chose to ignore his undertakings…” I do not think it insignificant that the Claimant referred to “obligations” as opposed to a single “obligation” in this passage. The above is enough, I think, to demonstrate that, at least initially, the Claimant pursued the Third Defendant under the Facility Agreement and, that is, additionally, under the Personal Guarantee.

15. Moreover, and importantly in this regard, the guarantee clauses of the Facility Agreement and the Personal Guarantee do not cross-reference each other. And insofar as each does refer to other guarantees in general terms, it is to affirm its own independence as a guarantee. Clause 18.10 of the Facility Agreement, the final clause of the guarantee in that document, states: “this guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by the Lender.” In the Personal Guarantee at clause 6 we find: “… I agree that this Guarantee shall be in addition to and shall not be in any way prejudiced by any other guarantee or security or lien or remedy of whatsoever nature to which you may now or hereafter be entitled.” It follows that the Third Defendant, as a party to the Facility Agreement and as a guarantor under the Personal Guarantee, was liable under each document separately for the amount or amounts that may be or become due. And it follows, in turn, that the Claimant was entitled to pursue the Third Defendant on both bases. In my opinion, this is all that the Claimant did. In conclusion, I find that nothing turns on any concurrent reliance on the Facility Agreement and the Personal Guarantee on the part of the Claimant in its claim. And at any rate, if the Claimant’s claim had at first been advanced as being under the Facility Agreement and the Personal Guarantee, presently it is only pursuing the Third Defendant under the latter document. In written submissions the Claimant has said that its “claim arises not under the Facility Agreement but rather under the [Personal] Guarantee as a consequence of [the Third Defendant’s] default under the Facility Agreement.” Accordingly, this first line of argument fails for the Third Defendant.

Facility Agreement and Personal Guarantee Must Be Read Together

16. In submissions, the Third Defendant referenced the case of Deutsche Bank v Sebastian Holdings [2010] EWCA Civ 998 which, in summarising earlier authorities, is authority for the propositions that, in deciding whether a dispute is subject to an arbitration agreement, the court should adopt a broad and purposive construction and take account that business people do not normally intend that different aspects of a dispute should be decided by different tribunals (see: [39] to [41]). The Third Defendant’s position is that when this approach is applied in the instant case, it becomes clear that, firstly, the Facility Agreement is the primary overarching agreement to which the Personal Guarantee is ancillary and that, secondly, the Facility Agreement contains a detailed dispute resolution clause which covers all disputes arising under or out of the transaction between the parties. Regarding the first of these points, I do not have any trouble accepting that the Personal Guarantee is ancillary to the Facility Agreement. Accordingly, I will focus on the second point, that the dispute resolution clause of the Facility Agreement covers all disputes arising under or out of the transaction.

17. A good place to begin is with one of the Third Defendant’s written submissions. The Third Defendant has argued that the language of clause 14 of the Personal Guarantee “merely mirrors” the structure of clause 39.1 of the Facility Agreement, concluding that the former clause, like the latter clause, is, therefore, subject to clause 39.2 of the Facility Agreement, the Arbitration Agreement. I do not think that it is correct that clause 14 of the Personal Guarantee “merely mirrors” clause 39.1 of the Facility Agreement. A comparison of the jurisdiction of the DIFC Courts as conferred by each clause reveals, I think, that the draftsmen had different intentions with respect to each of the clauses and that the parties, in turn, had different intentions when agreeing to them. In clause 39.1 of the Facility Agreement we find that the DIFC Courts has jurisdiction to settle “any dispute [emphasis added] arising from or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or any non-contractual obligations arising out of or in connection with this Agreement…).” Clause 14 of the Personal Guarantee, on the other hand, provides only that the DIFC Courts has jurisdiction over “any legal action or proceedings [emphasis added] with respect to the Guarantee…” It will be noted immediately that clause 14 of the Personal Guarantee makes no reference to prospective disputes between the parties, unlike clause 39.1 of the Facility Agreement which goes to some lengths to emphasise that all disputes are encompassed by it. To me, this difference is not insignificant and is consistent with the nature of each document.

18. The Facility Agreement is the primary agreement in the relationship between the Claimant and each of the Defendants, including the Third Defendant. Most fundamentally, the Facility Agreement gave the borrower, being the First Defendant, the right to the availability of the facilities, subject to numerous conditions, and liability in terms of its eventual repayment, according to a certain schedule, while giving the lender the inverse right and liability. There are other sub-rights and sub-liabilities spread across the seventy-four-page document, too, including the guarantees given by the Second and Third Defendant within it. Moreover, there are naturally nuances pertaining to the terms of the agreement and so possible differing interpretations of the rights and liabilities that they describe. In the context of such an agreement – creating mutual and numerous rights and liabilities, not all of which will be clear-cut – disputes can and very often will arise. It follows, and it goes without saying, that a dispute resolution clause in such an agreement will invariably be catered to such eventualities. Clause 39.1 (and clause 39.2) of the Facility Agreement has been worded in this way.

19. The Personal Guarantee is a very different type of agreement, however. It is comparatively very simple. Not only does this agreement home in on only one right and one corresponding liability pertaining to the lender and the borrower, respectively – namely the right to and liability for repayment of the facilities – but also, importantly, and as a consequence of this, only one party has a right under the guarantee while the other party is charged with the only liability. Moreover, liability under the Personal Guarantee is triggered by a single circumstance: “… non-payment or non-satisfaction of any and all moneys or other liabilities now or hereafter owing to [the Claimant] by the [First Defendant] under and in connection with the Facilities…” If a guarantor under the Personal Guarantees disputes that monies or other liabilities are owed to the Claimant under the Facility Agreement at the time that the latter attempts to enforce the Personal Guarantee, such a dispute will pertain to the Facility Agreement, not the Personal Guarantee, and so will be covered by the former agreement’s dispute resolution clauses.

