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Claim No: ARB 010/2016

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

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

IN THE COURT OF FIRST INSTANCE
BEFORE JUSTICE SIR JEREMY COOKE

BETWEEN

HAYRI INTERNATIONAL LLC

Claimant

and

(1) HAZIM TELECOM PRIVATE LIMITED (2) HAZIM TELECOM LIMITED

Defendants

RULING OF JUSTICE SIR JEREMY COOKE

Transcribed from the oral ruling handed down on 25 February 2017, revised and approved by the Judge.

Justice Sir Jeremy Cooke:

1. In this case I am satisfied that there is a high degree of probability that the Claimant will be entitled to the final relief it seeks. The starting point must be the terms of Clause 14 of the Master Services Agreement (“MSA”) which evidences clearly an intention on both parties to arbitrate. The only issue which can sensibly be said to arise is where that arbitration is to take place, because of the form of words used and the only two competing places are the DIFC on the one hand and non-DIFC Dubai on the other and that issue applies both to what I might call venue generally as well as to the question of the seat.

2. What, however, appears to me to be plain is that again the Claimant can show a high degree of probability that DIFC is the seat of the arbitration. The reason for that essentially is that the reference to the rules of arbitration of DIFC in Clause 14 of the MSA one way or the other determined the curial law for the purpose of the arbitration. Whether the reference is in fact to the DIFC-LCIA rules on the one hand or to the law of the DIFC on the other, the outcome is the same. That of course is supported further by the reference to the selection of an arbitrator which suggests that the ordinary and natural meaning of the rules in fact refers to the DIFC-LCIA rather than anything else. Once one takes those matters into account the reference to Dubai UAE then takes on a different nuance altogether, the sensible and obvious conclusion being that it is intended to mean one of the same thing and to refer to DIFC throughout. So, there is plainly is a good arguable case, a strongly arguable case and a high probability of succeeding in showing that DIFC is in fact the seat of the arbitration and that the rules to be applied are those of DIFC-LCIA.

3. For present purposes, I probably do not need to go so far but it is worth pointing out that at one time the Defendant has referred to Dubai meaning non-DIFC Dubai as the seat and it is more than clear that the seat cannot be Pakistan nor indeed can Pakistan be said to have any real connection with the dispute save in so far as one party is resident or domiciled there. The law which governs the agreement is that of the Commonwealth of Virginia in the USA but no evidence has been put before me as to that law, so for current purposes it is to be treated as the same as the law in DIFC. That is the only law which can fall to be applied at present. If the position is that the DIFC is the seat of the arbitration, then the DIFC Court is the supervisory court and its jurisdiction and power to grant the interim injunction is undoubted. It is also right to say that should it be necessary, this court has a supportive jurisdiction in relation to the grant of interim anti-suit injunctions even if the seat were to be said to be non-DIFC Dubai, although it would be rare for such a jurisdiction to be exercised.

4. The principles which govern the granting of anti-suit injunctions are set out in Aggeliki Charis Compania Maritima SA v Pagnan SpA (The Angelic Grace) (CA) [1995] 1 Lloyd’s Rep 87 and in AES Ust-Kamenogorsk Hydropower Plant JSC v AED UST-Kamenogorsk Hydropower Plant LLP [2013] 1 WLR 1889 (SC) and essentially, if there is an agreement to arbitrate that is an agreement that should be upheld. An anti-suit injunction is to be granted preventing breach of that agreement unless there is strong reason not to do so. Here, there is no strong reason that can be put forward that I can see as to why the Defendant should not be compelled to adhere to the arbitration agreement. At this stage, it is worth pointing out that there is a measure of doubt as to which of the two named Defendants is truly the Defendant and it is clearly right that both of these Defendants should be joined in for the purposes of the order which I am about to make.

5. It is plain also from the material before the court that the proceedings in Pakistan have been adopted with one view in mind; namely that of stalling any progress with the arbitration and making it as hard as possible for the Claimant to pursue its claim. The Pakistani court has no real connection to the arbitration. Despite previously granting an ex parte interim injunction against the Claimant proceeding with the arbitration, it has now discharged that following 5 months of a series of adjournments and stalling tactics by the Defendant to avoid the point being decided. What it has not yet done is grappled with the question of its jurisdiction to determine whether or not the arbitration agreement is invalid. The position under the law of the DIFC, as in English law, is that the determination of the validity or invalidity of an arbitration agreement is a matter for the exclusive jurisdiction of the supervisory court or the arbitrators themselves. In those circumstances, the Defendants should not be allowed to proceed with matters in the Pakistani court as they fall foul of that principle. The matter is one either for the arbitrators themselves in the first place or for the supervisory court to deal with and this court should uphold that principle.

6. In those circumstances, I am satisfied that this is not just an appropriate case but a paradigm case for the grant of an interim injunction to restrain the proceedings taken by the Defendants in Pakistan. This of course does not reflect in any way upon the courts in Pakistan and the principles of comity which must apply between the courts of one country and the courts of another. The injunction operates in personam against the Defendants and not against the court.

7. There remain just two further matters apart from the form of the order. The first of those relates to a need for an extension of time in relation to service of the claim form. The one month period expired at a time when the Defendants had obtained the ex parte injunction in Pakistan preventing the pursuit of the arbitration. The arbitration claim form, which had been issued on 22 August 2016 in DIFC, could therefore not be pursued any further by way of service. In the result the requirements of Rule 7.23 of the Rules of the DIFC Courts (“RDC”) are met. The arbitration claim form could not be served because of the interim injunction granted in Pakistan and following the discharge of that injunction after the 5 months of delay brought about by the Defendants a prompt application has now been made. It is right therefore and just that I should extend the time for service of the claim form.

8. The second point that has to be dealt with is the issue of alternative service. The Claimant seeks to serve by email and to do that they need the Court’s permission on the basis of showing some good reason why that should be permitted. The run of English authorities on the point is clear in its outcome. It is not sufficient for ordinary purposes to say simply that it is a protracted procedure to serve in accordance with the ordinary methods and therefore it is more efficient to do so by the alternative method. Where, however, speed is of the essence as it is here because at any moment it could be that the Defendants might seek to appeal the discharge of their temporary injunction in Pakistan or take further steps there, then alternative service is not only appropriate but essential. Given the circumstances that the Defendants have done everything so far that they can to avoid arbitration and served the injunction granted in Pakistan by email, and this court can be confident that communication by such means will reach the Defendants, I am again entirely satisfied that this is an appropriate case for service by alternative means namely by email as requested.

Issued by:
Maha Al Mehairi
Judicial Officer
Date of Issue: 28 February 2017
At: 2pm