October 18, 2022 COURT OF FIRST INSTANCE - ORDERS
Claim No: CFI 052/2021
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
EAST FISH PROCESSING LLC
Claimant/Applicant
and
(1) ECOLOG INTERNATIONAL FZE
(2) ECOLOG INTERNATIONAL
Defendant/Respondent
ORDER WITH REASONS OF JUSTICE WAYNE MARTIN
UPON the Order with Reasons of Justice Wayne Martin issued on 23 August 2022 and re-issued on 12 October 2022 (the “Judgment”)
AND UPON the Claimant’s Appeal Notice dated 13 September 2022 seeking permission to appeal against the Judgment (the “Permission Application”)
AND UPON the Claimant’s Skeleton Argument dated 3 October 2022 filed in support of the Permission Application
AND UPON the First Defendant’s response to the Permission Application dated 6 October 2022
AND UPON reviewing Rule 44.19 of the Amended Appeal Rules of the Rules of the DIFC Courts (“ARDC”)
IT IS HEREBY ORDERED THAT:
1. The Permission Application is refused.
2. The Claimant shall pay the First Defendant’s costs of the Permission Application to be assessed by the Registrar if not agreed.
Issued by:
Ayesha Bin Kalban
Acting Registrar
Date of issue: 18 October 2022
At: 3pm
SCHEDULE OF REASONS
1. The Claimant applies for permission to appeal against a judgment entered following trial dismissing the claim and allowing the First Defendant’s counterclaim in the amount of AED 574,634.40 plus interest and costs.
Permission to Appeal - Principles
2. Rule 44.19 of the Amended Appeal Rules of the Rules of the DIFC Courts provides:
“Permission to appeal may only be given where the lower Court or the Appeal Court considers that:
(1) The appeal has a real prospect of success; or
(2) There is some other compelling reason why the appeal should be heard.”
3. In this case the submissions in support of the Permission Application do not contend that there is some other compelling reason why the appeal should be heard. Accordingly, the only question is whether the appeal “would have a real prospect of success”. It is established that in this context “real” means realistic rather than fanciful.1
4. In Dattani v Damac Park Towers Company Lt2 Justice Roger Giles, after referring to various English decisions, observed that a “real prospect of success does not mean probability, but more than mere arguability and a realistic, as opposed to fanciful prospect of success”. Consistently with this observation, in Vannin Capital PCC plc v Rafed Al Khorafi,3 the Court accepted that the applicant for permission had a good arguable case but refused permission to appeal because there was no realistic prospect of success on the appeal. Mere arguability is not enough.
5. It is necessary to apply these principles to the various grounds of appeal proposed.
The Grounds of Appeal
Ground 1
6. The first ground of appeal asserts that:
“The judge has not considered the witness statements and evidence produced by the Appellant in his Judgment”.
7. As the Judgment is replete with references to the witness statements and evidence adduced by the Claimant, the ground expressed in such broad terms is patently incorrect. In these circumstances one might have expected particulars to be provided, or at least submissions in support of the Permission Application identifying with precision the evidence, which is said to have been overlooked, and the significance of that evidence to the outcome of the case.
8. There are three paragraphs in the skeleton argument provided by the Claimant in support of this ground. The first two of those paragraphs appear irrelevant to the ground and are in any event difficult to comprehend.
9. There appears to be an assertion in these paragraphs of the submissions to the effect that there was no term of the contract which specified that the products supplied by the Claimant had to comply with the specifications issued by the United Nations. Leaving to one side the fact that there is no ground of appeal to that effect, the submissions fail to address the evidence and reasoning set out at [143]-[144] of the Judgment.
10. The third paragraph in the skeleton said to support the first ground of appeal does not assert a failure to consider evidence. Rather, it complains of the failure to give weight to the witness statement of Ms Girish. As such, the argument appears to be an attack upon [107]-[116] of the Judgment in which, contrary to the asserted ground of appeal, the evidence of Ms Girish is considered at some length. In particular, the complaint appears to be directed at the finding that Ms Girish gave no evidence to the effect that she was personally involved in taking, or not taking any action in relation to the goods which were sold to the First Defendant, and which were the subject of the proceedings.4
11. In the submissions, it is asserted that “she was very much involved in the process (microbiological and chemical analysis, DNA analysis, glazing, labelling) to ensure that the products are being supplied in accordance with the specifications”5.
12. The evidentiary basis for this submission is not identified. Nor is it clear whether the assertion is meant to be a description of the general activities and responsibilities of Ms Girish, or whether the challenge is to the finding that there was no evidence of her involvement with the products which were the subject of the proceedings. Neither the ground of appeal nor the submissions in support of the ground identify any evidence to the latter effect. That is because there is no such evidence.
