May 02, 2023 COURT OF FIRST INSTANCE - ORDERS
Claim No. CFI 051/2022
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF APPEAL
BETWEEN
ZAYA LIVING REAL ESTATE DEVELOPMENT L.L.C
Claimant/Appellant
and
CHINA STATE CONSTRUCTION ENGINEERING CORPORATION (MIDDLE EAST) (L.L.C)
Defendant/Respondent
ORDER WITH REASONS OF CHIEF JUSTICE ZAKI AZMI
UPON the Defendant’s Application No. CFI-051-2022/2 dated 26 August 2022 seeking to contest jurisdiction (the “Jurisdiction Application”)
AND UPON the Order with Reasons of Justice Sir Jeremy Cooke dated 25 November 2022 granting the Jurisdiction Application (the “Order”)
AND UPON the Claimant’s Appeal Notice dated 13 December 2022 seeking permission to appeal the Order (the “First PTA”)
AND UPON the Order of with Reasons of Justice Sir Jeremy Cooke dated 1 February 2023 refusing the First PTA
AND UPON the Claimant’s Appeal Noticed dated 22 February 2023 seeking a renewed permission to appeal the Order (the “Second PTA”)
AND UPON the Defendant’s response to the Second PTA dated 6 April 2023
IT IS HEREBY ORDERED THAT:
1. The Second PTA is refused.
2. Costs shall be awarded to the Defendant, to be assessed by the Registrar unless agreed by the parties.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 2 May 2023
At: 1pm
SCHEDULE OF REASONS
1. This is an application for a second permission to appeal the Order of Justice Sir Jeremy Cooke dated 25 November 2023. This case involves a DIFC Courts jurisdictional dispute between the Claimant, Zaya Living Real Estate (the “developer”) and the Defendant, China State Construction Engineering Corporation (Middle East) (LLC) (the “contractor”) relating to the development of Hameni Tower in Jumeirah Village Circle, Dubai.
2. The question at this stage is whether the dispute should be resolved by the DIFC Courts, or by arbitration, and whether on the facts of this case, the DIFC Courts is empowered to refer the dispute to arbitration.
3. The contractor filed its claim against the developer at the Dubai onshore courts and obtained judgment against the employer. While that was proceeding there, the developer on the other hand, filed a claim that the dispute should be referred to arbitration in the DIFC and towards this end, filed a Part 8 claim for declaratory relief at the DIFC Courts.
4. The issue before this court now is whether the DIFC Courts has jurisdiction to hear the claim for declaratory relief.
5. The Judge at the Court of First Instance dismissed the claim with costs. Permission to appeal was also refused by the Judge at the Court of First Instance. The Appellant now seeks a renewed permission to appeal.
6. It is quite well established that in order for the Appellant to succeed, it must show real prospect of success in appealing, should permission be granted. The other ground for granting permission to appeal is when there are other compelling reasons (See RDC 44.19). For authorities to support this statement, suffice if I refer to DIFC Courts’ Practice Rupert Reed and Tom Montagu-Smith.
7. The Appellant had filed a Part 8 Claim, seeking a declaratory relief, where it was stated that the governing law was UAE law and Dubai law. It also relied on Article 5 of the Judicial Authority Law, Dubai Law No. 12 of 2004, as amended (the “JAL”). Part 8 Claim is for final relief and not interim relief.
8. The Appellant sought for an order to refer the dispute to arbitration, which the court cannot do because it is not seised of a substantive dispute before it. Had the opposing party filed and action at the DIFC Courts, then the Appellant could have asked for an injunctive relief from the matter being heard by the DIFC Courts. The court does not have the power to direct a dispute to be disposed by arbitration.
9. When a dispute involves the question of whether it is to be heard by the court or arbitration, the court can only make an order staying any case relating to the claim pending before it or dismissing it altogether. As said earlier, in our present case that is nothing before the court for the court to make either order. To me that in itself is sufficient to dispose of the matter and for permission to be refused on grounds there is no real prospect of success at appeal.
10. The Appellant was also not able to show that the DIFC-LCIA Rules confers jurisdiction on this court to direct the matter to be heard by arbitration. In this respect, it has no power to grant a declaratory relief for the reasons given by the learned Judge. The learned Judge discussed at length before concluding that the relief sought by the Appellant in this in this action did not fall within the jurisdiction of the DIFC Courts, as far as this claim is concerned. I agree with him.
11. The Curial law and the seat of arbitration are synonymous. The law governing this arbitration is the law of UAE and Dubai and the place of arbitration is Dubai. It is not the DIFC.
12. I also agree with the learned Judge that this court cannot exercise a jurisdiction which is not given by DIFC statute. Also, it cannot interfere with the decision of the onshore Dubai courts when it refused to refer the dispute to arbitration. The Judge had reasoned this out in detail. There is no reason to disagree with him.
13. Apart from these reasons, the Dubai courts had already provisionally determined the merits of the claim itself rather than refer it to arbitration. The developer had also participated in complying with the Dubai court order relating to provision of expert evidence to the expert committee as was directed by the Dubai court. The developer filed a counterclaim against the contractor for a sum of about AED 45M. By doing so, it can only be concluded that the Appellant conceded to the jurisdiction of the Dubai courts. The expert committee in their preliminary report concluded that the employer owes the contractor a sum of AED 55,553,731.73.
14. The Second PTA is therefore refused with costs awarded to the Defendant, to be assessed by the Registrar, unless agreed by the parties.