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Claim No: CFI 077/2022

IN THE COURTS OF DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

ASW HOSPITALITY AG

Claimant

and

MAG OF LIFE FZ-LLC

Defendant

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JUDGMENT OF JUSTICE SIR PETER GROSS

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UPON the Part 7 Claim Form dated 7 November 2022 (the “Claim”)

AND UPON hearing Counsel for the Claimant and Counsel for the Defendant at a hearing held from 11 March to 15 March 2024 (the “Trial”)

AND UPON answering the principal Issues in the Trial as follows:

1. Issue I: What was the scope of the services ASW was engaged to provide under the SCA? As set out in Schedule 2 to the SCA (also having regard to the Consultancy Agreements), but fact specific as to delineating what this meant in practice in connection with individual matters.

2. Issue II: When did sales actually commence under the SCA? On or about 15 February 2022.

3. Issue III: What is the correct interpretation of the Target set under the SCA? Target revenue was only to be treated as earned when an SPA, not an RA, had been signed.

4. Issue IV: Did ASW meet the Target for Q1 and Q2 2022? No.

5. Issue V: If not, was any shortfall excusable under the terms of the SCA? No

6. Issue VI: Was MAG entitled to terminate the SCA when it did or did such termination amount to repudiatory breach? No. Accordingly, MAG’s purported termination of the SCA on 18 August 2022 itself constituted a repudiatory breach thereof.

7. Issue VII: If MAG was in repudiatory breach when it terminated the SCA, would it have acquired a right to terminate at some other time and, if so, when? Yes, on 15 September 2022. Accordingly, in respect of MAG’s repudiatory breach under Issue (VI), ASW is entitled to no more than nominal damages.

8. Issue VIII: To what, if any, commission, was ASW entitled on termination? The amount of AED 1,928,609.20.

IT IS HEREBY ORDERED THAT:

1. MAG must pay ASW commission in the amount of AED 1,928,609.20 within 28 days of the date of this Judgment.

2. If no agreement has been reached as to Costs and Interest within 28 days of the date of this Judgment, the parties must exchange short submissions on Costs and Interest of no more than 5 pages each (min. font size 12, min. line spacing 1.5), to be followed within 14 days thereafter by short reply submissions of no more than 3 pages each.

Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 1 October 2024
At: 10am

SCHEDULE OF REASONS

Introduction

1. This Trial involved claims by a Consultant against a Property Developer for commission relating to the development of a luxury wellness resort, known as “Keturah”, located in Dubai Creek (the “Project” and the “Resort” as appropriate). For reasons which are very much in dispute, the Project made a slow start before, it would seem, subsequently turning the corner – but (in very broad terms) at around this time the relationship between the parties was drawing to a close.

2. The Claimant (“ASW”) is a company incorporated in Zurich, Switzerland. It provides consulting services for the development and management of luxury hotels and resorts.

3. The Defendant (“MAG”) is a real estate developer, incorporated in Dubai.

4. As set out in MAG’s skeleton argument:

5. The USP of the Resort was the concept of “wellness”. Two features of the Project were, first, that the properties were to be luxury branded; secondly, that they were to be sold “off plan” – i.e., buyers would purchase prior to the construction of the properties.

6. In outline, ASW claims damages for MAG’s alleged wrongful termination of the SCA (see below) on 18 August 2022. ASW argues that MAG had no right to terminate the SCA because ASW had met its contractual targets during the contractual period. If such targets were missed, this was due to causes outside ASW’s control (SCA, cl. 4.6). In any event, MAG failed to comply with the contractual termination provisions in the SCA.

7. For its part, MAG characterised ASW’s claim as “little more than an opportunistic attempt by ASW to obtain a windfall” at MAG’s expense, after failing to deliver. MAG terminated the SCA as it was entitled to do, and no commissions had accrued to ASW by that date. Even if MAG had terminated the SCA incorrectly or prematurely (which MAG denies), MAG would properly have done so on or by 16 September 2022 (or the months that followed); sales targets still had not been achieved (even with MAG in charge) and would never have been achieved had ASW remained in situ. Accordingly, ASW suffered no loss or damage in any event.

8. The SCA: On 16 December 2021, the parties entered into the Amended and Restated Sales Coordination Agreement (the “SCA”), the agreement at the centre of the dispute. By cl. 2.1, MAG appointed ASW “…as its sales coordinator to coordinate and manage the sales of all the Residential Units (“the Services”) as further detailed in Schedule 2 and pursuant to the terms of this Agreement.”

9. The Recitals indicate the context of the SCA:

10. Cl. 3 of the SCA dealt with the payment of commission. Cl. 3.1 provided as follows:

Cl. 3.2 was in these terms:

It is unnecessary to refer to cll. 3.3 or 3.5.

11. While the relevance of cl. 3.4 may not have been immediately obvious, it was relied on in the course of argument and provided as follows:

12. Cl. 4 of the SCA was headed “Performance” and was in these terms:

13. Before turning to cl. 11, cl. 5.1(d) should be noted:

14. Cl. 11 of the SCA is entitled “Term and Termination”:

15. Cl. 12.9 provided for English law to be the governing law and for the DIFC Courts to have exclusive jurisdiction.

16. As already noted, cl. 2.1 of the SCA cross-referred to Schedule 2 regarding the “Scope of Services”, there defined as follows:

17. Finally, Schedule 3 to the SCA contained the “Target and Absorption Plan”, reproduced here and to which reference will be made in due course.

Residential Sales Projections - Phase 1

18. The Consultancy Agreements: While the SCA was the key agreement between the parties for the purposes of the Trial, it had been preceded by a number of Consultancy Agreements (the “Consultancy Agreements”) between the parties, with MAG described as the “Client” and ASW as the “Consultant”. Though (on the evidence) ASW’s involvement in the Project was not uninterrupted, it may be noted that the 1 May 2019 Consultancy Agreement obliged ASW to produce a business plan and commercial model for the Project. So too, the 1 September 2019 Consultancy Agreement called for ASW to produce a detailed report addressing a “proposed sales strategy for [the Project] memberships and branded homes…”. The 17 June 2020 Consultancy Agreement provided for services from ASW similar to those under the previous agreement. ASW’s fees were USD 55,000 per month for the duration of the contract.

19. Finally, by a still further Consultancy Agreement dated 16 December 2021 (the “December 2021 Consultancy Agreement”, concluded on the same date as the SCA) and which ran in parallel with the SCA, the parties recited the following:

20. Schedule 1 to the December 2021 Consultancy Agreement dealt with the Services to be provided by ASW, which included the following:

21. Schedule 2 to the December 2021 Consultancy Agreement was headed “Fixed Remuneration” and provided for a retainer fee of USD 55,000 per month plus an amount of USD 330,000, payable at the earlier of the termination of this agreement or 30 June 2022.

22. Legal representation: At the Trial, ASW was represented by Mr Stephen Doherty, instructed by Davidson & Co., and MAG was represented by Mr Harris Bor, instructed by Mayer Brown International LLP. I am grateful to all concerned for their assistance, by way of both written and oral submissions.

23. The Trial Hearing and Witnesses called to give evidence: The Trial took place, online, over a period of 5 days, 11 – 15 March 2024, inclusive of both days. ASW called Mr Michael Manz, Mr Victor Grosse and Mr Alexander Manz to give evidence. For its part, MAG called Mr Talal Mofaq Al Gaddah, Mr Bashir Samia, Ms Sharena Habr, Mr Mohammed Abdelrahman and Mr Munir Al Deraawi to give evidence. All the witnesses were witnesses of fact. No expert evidence was called – a matter which I simply note; it is certainly not a complaint or criticism. Strong personal feelings and a distinct air of partisanship coloured the evidence; this was perhaps unsurprising given the time and effort both parties had committed to the Project, together with the fact that Mr Michael Manz is the Chairman of ASW and Mr Al Gaddah is the Managing Director of MAG – but it did not assist the quality of the evidence or the reliance I felt able to place on it. When a project encounters difficulty, mutual recriminations are difficult to avoid and that was certainly so here. Where necessary to express a view of the evidence, I do so in the course of the judgment but, in the main, I found the contemporaneous documents of more assistance than the witness evidence. For completeness, I exempt Mr Abdelrahman from the charge of partisanship but note that a very great deal of his evidence was hearsay, carrying minimal weight.

