CFI 026/2017 Tavira Securities Limited v (1) RE Point Ventures Fzco (2) JAI Narain Gupta (3) Maynak Kumar

Claim No CFI-026-2017

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN:

TAVIRA SECURITIES LIMITED

Claimant

-and-

(1) RE POINT VENTURES FZCO

(2) JAI NARAIN GUPTA

(3) MAYNAK KUMAR

Defendants

RULING AND DECLARATION OF JUSTICE SIR RICHARD FIELD

UPON the dismissal by a judgment dated 17 December 2017 of the Defendants’ application challenging the jurisdiction of the Court (the “Jurisdiction Challenge”)

UPON the Claimant’s application for costs (the “Costs Application”) in respect of the jurisdiction challenge

UPON the Claimant’s application dated 4 October 2017 for permission to amend the Claim Form (the “Permission Application”)

UPON the filing by the Defendants of Acknowledgements of Service stating an intention to defend the whole of the claim without prejudice to their contention that the Court lacks jurisdiction

UPON considering the Claimant’s written submissions in support of the Permission Application and in support of the Costs Application

AND UPON the Defendants failure to serve reply submissions to the Costs Application and the Permission Application by the dates set by the Court 

IT IS HEREBY NOW DECLARED THAT:

1.The Defendants shall pay the Claimant’s costs in respect of the Jurisdiction Challenge to be taxed by the Registrar on the standard basis if not agreed.

2. The Defendants shall pay to the Claimant within the 14 days of the date of this order USD46,000 on account of the costs awarded in paragraph 1 above.

3. The Claimant is granted permission to amend the Claim Form as set out in its Permission Application with no order as to costs.

Issued by:

Natasha Bakirci

Assistant Registrar

Date of issue: 23 January 2018

At: 9am

SCHEDULE OF REASONS

The Costs Application

1.The Claimant won on every issue raised in the Jurisdiction Challenge and there is no reason why the normal rule that costs should follow the event (RDC 38.7(1) should not apply.

2. The Claimant submits that those costs should be taxed on the indemnity basis because of the shifting nature of the Defendants’ case and because of their reprehensible conduct.

3. The alleged shifting nature of the Defendants’ case is as follows:

a. having at first argued forum non conveniens and abuse of process on the basis that there might be “some other forum” more suitable for the claim, it was only in the Defendants’ skeleton argument that England was identified for the first time as the more suitable forum;

b. it was also only in their skeleton argument that the Defendants raised the prospect of a claim in the Dubai Courts or an application to the Joint Judicial Council under Dubai Decree 19 of 2016;

c. despite the fact that the Defendants were sent a copy of the Claimant’s General Terms and Conditions of Business by email on 30 September 2015, they sought a copy of this document from the Claimant on the eve of the hearing of the Jurisdiction Challenge and, despite denying the contract alleged against them, sought to rely on the English High Court jurisdiction clause contained within that document relying on the Fiona Trust separability approach, only to abandon that separability argument in their post-hearing submissions.

4. The reprehensible conduct relied on is the Defendants’ allegation in their post-hearing submissions that the Claimant “hid” the General Terms and Conditions of Business whereas the Defendants had been sent a copy thereof on 30 September 2015 and the Claimant had referred to and identified these terms and conditions in the Claim Form.

5. Indemnity costs are awarded where a party is responsible for something “outside the norm”, see Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson[2002] All ER (D) 39. Examples of conduct outside the norm include baseless allegations of fraud, bringing a claim that totally lacks merit and misleading the court. In my opinion, the conduct of the Defendants relied on by the Claimant in its application for indemnity costs is not sufficiently “out of the norm” to require the Court to mark its disapproval thereof by awarding indemnity costs.

6. The Defendants must therefore pay the Claimant’s costs incurred in resisting the jurisdiction challenge, such costs to be taxed on the standard basis, unless otherwise agreed.

7. The Claimant also applies under RDC Rule 38.13 for an interim payment on account of costs. The Claimant’s costs in resisting the Defendant’s jurisdiction challenge down to and including the service of its post-hearing submissions totaled US$97,964. In my judgment, the appropriate figure to be awarded as an interim payment is USD46,000, which sum must be paid within 14 days of the date of this Order.

The Permission Application

8. The amendments to the Claim Form for which permission is sought are:

a. a plea that the contract in respect of the Defendants’ instruction to sell 190 shares in SAB Miller plc (the “Trade”) was induced by dishonest and false representations made by the 3rd Defendant

i. by an email dated 12 October 2015 representing that the 1st and/or the remaining Defendants severally or jointly had a present intention to meet their contractual obligations if the trade was unprofitable; and

ii. by an email dated 30 September 2015 to the Claimant enclosing the 1st Defendant’s standard settlement instructions representing that the 1st Defendant had an established relationship with clearing banks.

b. a plea of an actionable conspiracy by all of the Defendants on or before the conclusion of the contract between the Claimant and the 1^st Defendant to use unlawful means with the intention of injuring the Claimant, the unlawful means being, inter alia, the 3^rd Defendant’s above-mentioned deceit and procuring the 1^st Defendant’s breach of contract with the Claimant.

9. The Permission Application is supported by a witness statement of Mr Omar Ulrich, the CEO of a Bermudan boutique financial firm, Castle Harbour Securities Ltd (“Castle Harbour”), in which Mr Ulrich states that he handled the opening of a trading account between Castle Harbour and the 1^st Defendant under which the 1^st Defendant issued an instruction for the sale of shares in a Finnish company but failed to settle the trade by providing shares to cover the sale.

10. In my judgment, the proposed amendments are pleaded with the necessary particularity and have a reasonable evidential basis. This is constituted both by the emails that passed between the Claimant and the Defendants that are referred to in the judgment of 17 December 2017, and by Mr Ulrich’s witness statement that constitutes evidence of a consistent modus operandi. I accordingly grant permission for the proposed amendments to the Claim Form.

11. Normally, a party obtaining permission for the amendment of a pleading must pay the costs of the application and any responsive amendments made by the opposite side. Here, however, the amendments are to the Claim Form at a time before any Defence has been served and the Defendants have failed to serve any submissions in response to the Claimant’s application, in breach of a direction of the Court. I therefore propose to make no order as to costs on the Claimant’s application.