September 11, 2024 COURT OF FIRST INSTANCE - ORDERS
Claim No: CFI 079/2023
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
(1) THAMER ABDULAZIZ ALBULAIHID
(2) MOUSTAFA EL SAYED ABDULGHANI EL SHAFAEI
Claimants
and
(1) NASSER SHEHATA
(2) HEALTH INSIGHTS FZ-LLC
(3) HEALTH INSIGHTS ASIA (L) BHD
Defendants
ORDER WITH REASONS OF JUSTICE RENE LE MIERE
UPON the Part 8 Claim Form dated 23 October 2023 (the “Claim” or “Claim Form”)
AND UPON the Order with Reasons of Justice Le Miere dated 12 July 2024 (the “Order”)
AND UPON the Claimant’s Application No. CFI-079-2023/5 dated 28 August 2024 (the “Application”) seeking an extension of time for the filing of the Reply and Defence to Counterclaim
AND UPON the witness statement of Nasser Shehata dated 9 September 2024
AND PURSUANT TO the Rules of the DIFC Courts (the “RDC”)
IT IS HEREBY ORDERED THAT:
1. The Application is granted.
2. The time for the submission of the Reply and Defence to Counterclaim shall be extended to 4pm (GST) on Wednesday, 18 September 2024.
3. The costs of the Application shall be in costs in the case.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 11 September 2024
At: 1pm
SCHEDULE OF REASONS
Summary
1. By Application No. CFI-079-2023/5 issued on 28 August 2024, the Claimants applied for an order that the time for the submission of the Reply and Defence to Counterclaim be extended by 21 days from 28 August 2024 to 18 September 2024 (the “Application”).
2. For the reasons which follow:
a) The Claimants Application shall be granted.
b) The time for the submission of the Reply and Defence to Counterclaim will be extended to 18 September 2024.
c) The costs of the Application shall be in costs in the case.
The Order
3. By paragraph 5 of the Order issued on 12 July 2024 (the “Order”), the Claimants were directed to file the Reply and Defence to Counterclaim (with any supporting documents) (the “Reply”) by no later than 4pm (GST) on Wednesday, 28 August 2024.
Claimants’ reasons for the Application
4. The Claimants seek the extension of time on the ground that they require additional time to prepare the Reply and Defence to Counterclaim for the following five reasons.
5. First, the Defence and Counterclaim filed by the First Defendant on 7 August 2024 contains substantial new claims and allegations (most of which were not previously made by the Defendants during the Part 8 proceedings) that require significant factual investigation. In particular, the Counterclaim advances a substantial claim for unfair prejudice wherein it is alleged:
a) That the Claimants have breached their duties to the Second Defendant to exercise their powers only for a proper purpose by seeking to remove the First Defendant from the management of the Second Defendant so as to write off debts owed by Al Khaleej to the Second Defendant and/or so as to divert revenues from the Second Defendant; and
b) That the Claimants have breached their duties to the Second Defendant to act in good faith, lawfully and in the best interests of the Second Defendant, and to act in a way which avoided conflicts of interest, by:
i. causing companies owned by the Claimants, including Al Khaleej, to refrain from paying debts to the Second Defendant;
ii. participating in proceedings brought by the Second Defendant against Al Khaleej which Al Khaleej opposed;
iii. taking contradictory positions before the Egyptian and Saudi Arabian courts and the DIFC Courts;
iv. seeking to register interests in the MCC software which conflict with the Second Defendant’s rights;
v. permitting businesses owned by the Claimants to market, sell, and use the MCC software without recourse to the Second Defendant’s economic rights; and
vi. diverting business and revenues away from the Second Defendant to other companies owned or controlled by the Claimants.
6. In order to properly respond to the claims and allegations raised by the First Defendant, the Claimants require further time to investigate the factual position and prepare their Reply.
7. Second, the overriding objective of the Rules of the DIFC Courts (the “RDC”) is to enable the Courts to deal with cases justly. This includes ensuring that the parties are on an equal footing, saving expense, dealing with the case in ways which are proportionate and ensuring that the case is dealt with expeditiously and fairly. Providing this relatively short extension will contribute to procedural fairness and cost efficiencies as it will allow the Claimants to submit a Reply that is focused and particularised and that adequately addresses the issues raised in the Defence and Counterclaim. This extension will also avoid the need for amendments at a later stage, which will only result in additional costs.
8. Third, given the summer vacation period, members of the Claimants’ legal team have not been available during August (including both Leading and Junior Counsel) and as such, additional time is required for the purposes of preparing and filing the Reply.
9. Fourth, the extension sought (21 days) is relatively short. If the extension is granted, the Claimants will have had six weeks within which the prepare their Reply, which is reasonable and proportionate taking into account the issues raised in the Defence and Counterclaim and the availability issues of the Claimants’ legal team during summer vacation period.
10. Fifth, since no trial date has been set for this matter, the extension will not cause any trial date to be lost, nor will it cause any prejudice to the Defendants.
Defendants’ position
11. The Claimants sought the Defendants’ agreement to the Claimants’ request for an extension to 18 September 2024. The Defendants rejected the Claimants’ request, offering instead a ten-day extension.
12. The Defendants’ position on the Application is neutral. They say that a considerable period of time has already been allowed for the submission of pleadings, and it is a matter for the Court to determine whether the further lengthy extension sought by the Claimants is reasonable and proportionate, and whether it has offered a good reason for seeking such an extension.
Discussion
13. The Court may extend the time for compliance with any Court order (even if an application for extension is made after the time for compliance has expired) RDC 4.2(1).
14. I will exercise my discretion to extend time for filing the Reply and Defence to Counterclaim by 21 days from 28 August 2024 to 18 September 2024 for the following reasons:
a) The Claimants have given a good explanation for their failure to file the Reply and Defence to Counterclaim by 28 August 2024.
b) The trial date or likely trial date will not be affected by granting the extension.
c) The Application is not opposed by the Defendants.
d) The extension will cause no prejudice to the Defendants.
e) Denying the extension would cause substantial prejudice to the Claimants
Costs
15. On the one hand, the Claimants are the successful parties, further, the Application was reasonably necessary because the Defendants refused to agree the extension of time requested by the Claimants, but did not oppose the Application.
16. On the other hand, the Claimants sought dispensation from complying with an order of the Court and the Defendants did not oppose the order sought. The costs incurred by the Defendants are relatively minimal.
17. In all the circumstances, the fair and appropriate order as to costs is that costs be in the case