The Principal Issues

24. The principal Issues are these:

I deal with each Issue in turn but, before doing so, it is convenient to outline the factual history.

The Factual History

25. The nature of the Project, its USP and particular features (including luxury branding) have already been set out.

26. Reference has also been made to the Consultancy Agreements, preceding and forming part of the matrix of the SCA, obliging ASW to produce a proposed sales strategy for the Project. The December 2021 Consultancy Agreement, running in parallel with the SCA, recited both the reputation of MAG and the relevant experience of ASW, leading to MAG appointing ASW as its “non-exclusive consultant and advisor” in relation to the Project.

27. As will appear, a significant dispute between the parties concerned the strategy of relying on “international” or “global brokers” as distinct from the later engagement of “local” Dubai brokers. As a matter of fact, dating back to before the commencement of the SCA, ASW had advised the engagement of international brokers and, it may well be at a time when ASW was not involved in the Project, MAG had appointed such brokers. Thus, on 13 April 2021, Mr Alexander Manz’s email to Mr Al Gaddah, included the following:

In a June 2021 MAG presentation, referring to “Key Partners”, ASW was named as “Strategic Adviser”, while both Sotheby’s International Realty (“Sotheby’s”) and Berkshire Hathaway Home Services & Co (“BHH”) – i.e., “global” brokers - were referred to. Subsequently, in August and November 2021 respectively, MAG engaged both BHH (or an associated Berkshire Hathaway company, for convenience referred to as BHH) and Sotheby’s (or an associated Sotheby’s company, for convenience referred to as Sotheby’s). A further “international” broker, Kalinka, with a particular focus on the Russian market (i.e., potential Russian custom), was engaged later.

28. It is fair to say that the matter is not as straightforward as would superficially appear from labelling a broker “global”, “international” or “local”. There are undoubted nuances of meaning, as perhaps best emerged in the course of Mr Al Gaddah’s evidence (T3/43):

29. The evidence of Mr Grosse (T2/44-45) reinforced the view that the marketing and sale of the Project involved an assortment of complex threads, in particular as the properties were to be sold off plan:

30. Following signature of the SCA, the focus in December 2021 – January 2022 was on the forthcoming sales launch, then, as is plain from the contemporaneous documents, planned for February 2022. An email from Mr Michael Manz, dated 19 January 2022, to various Marriott International (“Marriott”) personnel, is particularly clear in this regard:

Mr Manz added:

31. Pausing there, the importance of Marriott approval is to be underlined. The Ritz-Carlton branding of the Project meant that Marriott approval was essential; as it seemed to me, both ASW and MAG were (understandably) concerned not to fall foul of Marriott’s franchising (or brand) requirements.

32. Returning to the narrative, on 26 January 2022, Ms Hartnett of Marriott approved the press release sent to her by Mr Alexander Manz to coincide with the sales launch.

33. The timing appeared to be favourable. As Mr Michael Manz accepted in evidence (T1/123), the market in Dubai for luxury properties “generally was booming…It was a very good time for market. Like it kept booming the last two years…”

34. The contemporaneous documents continued, as I find, to speak with one voice of a sales launch on 15 February 2022: see, for instance, Bundle, pp. 2824 and 2655 (dated 9 and 10 February, respectively). On 11 February, an article in the media (Bundle, pp.2332 and following) said that: “…MAG of Life will launch sales on February 15, through eight-bedroom mansions.” Also on 11 February, Marriott congratulated Mr Grosse on the launch, to which Mr Grosse responded, saying “We couldn’t have done without you. Now starts the critical phase of residential sales.” On 15 February, Mr Alexander Manz emailed Mr Farid Haroun (“Mr Haroun”) of Mayer Brown (MAG’s lawyers) and Mr Samia (of MAG), with a list of outstanding matters needing attention but saying “Tomorrow is actually our sales start”.

35. According to Mr Samia, by this time, the Sales Centre was operational, and the “Global” brokers had been “onboarded”.

36. A 17 December email from Mr Michael Manz to Mr Menezes of Marriott, recorded that Marriott had approved the Sale and Purchase Agreement (“SPA”), though, in his oral evidence (see below), Mr Manz sought substantially to qualify that statement (T1/160- 161).

37. On 23 February, Mr Grosse emailed Mr Shah of Marriott, saying that now “both marketing and sales launches have taken place, we are ramping up the sales effort to get a maximum of traction.” On the next day, 24 February, Mr Michael Manz (in an email to Mr Alexander Manz, Mr Samia and others) spoke of about 50 good days left this year and of setting a target “…to 150m USD of sales in the coming 45 days…”. It is likewise fair to record that in that same email, Mr Michael Manz referred to a number of outstanding matters “amongst which ‘finishing the work at the sales centre’ is probably the most urgent one.” In that regard, the Brokers needed to be able to come to the sales centre and bring guests but “now that is not possible”.

38. On 13 March, Mr Michael Manz, in an email to Mr Al Gaddah, spoke of achieving “the go live in February” and expressed concern about a “slow down in sales efforts”, thus losing “the speed in converting the ‘go live’ into a ‘go sales’”. I defer for the moment an analysis of Mr Manz’s meaning in this email.

39. More generally, by March 2022, it was apparent that nothing was moving, setting the scene for heightened concerns in April and May, to which I next turn.

40. April 2022 does not lend itself to easy analysis. First, it remained the case that nothing was moving; the global brokers (Sotheby’s, BHH and Kalinka) had not sold anything, as accepted by Mr Grosse in his evidence (T2/8).

41. Secondly, put neutrally, there was interest in engaging local brokers, as appears from a list under discussion on 20 April (Bundle, p. 2341); the idea seems to have been that ASW would supervise the global brokers, with MAG supervising (or managing) the 15 or so local brokers on that list. Perhaps not without significance and in tandem, an increase of commission to 4% was under discussion.

42. Thirdly, the question of whether the involvement or increased involvement of local brokers was pushed by MAG or was a common understanding between the parties remained in dispute at the Hearing. At all events, Mr Grosse spoke of a common understanding (T2/11) while underlining (T2/7) that the main difference between international/global brokers and local brokers was “brand power”, albeit that they catered to “the same kind of nationalities”.

43. It must, however, be said that Mr Michael Manz’s evidence was somewhat less welcoming as to local brokers. Thus, in an email to Mr Al Gaddah on 8 April (Bundle, p.1315), Mr Michael Manz said this: “I am not saying that I want to get completely rid of those brokers, but we need to make the appearance to the brokers we have signed that are not really doing a bazaar here.” On 12 April, in his email to Mr Al Gaddah (Bundle, p.1032), discussing “hot topics of today”, Mr Michael Manz referred to “Rogue brokers” in these terms: “…we agreed to keep additionally to the 3 officially signed brokers about 6 of the rogue brokers (the best performing ones) and try to keep relationship under the radar with them by giving them the hope that we can sign with them something at a later stage in case they will perform. They however cannot officially put marketing material out there and need to collaborate with us to keep it under the radar…” By way of explanation of his attitude to the local brokers, Mr Michael Manz emphasised two themes: (1) a concern that they should not fall foul of Marriott’s strict franchise requirements – a concern plainly shared by others at ASW (see, Bundle, p. 1540); (2) his concern as to the marketing of a “super-luxury” product; imagine, he said (T1/137), “you have 15 car dealerships of Ferrari in one city. Nobody would do that.”