20. Moreover, the language of the Personal Guarantee is extremely ‘watertight’ such that it is not clear how a dispute might arise under it at all: “in the event of non-payment or non-satisfaction…”; “…of any and all moneys or other liabilities now or hereafter owing…”; “…under and in connection with the Facilities…”; “…I jointly and severally…”; “…guarantee and undertake to pay you on your first demand upon me…”; “…without protest or notifications …”; “…waiving all rights of objection and defense arising from any relationship which exists or may exist between you and the Borrower …”; “…such amount or amounts as you shall demand from time to time…”; “… you shall be at liberty at any time and from time to time …” ; “… with or without my consent [all emphases added]…”; and so on. These consecutive examples from the first few paragraphs of the Personal Guarantee suffice to demonstrate the ‘watertight’ character of the entire agreement: in the event that the triggering circumstance arises, the guarantor under the Personal Guarantee shall pay such amount as the Claimant demands, or else be in breach of the guarantee. There seems to be nothing to dispute regarding or under the Personal Guarantee, and nor has the Third Defendant made submissions to the contrary.

21. In the context of an agreement like the Personal Guarantee, there seems to me to be good reason why a lender would not chose arbitration as a means of ‘dispute’ resolution. In the event of non-payment or non-satisfaction of the monies owed to the borrower, the latter wants, on first demand, the monies owed to it from the guarantors, failing which a court order ordering the same. This construction of the Personal Guarantee seems to me to be entirely consistent with the jurisdiction clause within it which the Third Defendant had incorrectly stated “mirrored” the jurisdiction clause of the Facility Agreement:

14. This Guarantee shall be governed and construed in accordance with the law of Dubai International Financial Centre and any legal action or proceedings with respect to the Guarantee may be brought against me or on any of my assets in the courts of the Dubai International Financial Centre and the enforcement of any judgment rendered by such courts may be brought against me in any jurisdiction you may elect.

22. As a final observation, it will be noted that the Personal Guarantee does not even contemplate legal actions or proceedings being brought against the Claimant: “… any legal action or proceedings with respect to the Guarantee may be brought against me [that is, the guarantor] or on any of my assets…” As such, under the Personal Guarantee, the Third Defendant would be entitled only to a defence to any legal action or proceedings brought against him in these Courts and not even to bringing an action or proceedings himself, much less initiating arbitration proceedings.

23. With this in mind, as well as the previous observations, I find that the Third Defendant fails in his second line of argument, too. In my view, the Facility Agreement and the Personal Guarantee not only need not be read together as far as their dispute resolution clauses are concerned, but, importantly, they should not be read together and the dispute resolution clauses of the Facility Agreement do not cover any ‘disputes’ which may arise out of the Personal Guarantee. Moreover, each agreement contains its own independent obligations. As a consequence, the Personal Guarantee is a separate operative contract which, in theory, the Third Defendant can be sued under.

Deutsche Bank and Fiona Trust distinguished

24. As noted above, the Third Defendant has relied on Deutsche Bank and Fiona Trust in order to demonstrate that the parties in the instant matter should be presumed to have intended that all disputes arising out of their relationship should be settled by the same tribunal. The present case can be distinguished from Deutsche Bank and from Fiona Trust in at least one important respect, however. In both of these cases, the same parties were party to the various agreements in question. In this case, however, only the Second and Third Defendants are party to the Facility Agreement while the Second to Sixth Defendants are party to the separate Personal Guarantees. Neither the Third Defendant nor the Claimant have dealt with the difficulty that this may introduce when trying to apply the presumptions of Deutsche Bank and Fiona Trust. Applying the presumptions myself, I think that the consequence of the Third Defendant’s proposition is that either the signatories of the Personal Guarantees who were not also parties to the Arbitration Agreement contained in the Facility Agreement – namely the Fourth to Sixth Defendants – would still be captured by the Arbitration Agreement or, alternatively, that only those signatories of the Personal Guarantees who were also parties to the Arbitration Agreement would be captured by it, with the remaining guarantors being captured by clause 14 of the Personal Guarantees.

25. In the first scenario, and in the instance that legal proceedings in respect of the Personal Guarantees had been brought against the guarantors, the Fourth to Sixth Defendants would be able to object to the jurisdiction of the DIFC Courts on the basis that the dispute was subject to an arbitration agreement, despite the fact that they were not party to it and despite the fact that the only agreement they were party to explicitly confers jurisdiction on the DIFC Courts.

26. To me, to the extent that this analysis is correct, clause 14 of the Personal Guarantees becomes entirely superfluous; indeed, misleading. As partially cited above, in written submissions, the Third Defendant stated that “the Personal Guarantee does not have a different dispute resolution [to the Facility Agreement]. The language merely mirrors the structure of clause 39.1 [of the Facility Agreement]… That provision, like clause 39.1 of the Facility Agreement, is subject to the arbitration agreement in the Facility Agreement.” This begs the questions of why, if the Third Defendant is correct, clause 14 of the Personal Guarantee did not do a better job of mirroring clause 39.1 of the Facility Agreement (for example, by including “Subject to the Arbitration Agreement contained in clause 39.2 of the Facility Agreement…”) or why the Personal Guarantee did not also mirror clause 39.2 of the Facility Agreement itself. These would have been simple and reasonable steps that the parties could have taken in order to clearly convey that the Personal Guarantees were subject to the Arbitration Agreement. Next most clear, I think, would have been to say nothing of ‘dispute’ resolution at all, which may have implied that the dispute resolution provisions of the parent agreement, the Facility Agreement, apply. But to only have a portion of the dispute resolution clauses of the Facility Agreement ‘mirrored’ suggests to me that there was no mirroring happening at all and that clause 14 of the Personal Guarantee did, in all likelihood, and contrary to the Third Defendant’s submission, provide for different ‘dispute’ resolution.

27. In the second scenario, where only some of the guarantors would be captured by the Arbitration Agreement, the Claimant would only be able to pursue the Fourth, Fifth and Sixth Defendants in respect of the Personal Guarantees in the DIFC Courts (under clause 14 of the Personal Guarantees) while the Second and Third Defendants would be able to resist the same proceedings and insist on arbitration (under clause 39.2 of the Facility Agreement) but which the remaining Defendants could not be joined to. The Defendants themselves cannot be presumed to have intended to agree to this. Each of the Defendants is jointly and severally liable. It follows that the Claimant has no need to pursue all of the Defendants, much less in two sets of proceedings. According to this construction, then, the Defendants cannot be deemed to have intended to agree to making some but not all of the co-guarantors vulnerable to a suit. Moreover, this eventuality would also be entirely at odds with the Third Defendant’s position that all the disputes arising out of the relationship into which the parties entered should be decided by the same tribunal, and so I think it can be dispensed with at once.

