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Claim No: CFI 001/2012

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai

IN THE COURT OF FIRST INSTANCE

BEFORE H.E. JUSTICE ALI AL MADHANI

Between

DIFC AUTHORITY

Applicant / Defendant

-v-

(1) SOPHIA AL SHAYKH 

(2) YAHYA AL SHAYKH

Respondent / First Claimant

Hearing: 5 February 2012

Counsel: Sophia Al Shaykh (Claimant in person)

Graham Lovett, Clifford Chance LLP for Defendant

Judgment: 12 February 2012

JUDGMENT

Introduction

2. The Applicant's reasons are that the Respondent, Sophia Al Shaykh, is the wife of Yahya Al Shaykhwho entered into an Employment Contract with DIFCA. Sophia Al Shaykhhas brought a claim before DIFCA seeking AED 200,000 relating to unpaid costsof relocation to France, return air ticket and relief compensation for reasons that DIFCA had asked her to wait for a positive solution to Yahya Al Shaykh's termination.

3. The Applicant insists that Sophia Al Shaykh was not a party to the Employment Contract and, on that basis, Sophia Al Shaykh cannot bring an action against DIFCA in relation to the termination of her husband's Employment Contract.

4. Sophia Al Shaykh failed to address any reasonable grounds or explain on what basis she has any rights to the claim brought against DIFCA. As no cause of action has been established by her, this court is required to strike out her claim according to Article 4.16 of the RDC.

5. The Application was served upon the Respondent and, as a result, Sophia Al Shaykh submitted a Defence on 25 January 2012 and Skeleton Arguments on 5 February 2012. The summary of the Respondent's defense to this application is as follows:

(a) Sophia Al Shaykh was named in DIFCA's records as the wife of Yahya Al Shaykh the contracting party with DIFCA and, as such, she was entitled to a business class air ticket, as stated in Article 5 of the Employment Contract of her husband.

(b) The mention of her by description as a wife of Yahya Al Shaykh — the contracting party makes Sophia Al Shaykha party and beneficiary to the contract; as such she can sue based on that capacity.

(c) After termination of Mr Yahya Al Shaykh's employment, Sophia Al Shaykh was requested by the Governor of the DIFC and DIFCA to wait for a fair solution — which did not occur.

(d) Sophia Al Shaykh was named in the initial claim brought before the Small Claims Tribunal and, therefore, her name was in the Order issued by the SCT Judge on 28 November 2011.

(e) The Dubai Ruler's Court, the Governor of the DIFC and DIFCA, by asking her to wait for a fair solution, prevented Sophia Al Shaykh from travelling to France to see her family and, therefore, she had to stay in Dubai incurring extra living costs.

(f) Sophia Al Shaykh advised that she had received several verbal and written remarks from the CEO of DIFCA that she claims were insulting which, ultimately, led her to sue for relief compensation of AED 126,000.00 due to the suffering caused to her by DIFCA as a result of the cruel termination of her husband.

(g) The Respondent then asked for the Application Notice CFI 001/2012/1 to be dismissed.

(h) There were also a number of points of fact that were irrelevant or un-established with reference to point of law and were, therefore, not considered.

6. On 5 February the Applicant submitted a Skeleton Argument and it can be summarised as follows:

The Finding

Was Sophia Al Shaykh a party to the Employment Contract?

8. It is quite right to say that, under traditional common law rules, the term of the contract is enforceable by only the party to the contract (the privity of the contract). However, DIFC Contract Law of 2004 has created an exception where a third party to a contract might enforce a term or certain rights given to him according to Article 104 as follows:

"(1) Subject to the provisions of this law, a person who is not a party to a contract (a "third party") may in his own right enforce a term of the contract if:

(a) The contract expressly provides that he may; or

(b) Subject to Article 104(2), the term purports to confer a benefit on him.

(2) Article 104(1)(b) does not apply if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party.

(3) The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into.

(4) This Article does not confer a right on a third party to enforce a term of a contract otherwise than subject to and in accordance with any other relevant terms of the contract."

9. Sophia AL Shaykh argues that she is entitled to claim the right of a return air ticket (AED 9,000), the cost of relocation (AED 65,000) and relief compensation (AED 126,000) as a third party to Yahya AL Shaykh's Employment Contract with DIFCA due to Article 104 of the DIFC Contract Law.

10. On reading Article 104(1) and (3) of the DIFC Contract Law — Sophia Al Shaykh seems to meet the description of a third party (dependent or spouse) under the terms of Yahya Al Shaykh's Employment Contract; having purported to confer a benefit on her under clause 5 of that Contract:

"The Employee shall be entitled to receive one return Business Class air ticket to the Employee's home country, for each year of employment.

Such entitlement will also apply to the Employee's dependents (spouse and up to three children under the age of 18 years old) residing with the Employee in the UAE. The tickets must be utilized by the Employee within one (1) year after it has accrued".

11. A similar situation arises in clause 10 of the Contract:

"…. and the Employee's approved dependents shall be entitled for coverage under DIFCA's private group medical insurance plan in effect and as may be amended from time to time."

12. And in regard of repatriation expenses as stated in the DIFCA Separation Policy:

The repatriation package consists of:

"One way ticket to home country, nearest international airport as per passport will be provided upon cancellation of residence visa (local & overseas hires) for employee and approved dependents (Spouse and 3 children who are having a valid UAE residence visa and residing at UAE.)

Relocation assistance (20-foot container by sea freight) will be provided to expatriates upon completion of visa cancellation formalities."

13. However, Article 104 (2) of the Contract Law provides that:

14. That means even if the third party has been given certain rights in a contract he still needs the parties of that contract, by consent, to give him the right to enforce such a right.

15. It's evident that Sophia Al Shaykh is not a party to the Employment Contract. She was never named as a party by the signing parties of that contract (DIFCA and Yahya Al Shaykh). The rights she is claiming for (ticket and cost of relocation) cannot be said to be given to her. It is in fact an employment benefit given to her husband and enforceable by him only as a party of that contract. What can be understood from clause 5 of that contract "… the equivalent cash value of tickets may also be taken by the Employee" is that the ticket entitlement or cash equivalent can be enforced by the employee himself and not his wife.

16. Furthermore, there is no explicit intention in the Employment Contract between DIFCA and Yahya Al Shaykh that gives Sophia Al Shaykh the direct right to enforce any right even with the assumption that such right did exist. It is fair to say that the court, while considering this issue, bears in mind that the right of (ticket and cost of relocation) can be claimed by the husband of the Respondent and the court presumes he is doing so in the Particulars of Claim.

17. Accordingly, this court is not convinced that the Respondent has put forward arguable grounds that she was a party to Employment Contract nor was she given any right to enforce any terms of it.

Does the Respondent rely on any other cause of action apart from the Employment Contract?

20. The Respondent to pay the cost of this application to be assessed by the Registrar if not agreed.

H.E. Justice Ali Al Madhani

Date of Issue: 12 February 2012