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Claim No: CFI 057/2018

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

BASIN SUPPLY CORPORATION

Claimant/Respondent

and

(1) ROUGE LLC
(2) CLAUDE BARRET

Defendants/Appellants

ORDER OF H.E JUSTICE ALI AL MADHANI

UPON the Claimant’s claim form issued on 8 September 2018

AND UPON the judgment in respect of the matter dated 6 September 2020 (the “Judgment”)

AND UPON the Defendants’ Appeal Notice in respect of the Judgment dated 28 September 2020 (the “Appeal Application”)

AND UPON the Defendants’ application for the Appeal Application to be considered at an oral hearing dated 18 November 2020 (the “Oral Hearing Application”)

AND UPON considering the submissions of the parties

AND UPON reviewing the relevant documents on the Court’s file

IT IS HEREBY ORDERED:

1. The Oral Hearing Application is dismissed.

2. The Appeal Application is dismissed.

3. The Defendants shall pay the Claimant its costs of the Appeal Application on the standard basis, to be assessed by a Registrar if not agreed.

Issued by:
Nour Hineidi
Registrar
Date of Issue: 20 December 2020
Time: 1pm

SCHEDULE OF REASONS

Introduction

1. By Appeal Notice dated 28 September 2020, the Defendants seek permission to appeal the judgment in this matter dated 6 September 2020 (the “Judgment”) (the “Appeal Application”).

2. By Application dated 18 November 2020, the Defendants also request that the Appeal Application be heard at an oral hearing rather than be decided on the papers (the “Oral Hearing Application”).

3. For the reasons given below, both Applications are dismissed.

The Oral Hearing Application

4. The Defendants say the Appeal Application should be heard at an oral hearing for the following reasons.

5. First:

That there are so many documents in this case, and this will be inconvenience to the court to read all, therefore the appellants would like mention the important contents from the bulk of documents at the time of oral hearing.

6. Second:

The reasoning given in reference about governing law is ambiguous as lower court below failed to complied with the procedures applicable in present case, and there is attempt to mix the common law and local law. If the present case govern by the common law, then only common law shall be applicable, but there are several places where the respondent relied on the local law for its wrongful intent. The appellants can only be able to submit by way of oral hearing, therefore the appellants request for permission to appeal be considered at an oral hearing by following the basic principle of Natural Justice. (original emphasis)

7. Third:

That the Impugned Judgment is unjust, improper and against the applicable law. The appellant would like to highlight the gross legal errors at the time of oral hearing.

8. Fourth:

That the transcript dated 16th March 2020 is very lengthy, and its only possible to mention the relevant contents of the transcript at the time of oral hearing.

9. Fifth:

That the Appellants most respectfully submit that Judgment is unjust because of this is against the applicable Law, unfair and is amount to miscarriage of justice. The Appellant crave leave to explain at the time of oral hearing.

10. Sixth:

That there are several issues which has to be heard orally in the interest of justice.

11. Seventh:

The principle of audi alteram partem be given its true meaning and this principle can be properly implemented if oral hearing in a case of this nature is given.

12. Eighth:

The procedure must be fair. The nature of issue, under what circumstances the Claimant executed SENIOR SECURED PROMISSIORY NOTE dated December, 2016 has to be heard orally in the interest of justice. The Appellant most respectfully request that if oral hearing not granted then the appellant fear that there are strong chances for defeating the justice.

13. RDC r. 44.16 provides:

An application for permission to appeal not made orally to the lower Court at the hearing will ordinarily be decided without an oral hearing.

The Oral Hearing Application was not made orally at the hearing of the trial. The starting position is, therefore, that the Appeal Application should be decided without an oral hearing.

14. RDC r. 44.17 provides:

The appellant may request that the application for permission to appeal be considered at an oral hearing, supported by grounds as to why it would be in the interests of justice to do so.

By the Oral Hearing Application, the Defendants have requested that the Appeal Application be considered at an oral hearing. However, the Defendants have said very little about why it would be in the interests of justice for the Appeal Application to be heard an on oral hearing.

