October 12, 2022 COURT OF FIRST INSTANCE - ORDERS
Claim No: CFI 055/2018
IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
CATERPILLAR FINANCIAL SERVICES (DUBAI) LIMITED
Claimant / Applicant
and
(1) NATIONAL GULF CONSTRUCTIONS LLC
(2) NATIONAL GULF INVESTMENT LLC
Defendants / Respondents
ORDER OF H.E. JUSTICE SHAMLAN AL SAWALEHI
UPON reviewing the Claimant’s (“Caterpillar”) Application No. CFI-055-2018/8 dated 12 August 2022 seeking an order lifting the stay imposed by paragraph 9 of the judgment dated 13 October 2020 and amended on 27 October 2020 (the “Application, the “Judgment” and the “Stay”)
AND UPON reviewing the Judgment
AND UPON considering Caterpillar’s submissions in support of the Application, to which the First Defendant and the Second Defendant (together “National Gulf”) did not respond
IT IS HEREBY ORDERED AND DECLARED THAT:
1. The Application is granted.
2. The Stay is lifted.
3. The Judgment is enforceable.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 12 October 2022
At: 10:30am
SCHEDULE OF REASONS
1. I handed down judgment in this case on 13 October 2020 (amended 14 days later on 27 October), awarding Caterpillar USD 11,266,653.49 plus interest together with some further sums for costs of sale of certain vehicles and legal costs and granting orders intended to enforce Caterpillar’s mortgages over the vehicles the subject of financing. But I also stayed the Judgment.
2. Fifteen days before the Judgment was handed down, on 29 September 2020, the Court had been informed by Caterpillar’s lawyers that, earlier on 23 July 2020—which was the day after the two-day trial of the Claim had ended—the Ruler of Dubai, by Resolution No. 13 of 2020 (the “Resolution”), had formed a committee and had conferred upon it exclusive jurisdiction to hear and determine claims and applications by or against National Gulf. Article 4 paragraphs (a) and (b) of the Resolution provide (in unofficial translation) as follows:
“Article 4
(a) All courts and judicial authorities in Emirate of Dubai, including DIFC Courts, may not consider any request, claim or appeal filed before them following the enforcement of the decision that fall within the scope of the Committee’s jurisdiction. They shall cease the trial of the requests, claims and appeals having been filed prior to the enforcement of this decision and refer the same to the Committee.
(b) The execution of judgments and awards rendered prior to the enforcement of this decision by all courts and judicial authorities in Emirate of Dubai, including DIFC Courts, in respect of all the matters subject to the Committee’s jurisdiction shall be stayed. The execution departments shall stay the execution of such judgments and awards, even if partially executed, including the attachments levied on the funds of the company, and refer such relevant judgments, award and execution requests to the Committee to identify the identify the mechanism, procedures and periods necessary to the execution thereof.”
As I noted in the Judgment, Article 4(a) of the Resolution prohibit hearings of a defined category of cases—into which Caterpillar’s claim (the “Claim”) fell—but it did not prevent determination of those cases if they had already been heard (the Judgment at paragraph 17). And Article 4(b) of the Resolution required a stay of judgments and orders which had been issued before the Resolution came into force, but required nothing in respect of judgments or orders which might be issued at a later date (the Judgment at paragraph 18). And so at the time the Resolution was issued the Claim had already been heard, taking the case outside the ambit of Article 4(a) of the Resolution, but no order or judgment had been issued, taking things outside the ambit of Article 4(b). In other words, the Resolution did not operate to prevent the Court from determining the Claim and nor did it require the Court to stay any judgments it may later hand down: the Claim was not affected by the Resolution.
3. Why was the Judgment nevertheless stayed? This was explained in paragraph 20: “Out of precaution, however, and [inasmuch as] I have not had the benefit of submissions from the parties on [the effect, if any, of the Resolution on the Claim], I will stay this judgment.”
4. On 9 August 2022, Caterpillar made the Application, explaining its position on why the stay should be lifted. In short, Caterpillar agrees with the Court’s observations set out in paragraphs 17 and 18 of the Judgment, summarised in paragraph 2 above, and adds the following further submissions, amongst others:
i. case management stays—of which the Stay was one—will be imposed only in rare and compelling cases ( IGPL v Standard Chartered Bank [2015] CA 004 (19 November 2015) at paragraph 76);
ii. any mandatory stay would constitute a significant restriction on parties’ rights to access to the courts, a right which is guaranteed by the Arab Charter on Human Rights, to which the UAE is a party, and in particular Article 12 thereof;
iii. National Gulf has taken no steps to dispute my findings on the impact of the Resolution; and
iv. no other arguments have been suggested supporting a stay of execution on any other basis.
The last two points remain true at the time of writing this decision: National Gulf did not respond to the Judgment and has not responded to the Application.
5. It is unclear why the Application was made nearly two years after the Judgment was issued—did Caterpillar not deem it necessary or desirable to make the Application sooner? —but I see no reason for the Court to inquire into this question in circumstances where National Gulf has taken no issue with it—perhaps there is a good reason. But it is also unclear why I should remain concerned about the Judgment being enforceable when the parties have had an opportunity to make submissions on the effect of the Resolution and the only submissions which have been received by the Court support my interpretation of the relevant provisions of it.
6. The Stay is lifted.
7. I make no order as to costs.