December 24, 2024 COURT OF FIRST INSTANCE - ORDERS
Claim No: CFI 095/2023
IN THE COURTS OF DUBAI INTERNATIONAL FINANCIAL CENTRE
IN THE COURT OF FIRST INSTANCE
BETWEEN
AHMED SEDDIQ MOHAMED SAMEA ALMUTAWA
Claimant
and
MOHAMED SEDDIQ MOHAMED SAMEA AL MUTAWA
Defendant
ORDER WITH REASONS OF JUSTICE RENE LE MIERE
UPON the Part 7 Claim Form dated 20 December 2023 (the “Claim”)
AND UPON the Defendant’s Application No. CFI-095-2023/4 dated 26 November 2024 seeking to rely on experts and to file an expert report (the “Application”)
AND UPON the Claimant’s evidence in answer to the Application dated 10 December 2024
AND UPON the Defendant’s evidence in reply dated 17 December 2024
AND PURSUANT TO the Rules of the DIFC Courts (the “RDC”)
IT IS HEREBY ORDERED THAT:
1. The Application is granted.
2. The Defendant is granted permission to file an expert report on the accuracy and completeness of the Deloitte Report used for the company’s valuation, including the extent to which it was a draft and not final, whether it reflected the company's actual value at the time of signing and completing the SPA, and the actual value at the time of signing or completing the SPA. The report is not to deal with the company’s current value.
3. The parties must confer on directions for the filing and service of the Defendant’s expert report, any responsive expert evidence by the Claimant and, if the Claimant serves an expert report, a meeting of the experts and a joint expert report stating:
(a) the matters on which they agree;
(b) the matters on which they disagree;
(c) for each point of disagreement, a concise explanation of why the experts hold different views;
(d) a summary table or section that outlines the positions of each expert on the key issues; and
(e) references to the evidence and data that each expert has relied upon to inform their opinions where those opinions differ.
4. By 24 January 2025, the parties must file a minute of agreed directions or, if they cannot agree, each party is to file a minute of the directions they propose, and the Court will then make directions without a further hearing.
5. The costs of this Application shall be costs in the case.
Issued by:
Delvin Sumo
Assistant Registrar
Date of Issue: 24 December 2024
At: 9am
SCHEDULE OF REASONS
Summary
1. The Claimant, Mr. Ahmed Seddiq Mohammed Samea Almutawa, is the elder brother of the Defendant, Mr. Mohamed Seddiq Mohamed Samea Almutawa. They are both UAE nationals and reside in Abu Dhabi.
2. In 2018, the Claimant held 70% and the Defendant 30% of the shares in Atlas Dynamic Electronic System LLC (the “company"). On 25 November 2018, the Claimant agreed to sell his shares to the Defendant for AED 16,030,000 by a sale and purchase agreement (the SPA). The Defendant failed to meet his obligations under the SPA. Consequently, the Claimant demanded payment of the amount due under the SPA.
3. The Claimant claims the amount due under the SPA.
4. The Claimant has applied for permission to rely on experts and to file an expert report.
5. The Application is opposed.
6. For the reasons that follow:
(a) The Court will grant the Defendant permission to file an expert report on the accuracy and completeness of the Deloitte Report used for the company’s valuation, including the extent to which it was a draft and not final, whether it reflected the company's actual value at the time of signing and completing the SPA, and the actual value at the time of signing or completing the SPA. The report is not to deal with the company’s current value.
(b) The parties must confer on directions for the filing and service of the Defendant’s expert report, any responsive expert evidence by the Claimant and, if the Claimant serves an expert report, a meeting of the experts and a joint expert report stating:
i. the matters on which they agree;
ii. the matters on which they disagree;
iii. for each point of disagreement, a concise explanation of why the experts hold different views;
iv. a summary table or section that outlines the positions of each expert on the key issues; and
v. references to the evidence and data that each expert has relied upon to inform their opinions where those opinions differ.
(c) By 24 January 2025, the parties must file a minute of agreed directions or, if they cannot agree, each party is to file a minute of the directions they propose, and the Court will then make directions without a further hearing.
(d) The costs of this application will be costs in the case.
The Application
7. The Defendant seeks to rely on expert evidence of the value of Alsaher Telecom LLC, formerly known as Atlas Dynamic Electronic Systems LLC. The Defendant also seeks to introduce an independent expert's report to assess the current valuation of the business, its assets, and the fair market value of its equity.
8. The Defendant says this request is driven by the inadequacies of the draft valuation report prepared by Deloitte in August 2018, which was intended for internal decisionmaking and not finalised. The Deloitte Draft Valuation Report contained several limitations, including reliance on unaudited management accounts, exclusion of liquidityrelated adjustments, and assumptions about future business plans and secured contracts that did not materialise. These limitations, along with the absence of a final report, have led the Defendant to argue that the draft report does not accurately reflect the true value of the company at the time of the Share Sale and Purchase Agreement in November 2019.
9. The Defendant emphasises the need for a current and accurate valuation that addresses these limitations and reflects the present circumstances of the company, including the influence of the Atlas brand name on its marketability and potential contracts. The Defendant requests permission to serve expert evidence based on a comprehensive and updated valuation.