15. In my view, RDC rr. 44.16 and 44.17 together require an appellant to explain why it would be in the interests of justice to depart from the ordinary rule – that applications for permission to appeal not made orally at the hearing which resulted in the appealed decision be decided on the papers – and list an oral hearing for the application. It is not enough for a litigant to express that he would prefer an oral hearing or indeed to argue that oral hearings are inherently preferable. An appellant is required to specifically address the question of why it is in the interests of justice for the Court to depart from its starting position in respect of applications for permission to appeal.

16. The Defendants have fallen far short of addressing this question. Each of the eight reasons they argue an oral hearing is preferable speak only to their own preference, grossly unexplained, or to the general preferability of controversies being considered at oral hearings rather than being decided on the papers. The Defendants have not highlighted a single step they would like to take that they could not have taken on paper (for e.g. adequately referencing “important contents” of the “many documents”). Indeed, and as will have been noted, some of the points raised by the Defendants in the Oral Hearing Application – like that cited in [6] above in relation to governing law – appear to be points more suitable for a permission to appeal application or an actual appeal than the Oral Hearing Application.

17. The Oral Hearing Application is, therefore, dismissed.

The Appeal Application

18. As to the Appeal Application, it is comprised of eight grounds.

19. Pursuant to RDC r. 44.31:

20. Pursuant to RDC r. 44.19:

21. In its submissions in opposition to the Appeal Application, the Claimant has asserted that the Defendants rely “entirely on unsubstantiated (and misconceived) assertions.” I agree with the Claimant and adopt its arguments in dismissing the Appeal Application.

The First Ground

22. The Defendants say:

It is submitted that the Hon’ble Justice of Court Of First Instance Dubai International Financial Centre Courts was not correct in allowing the claim by ignoring the true facts submitted before the court at the time of arguments and at the direction of the Hon’ble Justice of Court Of First Instance Dubai International Financial Centre Courts the Defendants filed a written arguments.

23. The Judgment expressly refers to all of the relevant evidence which was before the Court. No attempt is made by the Defendants to explain which factual findings should have been made which were not made. The Defendants have not demonstrated that the Court’s factual conclusions were not well founded. Indeed, I think the conclusions were ones which a Court could reasonably have reached on the evidence before it.

24. This ground is dismissed.

The Second Ground

25. The Defendants say:

It is submitted that the Claimant failed to show its intention to execute the Senior Security Promissory Note. The Claimant interpretation given by the Hon’ble Justice of Court Of First Instance Dubai International Financial Centre Courts was not in accordance with the provisions contained in Contract Law.

26. This ground is difficult to follow. Moreover, the Defendants have failed to demonstrate why or how the Claimant’s subjective intention was/is irrelevant. In the decision, I construed the arrangement between the parties as a loan. That conclusion was an obvious one to reach on the evidence before me.

27. This ground is dismissed.

The Third Ground

28. The Defendants say:

It is submitted that the Hon’ble Justice of Court Of First Instance Dubai International Financial Centre Courts erred in giving its own liberal interpretation beyond the terms of agreement when it is well settled law by this Hon’ble Court, the terms of agreement / contract should be strictly interpreted unless there is any ambiguity. Therefore, interpretation given by the Hon’ble Justice of Court Of First Instance Dubai International Financial Centre Courts in favour of the respondent can not be sustained.

29. In my view, this ground is misconceived. As I see it, orthodox principles of contractual construction in respect of the terms of the agreement were applied. Notwithstanding that the agreement was headed “Promissory Note,” its terms, I found, gave rise to a loan agreement. It is notable that the Defendants do not themselves suggest how those terms should be construed differently from my construction of them.

30. This ground is dismissed.

The Fourth Ground

31. The Defendants say:

It is submitted that the Hon’ble Justice of Court Of First Instance Dubai International Financial Centre Courts after having held clause- of the SENIOR SECURED PROMISSORY dated December 1, 2016 ignored the all facts brought in to the notice at the time of the arguments and in written submission. If the contents of the written submission considered at the time of passing the Judgment the justice would have been prevailed. Therefore, the impugned order of the Hon’ble Commission is liable to be set aside.