28. In conclusion, I find that the presumptions from Deutsche Bank and Fiona Trust should not be applied in the instant case. It follows that, and in as much as it is a separate operative contract, the Personal Guarantee is not subject to the dispute resolution clauses of the Facility Agreement, including, crucially, the Arbitration Agreement contained within it. It follows, finally, that the Third Defendant’s Application under Article 13 must be dismissed.

Construction of clause 39 of the Facility Agreement

29. It is not necessary for me to continue my analysis, but for completion I will make a few further remarks about clause 39 of the Facility Agreement which has been the subject of disagreement between the parties. At a glance, clauses 39.1 and 39.2 appear to be inconsistent with each other. The relevant subclauses of clause 39 for the present purposes are as follows:

39. ENFORCEMENT

39.1 Jurisdiction

(a) Subject to Clause 39.2 (Arbitration) the courts of the Dubai International Financial Centre (the “DIFC”) shall have non-exclusive jurisdiction to settle any dispute arising from or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or any non-contractual obligations arising out of or in connection with this Agreement (a “Dispute”)).

39.2 Arbitration

(a) Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Arbitration Rules of the DIFC-LCIA Arbitration Centre, which Rules are deemed to be incorporated by reference into this clause.

30. As Gloster J said in the High Court of England and Wales in the case of Axa Re v Ace Global Markets [2006] EWHC 216 (Comm), “in cases of potential inconsistency between clauses, it is well settled that the contract must be read as a whole… an effort should be made to give effect to every clause in the agreement.” ([16]) Both the Claimant and Third Defendant have attempted to resolve the apparent inconsistency between these two clauses. I will discuss each construction now.

31. The Claimant contends that the beginning of clause 39.1(a) – “subject to Clause 39.2 (Arbitration)…” – is to be construed as confirming the parties’ entitlement, in the event of a dispute, to either elect the jurisdiction of the DIFC Courts or refer the dispute to arbitration. This appears to me to be a very strained interpretation of clause 39 which, amongst other things, entirely ignores the very firm language of clause 39.2(a) – “any dispute… shall [emphasis added] be referred to… arbitration…” – and the qualified nature of clause 39.1(a) – “subject to [emphasis added] Clause 39.2…” In my opinion, this construction is to be rejected immediately.

32. For his part, the Third Defendant has submitted that “clause 39 provides first for mandatory arbitration of disputes by DIFC-LCIA arbitration. That is the only interpretation which gives effect to the words ‘Subject to Clause 39.2 (Arbitration).’” I think that the Third Defendant is incorrect in his statement that this is the “only” valid interpretation. Moreover, I think that this construction is unsatisfactory because it overlooks key differences in the language of the two clauses.

33. Granted, clauses 39.1 and 39.2 are similar in subject matter. Both clauses are concerned with disputes, including those regarding ‘existence,’ ‘validity’ and ‘termination.’ However, it will be noted that clause 39.1 is concerned with disputes about the existence, validity and termination of the “Agreement” while clause 39.1 is concerned with such disputes in relation to the “contract.” In my opinion, this difference should not to be overlooked. “Contract” is not a defined term in the Facility Agreement, but when juxtaposed with “Agreement,” I think it is of a narrower scope than the latter term – in my opinion, “contract” refers to the Facility Agreement itself as a document, including but not exceeding the terms contained within it. To the extent that this is correct, it follows that “Agreement” is of a wider scope than just the Facility Agreement. Indeed, the illustrative list of types of disputes covered by clause 39.1 supports this ‘broader’ interpretation. In this list, along with existence, validity or termination of the Agreement, we find “or any non-contractual obligations arising out of or in connection with this Agreement.” Importantly, this additional category of dispute is not replicated in clause 39.2. Moreover, I think it is enough that reference is made to “non-contractual [emphasis added]” disputes, which unambiguously goes beyond the scope of the contract mentioned in clause 39.2. It follows that while there may be much overlap between clauses 39.1 and 39.2, they are by no means identical. And insofar as they are not identical, both clauses can be mutually effective without “subject to Clause 39.2…” needing to provide for mandatory arbitration of disputes in the first place. According to this construction, “subject to Clause 39.2…” instead means “unless clause 39.2 applies.”

34. The position is even stronger when consideration is given to the definition of “Agreement” in the Definitions and Interpretation section of the Facility Agreement: “Agreement: means this Agreement including its schedules as amended, supplemented [emphasis added] and varied from time to time and agreed between the Parties.” At this juncture, it is worthwhile making a final and pre-emptive point. On the Third Defendant’s own case, the obligation for the Personal Guarantees arose under clause 2.1(d) of Schedule 3 (‘Conditions Precedent’) of the Facility Agreement. It follows, in my opinion, that the Third Defendant’s Personal Guarantee can be considered to be a supplement of a schedule of the Agreement and, thereby, a part of the Agreement according to the term’s definition and also, importantly, for the purpose of clause 39.1, too. It seems unlikely, on the other hand, that the Personal Guarantee was intended to be encompassed by the term “contract” in clause 39.2. It is a separate document. In conclusion, while, again, there is a lot of overlap between clauses 39.1 and 39.2, on a true construction, and to the extent that the Personal Guarantee might be encompassed by the dispute resolution clauses of the Facility Agreement, in my opinion, the former is not to be located in their intersection, whereby clause 39.2 (arbitration) would apply, but instead in the area only subject to clause 39.1 (jurisdiction), whereby these Courts have jurisdiction. (If anything in this construction seems counterintuitive, I direct to the aforementioned case of Axa Re which conveniently collects examples, as well as providing its own, of how courts have saved and given effect to at first seemingly inconsistent provisions, and not all of which present themselves as at first intuitive; without, that is, close analysis.)

35. According to this construction, then, had the Claimant pursued the Third Defendant under the guarantee in the Facility Agreement, arbitration would have been mandatory and I would have been obliged under Article 13 to dismiss or stay this action; while in so far as the latter has been pursued under the Personal Guarantee, and supposing for argument’s sake that this document is found to not be a separate operative contract, as a part of the “Agreement,” the DIFC Courts would have been designated to finally decide the matter and, whatever their present positions are now, the parties would have been taken to have regarded, as stated in clause 39.1(b) of the Facility Agreement, “that the courts of the DIFC are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.”