44. Fourthly, amidst all these exchanges and apparent and growing tensions, it is incontrovertible that, on 5 April, Mr Al Gaddah elevated the role of ASW and Mr Michael Manz, saying this in an email to his colleagues and staff on that day:

The significance of this elevation will need to be considered later. For the moment, it may be noted that Mr Alexander Manz asked (T2/89) why, if MAG was not happy with ASW, ASW had been elevated in this fashion. For his part, in an email dated 27 April, Mr Michael Manz viewed it as an evolution in ASW’s role from “non-executive” to “executive” (Bundle, p.1655). In the same email, comprised of slides prepared for a forthcoming presentation to MAG, Mr Manz referred to USD 400 million sales leads that ASW had generated over the preceding two weeks – though it would seem that nothing came of any of those leads.

45. Fifthly, ASW’s primary case was that under cl. 4.3 of the SCA, April was the month in which sales “actually commenced”. More specifically, 9 April was suggested as the commencement date. Underpinning this case was an emphasis on matters which remained outstanding after February. So, in a 13 March email (Bundle, p.1491), Mr Manz expressed continuing concern at the absence of renders following the earlier termination by MAG of its design studio (Evolution). The quality of such renders as were available was the subject of criticism by Marriott (Bundle, p.2112). Further, in the 13 March email Mr Manz underlined that ASW had been able to secure 10 April for a “solo campaign with Marriott newsletter”. There followed, in due course, the Marriott Bonvoy “Announcement” of the Ritz-Carton Residences of the Project on 9 April (Bundle, p. 1576), a matter coupled with some “behind the scenes” references to it being a “launch” (Bundle, p.1041). Mr Michael Manz’s second witness statement referred to Mr Al Gaddah’s enthusiastic contemporaneous response to this Marriott email campaign (at para. 52, Bundle, p.675) and averred that it “kicked off the sales process” (at para. 53, ibid). Furthermore, 13 April was the date on which the first Reservation Agreement (“RA”) was executed.

46. I come next to May 2022, a significant month in the chronology. First, on 6 May, Kalinka held a “Russian-Focused Event”. In short summary, recriminations followed this Event. Though accepting that it was not immediately successful, ASW maintained that the Event raised awareness (or “buzz”) in the Russian market and pointed to the large number of Russian buyers in the properties subsequently sold (Bundle, pp.6965 and following and see the evidence of Mr Michael Manz, T1/146-147). Conversely, MAG complained at the cost of the Event, that the budget had overrun, that Kalinka offered attendees unauthorised discounts and that ASW failed to supervise Kalinka and coordinate the Event satisfactorily. Furthermore, MAG pointed to the fact that no sales (at least up to August 2022) had been made through Kalinka (T1/147).

47. Secondly, important meetings took place in May 2022. The first of these was held on 13 May and included Mr Michael Manz and Mr Grosse (ASW) and Mr Gaddah and Ms Habr (MAG). Mr Manz produced a slide presentation for this meeting. That presentation included a heading “Analysis: Why haven’t we hit our sales targets?” There followed a list or litany of problems which were said to have emerged in the preceding 40 days and explained why some deals had been lost:

48. There followed a number of suggestions – ideas for discussion – to solve the problems:

49. Ms Habr, it may be noted, went into the 13 May meeting critical of ASW’s work – as can be seen from her 10 May email (Bundle, p.6776) to MAG’s lawyer, Mr Haroun. There, Ms Habr, while saying that a “pointing fingers game” was not the way forward, expressed herself as follows:

50. Against that background, from their perspective, Mr Gaddah and Ms Habr were unimpressed with the MAG presentation. Mr Gaddah himself expressed concern as to the damage to MAG’s reputation if sales were not being made (T3/42). In her evidence, Ms Habr (T4/82-83) put it this way:

Mr Gaddah who, according to Ms Habr, had been concerned from March onwards, was still more concerned in May. Ms Habr’s evidence continued (ibid):

51. It appears that Mr Grosse thereafter produced Minutes of the 13 May meeting. A subsequent discussion of the minutes resulted, however, in an inflammation of an already somewhat over-heated atmosphere with Ms Habr referring to the feedback at the ASW – MAG 13 May meeting as “defaming the brand of MAG”. As I understood it, this was a reference to it being said that there was no confidence in the MAG brand (T4/110).

52. At all events, there followed a second meeting on 14 May 2022, between Mr Michael Manz and Mr Gaddah, this time with Mr Haroun (Mayer Brown and MAG’s lawyer) also present. It seems that Mr Manz defended ASW’s sales strategy and sought to attribute the absence of sales to the market’s lack of trust in the MAG brand. The upshot of the meeting was Mr Gaddah taking (or taking back) control of the Project and, in the presence of Mr Manz and Mr Haroun, instructing Mr Al Dewaari to take the lead on the Project. Thereafter, the involvement of local brokers increased and subsequently, whether attributable to the greater involvement of local brokers, or the increased commission available to the brokers (see above), or for whatever reason, the Project began to turn the corner.

53. The period July to August 2022 involves (neutrally expressed) the drawing to a close of the relationship between ASW and MAG.

54. On 16 July, Ms Habr emailed her MAG colleagues (Bundle, p. 1487), averring that MAG had ended its agreements with ASW on 30 June and, therefore, all reporting (and the like) was to be directed to Mr Al Deraawi, in his capacity as Head of Sales for the Project. She added the following:

55. On 19 July, ASW’s then lawyers (Geldards) complained (Bundle, p.1329) that MAG had recently blocked ASW’s access to MAG’s “Salesforce” system (i.e., the centralised IT system through which sales were conducted, tracked and recorded). Geldards additionally complained of MAG’s instructions (see above) to its employees to cease dealings and communications with employees of ASW. Geldards went on to say that these actions by MAG were both material and repudiatory breaches of the SCA and required MAG to remedy the breaches within 30 days, in accordance with cl. 11.2 of the SCA.

56. It would appear that this blocking of ASW’s access and the instructions given to MAG’s employees had been given without prior warning or notice to ASW. It has been said that MAG took these measures because wider settlement negotiations were under way and, additionally, that MAG had in any event taken over ASW’s role.

57. On 18 August (Bundle, p.298), Mayer Brown (for MAG) issued (or purportedly issued) a Notice of Termination of the SCA, saying that ASW had not secured, directly or indirectly, a single sale of a unit within the Project nor had it achieved its minimum sales targets. MAG therefore exercised (or purported to exercise) its right to terminate the SCA pursuant to cll. 4.9 and 11 thereof. For its part, ASW contends that, in doing so, MAG was in repudiatory breach of the SCA.

58. I turn to the Principal Issues.

Issue I: What Was The Scope Of The Services ASW Was Engaged To Provide Under The SCA?

59. On all the evidence, there is no doubt that ASW was engaged by MAG because of its international experience and expertise in (inter alia) the luxury sector of hotel operation and management: see, for instance, Recital (B) to the 2021 Consultancy Agreement. While, however, the Scope of the services ASW was contracted to provide under the SCA is easy to state (see Schedule 2 to the SCA, set out above), delineating the practical application of that commitment can be rather more elusive. Thus, while plainly ASW’s role was not executive (at least apart from a period in April 2022) – it was not, for example, itself under any duty to sell properties at the Resort – it is more difficult to spell out where ASW’s coordination, oversight, management and supervision role ended. ASW is of course not facing a claim for negligence - but this Issue matters because it informs the later discussion (inter alia) as to what was outside ASW’s control under cl. 4.6 of the SCA. Moreover, for this purpose and though arising under separate agreements, it is necessary to have regard to the scope of the services which ASW was committed to provide under the Consultancy Agreements; these (see above) extended to an earlier business plan and commercial model, and a proposed sales strategy for the Project. On any view, in my judgment, ASW was more than a passive advisor to MAG; its role was significantly more active than that. Inevitably, this meant that while much of ASW’s work would be front-loaded, its remuneration (under the SCA) would be deferred; that was the bargain the parties agreed.

60. Something of the flavour of the services ASW was engaged to provide under the SCA appears from the evidence of Mr Alexander Manz ((T2/69 and paras. 17 and following of his witness statement, Bundle, p.599). So:

Elaborating, Mr Alexander Manz said this:

61. In similar vein, Mr Doherty (for ASW) said this in his Opening submissions (T1/18-19):

62. On this footing, though fact specific lines need to be drawn regarding individual matters, ASW’s role extended, at least to some extent, to the sales and marketing documentation, the design work for the Project, the contractual documentation and sales events (e.g., the Kalinka Event).