32. Save for the reference to “all” facts, rather than the “true” facts, this ground appears to be a repetition of the First Ground. In my judgment, it is without merit for the reasons set out in [23] above.

33. This ground is dismissed.

The Fifth Ground

34. The Defendants say:

It is submitted that the Hon’ble Justice of Court Of First Instance Dubai International Financial Centre Courts failed to consider the true facts that Respondent (Claimant in CFI-057-2018) provided that sums advance to Rough LL.C was actually not a loan but an investment in the company under the TERMS SHEET Therefore, the Judgment dated 6th September 2020 passed by Hon’ble Justice of Court Of First Instance Dubai International Financial Centre Courts herein is totally unjustified.

35. I believe this argument was rightly rejected in the Judgment: it was contradicted by the express terms of the agreement as well as the parties’ conduct before and after the agreement was concluded, including the Defendants’ acknowledgment of their indebtedness and their part re-payment of the, in my finding, loan.

36. This ground is dismissed.

The Sixth Ground

37. The Defendants say:

It is submitted that the Hon’ble Justice of Court Of First Instance Dubai International Financial Centre Courts failed to consider the fact that because of the variation in the original Note through the amendment by extension of time in the repayment without a maturity date and increase rate from 7% to 10.5% without the consent of the Appellant 2 (Defendant 2 in in CFI-057- 2018), the Defendant 2 is completely discharges from any repayment obligation as an alleged guarantor under the Note.

38. This ground is demonstrably wrong. In the Judgment, I expressly considered the impact of the variation on the Second Defendant’s rights. I found, as a fact, that the Second Defendant agreed to the variation in a personal capacity and that the Defendants represented that the Second Defendant had so agreed. I accepted three of the Claimant’s four alternative reasons (and expressly left open the fourth reason) as to why the variations to the agreement did not discharge the Second Defendant’s obligations. No attempt is made by the Defendants to engage with the conclusions in the Judgment in respect of those reasons.

39. This ground is dismissed.

The Seventh Ground

40. The Defendants say:

It is submitted that the SENIOR SECURED PROMISSORY NOTE was not signed by the Claimant, and the address and information is missing, therefore, SENIOR SECURED PROMISSORY NOTE can not be treated as a loan agreement or any sort of Contract.

41. This appears to be a new argument which was not run at trial, including in the Defendants’ supplemental submissions. In any case, it appears to be hopeless. Firstly, as a matter of law, the Claimant has not explained a legal basis for the supposed requirement for a party to give information about itself in order to constitute a valid loan contract. Secondly, as a matter of fact, the agreement (at page 21) was in fact signed by the director of the Claimant and the Claimant’s address was included.

42. This ground is dismissed.

The Eighth Ground

43. The Defendants say:

It is submitted that this Court repeatedly held that while construing the terms of contract / policy / agreement is not expected to venture into extra liberalism that may result in rewriting of the contract or substituting the terms which were not intended by the parties. Admittedly, the Hon’ble Justice of Court Of First Instance Dubai International Financial Centre Courts ignored the above dictum.

44. This ground is misconceived. The Judgment did the very opposite of what the Defendants allege. In it, I applied the plain meaning of the terms in the agreement in order to identify the parties’ contractual obligations. It is striking that the Defendants do not identify any terms which they suggest were misconstrued, let alone offer the propose construction of such terms.

45. This ground is dismissed.

Conclusion

46. The Defendants have failed to demonstrate that the proposed appeal would have a real prospect of success or that there is some other compelling reason why the appeal should be heard on the basis of the Judgment being wrong or unjust because of a serious procedural or other irregularity in the proceedings in which it was handed down. The Appeal Application is accordingly dismissed.

Costs

47. The Claimant seeks its costs of responding to the Appeal Application in the sum of USD 7,818.50. The general rule in respect of costs, pursuant to RDC r. 38.7(1), is that “the unsuccessful party will be ordered to pay the costs of the successful party.” The Claimant is the successful party. The Defendants are, therefore, ordered to pay it its costs of the Appeal Application, on the standard basis, to be assessed by a Registrar if not agreed.