36. As a final remark, I think the Claimant appropriately invoked the Overriding Objectives of the Rules of this Court, and in particular RDC 1.6 which confirms that the overriding objective of the DIFC Courts is to deal with cases justly which includes, as per RDC 1.6(4), ensuring that cases are dealt with “expeditiously.” As Justice Sir Jeremy Cooke said in June 2019, in the appeal mentioned at the start of this judgment, “it appears to me that there has been enough delay in this action already and that it should now continue following dismissal of the appeals, at a much faster rate than heretofore.” ([37]) While activity continues for some of the Defendants in this matter, the Fourth Defendant has exhausted his rights of appeal and has been found to be liable under his Personal Guarantee. In my opinion it is high time that his colleagues or former colleagues, whatever the present situation is, including the Third Defendant, honour the guarantees that they had given, so that this case, which begun in 2017, can once and for all be closed.

Cost

37. In accordance with the principle contained in RDC 38.7, that the unsuccessful party should pay the costs, the Third Defendant shall pay the Claimant’s costs of this Application on a standard basis, to be assessed by a Registrar if not agreed.

Conclusion

38. As stated above, the Third Defendant’s application is dismissed with the Cost.

Claim No: CFI-037-2017

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

ILYAS GAFFAR SABOOWALA

Claimant

and

(1) SOMAN KUNIYATH NAIR
(2) MINI SOMAN THORUVIL VELUTHEDATH
(3) RAG FOODSTUFF TRADING LLC

Defendants

ORDER OF H.E. JUSTICE SHAMLAN AL SAWALEHI

FURTHER TO the Case Management Order of Judicial Officer Nassir Al Nasser dated 5 September 2019

AND UPON reviewing the Order of Judicial Officer Nassir Al Nasser dated 8 January 2020 (the “Order”)

AND UPON reviewing the Claimant’s Application No. CFI-037-2017/7 filed on 13 January 2020 for a de novo review of the Order (the “Application”)

AND UPON reviewing the Defendants’ reply to the Application dated 16 January 2020

IT IS HEREBY ORDERED THAT:

1. The Application is denied.

2. Costs shall be costs in the case.

Issued by:
Ayesha Bin Kalban
Assistant Registrar
Date of issue: 30 January 2020
At: 10am

Claim No: CFI 037/2019

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

GLOBAL ADVOCACY AND LEGAL COUNSEL

Claimant/Defendant by Counterclaim

and

THE INDUSTRIAL GROUP
(Also known as Al Banawai Trading and Industrial Group Co. Ltd.)

Defendant/ Claimant by Counterclaim

ORDER OF ASSISTANT REGISTRAR AYESHA BIN KALBAN

UPON reviewing the Defendant’s/ Claimant by Counterclaim (the “Defendant”) Application No. CFI-037-2019/2 filed on 30 December 2019 to amend the Statement of Defence and Counterclaim dated 1 September 2019

AND UPON reviewing the case file

IT IS HEREBY ORDERED THAT:

1. The Defendant is granted permission to amend the Statement of Defence and Counterclaim with respect to:

(a) the Matter against Bradley Dexter

(b) the Matter concerning Arwa AI Banawi’s Intellectual Property Dispute with All Saints Retail Limited;

(c) the Matter concerning Abdelazim El Fadil; and

(d) paragraphs 18 to 21 of the Counterclaim concerning Ramy Abouzeid.

2. Costs reserved.

Issued by:
Nour Hineidi
Deputy Registrar
Date of issue: 3 February 2020
At: 9am

Claim No. CFI 039/2018

THE DUBAI INTERNATIONAL FINANCIAL CENTER COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

MICHAEL PAGE INTERNATIONAL (UAE) LIMITED

Claimant

and

CURRENCY MATTERS MIDDLE EAST

Defendant

ORDER OF DISCONTINUANCE

UPON the Claimant having filed a Notice of Discontinuance

IT IS HEREBY ORDERED THAT:

1. Case No. CFI-039-2018 be discontinued.

2. There be no order as to costs.

Issued by
Nour Hineidi
Deputy Registrar
Date of Issue: 3 February 2020
At: 2pm

Claim No: CFI 027/2016

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

(1) NEST INVESTMENTS HOLDING LEBANON S.A.L.
(2) JORDANIAN EXPATRIATES INVESTMENT HOLDING COMPANY
(3) QATAR GENERAL INSURANCE AND REINSURANCE COMPANY P.J.S.C.
(4) GHAZI KAMEL ABDUL RAHMAN ABU NAHL
(5) JAMAL KAMEL ABDUL RAHMAN ABU NAHL
(6) TRUST COMPASS INSURANCE S.A.L.
(7) TRUST INTERNATIONAL INSURANCE COMPANY (CYPRUS) LIMITED
(8) HIS EXCELLENCY SHEIKH NASSER BIN ALI BIN SAUD AL THANI
(9) FADI GHAZI ABU NAHL
(10) HAMAD GHAZI ABU NAHL
(11) KAMEL GHAZI ABU NAHL

Claimants/Appellants

and

(1) DELOITTE & TOUCHE (M.E.)
(2) JOSEPH EL FADL

Defendants/Respondents

ORDER OF JUDICIAL OFFICER MAHA AL MEHAIRI

UPON reviewing the Claimant’s Appeal Notice dated 13 January 2020 seeking permission to appeal against the Order of Judicial Officer Maha Al Mehairi dated 18 December 2019 (the “Order”)

AND UPON the request to stay the procedural timetable in the Case Management Order dated 18 December 2019

AND UPON the Respondents submissions in response to the Appeal Notice filed on 30 January 2020

AND UPON reviewing all relevant material in the case file

PURSANT to the Amended Part 44 of the Rules of the DIFC Courts (“RDC”)

IT IS HEREBY ORDERED THAT:

1. The permission to appeal against the Order be granted as the requirements of RDC 44.19(1) have been met on the grounds that the appeal would have a real prospect of success.

