CFI 029/2018 The Industrial Group Ltd v Abdelazim El Shikh El Fadil Hamid

Claim No. CFI 029/2018

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

THE INDUSTRIAL GROUP LTD

Claimant/Defendant by Counterclaim

and

ABDELAZIM EL SHIKH EL FADIL HAMID

Defendant/Claimant by Counterclaim

ORDER WITH REAONS OF JUSTICE SIR RICHARD FIELD

UPON considering the Defendant’s application dated 26 March 2020 (the “26 March 2020 Application”): (1) to strike out the amendment made under the Particulars given of paragraph 22 of the Claimant’s amended Points of Claim dated 17 March 2020 in respect of an alleged grant of credit by the Defendant to Merab Establishment for Trading (the “Merab Credit Claim”); and (2) for payment out of court of the sum AED 1,009,645.71.

AND UPON considering the Claimant’s Reply dated 9 April 2020 to the 26 March 2020 Application

AND UPON reading the Fourth and Fifth Witness Statements of the Defendant dated respectively 26 March 2020 and 9 April 2020

AND UPON reading the Fourth Witness of Khalid Jaberah dated 4 April 2020

AND UPON considering the Defendant’s Reply Submissions dated 16 April 2020

IT IS HEREBY ORDERED THAT:

1. The pleading of the Merab Credit Claim inserted into the Points of Claim (“POC”) on 17 March 2020 be struck out.

2. The Claimant shall have liberty within 14 days of the date of this order to serve a new free-standing Merab Credit Claim wholly separate from paragraph 28 of the POC which new claim is fully compliant with RDC 17.17 and pleads without reference to annexed documents a specific breach of the Defendant’s employment contract and/or a breach of a term of the Defendants employment contract, express or implied, to exercise reasonable care, in respect of an alleged “one-off” grant of credit to Merab Establishment for Trading (“Merab”) under which SAAF Technologies Limited (“STL”) supplied goods to Merab on 2 September 2015 to the value of SAR 1,718,750 giving full particulars of how the said alleged one-off grant of credit caused loss to the Claimant in the sum of SAR 1,718,750 (the “substitute Merab claim”).

3. If the Claimant exercises the liberty granted in (2) above to serve a substitute Merab Credit Claim and there are good arguable grounds for striking out the said claim, the Defendant shall have liberty to restore the 26 March 2020 Application.

4. The Claimant will pay the costs of: (i) the 26 March 2020 Application; and (ii) the Defendant’s costs incurred in pleading to the substituted claim if that claim is not struck out on a restoration of the 26 March 2020 Application.

Issued by:
Nour Hineidi
Deputy Registrar
Date of issue: 27 May 2020
At: 3pm

SCHEDULE OF REASONS

1. The pleading of the Merab Credit Claim inserted into the POC on 17 March 2020 is unacceptable for the following reasons.

2. First, in defiance of the Order and Reasons issued on 3 March 2020, the amended Merab Credit Claim is pleaded as part of the Particulars given under paragraph 22 of the POC of the transactions identified in the Ernst & Young Report as being unsupported by documentary authorisations or approvals.

3. Second, it is extremely difficult, if not impossible to decipher what is being freshly pleaded and what is being excised in sub-paragraphs (ii) and (iii).

4. Third, given that the Claimant’s claim is that there was a one-off authorisation of credit to Merab, the proposed pleading does not contain sufficient particulars of how that alleged breach of contract or negligent act caused the loss alleged to have been suffered by the Claimant bearing in mind that Merab made subsequent payments to STL which together exceed SAR 1,718,750 and Merab’s indebtedness was owed to STL, not to the Claimant.

5. I reject the Defendant’s submission that the amended Merab Credit Claim fails sufficiently to plead the legal duty alleged to have been breached.

6. Despite the deficiencies identified in paragraphs (2), (3) and (4) above, I do not think the Claimant should here and now be shut out from pursuing the Merab Credit Claim. Instead, I am persuaded that the Claimant should be given one last chance to produce an acceptable pleading that addresses the identified deficiencies.

7. The substitute claim should plead a “one-off” grant of credit to Merab and should not involve annexing copies of contractual documents to the Points of Claim. Instead, the contractual terms sought to be relied on should be simply be pleaded out as part of the substitute claim. The purpose of pleadings is to set out a party’s case in a free-standing document in clear concise language. As a general rule, this purpose is subverted if documents are annexed to the pleading and thus the annexing of documents to pleadings should only be adopted in exceptional cases where the claim or defence, as the case may be, involves a great many terms or conditions contained in particular documents. The present proceedings are not such an exceptional case.

8. The substitute claim should therefore be a free-standing pleading entire in itself which the Claimant will not be permitted to construe by reference to some document separate from the pleading such as an affidavit intended to be deployed as an explanatory memorandum of the pleading.

9. For the sake of completeness, I deal with the following additional grounds advanced by the Defendant in support of the 26 March 2020 Application which I do not accept because they do not go to any insufficiency of pleading but involve questions of fact that can only resolved at trial.