July 11, 2023 court of first instance - Orders
Claim No: CFI 070/2022
IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
PARAMJIT KAHLON
Claimant/Applicant
and
LIBERTY STEEL GROUP LTD
Defendant/Respondent
ORDER WITH REASONS OF H.E. DEPUTY CHIEF JUSTICE ALI AL MADHANI
UPON reviewing the Claimant’s Appeal Notice dated 15 May 2023 seeking permission to appeal against the Order with Reasons of H.E. Deputy Chief Justice Ali Al Madhani dated 24 April 2023 (the “Order”) (the “Permission to Appeal Application”)
AND UPON hearing counsel for the Claimant and counsel for the Defendant at the hearing listed before me on 17 March 2023
AND UPON reviewing the Permission to Appeal Application and Skeleton Arguments submitted by the Applicant and the Respondent
AND UPON reviewing the relevant documents in the case file
IT IS HEREBY ORDERED THAT:
1. The Permission to Appeal Application of the Defendant is dismissed.
2. The DIFC Courts have jurisdiction to hear and determine this Claim.
Issued by:
Hayley Norton
Assistant Registrar
Date of Issue: 11 July 2023
At: 9am
SCHEDULE OF REASONS
1. This is an application for permission to appeal the Order of H.E. Deputy Chief Justice Ali Al Madhani (the “Judge”) issued on the 24 April 2023 (the “PTA”). The Order was granted in favour of the Claimant ruling that the DIFC Court had jurisdiction to hear and determine the underlying issue between the parties. The Order is challenged by the Defendant on the ground that the Judge had made an error when analysing the jurisdiction issues and assessing whether the Defendant had satisfied the jurisdiction gateway Article 5A(1)(a).
2. My reasons for dismissing the PTA are four-fold. First, the Defendant has failed to discharge its burden of proof and failed to provide any cogent reasons explaining why the Order should be overturned. Second, the grounds of appeal do not identify any real prospect of success. Thirdly, the lack of jurisdiction issue, even if it were to be considered, it would not be apt to be considered persuasive and to have the effect of reversing the outcome of the Judgment. Fourth, there are no reasons whatsoever as to why the appeal should be heard.
3. I will not repeat the facts or the background of the case as it has been dealt with thoroughly in my Order. I have read through the Claimant’s and the Defendant’s submissions and in this short Schedule of Reasons, I do not intend to refer to each point that has been raised by the parties. The fact that I may omit some arguments does not mean that I have overlooked them. For ease of reference, terms that have been defined in the previous Order will be adopted here.
4. Before I deal with the grounds of appeal, I will remind myself of the applicable test set out under RDC 44.19 in which the Court will only grant permission to appeal if the Court considers that (a) the appeal would have a real prospect of success or (b) there is some other compelling reason why the appeal should be heard.
5. The issues that arose out of the parties dispute were set out succinctly [at para 6 - para 12] of the previous Order and I shall not repeat them in this short Schedule of Reasons.
6. The main ground of this PTA is based on the Defendant’s contention that if the Court had applied the correct test to establish the CFI’s jurisdiction under Gateway A, it would have concluded that the DIFC Courts do not have exclusive jurisdiction to hear and determine it under Gateway A. The Defendant submits that the Court should have applied the following two-limb test being:
(a) there must be a civil or commercial claim or action - extending to the Claimant demonstrating that its pleading “contains a coherent, formulated and discernible civil or commercial cause of action” against the defendant in question; and
(b) the DIFC, or any DIFC Body, DIFC Establishment or Licensed DIFC.
7. I disagree with the suggestion that for the Court to establish jurisdiction under Gateway A, it must apply a two-limb test and only on that basis, jurisdiction would be found over the relevant claim. It is clear that the legislative intention of the literal wording of Gateway A has not been drafted so that it extends to the condition of a “formulated and discernible claim” by a prospective claimant, otherwise the legislation would have expressly provided so. Accordingly, in the absence of an amendment to the JAL, the Court will not introduce a two-limb test when deciding jurisdictional matters.
8. The Defendant contends that Hardt should be interpreted as introducing the strike out/immediate judgment test into Gateway A, in which a prospective claimant is required to establish a “formulated and discernible claim” before the Court proceeds to consider the second limb of the two-stage test. Now, assuming the Court is of the view that the pleadings of the prospective claimant do not fall within the meaning of a “formulated and discernible claim” and declines jurisdiction on that basis. In this context, the Court will be faced with an application from the claimant to amend pleadings to meet this high threshold allegedly set by Hardt, because the Court’s general position, before striking out or granting the immediate judgment, is to consider whether the claim is curable by way of an amendment. Therefore, the Court will be faced with amendment application which will have to be dealt with before the jurisdiction application. Accordingly, I agree with the Claimant’s submission in response to the PTA [at para 43.8 and 43.9].
9. I reject and find it unpersuasive that this was the true intention behind the express wording of Gateway A. The proposed exercise would involve amendments to the JAL and RDC to reflect the Court’s proposed assessment on jurisdiction by applying the two-limb test. It should also be born in mind that the JAL’s original text is in Arabic and the English translation may narrowly define the true meaning and expression of the original text in Arabic therefore it is important not to lose sight of the legislative purpose of the underlying text and I am of the view that Article 5A(1)(a) shall not be construed narrowly to the extent the Defendant contends.
10. The Defendant’s counsel referred to the authority of Al Khorafi, however having considered the relevance of this case, in my view they do not support the proposition put forward by the Defendant. I agree with the Claimant’s counsel in that the Court of Appeal was concerned with the question of whether Gateway C was engaged considering Sarasin Switzerland was not a DIFC body or DIFC Establishment. The language that was used by the Court of Appeal in Al Khorafi was whether the Court has jurisdiction under the JAL.
11. I think it is absolutely important to be made clear that where it is plain beyond argument that the Court has jurisdiction under any of the JAL Gateways (in which it does under this claim), it is simply not for the Defendant “to mount a jurisdiction challenge on the ground that the claim is not reasonably arguable” (Protiviti Member -v- Al Mojil [CA-003-2016]). I agree that the Defendant has not submitted to the DIFC Court jurisdiction, however it is seeking the Court to establish that it lacks jurisdiction and did not strike out the claim, thereby the Defendant is invoking the adjudicative jurisdiction of the DIFC Court.
12. The Defendant takes an issue with a finding in the Order [at para 51] contending that the Court failed to provide any reasoning or analysis that the test for jurisdiction provided under Hardt is satisfied in relation to the Claimant’s pleadings. It should be noted that a Judge is not bound to make findings on every individual matter in issue and it is not enough for the Defendant to point out to an additional finding that the Judge could have made (Al Khorafi, citing Sohal v. Suri [2012] EWCA Civ 1064).
13. Finally, the Defendant referred and relied on SCT cases in supports of its ground of appeal, it should be noted that a CFI Judge is not bound by decisions, findings of a lower court, therefore I am not bound by those authorities, irrespective of their convincing analysis on this issue.
14. The Defendant’s grounds of appeal fail to put forward any argument of submissions that points to an error of law, none of the points that were relied on by the Defendant in supports of its PTA could give rise to any real prospect of success against the Order.
15. For those reasons I have given, this PTA should be dismissed because the DIFC Court has jurisdiction over this claim under Gateway A.
Conclusion and costs
16. There is no reason why costs should not follow the event and therefore the Defendant should be ordered to pay the Claimant’s costs of the PTA to overturn the Judgment. The costs should be on the usual standard basis if not agreed between the parties.