2. The Order is stayed.

Issued by:
Nour Hineidi
Deputy Registrar
Date of issue: 5 February 2020
At: 10am

Claim No. CFI 009/2019

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

FANTINI MOSAICI S.R.L (ABU DHABI BRANCH)

Claimant

and

BULLDOZER INVESTMENTS LTD

Defendant

CONSENT ORDER

UPON the Claimant and the Defendant having agreed to stay the proceedings for a period of 21 days in light of having reached a settlement and are currently finalising the terms of such settlement between them and having requested for the CMC to be rescheduled post the period of stay;

AND UPON the Claimant and the Defendant having agreed to the terms set forth in this Consent Order:

IT IS HEREBY ORDERED THAT:

1. The proceedings in relation to Claim No. CFI-009-2019 be stayed for a period of 21 days until 27 February 2020;

2. The CMC currently scheduled for 11th February 2020 be rescheduled post the period of stay;

3. There shall be no order as to costs.

Issued by:
Nour Hineidi
Deputy Registrar
Date of issue: 6 February 2020
At:2pm

Claim No. CFI 069/2019

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

STATE BANK OF INDIA (DIFC BRANCH)

Claimant

and

(1) MOULDS PERTOCHEM FZE
(2) MOULDS & METALS FZE
(3) VIWASVAT KUMAR SHASTRI

Defendants

DEFAULT JUDGMENT MADE BY JUDICIAL OFFICER NASSIR AL NASSER

UPON the request made by the Claimant on 6 February 2020 for a Default Judgment against Moulds Petrochem FZE (the “First Defendant”) and Moulds & Metals FZE (the “Second Defendant”) pursuant to Rule 13.1 (1) and (2) of the Rules of the DIFC Courts (“RDC”), it is found as follows:

1. The request is not one prohibited by RDC 13.3 (1) or (2).

2. The First Defendant and Second Defendant have each failed to file an Acknowledgment of Service or a Defence to the claim (or any part of the claim) with the DIFC Courts and the relevant time for so doing has expired (see RDC 13.4).

3. The First Defendant and Second Defendant have not: (i) applied to the DIFC Courts to have the Claimant’s statement of case struck out under RDC 4.16, nor for immediate judgment pursuant to RDC Part 24 (RDC 13.6(1)); (ii) satisfied the whole claim (including any claim for costs) on which the Claimant is seeking judgment; or (iii) filed or served on the Claimant an admission under RDC 15.14 or 15.24 together with a request for time to pay (see RDC 13.6(3)).

4. The Claimant filed a Certificate of Service in accordance with RDC 9.43 on 23 January 2020.

5. The Claimant followed the required procedure for obtaining Default Judgment RDC 13.7 and 13.8.

6. The claim is for a specified sum of money and the request specifies the date by which the whole of the judgment debt is to be paid or the times and rate at which it is to be paid by instalments (RDC 13.9).

7. The request includes a request for interest pursuant to RDC 13.14 and the Claim Form sets out the calculation of interest in the claim.

8. The DIFC Courts are satisfied that the conditions of RDC 13.22 and RDC 13.23 [defendant served outside jurisdiction] have been met.

9. The Claimant has submitted evidence, as required by RDC 13.24, that: (i) the claim is one that the DIFC Courts have power to hear and decide; (ii) no other court has exclusive jurisdiction to hear and decide the claim; and (iii) the claim has been properly served (RDC 13.22 and 13.23).

ACCORDINGLY IT IS HEREBY ORDERED THAT:

10. The request is granted.

11. The First Defendant and Second Defendant are ordered, within 14 days from the date of this Judgment, to pay the Claimant the amount of USD 9,330,822.96, which consists of the following:

a. sum of USD 9,008,190.69 as the principal sum;

b. sum of USD 251,808.55 as interest accrued as per the Facility Agreement;

c. sum of USD 47,000 as legal cost incurred; and

d. court fees in the sum of USD 23,823.72.

The First Defendant and Second Defendant shall pay the Claimant post judgment interest at the rate of 9% per annum from the date of this Judgment until the date of full payment.

The Claimant shall serve this Default Judgment on the all of the Defendants in this case.

Issued by:
Nour Hineidi
Deputy Registrar
Date of Issue: 10 February 2020
At: 10am

Claim No: CA 006/2019

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 APPEAL
BEFORE THE CHIEF JUSTICE TUN ZAKI AZMI, H.E JUSTICE ALI AL MADHANI, JUSTICE JUDITH PRAKASH

BETWEEN

IBRAHIM SAIF HORMODI

Appellant

and

BANKMED (SAL) TRADING IN THE DIFC UNDER THE TRADE NAME BANKMED (DUBAI)

Respondent

JUDGMENT

UPON the order of Judicial Officer Nassir Al Nasser issued on 29 October 2017 entering default judgment against the Appellant (the “Default Judgment”)

AND UPON the Appellant’s application dated 13 November 2017 to set aside the Default Judgment Order (the “First Set Aside Application”)

AND UPON the Witness Statement of the Appellant filed 22 November 2017 (the “2017 Witness Statement”)

AND UPON the order of H.E. Justice Shamlan Al Sawalehi issued on 14 January 2018 refusing the Appellant’s Set Aside Application (the “First Refusal to Set Aside Order”)

AND UPON the order of Judicial Officer Nassir Al Nasser issued on 16 January 2018 to confirm that the stay of enforcement proceedings shall be lifted (the “Stay Lift Order”)

AND UPON the Appellant’s application for leave to appeal the Refusal to Set Aside Order (the “Second Set Aside Application”) filed 6 January 2019

AND UPON the Second Set Aside Order being denied on 13 January 2019 (the “Second Refusal to Set Aside Order”)

AND UPON the Appellant’s appeal notice filed 3 February 2019 seeking permission to appeal the First Refusal to Set Aside Order (the “Permission to Appeal Application”)

AND UPON the order of Justice Zaki Azmi issued on 27 February 2019 (the “Permission to Appeal Order”) granting the Appellant permission to appeal the First Refusal to Set Aside Order

AND UPON the hearing of 27 August 2019 (the “Appeal Hearing”)

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

IT IS HEREBY ORDERED THAT:

1. The Appellant’s Appeal is dismissed.

2. Costs of this Appeal shall be paid to the Respondent by the Appellant, the amount of which shall be assessed, if not agreed within 30 days of the issuance of this order, by the Registrar.