Issue II: When Did Sales Actually Commence Under The SCA?

63. This was a hotly contested Issue because the date when “sales actually commence” (in cl. 4.3 of the SCA) serves as a trigger for the first performance review with its minimum revenue Target (cl. 4.4), the latter impacting on the payment of commission (cl.4.7). MAG’s case was that sales actually commenced on (or about) 15 February 2022; ASW resisted this conclusion, contending for a variety of alternatives but principally 9 or 10 April, the start of the Marriott email campaign.

64. In this regard, the sense of Mr Michael Manz’s evidence was that while it was hoped that the launch would take place in February, it had not happened. Mr Alexander Manz was of the view (T2/80) that too many things remained outstanding for February to be the start date. When he (Mr Alexander Manz) had emailed on 15 February (see above), “Tomorrow is actually our sales start”, he was, he said, being sarcastic. Asked about the contemporaneous documents, Mr Grosse sought to downplay (T2/25) the Marriott launch announcement and when pressed on his communications with Marriott gave the following response (T2/29-30):

65. Mr Doherty, in his Skeleton Argument, urged an extended list of reasons (para. 60), which, he said, told against a February launch date. These included a suggested failure to comply with Marriott Licensing requirements; gaps in MAG’s personnel; sales documents not yet finalised; final renders not yet approved, and the sales centre not yet completed. He canvassed alternative start dates over and above 9 or 10 April, including a broker launch initiative (10 March), a possible 15 March launch date and added the suggestion that sales actually commenced on 13 April 2022 when the first RA was executed. This last submission can be disposed of at once. The sales commencement date could not plausibly be linked to the date on which the first RA was executed; on this hypothesis, if no RA was executed, deadlock must have resulted.

66. With respect to ASW’s tenacious resistance to a 15 February start date, I am not persuaded. The weight of the evidence favours sales “actually commencing” within the meaning of cl. 4.3 of the SCA on or about 15 February 2022. My reasons follow.

67. First, I accept that no fixed date was given in the SCA for sales actually commencing. There is thus, inevitably, a factual inquiry as to when realistically they did. The question is more practical than formalistic.

68. Secondly, the topic should not be over-elaborated by terminology. In the evidence, an assortment of terms came to be used – not necessarily consistently. Thus, at various points, reference was made to pre-sales, a soft launch, a sales launch and a marketing launch; the many presentation documents (see, e.g., Bundle, p.997) epitomised this usage without any common definitions. Ordinarily, I would expect (pace Mr Gaddah and Mr Samia) a marketing launch to precede a sales launch – though it must be appreciated that work did not stop after sales commenced but continued and very clearly needed to continue; moreover, there was some force in the MAG suggestion that subsequent marketing would be funded from prior sales. Overall, however, while there are obviously differences between the activities covered by the varied terms, there is a danger that the terminology simply transfers the problem without answering the question. I am therefore unable to accept that the answer to this Issue lies in terminology.

69. Thirdly, that work and snags remained outstanding did not tell against sales actually commencing on or about 15 February. Cl. 4.3 did not legislate for a counsel of perfection. It is hardly surprising that further work remained necessary (for example, on the sales centre or the renders) thereafter. That does not mean that sales did not actually commence on the February date.

70. Fourthly, with respect and making every allowance for language (though the ASW witnesses’ English was excellent overall), I did not find persuasive the ex post facto efforts by Mr Michael Manz, Mr Alexander Manz and Mr Grosse to distance themselves from what had been said contemporaneously. I have anxiously considered Mr Michael Manz’s attempt to distinguish “go live” (email, 13 March) from “go sales” but, on balance, fear that this essentially reflected a hindsight desire to escape the consequences of a February start date. By way of further and, with respect, somewhat egregious, examples, Mr Alexander Manz’s attempt to explain his 15 February email as sarcasm, struck me as unattractive (to put it no higher). There is no good reason to displace the obvious interpretation of what he said: namely, sales would start on the next day, but a great deal remained to be done. I formed the same view of Mr Grosse seeking to explain his communications with Marriott at the time as “fake it until we make it”; that is not how I read those communications and Mr Grosse (otherwise an appealing witness) did himself no credit with these answers in evidence, which I reject.

71. Fifthly, the contemporaneous exchanges (listed above when dealing with February 2022) pointed overwhelmingly towards sales actually commencing on or about 15 February 2022. The documents spoke with one voice of an actual February start, both very shortly before and immediately after 15 February. Sales activity was, on these contemporaneous documents, clearly under way. I reject as improbable that this was no more than an intended start date or media puff which did not materialise; the communications were simply too close to the start date and were not corrected or qualified at the time: put bluntly, no one, at the time, said anything to the effect of, “unfortunately, despite our hopes, we have not actually commenced sales”. This contemporaneous evidence, as it seems to me, plainly outweighs the later gloss sought to be put on the February 2022 events.

72. Sixthly, I readily accept the importance of satisfying the Marriott conditions (see, e.g., cl. 3.2.C, Bundle, p.2118) for a sales launch date. More generally, the final words of cl. 4.3 of the SCA (set out above) speak for themselves as to the significance of branding requirements. The short answer, however, to ASW’s point about Marriott licensing requirements, is that Marriott itself congratulated ASW/MAG on the February launch (see above). Had there been a contractual issue, that must be unlikely. It is indeed the case that Marriott was pressing for more to be done – but that is no more than consistent with the consideration that Marriott was content for sales to commence, albeit that further work remained outstanding. That is, similarly, the sense of the contemporaneous ASW-MAG exchanges: there was more to do for purposes of satisfying Marriott licensing requirements but not a block or bar on matters proceeding, at least unless Mr Grosse’s “fake it until we make it” evidence is accepted – which I decline to do.

73. Seventhly, it is to be underlined that sales actually commencing in February is in no way inconsistent with a broker launch initiative in March or the Marriott April email campaign. In any such venture, it is hardly likely that work would stop after the commencement date; all the more so here, where progress remained elusive.

74. Eighthly, it is noteworthy – though I do not rest my decision on it – that Mr Michael Manz’s slide presentation for the 13 May meeting (see above) was headed “…Why haven’t we hit our sales targets?”. Given that the SCA expressed targets in terms of three-month periods, this heading is more consistent with a February date for the actual commencement of sales, rather than any later date.

75. For all these reasons, I conclude, for the purposes of cl. 4.3 of the SCA, that sales “actually commenced” on or about 15 February 2022.

Issue III: What Is The Correct Interpretation Of The Target Set Under The SCA?

76. (A) Introduction: This Issue concerns cl. 4.4 of the SCA and essentially poses the overarching question of how to determine whether ASW had met the Target as there defined (the “Target”).

77. The Issue gives rise to three individual questions. There is common ground on the first; a degree to which the second is not in dispute; and a sharp divergence of views on the third and key question.

78. (B) Question (1): First, there was common ground as to the formula contained in cl. 4.4 of the SCA. It was agreed that the target figure for each quarter was AED 162,564,205. This figure was arrived at by adding the AED figures from the bottom row of Schedule 3 to the SCA (set out above) for Q1, Q2, Q3 and Q4, then dividing by 4 and multiplying by 0.8. It followed that the six-month target was the quarterly target multiplied by 2 = AED 325,128,410. As is clear from cl. 4.4 of the SCA, read with Schedule 3, the figures for “projected revenue” refer to the total value of the sale – not simply the portions payable at the time of booking (whether of the RA or the SPA, discussed further below).

79. (C) Question (2): Secondly, however, there was sensible agreement that for a sale to be counted towards “projected revenue”, it was not anticipated that the entirety or indeed any portion of the purchase price should have been collected by MAG. That must be right, as the Project related to off plan sales, so there could be no question of receiving full payment for the properties until their construction had been completed. If the test for revenue counting was signing the SPA, then this was indeed common ground. If, per contra, and as ASW argued, the test for revenue counting towards the Target was a client entering into an RA, then it is not clear that MAG agreed. To my mind, however, it is indisputable (insofar as it was disputed) that the point at which a sale counted towards “projected revenue” under cl. 4.4 was either signature of an RA or signature of an SPA. Whichever it was, that must be the point at which the total value of the sale (i.e., the total purchase price) counted towards “projected revenue”.