13. In any case the evidence establishes that the Claimant did not undertake any testing or analysis of the products supplied to the First Defendant which were the subject of the claim as those products were supplied to the Claimant frozen and packed by the Claimant’s Chinese suppliers. The most that was done by the Claimant was to re-label the products and perhaps provide some additional packing6. It follows that whatever the general responsibilities of Ms Girish may have been, they are irrelevant to these proceedings.
14. The submissions in support of this ground make no reference to the evidence of Mr Sudheer. In particular, no challenge is made to the reasons given in the Judgment for giving the evidence of that witness no weight.
15. Ground 1 has no prospect of success, real or otherwise.
Ground 2
16. Ground 2 asserts that:
“The First Defendant failed to produce any evidence for the rejection of the products from the UN. There is no list of rejected products provided other than the list of disposed products which contradicts their supporting documents.”
17. This ground appears to ignore the terms of the Judgment. The Judgment sets out at length the sequence of events between 5 February 2019, when the Rations Officer of the UN Mission sent an email complaining of excessive glazing content in the products supplied by the Applicant, and 13 May 2019 when the Applicant was advised that it would not be paid for the goods supplied which could either be collected from the warehouse in which they were stored or they would be disposed of7. The Judgment sets out in detail the various complaints that were made with respect to the deficiencies in the goods supplied between those two dates, and the communications from the First Defendant which made it clear that the goods had been rejected by both the buyer8 and the ultimate consumer9.
18. Following the recitation of the discovery and communication of the various deficiencies in the products supplied over that period, the Judgment records that by at least 13 May 2019:
“East Fish can have been in no doubt that Ecolog had rejected the products supplied by East Fish because they did not comply with the provisions of the purchase orders or the requirements of the UN specifications, and that Ecolog would not pay for the rejected product. East Fish were advised, in unequivocal terms, that unless the product was collected it would be disposed of, at the cost of East Fish.”10
19. The submissions advanced in purported support of this ground do not appear to relate to the ground as formulated. Rather, the submissions refer to allegations made in the Claimant’s pleading rather than the evidence. Further, the allegations made in the pleading relied upon in the submissions relate only to communications from the Claimant to the First Defendant and do not address any of the facts which led to the finding that the goods had been rejected.
20. Further, this ground and the submissions provided in support appear to elide the distinction between the rejection of the goods by the First Defendant (the buyer) and the ultimate destruction of the goods rejected by the buyer under the auspices of the United Nations, which was the intended consumer. The relevant legal issue with respect to rejection of the goods was whether the goods had been validly rejected by the buyer prior to acceptance. That issue was addressed at [157]-[161] of the Judgment. There is no ground of appeal challenging the reasoning or conclusion in those paragraphs nor have any submissions been provided addressing those issues.
21. The destruction of the goods under the auspices of the United Nations is only relevant to the question of whether the First Defendant breached the contract by failing to return the goods to the Claimant following their rejection. This is the issue addressed at [162]-[168] of the Judgment where it was held that the Claimant was obliged to collect the rejected goods and the First Defendant was under no obligation to arrange and pay for their delivery to the Claimant. It was also held that the Claimant failed to take the opportunity to collect the goods which was provided by the First Defendant. In light of those conclusions, the ultimate destruction of the perishable goods is irrelevant.
22. There is no ground of appeal challenging the reasoning or conclusion in paragraphs [162]-[178] of the Judgment, nor have any submissions been provided addressing those issues.
23. Ground 2 has no prospect of success, real or otherwise.
Ground 3
24. Ground 3 is in the following terms:
“In the hearing the Appellant’s counsel had established that Mr Nader is not an expert on fish which the judge failed to take into consideration.”
25. The ground is oddly expressed. Presumably it is to be construed as an assertion that Dr Nader’s lack of relevant expertise rendered his evidence inadmissible or of little or no weight.
26. Dr Nader is not a marine biologist and did not hold himself out to be an expert on the different species of fish. However, the evidence established his expertise with respect to food safety management systems, including the processing of seafood. There was no challenge to his expertise in those fields, which were the fields relevant to the issues in this case. Dr Nader analysed the testing processes performed by the Eurofins laboratory in Hamburg and confirmed the scientific integrity and outcome of the tests that were performed and the procedures that were followed. There was no challenge to the adequacy or integrity of those tests or procedures in the cross-examination of Dr Nader.
27. As noted in the Judgment:
“Dr Nader was a credible and coherent witness and there is no reason to doubt any of his testimony. That testimony, which was uncontradicted, establishes that the seafood products supplied by East Fish to Ecolog did not comply with the requirements of the contracts relating to the supply of the products.”11
28. The submissions provided in support of this ground provide no credible or coherent basis for challenging this conclusion. This ground has no prospect of success, real or otherwise.
29. Before leaving the grounds of appeal relating to the rejection of the claim, it should be observed that none of the grounds of appeal, either individually or in combination, go to the fundamental reason why the claim was refused – namely the uncontradicted evidence that the products supplied by the Claimant did not comply with the contract. Even if any of the grounds had some merit (which they do not) the success of the ground would not result in success of the appeal12.