Issued by:
Nour Hineidi
Deputy Registrar
Date of issue: 11 February 2020

Time: 12pm

JUDGMENT

CHIEF JUSTICE ZAKI AZMI

Summary

1. This Appeal is against the Order of H.E. Justice Shamlan Al Sawalehi (the “CFI Judge”) issued on 14 January 2018 (the “First Refusal to Set Aside Order”), which rejected a set aside application filed on 13 November 2017 (the “First Set Aside Application”).

2. The First Set Aside application concerned the default judgment of Judicial Officer Nassir Al Nasser issued on 29 October 2017 (the “Default Judgment”), which was entered against the Appellant (and against all defendants in the substantive claim) in the sum of USD 14,463,479.03.

3. Except for the Default Judgment Order against the Appellant, (who is one of the Defendants in an action by the Respondent) all other default judgment orders have been set aside against the other Defendants. This Appeal, however, is dismissed. The decision of this Court was handed down to the parties at the hearing of 27 August 2019 with brief oral reasoning. Fuller reasons are given in this judgment.

4. In short, there are two options within the RDC for setting aside a default judgment; the first in which the Court must set aside, the second where the court may set aside. In a sense, there is a mandatory provision on the one hand, and a discretionary power on the other.

5. Pursuant to RDC 14.1 the Court must set aside a judgment; (i) in the case of a judgment in default of an acknowledgment of service; (ii) in the case of a judgment in default of a defence; or (iii) if the whole of the claim was satisfied before judgment was entered.

6. On the one hand, alternatively, as per RDC 14.2, the Court may, set aside (or vary) a judgment if: (i) the defendant has a real prospect of successfully defending the claim; or (ii) there is some other good reason why (iii) the judgment should be set aside or varied; or (iv) the defendant should be allowed to defend the claim.

7. The Appellant argues this appeal under the grounds of both RDC 14.1 and RDC 14.2. This Court finds that the Appellant has failed to prove the first arm (14.1 – the mandatory provisions) does not succeed, for reasons which I shall come to. This leaves us with the second arm (14.2 – the exercise of discretion), which does not succeed, as I shall explain.

8. In sum, Counsel for the Appellant has also failed to demonstrate a real prospect of proving a good defence and has further failed to prove that discretion should be exercised in the Appellant’s favour.

Background

9. It is not necessary to delve into the details of the dispute, save to say that the underlying claim concerns a USD 15,000,000 facility agreement dated 22 December 2015 (the “Facility Agreement”) which provided for various securities to be provided by, amongst other defendants, the Appellant.

10. The Appellant is a former shareholder of Fast Telecom General Trading LLC (“Fast Telecom” or the “Appellant”). The Respondent, Bankmed (Sal) (“Bankmed” or the “Respondent”) is a Lebanese joint stock company registered in the DIFC as a foreign recognised company.

11. The substantive claim was filed by Bankmed, the Respondent in these proceedings, on 23 July 2017.The claim form was subsequently sent by courier to Mr Hormodi, the Appellant, at Al Warka 4, Street 35, Villa 11, Dubai (the “Al Warka”). There has been an ongoing dispute about whether or not this was the correct address to which the claim form was meant to be delivered. The Appellant insists that Al Warka was not, nor has it ever been his address. It is also the Appellant’s case that he never instructed or authorised BSA to act on his behalf. 1

12. In any event, the Acknowledgement of Service (the “AoS”) was filed by instructing solicitors BSA Ahmad Bin Hazeem & Associates LLP (“BSA”) on behalf of Fast Telecom and all defendants on 5 September 2017, yet BSA failed to file a defence in the appropriate time as set out in Rule 13.5(1) of the RDC.

13. On 14 January 2018 the CFI Judge rejected the First Set Aside Application on the grounds that the application both lacked the formalistic requirements of Part 14.4 of the RDC and the Appellant had no real prospect of successfully defending the claim (14.2(1)).

14. Almost a year later, on 6 January 2019, the Appellant submitted an application seeking permission to appeal the 14 January 2018 Order (the “First Permission to Appeal Application”). That Application was denied by the CFI Judge on 13 January 2019 on the basis that the First Permission to Appeal Application fell outside of the 21-day time period, pursuant to RDC 44.10.

15. On 3 February 2019 the Appellant then filed a second “fresh” application (the “Second Permission to Appeal Application”). I granted permission on 27 February 2019 (the “Permission to Appeal Order”). The matter consequently came before this Court of Appeal on 27 August 2019.

The Appeal

16. The Appellant argues that in respect of the First Refusal to Set Aside Order the CFI Judge:

i. erred by dismissing the Appellant’s application dated 6 January 2019 (First Permission to Appeal). The Appellant argues that it complied with the requirements of RDC 14.4 by submitting evidence in the form of the 2017 Witness Statement. On the Appellant’s case, the Learned Judge failed to give due weight to that Witness Statement;

ii. erred by failing to consider that the Appellant acted as a litigant in person. Here, the Appellant cites RDC 14.2(2)(b) and argues that despite any technical irregularity in the application, they had sufficiently demonstrated a strong reason why the Default Judgment Order should be set aside;

iii. erred by concluding that the Appellant had no real prospect in successfully defending the claim if the Appellant’s application was not considered in the first instance on the basis that the Learned Judge dismissed the Appellant’s application for failing to adhere to the requirements of RDC 14.4;

iv. erred by dismissing the Appellant’s First Set Aside Application and is unjust and in conflict with the overriding objective of the Courts;

v. erred by concluding the AoS was served. On the Appellant’s account, the time for him to file either an AoS or a defence had not “started to run”;

vi. erred in fact and law by failing to accept that even if the fifth defendant’s position was that BSA were properly instructed the original application for default judgment was not in compliance with the requirements of RDC 13 and therefore must be set aside in accordance with RDC 14.1.

The Appellant thus seeks the following from the Court: a) an order setting aside the Default Judgment Order of Judicial Officer Nassir Al Nasser issued on 29 October 2017; b) a declaration that the Appellant did not instruct BSA to act on his behalf in respect of the proceedings; c) a declaration that the Appellant has a reasonable prospect of defending the claim in the substantive proceedings; d) an order for costs in favour of the Appellant; and e) any other order the Court deems appropriate.

