Claim No. CFI 018/2015
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
OZAN KALEMDAROGLU
Claimant
and
GMG (DUBAI) LTD
Defendant
ORDER OF JUSTICE TUN ZAKI AZMI
UPON reviewing the Claimant’s Part 8 Claim Form dated 11 June 2015 seeking an order for the production of documents from the Defendant before proceedings (“the Claim”)
AND UPON reviewing the Defendant’s response to the Claim dated 15 July 2015 and the Claimant’s subsequent reply to the Defendant’s response dated 6 August 2015
IT IS HEREBY ORDERED THAT:
1. The Claim is granted and the Defendant shall produce to the Claimant all documents or classes of documents confirming the net profit and loss (Net PNL) of the Turkey Bonds desk, including the underlying financial information on which the Net PNL is calculated, for the period of January to December 2014.
2. The production ordered in paragraph 1 above shall consist of the production of any books, records or other documents or information or other data in the Defendant’s possession or control.
3. The documents or classes of documents to be produced pursuant to paragraphs 1 and 2 above shall include, but shall not be limited to:
(a) Gross Brokerage Income
Documents or classes of documents evidencing the “gross brokerage” fee payments made by customers of the Turkey Bonds Desk for inter-dealing brokerage services provided by the Turkey Bonds Desk for the period 2014 including:
(i) copies of internal accounting records showing the value of fee payments made to the Defendant, including but not limited to:
1. amounts invoiced by GMG (Dubai) Limited to customers of the Turkey Bonds desk for brokerage services;
2. receipts confirming payments made to GMG (Limited) Dubai for brokerage services provided by the Turkey Bonds Desk;
(ii) copies of internal accounting records showing the value of payments made to the Defendant by its prime broker, Global Prime Partners (GPP), including but not limited to:
1. amounts invoiced to GPP in respect of brokerage fees generated by the Turkey Bonds Desk;
2. receipts confirming payments made to GMG (Limited) Dubai for brokerage services provided by the Turkey Bonds Desk;
(iii) copies of all internal reports and communications referencing the daily profit and loss allocated to the Turkey Bonds Desk, including, but not limited to, emails circulated by the Head of Back Office, Mohamed Hafit;
(iv) copies of all internal reports and communications received by Marco Saviozzi and Seyf Trad, referencing the daily profit and loss allocated to the Turkey Bonds Desk;
(v) Copies of all internal reports and communications sent by Danielle Donaldson and received by Marco Saviozzi and Seyf Trad confirming the quarterly bonus payments made to Turkey Bonds Desk brokers;
(b) Fixed Costs
Documents or classes of documents evidencing the “fixed costs” amounts incurred in respect of the running costs of the Turkey Bonds desk for the period 2014 as follows:
(i) Bloomberg costs: the cost of the terminal used by the Applicant which provided access to Bloomberg information for the purposes of the Applicant’s employment as Head of the Turkey Bonds desk;
(ii) Reuters costs: the cost of the terminal used by, inter alia, the Applicant which provided access to Reuters information for the purposes of the Applicant’s employment as Head of the Turkey Bonds desk;
(iii) IPC costs: the cost of a live telephone line used by, inter alia, the Applicant for the purposes of the Applicant’s employment as Head of the Turkey Bonds desk;
(iv) Medical insurance costs: the cost of medical insurance provided to the Applicant;
(c) Travel and Expenses (TNE) Costs
Documents or classes of documents evidencing the “TNE” costs (i.e. travel and expenses) claimed by the Applicant for the period 2014.
4. The Production of documents or data to be made by the Respondent pursuant to this Order shall take place within fourteen (14) days of the date of this Order.
5. The date by which the Applicant shall commence proceedings against the Respondent is subject to further Order of the Court following the Respondent’s compliance with paragraphs 1 to 4 of this Order.
6. The Defendant shall pay the Applicant’s costs of and occasioned by this Order.
Issued by:
Mark Beer
Registrar
Date of issue: 6 October 2015
At: 3pm
REASONS
Introduction
- The facts are briefly as follows.
