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Claim No: CFI 047/2017

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

COMMERCIAL BANK OF DUBAI PSC

Claimant

and

SHAIKA RANAYA HAMAD MUBARAK HAMAD AL KHALIFA

Fourth Defendant

AMENDED ORDER OF H.E JUSTICE ALI AL MADHANI

UPON the Court’s Order dated 23 January 2019 granting default judgment against the First to Third Defendants and dismissing the Second and Fourth Defendants’ applications contesting jurisdiction

AND UPON the Second and Fourth Defendants’ application to the Joint Judicial Tribunal (the “JJC”) having been dismissed on 27 March 2019

AND UPON the stay in respect of the claim having been lifted and the Second Defendant’s application for permission to appeal having been refused by order of 10 October 2019

AND UPON an unless order having been made against the Fourth Defendant on 19 May 2020 (the “Unless Order”)

AND UPON the Fourth Defendant having failed to comply with the said Unless Order

AND UPON the Court’s order dated 11 June 2020 striking out the Fourth Defendant’s defence and permitting the Claimant to apply for immediate judgment

AND UPON reviewing the Claimant’s application without a hearing pursuant to RDC 23.69 and supporting evidence seeking an order for immediate judgment to be entered pursuant to RDC Part 24 (the “Application”)

IT IS HEREBY ORDERED:

1. The Claimant’s Application for immediate judgment is granted.

2. The Fourth Defendant to pay the Claimant the sum of AED 3,081,796.44.

3. Interest is due on the sum in paragraph 2 at the rate of 7.5227% at a daily rate of AED 260 from 27 June 2020 until payment (amounting to AED 3,900 as at 13 July 2020) and continuing at this daily rate thereafter.

4. The Fourth Defendant shall pay the Claimant’s costs of pursuing this claim, including this Application, on the standard basis, to be assessed by the Registrar if not agreed (the “Costs Order”). The Costs Order shall not include the Claimant’s costs of defending the Fourth Defendant’s Joint Judicial Tribunal application claim, such costs being USD 9,500.”

5. Nothing in this order shall affect any outstanding cost orders against the Fourth Defendant which shall remain in effect until discharged.

Issued by:
Nour Hineidi
Registrar
Date of Issue: 15 December 2020
Date of re-issue: 7 January 2021
Time: 9am

SCHEDULE OF REASONS

Background

1. On 6 April 2016, the Claimant entered into an agreement with the First Defendant, a restaurant named Totoro Restaurant and Lounge LLC, to provide an overdraft (the “Overdraft”) and term loan facility (the “Term Loan Facility”), the terms of which were amended by a letter dated 13 April 2016. The purpose of the Overdraft and Term Loan Facility Agreement was to provide the First Defendant with a financial loan to start up its new restaurant business in the DIFC.

2. The Second, Third and Fourth Defendants are individuals authorised to, among other things, provide guarantees on behalf of the First Defendant.

3. On 6 April 2016, the Claimant entered into agreements with each of the Second, Third and Fourth Defendants whereby each Defendant undertook to pay immediately on first demand the liabilities of the First Defendant under the Term Loan Facility (the “Guarantees”). Under the Guarantees, the Second, Third and Fourth Defendants are jointly and severally liable up to the amount of AED 4,500,000.

4. In a further agreement dated 6 April 2016, the Claimant entered into a promissory note with the First Defendant whereby the First Defendant undertook to pay the Claimant AED 4,000,000 plus interest. The promissory note was signed by the Second, Third and Fourth Defendants as authorised signatories of the First Defendant.

5. In and around April and May 2016, the First Defendant commenced trading.

6. The First Defendant ceased trading in and around May 2017, approximately one year later.

7. On 24 May 2017, the Claimant demanded, in writing, from all the Defendants the payment of AED 3,434,644.85. A further written demand for payment of AED 3,231,865.68 was made by the Claimant on 11 October 2017.

8. On 18 October 2017, the Claimant issued proceedings against all the Defendants in the DIFC Courts.

9. On 7 December 2018, the Fourth Defendant submitted an application disputing the jurisdiction of the DIFC Courts. On 4 January 2018, the Second Defendant also submitted an application disputing the jurisdiction of the DIFC Courts. Both applications by the Second and Fourth Defendants have since been dismissed by this Court.

10. Moreover, on 20 June 2019, in separate proceedings, the JJC found that the DIFC Court is the competent court to hear the Claimant’s claim.

11. An unless order was made against the Fourth Defendant on 19 May 2020, being the Unless Order. The Fourth Defendant failed to comply with its requirements. Consequently, the Court struck out the Fourth Defendant’s defence filed on 11 November 2019 and gave the Claimant the right to apply for immediate judgment.

The Application

12. The Claimant now seeks the following remedies:

13. RDC r. 24.1(1) and (2) state:

14. The Claimant makes this Application on the grounds that the Fourth Defendant has not contested, rejected or denied the Claimant' s claim and, moreover, has not complied with the Unless Order. As such, the Claimant submits, she has no real prospect of successfully defending the claim.

15. The Unless Order provided:

16. As stated above, the Fourth Defendant subsequently failed to comply with the Unless Order, thereby causing her defence to be struck out and enabling the Claimant to apply for immediate judgment. In such circumstances, the remedies now sought by the Claimant against the Fourth Defendant are entered, apart from, however, the remedy in respect of the costs of defending the JJC proceedings, being USD 9,500. In my view, it is not in the Court’s jurisdiction to grant this remedy and such an application should be made before the JJC tribunal.