The Defence

17. The Respondent’s defence is quite simply that the Learned Judge was neither wrong nor unjust, and that the Appellant has failed to offer any defence to the claim, even though proceedings commenced in July 2017 (sic. 23 July 2017).

18. As a preface to their submissions, the Respondent quotes Justice Sir Jeremy Cooke’s judgment of 9 June 2019 (Claim No. CA-001-2019) in relation to appeals brought by the second and third defendants.2 In that judgment, the Learned Judge warned of the continued delay to these proceedings:

“It appears to me that there has been enough delay in this action already and that it should now continue following dismissal of the appeals, at a much faster rate than heretofore.” [paragraph 37]

19. The Respondent contends that the Appellant is now seeking to further delay matters. On their account, it is apparent that the Appellant has no reasonable prospect of defending the claim and a fuller investigation into the facts of the dispute would not alter the outcome of the case.

Discussion

20. First and quite crucially, in determining this appeal, there is the high hurdle of RDC 44.117, the rule which sets out the limited grounds upon which this Court of Appeal would allow an appeal from a decision of the Court of First Instance; that is, only if the lower Court decision was; (i) wrong; or (ii) unjust because of a serious procedural or other irregularity.

21. As the Respondent rightly points out, in McGraddie v McGraddie [2013] the Supreme Court of England and Wales considered the principles governing when an appellate court would be able to interfere with findings of fact at first instance. McGraddie showed how the appellate court should intervene only in the very rare cases in which it is satisfied that the judge below was “plainly wrong”.

22. The same applies here at the DIFC Courts. We cannot re-open the case nor re-try the issues heard at first instance, we can only determine whether the Learned Judge erred in fact or law and came to a decision which was plainly wrong or unjust.

23. I must agree with the Respondent in that an even fuller investigation into the facts of the dispute would not alter the outcome of the case. The reasons for this are multifarious.

24. I will go through both limbs with reference to the three main issues that permeated the hearing; the premature filing, the delay, and the lack of defence.

25. Let me first address RDC 14.1 and the argument of the alleged premature filing for default judgment. The recent authority of Sir Jeremy Cooke in his judgment of CA-001-2019 is crystal clear on this matter; the Learned Judge directly refutes the Appellant’s arguments regarding premature filing. I echoed similar sentiments at the hearing.

26. The bench would have expected Counsel for the Appellant, (who was also instructed for the previous case) to have brought the alleged AoS/address issue to our attention in the very first instance. Counsel’s failure to notify us sooner could constitute a breach of ethics. The argument simply has little plausibility when made so late in proceedings.

27. To elaborate, it is simply not acceptable, that the factual matrix of this claim proves that the Appellant has not been served with the claim form and therefore the time for him to file either an AoS or a defence has “not started to run” and consequently the mandatory provisions that the Court must set aside the Default Judgment Order come into effect.

28. Rather, it appears on the factual matrix of this claim that the Appellant was served with the Claim Form at the address designated for service pursuant and likely failed to file an AoS in time. There is no evidence before this Court that the Learned Judge erred in his findings pertaining to the issue of the alleged premature filing and resulting Default Judgment.

29. Notably, and as an aside, it is not disputed that the guarantee between the parties was signed and dated on 21 November 2017 by the Appellant. As per clause 2 and clause 15 of the guarantee, the Appellant confirmed that the Al Warka Address was in fact his domicile and the designated place at which he was to be reached. Accordingly, in line with the Respondent’s submissions, the Court could only conclude that the Al Warka Address was in fact the contractually designated place for service.

30. It is also pertinent to note, as the Respondent did at the Hearing in reference to the judgment of Justice Sir Jeremy Cooke, that in relation to the issue of the allegedly premature Default Judgment “it is in fact only 14 days which must elapse following service of the Particulars of Claim where they are served separately from the Claim Form” [see paragraph 23].

31. So, in reference to the first limb (RDC 14.1), that is the mandatory provisions, we cannot find that (i) applies. It is simply not the case that the judgment was issued in default of an AoS. Indeed, there was an AoS. And as the Court has found the AoS, the onus was on the Appellant to participate in proceedings. With reference to RDC 14.1(i) therefore, it is not that the Court must set aside the Default Judgment because it was wrongly entered.

32. Secondly, I shall address 14.1 (ii) and the issue of the delay between the First Application to Set Aside the filing of the ill-conceived Second Application to Set Aside.

33. It remains unclear as to why the Appellant waited so long to apply to set aside the default judgment. Although the Appellant allegedly had a telephone call from a Mr. Fadi of Fast Telecom (the First Defendant), who informed him that matters were being resolved and to “continue his life as normal”, there still remained a Default Judgment issued against him for significant sums of money. Save to say, the rationale proffered to the Court for this lack of action on the Appellant’s part is unconvincing.

34. Had the Appellant filed for Appeal on 14 January 2018 Order in time, pursuant to Part 44, perhaps this appeal would have stood on different grounds. However, as it stands now, the significant delay in filing this appeal severely damages the plausibility of the Appellant’s claim. The rationale for explaining the year-long duration is simply not of substance; to believe Mr Fadi’s phone call is not enough of an explanation; it does not make logical sense.

35. Counsel was unable to provide a clear articulation of any intended defence against the underlying claim and persuade the Court to exercise its discretionary power to set aside the judgment under RDC 14.2. Despite being pressed several times, and indeed despite being heavily assisted by the Court, Counsel had clearly not turned their mind to 14.2 nor the case law in this field.

36. Counsel did make reference to a criminal matter in the Dubai Courts, but it was not put to the Court the precise way in how that proceeding would invalidate the agreement between the parties. Throughout, it remained unclear how an alleged on-shore criminal proceeding may affect the validity of the agreement between the parties, or how that proceeding should be taken under DIFC Law, and which common law theories of the DIFC would come into effect. Though Appellant’s Counsel made some reference to the principles of misrepresentation, she did so without clear connection to the facts of the case or specific reference to the applicable DIFC Law and without elaborating on the ways to show that the defendant had a real prospect of successfully defending the claim.