- The Claimant is an approved pro bono litigant and seeks an order for the Defendant to produce the documents listed in the application. The Claimant was an employee of the Defendant, a company incorporated and operating in the DIFC whose business is to arrange credit or deals in investments and which advises on financial products or credits. In particular he was employed as the “Head of Turkey Bonds and Swaps Desk” for the period 1 January 2012 to 19 May 2013; and as “Head of Turkey Bonds” for the period 20 May 2013 to 31 December 2014.
- On 25 September 2014 the Claimant tendered his written resignation to the Defendant under the employment contract with immediate effect. Taking the required 3 months’ notice, the Claimant’s employment ended on 25 December 2014.
The Claimant’s Case
- The Claimant claimed that he was entitled to be paid salary and commission which according to him the Defendant had failed to do, in breach of the employment contract. He alleged that the Defendant had wrongfully withheld his salary amounts, end of service gratuity and commissions earned as well as interest on such sums. The detailed figures are as set out in the application.
- About 5 months after his employment ended, the Claimant requested from the Respondent “documents in the Defendant’s possession and control that are necessary to enable the Claimant to calculate the value of the withheld commission earned on several occasions”. The Defendant did not respond to this letter. The Claimant claimed that without such confirmation, he is not able to determine and claim the amount of withheld commission.
- According to his application, the Claimant needs this data in order to determine the value of “Gross Brokerage” which is calculated as follows:
“Gross Brokerage – Fixed Costs – TNE (capped at 6%) – Quarterly Draw”
“Gross Brokerage” is the fee payment made by the Defendant’s customers i.e. banks on quarterly basis for inter dealing brokerage services.
The Claimant lists out “Fixed Costs” as including Bloomberg costs, Reuters costs, IPC and medical insurance costs.
The value of TNE (travel and expenses) is calculated according to the amounts recovered by the Claimant on a quarterly basis as expenses incurred.
“Quarterly Draw” is calculated on the salary payments on quarterly basis (i.e. USD 12,500 per month).
- The Applicant also claims that in breach of Article 17 of the DIFC Employment Law, the Defendant failed to pay him his earned quarterly commission within 7 days of each quarter.
- It is for these reasons that the Claimant requires the data sought from the Defendant. Without such data, the Claimant claims that “he is unable to calculate the Net PNL and is therefore unable to fully quantify his entitlement to commission without disclosure of the documents/information requested, which are in sole possession and control of [the] Respondent” (emphasis mine).
- The basis of his application is to:-
- dispose fairly of the anticipated proceedings (RDC) 28.4(4)(a)
- assist the dispute to be resolved without proceedings (RDC 28.47)(4)(b); and
- save costs (RDC 28.48)(4)(c)
The Defendant’s Response
- The Defendant on the other hand alleged that the Claimant had sufficient and full information to particularise his claims since he had access to his work emails. In the same breath the Defendant asked the Claimant “to confirm in his reply whether he has taken any data from the Respondent or committed any breaches of his employment contract”. The Defendant denied the Claimant’s entitlement to certain remunerations and commissions. It was alleged that the Claimant over-estimated his capability generating his PNL and that there was almost zero brokerage. It was also claimed that the Defendant had overpaid the Claimant by about USD160,000.
- As mentioned earlier, the Claimant also applied and successfully obtained an order for a pro bono cost-free trial. The Defendant contended that the figures given in the Claimant’s letter of demand and those in his cost-free trial application are inconsistent. To me this is not unexpected since the Claimant could not know the basis of his claim, the very purpose of this application.
- There is also contained in the Defendant’s response allegations by the Defendant that there were inconsistencies in the figures given in various correspondence between the Claimant’s solicitors and the Defendant’s. It was not denied that the Defendant did not respond to the Claimant’s letters.
- In support of their case the Defendant cites Black v Sumitomo Corporation [2001] EWCA Civ 1819 in particular Rix LJ’s judgment viz:
“that discretion is not confined and will depend on the facts of the case. Among the most important considerations…are the nature of the injury or loss complained of, the clarity and identification of the issues raised by the complainant, the nature of the documents requested, the relevance of any protocol or pre-action enquiries, and the opportunity which the complainant has to make his case without pre-action disclosures”.