80. (D) Question (3): I turn to the third and key question. Did signature of an RA serve as the trigger for the sale to count towards ASW achieving its Target? Or was signature of an SPA (and only an SPA, not an RA) necessary for the sale to count as projected revenue and towards ASW achieving the Target? ASW contended for the former; MAG for the latter.

81. (1) The Rival Cases: For ASW, Mr Doherty relied on the true construction of the language of the SCA, together with commercial common sense and workability. These considerations told in favour of the “projected revenue” in respect of a Residential Unit counting towards ASW’s Target at the time when the Unit was reserved by a purchaser, i.e., the time when the purchaser entered into an RA. At that point in time, the property was deemed to be sold and was taken off the market; consistently with the language “projected revenue”, the sale should then be treated as counting towards the Target. The RA, forming a part of Marriott’s requirements, contained a binding commitment to execute an SPA and complete the sale, failing which the purchaser would lose a non-refundable “Reservation Fee” (cl. 6), amounting (I was told) to a substantial deposit. Furthermore, insofar as MAG placed reliance on cl. 3.2 of the SCA (set out above), any such argument proved too much; no Oqoods (i.e., approvals from the Dubai Land Department, cl. 3.2(c)) had been issued even at the time of the Trial, which would mean that no matter how many sales had been made, projected revenue would not count towards the Target. This was a consideration of particular concern; Oqoods had not been issued because of a design change by MAG, a further pointer against the trigger being signature of the SPA. Still further and even if regard was had only to cl. 3.2(a) (signature of an SPA), there was a risk of an open-ended time lag if the trigger for the projected revenue counting towards ASW’s Target was signing the SPA (see cl. 7 of the RA) – a time lag which was within MAG’s control. The first 3 plots sold revealed the potential for delay; in each of those cases, the gap between signing the RA and signing the SPA was upwards of 3 months. It was implausible that the parties would have agreed to leave the fulfilment of ASW’s Target exposed to such delays in the control of MAG. By way of fallback, Mr Doherty argued in the alternative, that if the trigger for the sale counting was the SPA and if ASW missed the Target because of administrative delay on the part of MAG in generating an SPA, then ASW would be entitled to rely on cl. 4.6 (a cause outside its control).

82. For MAG, Mr Bor submitted that, as a matter of the true construction of the SCA, Target revenue was only to be treated as earned when an SPA, not an RA, had been signed. First, an RA did not bind a potential purchaser to complete the purchase of a property and pay the full purchase price; signature of an RA did not go beyond putting the potential purchaser’s downpayment at risk: see cll. 14, 15 and 17 of the (pro forma) RA. For this reason, no reasonable company Mr Bor contended (T5/172), would measure revenue and agree to pay commission by virtue of signature of an RA. Secondly, as a matter of consistency in the construction of the SCA, no obligations were to be assessed by reference to an RA. Thus, both cll. 5.1(d) and 3.2(a) (set out above) were linked to signature of an SPA. It was consistent with this construction that, according to the evidence of Mr Samir, sales were only booked onto the “Salesforce” system when an SPA was signed. Thirdly, concerns about the delay between signature of the RA and signature of the SPA had been overstated. MAG had no reason to delay signature of an SPA; that was not a matter within MAG’s sole control and, in any event, in part at least, the SPAs fell within ASW’s sphere of responsibility.

83. (2) Discussion and conclusions: Although I see some attraction in the ASW submissions, I am not persuaded by them and prefer those of MAG. Target revenue was only to be treated as earned when an SPA was signed; I am unable to accept that Target revenue was linked to the signature of an RA. My reasons follow.

84. First, as a matter of risk allocation, linking Target Revenue to signature of an RA would leave MAG exposed in any case where a purchaser chose not to complete the purchase contract. While it is correct that MAG would keep the downpayment (amounting to a substantial deposit), it would be curious to create linkage between measurement of revenue and an event (signature of an RA) which exposed MAG to an appreciable risk of not receiving that revenue.

85. Secondly, reinforcing the consideration as to linkage (putting cl. 11.5 to one side for the moment), the SCA focused on signature of an SPA as the trigger for commission payments to ASW. Thus, cl. 5.1(d), provided ASW’s acknowledgment that sales of properties by MAG to a third-party purchaser were not binding until the execution by MAG of an SPA. Consistently with cl. 5.1(d), cl. 3.2(a) provided that commission was payable to ASW only when (inter alia) an SPA was duly signed by the purchaser. Having regard to these provisions of the SPA, it would require plainer language than that contained in cl. 4.4 to persuade me that the trigger for a sale counting towards the Target was signature of an RA.

86. Thirdly, as it seemed to me, the remaining additional conditions in cl. 3.2, including the issuing of an Oqood, are red herrings in this context. The debate lies between – and only between – signature of an RA and signature of an SPA. The position as to the issuing of an Oqood and, for that matter, the fulfilment of the conditions set out in cl. 3.2(b) and (d) are neither here nor there.

87. Fourthly, I am of the view that ASW was making more than was justified of the potential for delay between signing an RA and signing an SPA. To begin with, the ASW submissions take no or insufficient account of ASW’s responsibilities in this regard – see, for instance, Schedule 2 to the SCA, paras. 1, 3 and 4. Further, on all the evidence, as Mr Bor demonstrated, the first three sales seem not to have been representative with regard to the length of delays. Still further, if a case arose where it could be established that a Target was missed because of a delay which was outside ASW’s control, ASW would be entitled to rely on cl. 4.6 of the SCA.

88. (3) Conclusion on Question (3) and Issue III: I accordingly conclude, as a matter of the true construction of the SCA, that Target revenue was only to be treated as earned when an SPA, not an RA, had been signed.

89. For completeness, I add that ASW’s argument as to the target figure depending on the “planned absorption” (or absorption rates, cl. 4.3 and Schedule 3) has not been overlooked. I am, however, unable to accept this argument, in the light of the plain language of the SCA as to the Target and its meaning.

Issue IV: Did ASW Meet The Target For Q1 And Q2 2022?

90. In the light of my conclusions on Issues II and III, the answer to this Issue is not (or not seriously) in dispute (T5/168). It is plain that ASW did not meet the Target for Q1 and Q2 2022, whether the trigger for Target revenue to be treated as earned was signature of an RA or an SPA – but all the more so if the trigger was signature of an SPA. The figures in the Table (Bundle, p.6965) comprising Appendix 1 to ASW’s Skeleton Argument, speak for themselves.

Issue V: If Not, Was Any Shortfall Excusable Under The Terms Of The SCA?

91. (A) The wording of cl. 4.6 of the SCA: Cl. 4.6 of the SCA forms the foundation of ASW’s contention under this Issue that even insofar as it failed to meet the Target (Issues II – IV above), any such shortfall was excusable. My starting point is therefore the wording of this clause.

92. Cl. 4.6 provides that ASW “…shall not be deemed to be in breach if its failure to meet the Target is attributable to causes which are outside its control…”. There follows a non-exhaustive list of such causes (“including, but not limited to”).

93. That list begins with “adverse market conditions”, a cause which was plainly inapplicable here. As already noted, the evidence was clear that the market in Dubai was booming at the material time: see, by way of examples, T1/123 (Mr Michael Manz) and T4/75 (Ms Habr). The fact that the Project was not selling in a buoyant market was, as seen, the cause of intense concern for Mr Al Gaddah.

94. The next enumerated cause was “force majeure”. It is not suggested that force majeure was applicable; no more need be said of it.