37. The case law of England and Wales indicates that the discretionary power to set aside under the “reasonable prospect of success” section of the setting-aside limb is seldom used, and sometimes not even exercised in the most exceptional cases (see De Ferranti v Execuzen Ltd [2013] EWCA Civ 592 2913; Continuity Promotions Ltd v O’Connor’s Nenagh Shopping Centre Ltd [2005] EWHC 3462; Henriksen v Pires [2011] EWCA Civ 1621.) Regretfully, Counsel made no reference whatsoever to examples in which the Courts of England and Wales have set aside default judgment and failed to make an argument for a good defence that shows a reasonable prospect of success.

38. Turning then the second part of 14.2, that is “some other good reason”, one can see that there are many reasons why the Default Judgement in this case may be set aside. Arguably, the allegation of misrepresentation could potentially constitute a “good reason”.

39. It is not for the Court to fill in the gaps, but rather, the burden is on the Appellant to argue why there was a good reason. As Counsel has failed to do so, and show pursuant to 14.2(ii), and indeed did not make an arguable case as explained above in relation to 14.2(i), the Court will not exercise its discretionary power in this case.

Conclusion 

40. For the reasons set out above, this Appeal is dismissed.

41. Similarly, is not within the scope of this Court to provide a declaration that the Appellant did not instruct BSA to act on his behalf. As referred to above in paragraph 5 and footnote 1, that is a matter for the Registry to determine within the context of the Code of Conduct Investigation and is entirely separate from any judicial decisions.

Costs

42. The parties were given the brief opportunity to make arguments on costs at the conclusion of the 27 August 2019 Hearing. Based on these arguments, it is determined that the Appellant is to pay the Respondent’s costs of this Appeal, to be assessed by the Registrar of the DIFC Courts if not agreed between the parties within 30 days of the issuance of this Judgment.

H.E. JUSTICE ALI AL MADHADI

43. I agree.

JUSTICE JUDITH PRAKASH

44. I agree.

Issued by:
Nour Hineidi
Deputy Registrar
Date of issue: 11 February 2020

Time: 12pm

Claim No: CFI 024/2019

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

TRANSCOM DMCC

Claimant

and

KPR AGROCHEM LTD

Defendant

DEFAULT COSTS CERTIFICATE MADE BY DEPUTY REGISTRAR NOUR HINEIDI

UPON the request for a Default Costs Certificate made by the Claimant on 21 January 2020 (the “Request”) pursuant to Rule 40.17 of the Rules of the DIFC Court (“RDC”)

AND UPON considering the documents filed in support of the Request

AND UPON the Claimant’s filing of its Notice of Commencement of Assessment filed on 23 December 2019

AND UPON the Defendant’s failure to file a points of dispute, pursuant to Rule 40.15 of the RDC, within 21 days from the date the Claimant filed its Notice of Commencement of Assessment pursuant to Rule 40.5

AND UPON considering the Default Judgment of Judicial Officer Maha Al Mehairi issued on 5 September 2019

AND UPON reviewing all other relevant case documents filed in this matter

IT IS HEREBY ORDERED THAT:

1. The Request is granted.

2. The Defendant is ordered to pay the Claimants a total of AED 136,250 within 21 days from the date of this Default Costs Certificate.

Issued by:
Nour Hineidi
Deputy Registrar
Date of issue: 12 February 2020
Time: 9am

Claim No: CFI 027/2016

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

(1) NEST INVESTMENTS HOLDING LEBANON S.A.L.
(2) JORDANIAN EXPATRIATES INVESTMENT HOLDING COMPANY
(3) QATAR GENERAL INSURANCE AND REINSURANCE COMPANY P.J.S.C.
(4) GHAZI KAMEL ABDUL RAHMAN ABU NAHL
(5) JAMAL KAMEL ABDUL RAHMAN ABU NAHL
(6) TRUST COMPASS INSURANCE S.A.L.
(7) TRUST INTERNATIONAL INSURANCE COMPANY (CYPRUS) LIMITED
(8) HIS EXCELLENCY SHEIKH NASSER BIN ALI BIN SAUD AL THANI
(9) FADI GHAZI ABU NAHL
(10) HAMAD GHAZI ABU NAHL
(11) KAMEL GHAZI ABU NAHL

Claimants/Appellants

and

(1) DELOITTE & TOUCHE (M.E.)
(2) JOSEPH EL FADL

Defendants/Respondents

ORDER OF JUDICIAL OFFICER NASSIR AL NASSER

UPON reviewing the Application Notice filed on 9 February 2020 by Onoma FZE pursuant to Part 37 of the Rules of the DIFC Courts to come off record as the Third Claimant’s legal representative in these proceedings

AND UPON considering the First Witness Statement of Carlo Fedrigoli

IT IS HEREBY ORDERED THAT:

Onoma FZE has ceased to be the legal representative of the Third Claimant in the proceedings.

Issued by:
Nour Hineidi
Deputy Registrar
Date of issue: 13 February 2020
At: 2pm

Claim No. CFI 047/2019

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

CATERPILLAR FINANCIAL SERVICES (DUBAI) LIMITED

Claimant

and

(1) OMER TRANSPORT LLC
(2) OMER CRUSHERS & QUARRIES LLC
(3) MR AYMAN ABDUL BAKI

Defendants

ORDER OF JUDICIAL OFFICER NASSIR AL NASSER

UPON reviewing the Claimant’s application dated 8 January 2020 (“the Application”) for permission to Re-Amend the Amended Claim and to rely on the Particulars of Claim filed with the Application in support of that claim.

IT IS HEREBY ORDERED THAT:

1. The Claimant has permission to Re-Amend its claim form and to rely upon the Particulars of Claim in support of that claim.

2. The Claimant shall file the said statements of case with the DIFC Court within 14 days of the date of this Order pursuant to RDC 18.6.

3. Pursuant to RDC 18.7, the Claimant will serve this Order and the amended statements of case on the First and Third Defendant within 14 days of the date of this Order,

4. The Claimant shall serve the amended statements of case on the Second Defendant by 27 February 2020, pursuant to RDC 7.20(2).

Issued by:
Nour Hineidi
Deputy Registrar
Date of Issue: 9 February 2020
At: 12pm