The Grounds of Appeal relating to the Counterclaim
30. There are five grounds of appeal against the decision to allow the counterclaim in part. They are expressed in the following terms:
1) “The judge failed to give a proper explanation as to how he ascertained and concluded the amount for the counterclaim;
2) The documents provided by the first defendant do not match either the quantity of the rejected goods nor with the price of rejected products;
3) The documents provided in support for the counterclaim are not conclusive enough and are rather contradicting;
4) The amount for the counterclaim is neither established by means of documentation or by testimony of witness, there is no documentation provided by the First Defendant to show that the third-party suppliers were paid by the First Defendant; and
5) As per the witness statement of Mr Nader it was mentioned that all the rejected products were sent for Eurofin’s testing. However, as per the documentation provided, there were only three items which were sent to Eurofin for testing. However, the judge allowed the full counterclaim amount without verifying the first defendant documentation.”
31. It is convenient to deal with all the grounds on the basis that each ground is, in effect, an aspect of a more general assertion that the evidence was inadequate to sustain those parts of the counterclaim which were allowed.
32. The grounds are expressed in vague and unclear terms such as “the Judge failed to give a proper explanation” or “the documents … are not conclusive enough and are rather contradicting”. The grounds are also expressed by way of general conclusions or assertions devoid of particularity.
33. The submissions served in support of the grounds fail to provide the particularity missing from the grounds themselves. For example, the submissions in support of the first ground of attack upon the counterclaim relating to the inadequacy of the reasons given in the Judgment consist of a summary of the reasons given followed by the assertion:
“Whereas in reality the so-called documents for the counterclaim are rather questionable and refutable and the Judge failed to examine the documents provided by the respondents.”13
34. That bald assertion, completely lacking any particularity, is the totality of the argument advanced in support of the first ground of attack upon the Judgment on the counterclaim. There is no prospect that a Court of Appeal would accept a submission of that kind.
35. The submissions in support of the second ground of attack on the Judgment on the counterclaim include factual assertions which were not advanced at trial in either evidence or submissions, and which are said to involve comparisons of the quantities of different types of seafood product drawn from different evidentiary sources. However, the particular evidentiary sources apparently relied upon in the preparation of the table of comparisons are not identified. More significantly, none of the propositions now included within the submissions were ever put to Mr Gelov in cross-examination. The acceptance of his testimony, and the documentary evidence which he adduced was the basis for the partial allowance of the counterclaim. It is too late for the Claimant to now attempt to raise matters that were not put to Mr Gelov during the course of his testimony.
36. Moreover, the various comparisons included in the detailed submissions appear to miss the point of the Judgment on the counterclaim. The rationale for the allowance of the counterclaim was that by reason of the breaches of contract by the Claimant, the First Defendant was required to obtain seafood from other suppliers in order to fill its client’s needs. The invoices relating to the alternative products acquired were produced in evidence, through Mr Gelov, together with detailed calculations of the differences between the cost of those goods and the price that would have been paid to the Claimant if goods had been supplied in accordance with its contractual obligations. There was clear evidence that the Claimant paid for the alternative products acquired. Analysis of the documentary evidence relating to the quantities of the goods destroyed following their rejection is simply not to the point. The point is that the First Defendant was required to acquire a quantity of seafood to replace the seafood which did not comply with the contract at a higher price than was payable under the contract.
37. But in any event, the figures provided in the submissions suggest that the quantity of seafood product sourced from alternative suppliers and which was the subject of the counterclaim was less than the quantity of seafood supplied by the Claimant which was destroyed. Accordingly, it is difficult to see the point of the comparison made in the submissions. Similarly, it is difficult to see the point of submissions made, for the first time, with respect to discrepancies in the evidence relating to the precise quantities of seafood destroyed. For the reasons already given, those quantities are irrelevant.
38. As noted in the Judgment, the evidence given in support of those aspects of the counterclaim which were allowed was clear. It was not contradicted by any other evidence, and the propositions which are said to support these grounds of appeal were not put to Mr Gelov in cross-examination or to the Court during the trial.
39. The assertion in the fifth ground to the effect that Dr Nader asserted that “all the rejected products were sent for Eurofin testing” is incorrect. Dr Nader’s expert report clearly identifies the three samples that were sent to his laboratory for testing.
40. For these reasons none of the grounds of appeal relating to the counterclaim have any prospect of success, real or otherwise.
Conclusion
41. Neither the grounds of appeal nor the submissions provided in support of those grounds identify any ground of appeal which has any prospect of success, let alone a real prospect of success. It follows that the Permission Application must be refused. The Claimant must pay the First Defendant’s costs of the Permission Application to be assessed by the Registrar if not agreed.