95. The cause which followed was at the centre of the debate on this Issue, namely “MAG action or in-action”. So too, was the proviso (“the proviso”), requiring ASW to establish that it had displayed the “reasonable care and skill expected from an international sales coordination and management company while performing the Services during the occurrence of such causes”. ASW thus focused on MAG’s alleged actions and/or inaction. MAG denied that any of its alleged actions and/or inactions were causative and submitted that, in any event, ASW had not complied with the proviso.

96. Given the width of the provision as to “MAG action or in-action”, it is unsurprising that no cause outside the non-exhaustive enumerated list was referred to or relied upon.

97. It should be noted that cl. 4.6 has a causation requirement. ASW would only be deemed not to be in breach insofar as its failure to achieve the Target “is attributable” to causes outside its control. The mere fact (if it be the fact) that MAG could be criticised for actions or inaction, would not itself excuse ASW. Only if such MAG action or inaction could be shown to have caused the shortfall in meeting the Target, would cl. 4.6 assist ASW.

98. In the course of the Trial, I posed the question as to the position which would prevail if failings on the part of both parties resulted in the shortfall. Mr Bor drew my attention to Lewison, The Interpretation of Contracts (8th ed.), at para. 1340, where, in the context of force majeure clauses, first instance authority was cited for the proposition that “…the triggering event must be the sole cause of the failure to perform”; thus, “but for” the force majeure event, the party in default would have performed its obligation. Ultimately, however, it was a question of the construction of the contract.

99. In the present case, as it seems to me, ASW could only rely on cl. 4.6 of the SCA, if:

100. (B) The rival cases: For ASW, Mr Doherty submitted that, insofar as ASW had failed to meet the Target, that failure was attributable to “MAG action or in-action” and was therefore outside its control; accordingly, as provided by cl. 4.6, ASW was not deemed to be in breach of the SCA. Furthermore, ASW had throughout complied with the reasonable skill and care proviso.

101. ASW targeted its criticisms on the marketing materials, the inadequacy (as it submitted) of the MAG marketing budget and the sales and marketing teams; a Head of Sales had not been appointed until 19 April 2022 (T1/181-182 and Bundle, p.1155). So too, Mr Al Gaddah’s “top-down” management style had delayed decision-making and, as seen in connection with the May meetings (above), Mr Al Gaddah did not react well to criticism. MAG had terminated its design studio but not replaced it, so that renders remained lacking – an important failure given that these were high-value off plan property purchases, aggravated by the sales centre which had not been completed. Matters had improved in April after ASW had been called upon to play an enhanced, executive role (T5/184 and Bundle, p.1130) and, thereafter in May, when all that changed was a belated increase in commission rates for the brokers. As regards extending the number of brokers, there had been a common understanding of the desirability of doing so (T2/11), subject only to ensuring compliance with Marriott’s requirements and orderly marketing considerations. Criticism of the Kalinka May event had been overstated; it had created a buzz in the Russian sector of the market. Particular damage to sales efforts was caused when ASW had been “shut out” (as summarised above) on 16 July from MAG’s Salesforce system and dealings with MAG’s employees: 10 RAs had been executed in the month preceding 16 July, whereas 2 (perhaps 3) were executed in the month following 16 July (Bundle, pp. 6965- 6966).

102. For MAG, Mr Bor submitted that the cause of ASW’s failure to meet the Target was its unsuccessful strategy of concentrating on international (or global) brokers to the exclusion of local brokers. Relying on the evidence of Ms Habr (T4/72), he contended that ASW had lacked a strategic plan and had not given much thought to the peculiarities of the Dubai market, in which foreign buyers engaged with local brokers to purchase properties in the UAE (T4/79). Strategy was an ASW responsibility (T5/183-184), as were many of the marketing related matters of which ASW made complaint. The Kalinka (May) event demonstrated a “shoddy” failure of supervision and coordination. In any event, ASW had not demonstrated that the MAG failures on which ASW relied had caused the failure to meet the Target. Though given leave to do so, ASW had not called any expert evidence on causation. Pulling the threads together, Mr Bor said this (at T5/182):

103. (C) Discussion and conclusions: The stuttering start of the Project before it turned a corner from May 2022 is difficult to disentangle and, to me at least, appears to be the result of a combination of factors – the view to which I have come after threading my way through starkly conflicting, partisan, evidence. Mr Grosse’s reference in evidence (set out above) to a “kaleidoscope of variables” resonated with me.

104. ASW’s initial strategy of placing reliance on international/global brokers is understandable given brand power (T2/7, above) and the ability to reach a large customer base. It is difficult to fault as a starting point, all the more so as the likely market segment of purchasers was foreign or expatriate. However, as an exclusive strategy it was exposed to the risk of a lack of local know-how or understanding. That the likely purchasers of Project properties were foreign, did not mean that local knowhow could or should be overlooked. Moreover, if the international brokers did not make rapid progress in a booming market – with the attendant risk of reputational damage (as Mr Al Gaddah and Ms Habr explained) – swift adjustment was called for; that did not happen. Thus, as it seemed to me, a more nuanced approach was called for than appears from ASW’s approach to engaging brokers.

105. Pausing there, I should not be thought of as endorsing Ms Habr’s criticism of the focus on the Russian sector of the market, which (as indicated during the Hearing, T4/94- 95), with respect, I found difficult to follow. The number of Russian and Eastern European purchasers is noteworthy (Bundle, pp. 6965 and following); following the Russian invasion of Ukraine, this was an obvious sector of the market to pursue – and as was clear from the purchases made, not a sector deterred by sanctions (at least at that stage). Instead, the question which mattered was how best to market and sell to this sector. At this stage of the argument, Ms Habr’s evidence as to sales taking place through brokers with local know-how, became more persuasive.

106. At this stage too, ASW’s, with respect, somewhat condescending approach to local business practices, as contrasted with the “Swiss way” (T1/168) could not have helped – a fortiori, in the absence of strong results. While there is plainly room for debate as to ASW’s willingness to expand the broker field and, equally plainly, a need to ensure compliance with Marriott requirements and sensible marketing practice (not having 15 Ferrari dealers in one city, see above), there are nonetheless disquieting observations in the documents. Thus, while making every allowance for abrasive (even unattractive) language in robust business email exchanges, disparaging references to “rogue brokers” (Bundle, 1032) and not really “doing a bazaar” here (Bundle, 1315) suggest a mindset which would not have assisted dealings with either MAG or local brokers. Against this background, I am unable to accept that ASW welcomed the introduction of local brokers to the extent its witnesses suggested at the Trial. For similar reasons, ASW’s readiness to adjust its strategy would have been impeded.

107. There is clearly some force in ASW’s submission that Mr Manz’s enhanced executive role in April 2022 suggested a continuing degree of confidence on the part of MAG in ASW. However, any comfort for ASW in this regard requires substantial qualification. First, by April, I conclude that Mr Al Gaddah was extremely concerned and casting around for any possible solution to the lack of sales progress. Secondly, the sizeable sales leads of which Mr Michael Manz spoke (Bundle, p.1655, see above), appear to have come to nothing. Thirdly, in May, as already seen, Mr Al Gaddah instructed Mr Al Dewaari to take the lead on the Project, so reversing Mr Manz’s April elevation.

108. May 2022 additionally saw both the expanded involvement of local brokers and increased commission available to brokers, with the improved results already discussed.

109. All that said so far as to ASW, MAG too appears to have been struggling. The sales centre was not completed as early as would have been desirable (see the exchanges referred to above). Additional renders should undoubtedly have been available sooner than they were; confidence in off plan marketing and sales required no less. There were obviously some staffing difficulties in the marketing and sales areas, even if overstated by ASW. So too, on the evidence of the contemporaneous documents from May 2022, Mr Al Gaddah – the key MAG decision-maker – and Ms Habra verged on the over-sensitive and were not immediately receptive to criticism or proposals as to budgeting, brochures and other measures to gain the market’s trust.

110. Pulling all these threads together, I am unable to accept that ASW’s failure to meet the Target was attributable to causes outside its control.

111. For all these reasons, ASW fails to make good its case under cl. 4.6 of the SCA on the ground of causation, even assuming that it complied with the (reasonable skill and care) proviso. In the circumstances, it is unnecessary to reach a final conclusion on the proviso and I do not do so.