10. The Defendant has not engaged an expert because the expert has not yet been identified, and the Defendant is currently in the process of identifying an expert to instruct, subject to agreement on the expert’s fees and availability
Claimant opposes the Application
11. The Claimant filed a witness statement by Walaa Belacy, the Chief Financial Officer of Atlas Group. The Claimant challenges the Defendant's application on several grounds, emphasizing procedural violations and the Defendant's delay in identifying an expert
12. The Claimant argues that the Defendant's Application to rely on expert evidence is untimely and procedurally improper. It seeks to expand the scope of the expert's role beyond the original dispute, which is confined to the company's valuation as of 2018.
13. The Claimant highlights that the Defendant has had ample opportunity to engage an expert since the dispute began in 2021 but failed to do so until late in the proceedings. The Claimant asserts that the Defendant's attempt to introduce a current valuation is irrelevant to the issues in dispute and violates the Rules of the DIFC Courts (the “RDC”).
14. The Claimant further contends that the Defendant's reliance on the draft status of the Deloitte Valuation Report from 2018 is a tactic to delay proceedings. The Defendant accepted the draft report during the transaction without raising concerns about its limitations or requesting a final version. The Claimant argues that the Defendant's current challenge to the draft report is inconsistent with their previous actions and is an attempt to introduce unnecessary delays costs. The Claimant requests that the Court deny the Defendant's Application for expert evidence or, if granted, restrict it to the original scope of the dispute.
Rules
15. RDC 31 outlines the Court's authority to regulate the use of expert evidence, emphasising that such evidence should be limited to what is necessary for resolving the case. Parties are required to obtain the Court's permission before calling an expert or submitting an expert's report, typically requested during the Case Management Conference. When seeking permission, parties must specify the field of expertise and, if possible, the expert they intend to use. If permission is granted, it is restricted to the identified expert or field. The court may also decide whether expert reports should be exchanged sequentially or simultaneously, a decision usually made at the Case Management Conference. Expert evidence is generally presented in a written report unless the court orders otherwise.
Matters in issue
16. The issues in contention between the Claimant and the Defendant on the pleadings include the Defendant’s breach of the SPA by failing to pay the monthly instalments, the Defendant’s claim of not fully and voluntarily assenting to the SPA due to coercion, duress, or undue influence, and his lack of capacity to understand the contract.
17. The Defendant disputes the relevance and accuracy of the Deloitte Report used for the company’s valuation, arguing it was a draft and not final, and did not reflect the company's actual value at the time of signing the SPA. He also claims the SPA incorrectly used the Deloitte Report’s range as the consideration amount and that he was under distress due to pressure and time limits for securing high-value contracts.
18. The Claimant asserts that the Defendant was aware of the consideration amount and denies causing any loss, refusing to sign contracts, or putting pressure on the Defendant.
19. The current value of the company is not an issue raised by the pleadings
Permission granted
20. The first consideration when deciding whether to grant permission to adduce expert evidence is whether it is necessary to resolve the issues in the case. The evidence must be relevant and likely to assist the court in making a just decision.
21. The issues include the accuracy and completeness of the Deloitte Report used for the company’s valuation and its value at the time the SPA was signed and completed. Expert evidence on those matters will likely assist the Court in resolving the case justly.
22. The Court must evaluate the scope of the expert's evidence to ensure it is confined to the relevant issues and does not extend beyond what is necessary. The evidence should not address the current value of the company because that is not a relevant issue.
23. The court considers whether the benefits of the expert evidence justify the costs and time involved. This includes assessing whether the evidence is proportionate to the complexity and value of the case. The evidence in this case should be confined to the issues I have identified. Thus, confined, the expert evidence will be proportionate to the complexity and value of the case.
24. I will give the Defendant permission to file an expert report, confined as I have stated. However, I will not, at this stage, allow the expert report to be adduced in evidence.
25. The expert must have appropriate qualifications and expertise to ensure they are suitably qualified to provide an opinion on the matter at hand. They must also be independent and impartial, with no conflicts of interest that could affect their testimony. Until the Defendant has identified the expert, the Court cannot determine whether they meet those criteria.
26. The Court will grant the Defendant permission to file an expert report. It will be confined to the accuracy and completeness of the Deloitte Report used for the company’s valuation, including the extent to which it was a draft and not final, whether it reflected the company's actual value at the time of signing and completing the SPA, and the actual value at the time of signing or completing the SPA. The report is not to deal with the current value of the company. That is not a matter in issue on the pleadings.
27. The parties must confer on directions for the filing and service of the Defendant’s expert report, any responsive expert evidence by the Claimant and, if the Claimant serves an expert report, a meeting of the experts and a joint expert report stating:
(a) the matters on which they agree;
(b) the matters on which they disagree;
(c) for each point of disagreement, a concise explanation of why the experts hold different views;
(d) a summary table or section that outlines the positions of each expert on the key issues; and
(e) references to the evidence and data that each expert has relied upon to inform their opinions where those opinions differ.
28. By 24 January 2025, the parties must file a minute of agreed directions or, if they cannot agree, each party is to file a minute of the directions they propose, and the Court will then make directions without a further hearing.
29. The costs of this Application will be costs in the case.