“It cannot be right to think that, wherever proceedings are likely between two parties to such an application and there is a real prospect of one of the purposes under [those conditions listed at paragraph 24 above] being met, an order for disclosure should be made of documents which would in due course fall within standard disclosures. Otherwise, an order for pre-action should be made in almost every dispute…”
My Decision
- I find that the English CPR 31.16 is identical to RDC 28.84 and that it will be safe and in fact appropriate for me to rely on authorities from the jurisdiction of England and Wales.
- Since this application is made pursuant to Part 8 of the RDC, I must be satisfied, as I am in this case, that the Claimant has complied with the requirements of RDC 8.1 in that it is unlikely to involve a substantial dispute of facts.
- Rix LJ in Black v Sumitomo Corporation set out in great detail the interpretation of Rule 31.16. He concluded that before the Court can exercise its discretion whether to make an order for pre-trial disclosure it must decide the jurisdictional threshold questions i.e. that both Claimant and Defendant are likely to be a party to the subsequent proceedings and there is a duty by way of standard disclosure that would extend to the documents. On the jurisdictional threshold questions I am satisfied that the Claimant has crossed the required threshold referred to in Sumitomo’s case.
- The facts hereto clearly show the dispute is only between the Claimant and Respondent, and there is no doubt that they will also be parties to the potential proceedings, if the Applicant decides to proceed against the Respondent.
- The second question that I have to decide is whether the disclosure of the documents and data sought by the Claimant will dispose fairly of the proceedings and assist the dispute to be resolved without proceedings or will save costs.
- It is under this part of RDC 28.48 that I here consider in a little more detail.
- In Sumitomo’s case, the Court of Appeal (Civil Division) disallowed the application by Mr Black to have access to documents in possession of Sumitomo. In support of that decision the Court cited many reasons. Reading through the judgment I find that there are many distinguishing features between Sumitomo’s case and the application before me. Some of these are as follows:
- Unlike Mr Black, the Claimant in this application is not a stranger to the proceedings. He and the Defendant are parties to an employment contract.
To quote Rix LJ;
“This….is not a case where the prospective claimant has suffered some reasonably plain injury or loss, at any rate on the face of things – such as following medical treatment, or following an accident at work or on the roads, or because of sale of unfit goods, or non-delivery, or some other breach of contract.” (emphasis mine)
- I find that unlike Mr Black who seems to have gone on a “fishing expedition” and whose “request for disclosure went extremely wide”, the Claimant has to some detail spelt out the documents and the data he needs.
- Mr Black’s complaint was held to be of speculative market loss while that of the Claimant is specifically related to his entitlement under the employment contract.
- While Mr Black took 4 years before he sought the documents from Sumitomo, the Claimant herein asked the Defendant for the information 5 months after his employment was terminated. I take into consideration the likelihood he might have during this period been waiting for the payments due to him from the Defendant.
- In my opinion the Defendant had acted unreasonably by refusing to provide the data since the data are in the “sole possession and control” of the Defendant. In fact had the Claimant extracted the information from his emails, he may have been open to accusations of breach of his employment contract by the Defendant. In my opinion the Defendant was blowing hot and cold.
- In any case, pursuant to Clause 11 of the employment contract, the Claimant could have been liable to breaches of that contract (as is raised in the Defendant’s response) if he had made use of some information from the data in the computer system.
- Although perhaps it may be true that the Claimant may be able to retrieve or otherwise obtain the information he requires to file his claim without asking them from the Defendant, it cannot be denied that it will be a time consuming and extremely expensive affair. On the other hand there is no mention that the Defendant is unable to provide the information or that they are not within his control.
- In my judgment, therefore, the extracts from Sumitomo’s case that was quoted by the Defendant are out of context.
- I also remind myself of the overriding objective of the Rules of this Court provided in RDC 1.6, even though this application can be decided without resorting to that Rule.
- I therefore allow the application with no order as to costs, this being a pro bono cost-free proceeding.
Issued by:
Mark Beer
Registrar
Date of issue: 6 October 2015
At: 3pm