Issue VI: Was MAG Entitled To Terminate The SCA When It Did Or Did Such Termination Amount To Repudiatory Breach?

112. (A) Introduction: This Issue arises from MAG purporting to exercise its right to terminate the SCA on 18 August, as already set out. For reasons which will become apparent under Issue VII below, this Issue is essentially academic. I was, however, addressed on it and therefore deal with it.

113. (B) The scheme of the SCA: The relevant clauses have all been set out above. On the conclusions so far reached, ASW failed to meet the Target in Q1 2022 (cll. 4.3 and 4.4) and cannot excuse that failure by reliance on cl. 4.6.

114. Accordingly, under cl. 4.8, ASW “…shall be deemed to be in material breach of the terms of this Agreement and shall have an additional three (3) month period to rectify such breach and meet the Target (including any shortfall in the preceding quarter).” As already concluded, ASW did not make good the shortfall in Q2 2022 (see also cl. 4.7).

115. On this footing, on 15 August 2022 (six months after the date sales actually commenced, Issue II above), cl. 4.9 applied, so that “…MAG will have the right to terminate this Agreement pursuant to Clause 11.”

116. In the circumstances, cl. 11(2)(a) is applicable. Thus, “Without limiting its other rights or remedies” MAG “…may terminate the Agreement with immediate effect by giving written notice” to ASW if:

117. The dispute under this Issue centred on the true construction of cl. 11. In a nutshell, Mr Bor submitted that MAG was entitled to terminate the SCA on 15 or 16 August; by contrast, Mr Doherty contended that the earliest MAG was entitled to terminate the SCA was 15 or 16 August plus 30 days (i.e., thus 14 or 15 September, which, for convenience, I will take as 15 September). Before indicating my view on this dispute, it is right to say a brief word about the July shut out.

118. (C) The July shut out: As already summarised, on or about 16 July, MAG blocked ASW’s access to MAG’s “Salesforce” system and instructed its employees to cease dealings with employees of ASW. In my judgment, these actions by MAG were unjustified. The suggestion that they were taken because of settlement negotiations is fanciful; furthermore, the threatening tone of the instructions to MAG employees was unwarranted (and unattractive). These actions could, at least arguably, have been characterised as material and repudiatory breaches of the SCA but it is unnecessary to reach a conclusion in this regard. Quite properly, ASW’s then legal representatives gave MAG 30 days to remedy the breaches; what followed in August rendered this point of theoretical interest only.

119. (D) MAG’s purported termination of the SCA in August 2022: There is something in Mr Bor’s submission but, with respect, not quite enough. I therefore prefer Mr Doherty’s approach to the construction of cl. 11 on this Issue.

120. Mr Bor underlined the curiosity of adding an additional 30 days under cl. 11 to the 3 months allowed under cl. 4.8 to remedy the “material breach”. That consideration led him to contend that the parties did not intend to stipulate for any such additional period. Additionally, the opening words of cl. 11.2 preserved MAG’s common law rights (including) to the right to terminate the SCA for repudiatory breach. Moreover, it was arguable that by this point in time – Q1 and Q2 both having elapsed – the failure to meet the Target in those Quarters was not capable of remedy.

121. In my judgment, however, first, the plain language of cl. 11.2(a) requires the additional 30 days before exercising the right to terminate under that clause. Were it otherwise, the wording “within 30 days of receiving written notice of the breach” would be deprived of meaning. The plain wording in which the parties expressed their bargain here outweighs any curiosity attached to the additional notice provision.

122. Secondly, so far as concerns common law rights preserved by the opening words of cl. 11.2, there could be room for argument as to whether the parties intended those rights to prevail (and remove the requirement of written notice), where the circumstances involved an overlap between common law rights and the provisions of the clause. That, however, matters not because I would not, without more, have been satisfied that Mr Bor had demonstrated a case of common law repudiatory breach on the basis of the contractual Target not having been met for two Quarters (especially with an improving trajectory). In my view, it is not at all self-evident that MAG was thereby deprived of substantially the whole benefit of the SCA.

123. Thirdly, I am likewise not persuaded that the breach was irremediable given the provisions of cl. 4.7 of the SCA. At the least, I would have required further argument on that issue before acceding to it.

124. For completeness, I do accept Mr Bor’s submission that holding a performance review was not a condition precedent for, or otherwise a bar to, exercising the right to terminate the SCA under cl. 11.2. Nothing, however, turns on that consideration.

125. (E) Conclusion: Accordingly, for the reasons given, I conclude that MAG’s purported termination of the SCA on 18 August was premature and that the earliest date on which MAG could properly have exercised the right to terminate under cl. 11.2 was 15 September 2022. It necessarily follows that MAG’s purported termination of the SCA on 18 August 2022 was itself a repudiatory breach of the contract.

126. I add that I have not overlooked Mr Doherty’s argument as to Braganza v BP Shipping Ltd [2015] UKSC 17; [2015] 1 WLR 1661 but, as indicated in argument, I do not regard this authority as of assistance.

Issue VII: If MAG Was In Repudiatory Breach When It Purported To Terminate The SCA, Would It Have Acquired A Right To Terminate At Some Other Time And, If So, When?

127. In the event and by reason of the conclusions already reached, this Issue can be disposed of very shortly indeed.

128. MAG’s purported termination of the SCA in August 2022 was, as I have held, premature. On the same facts, however, MAG would be and plainly was entitled to exercise its right under cl. 11.2(a) of the SCA to terminate the contract on 15 September 2022 – i.e., one month later. Nothing changed or could change in the interim.

129. It follows that MAG’s repudiation of the SCA in August 2022 entitled ASW to no more than nominal damages: see, The Mihalis Angelos [1971] 1 QB 164, esp. at p.210.

Issue VIII: To What, If Any, Commission Was ASW Entitled On Termination?

130. (A) Introduction: Issue VIII raises the question as to what, if any, commission ASW was entitled on 15 September 2022, when MAG terminated the SCA? The Issue turns on the true construction of cl. 11.5 of the SCA (already set out).

131. (B) The rival cases: It is convenient to start with MAG’s submissions, addressing ASW’s argument that the wording “…on all sales …substantially negotiated prior to termination” was satisfied by the conclusion of RAs, so that ASW was entitled to a substantial commission payment. Mr Bor resisted this approach, urging instead that the answer to this Issue was “nothing”.

132. First, Mr Bor submitted, cl. 11.5 did no more than confirm the common law position that rights “that have accrued to termination will survive the contract”. The clause did not create free-standing rights not yet accrued. The scope of the clause was confined by the important wording “…rights…which may have accrued up to the date of …termination”. Secondly, insofar as the later wording in the clause “…or substantially negotiated prior to termination” could not be reconciled with the earlier wording going to accrued rights, the earlier wording prevailed. By the application of the principle in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38; [2009] 1 AC 1101, the wording “substantially negotiated” was to be replaced with the wording “substantially completed”. Alternatively, the wording “substantially negotiated” added nothing to the clause and contradicted other provisions of the SCA; accordingly, it should be ignored altogether: Merthyr v Merthyr [2019] EWCA Civ 526, at [39]. In any event, the wording “substantially negotiated” was not thereby deprived of meaning; it was given meaning as and when the final sentence of cl. 3.4 applied regarding payment of the purchase price by instalments. In the further alternative, even if (which MAG denied) the wording “substantially negotiated” was capable of having the meaning contended for by ASW, MAG’s construction should be preferred by operation of the contra proferentem rule. Thirdly, the conclusion of an RA did not make good the requirement that a sale had been “substantially negotiated”; the RA was to be contrasted in this regard with an SPA (Bundle, pp. 1680, 1689).

133. For ASW, Mr Doherty submitted that the wording “substantially negotiated” was to be given effect and entitled ASW to a substantial payment of commission on termination of the SCA. As a matter of commercial common sense “substantially negotiated” simply meant “something prior to completion”, i.e., something prior to the formal execution of the SPA because otherwise it would have no meaning. Cl. 3.4 of the SCA dealt with different topics and added nothing here. In the present context, the requirement that a sale had been “substantially negotiated” was satisfied by the conclusion of an RA. Even if (as decided above) other Issues turned on the conclusion of an SPA (rather than an RA) while the SCA was continuing, the position on termination was different; the relationship was at an end, and the aim at this point in time was fair payment for work done. The MAG argument as to accrued rights hinging on the satisfaction of the conditions set out in cl. 3.2 of the SCA proved too much; if all hinged on the issuing of an “Oqood”, SPAs could be signed and 20% of the purchase price paid but ASW would not be entitled to any commission. Mr Doherty underlined that, here, by 15 September 2022, a number of SPAs had indeed been concluded (Bundle, pp. 6965 and following) but ASW had not been paid anything at all.

134. It will be noted that the emphasis of the rival cases rested on the conclusion of RAs, rather than the SPAs which had been concluded by 15 September 2022. On the part of ASW, the forensic reasoning is understandable: concluded RAs yielded a larger recovery than concluded SPAs (see the figures, below). From the opposite end, MAG’s interest lay in a knock-out blow (no recovery), rather than liability for a smaller sum, calculated with reference to concluded SPAs, arising from a fallback argument.

135. In the event, Mr Bor submitted (T5/212) that ASW’s case would have been more reasonable had it sought to link the wording “substantially negotiated” to signing of SPAs, rather than the conclusion of RAs. By reason of the same objections as those he advanced in respect of the RAs, a claim based on the signing of SPAs would still fail but it had in any event not been pleaded. ASW’s case, Mr Bor contended, involved an all or nothing approach in reliance on conclusion of the RAs.

136. (C) Discussion and conclusions: I proceed in stages, to begin with considering whether meaning is to be given to the words “substantially negotiated”, thereafter, if the answer is “yes”, what that meaning should be.

137. I have no hesitation in concluding that some meaning must be given to the words “substantially negotiated”. In my judgment, that is achieved by construing cl. 11.5 as a whole, giving a meaning to all its wording. Having regard to the structure of the clause, I am not persuaded that a focus on the wording “may have accrued” serves to deprive the later wording of meaning. Thus, the clause defined the rights which may have accrued up to the date of termination as “including” payment of commission to ASW “on all sales substantially completed or substantially negotiated” prior to termination. The wording “rights…which may have accrued…including” meant that those which followed were not necessarily exhaustive of the rights which may have accrued; but the clause was thus designed to include not exclude commission on sales “substantially negotiated” prior to termination, whatever other rights may have accrued. It is improbable that the parties dealt in terms with sales “substantially negotiated” only in order then to exclude any such sales from giving rise to the payment of commission. That all the conditions in cl. 3.2 may not have been fulfilled, seems to me to be neither here nor there in the light of the specific language of cl. 11.5 itself.

138. Additionally, I am unable to accept any of the suggested bases for ignoring the wording “substantially negotiated” or assigning no meaning to those words. The Chartbrook principle requires establishing that an error has been made with regard to the words used and, equally clearly, a solid foundation for replacing them with the proposed substitute wording. Nothing of that is at all evident here. Nor do I think that the wording “substantially negotiated” added nothing to the clause (so that it could properly be ignored) or that it contradicted other provisions of the SCA, at all or in a manner requiring it to be ignored; on the construction I favour, all the words of the clause can be accommodated. Further still, I see no scope here for any proper resort to the contra proferentem rule. Ultimately, in my view, the choice here is between giving the wording “substantially negotiated” a meaning or ignoring that wording (which, for the reasons given I do not think it would be right to do); I cannot agree that cl. 3.4 (insofar as it deals with instalment payments) provides a via media assisting the MAG case.

139. Accordingly, Mr Bor’s proposed knock-out blow fails. The next question is what meaning is to be given to the words “substantially negotiated”?

140. The straightforward meaning of the language “all sales…substantially negotiated” when contrasted with “all sales substantially completed” is that (as Mr Doherty contended) it meant something prior to completion, because otherwise it had no meaning. It remains, however, to resolve the question of whether the clause is satisfied by signature of RAs or required signature of SPAs. Initially, I saw attraction in Mr Doherty’s attempt to link “substantially negotiated” to signature of RAs but, on reflection, I was not persuaded. I conclude instead that to satisfy the wording “all sales…substantially negotiated prior to termination” required signature of SPAs, not simply RAs. My reasons follow.

141. First, the pleading point raised by Mr Bor does not deter me from considering and deciding this Issue by reference to the signature of SPAs. Although, technically, Mr Bor may well be right as to ASW’s pleaded case, the possible reliance on signature of SPAs has been live at least since ASW’s Skeleton Argument - where it was flagged (at para. 49b), albeit plainly not as a preferred outcome for ASW. Moreover, as Mr Bor made clear, his objections to ASW’s reliance on signed SPAs were based on the same grounds as those advanced by MAG in opposition to ASW’s reliance on signed RAs. There is accordingly no prejudice to MAG in my taking into account the signature of SPAs.

142. Secondly, as elsewhere when considering the SCA, notably in deciding under Issue III that Target revenue was only to be treated as earned when an SPA, not an RA, had been signed, it is the conclusion of an SPA which is key – not “merely” the conclusion of an RA. While conclusion of an RA is plainly an event of significance, signing of an SPA constituted the necessary condition for Target revenue to be treated as earned while the relationship between the parties was continuing. Mr Doherty urged that the position was different at the stage of termination, because the focus had shifted from future business to “fair remuneration”. To my mind, that is altogether too great a leap; there is nothing in the scheme of the SCA to warrant it. In any event, the search here is for an appropriate and workable touchstone. A consistent approach to the construction of the SCA overall, points to the touchstone being signature of SPAs, furnishing a workable, practical, objectively ascertainable line in the circumstances of termination.

143. Thirdly, whatever force Mr Bor’s point might have had as to an RA not having been “substantially negotiated” (a matter on which I do not need to and do not express a conclusion), that submission lacks force if the test is signature of an SPA. That the SPA contemplated further variations (having regard to the “off plan” nature of the sale) matters not; it cannot realistically be said that, at least generally, an SPA would be concluded without substantial negotiation. In any event, if signature of an SPA did not suffice to satisfy the test of substantial negotiation, it is difficult to see what would – and that would entail giving no meaning to the wording “substantially negotiated”, an argument I have already rejected.

144. Fourthly, the fact that an Oqood had not been issued (SCA, cl. 3.2(c)) is irrelevant. The touchstone is not whether all the conditions of cl. 3.2 have been satisfied but whether an SPA has been signed.

145. Fifthly and looked at in the round, the construction of the SCA which I favour is fortified by considerations of commercial common sense. The language in which the parties chose to express their agreement does not suggest that termination was intended to produce an all or nothing outcome. But for ASW to be entitled to commission, a sale must have been either “substantially completed” or “substantially negotiated”. The commercial balance is apparent and is well reflected if the dividing line (for “substantially negotiated”) is signature of SPAs. For completeness, I am not deterred from this conclusion by the consideration that it would or might apply in the case of insolvency.

146. On the basis of my conclusion that signature of SPAs satisfied the cl. 11.5 requirement of “substantially negotiated”, the amount of the commission to which ASW was entitled (as a figure) was not in dispute and appears from para. 49b of its Skeleton Argument: namely, by 15 September 2022, the total volume of Residential Unit sales for which there was an executed SPA totalled AED 192,860,920, entitling ASW to commission of AED 1,928,609.20 (akin to USD 525,091.63 at the time of the Trial).

Overall Outcome; Costs and Interest

147. Overall Outcome: It is convenient to summarise my answers to each of the Issues:

148. Costs and Interest: In the light of my decision, it is to be hoped that the parties will agree costs and interest. In the event, however, that no such agreement is reached within 28 days of the date of this Judgment, the parties must then exchange short submissions on Costs and Interest of no more than 5 pages each (min font size 12, min line spacing 1.5), to be followed within 14 days thereafter by short reply submissions of no more than 3 pages each.