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Claim No. CFI 008/2023

IN THE COURTS OF THE DUBAI INTERNATIONAL FINANCIAL CENTRE

IN THE COURT OF FIRST INSTANCE

BETWEEN

FAIZAL BABU MOORKATH

Claimant

and

EXPRESSO TELECOM GROUP LTD

Defendant

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JUDGMENT OF JUSTICE RENE LE MIERE

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UPON the Part 7 Claim Form dated 26 January 2023

AND UPON a Trial having been held on 22 to 23 January 2024 with both Counsel for the Claimant and Counsel for the Defendant in attendance

AND UPON reviewing all relevant material added on to the Court file

AND UPON reviewing the Rules of the DIFC Courts (the “RDC”)

IT IS HEREBY ORDERED THAT:

1. The Claimant’s claims shall be dismissed.

2. The Defendant’s counterclaim shall be dismissed.

3. The parties shall file a minute of proposed orders in relation to costs together with submissions and any supporting evidence within 14 days from the date of this Judgment.

Issued by:
Hayley Norton
Assistant Registrar
Date of issue: 14 March 2024
At: 10am

SCHEDULE OF REASONS

Summary

1. The Claimant, Faizal Babu Moorkath, is an Indian citizen and an accountant. I will sometimes refer to him as Mr Moorkath and sometimes as the Claimant.

2. The Defendant, Expresso Telecom Group Ltd, which I will sometimes refer to as ETG and sometimes as the Defendant, is a company registered in the DIFC. It is wholly owned by Sudatel Telecom Group Ltd (“STG”), a telecommunications company in the Republic of the Sudan. ETG provides telecommunications services in the region.

3. Mr Moorkath was employed by ETG on 1 March 2011 as a corporate accountant. In 2016 he was employed as Senior Corporate Accountant, and from 1 January 2017 as Director Corporate Finance.

4. On 6 May 2021, by email, ETG suspended Mr Moorkath on full pay from work until further notice. The email stated that the suspension was pending investigation into an allegation of gross negligence during the period of May - June 2016 which involved the payment of a large amount of money on behalf of STG without following proper financial procedure.

5. On 23 March 2022, by letter, ETG summarily terminated Mr Moorkath’s contract of employment for cause. The letter of dismissal stated:

6. The reference to squandering and wasting USD 2 million is a referenced to two payments:

7. Mr Moorkath brings this claim for damages for loss of opportunity of employment and/or three months’ salary in consideration of the statutory notice and unpaid end of service benefits Mr Moorkath claims he was entitled to receive pursuant to his employment contract.

8. ETG denies that it wrongfully terminated Mr Moorkath’s employment or that Mr Moorkath is entitled to any of the benefits he claims. ETG says that Mr Moorkath was involved in the loss of USD 2 million by ETG, his actions reflected serious accounting irregularities and were contrary to standard and proper accounting practises and accordingly ETG terminated his employment because all trust and confidence between the parties had been lost.

9. ETG counterclaims for AED 7,356,500 which it says is economic loss it has suffered as a result of Mr Moorkath’s negligence in relation to the 2016 and 2017 transactions.

10. For the reasons which follow:

11. The parties are directed to file a minute of proposed orders in relation to costs together with submissions and any supporting evidence within 14 days.

Outline of the Claim

12. Mr Moorkath commenced the claim by the Claim Form issued on 26 January 2023. The Claim Form states that the law governing the dispute is the Employment Law 2019 and the Law of Damages and Remedies 2005.

13. Mr Moorkath brings three claims. First, Mr Moorkath claims that the Defendant breached his contract of employment by wrongfully terminating the agreement for cause without providing 3 months’ notice in circumstances where the Defendant did not have just cause to dismiss him. Mr Moorkath denies any wrongdoing and specifically any involvement in any alleged wrongdoing in relation to the 2016 and 2017 transactions.

14. Mr Moorkath pleads that ETG has failed to establish any cause for termination, ETG should have given three months’ notice of termination and Mr Moorkath is therefore entitled to three months’ salary.

15. Secondly, Mr Moorkath pleads that ETG has failed to pay to him his statutory and contractual entitlements after the termination of his employment in accordance with the Employment Law, or at all. Mr Moorkath claims the following unpaid entitlements:

16. Thirdly, Mr Moorkath pleads that Article 57(3) of the Employment Law provides that an employer and employee must cooperate to ensure the cancellation of the employee's UAE residency visa as soon as reasonably practicable following the termination of his employment and by no later than 30 days following the date of termination. Mr Moorkath says that notwithstanding his denial of any wrongdoing as alleged by ETG, he asked ETG to cancel his residency visa following the termination of his employment, which ETG should have done no later than 22 April 2022, but failed to do until 3 November 2022.

17. Mr Moorkath says that as a result of ETG’s wrongful failure to cancel his visa, he was not able to secure employment until 16 November 2022. Mr Moorkath claims damages in accordance with Article 23 of the Law of Damages and Remedies for the loss of opportunity to obtain suitable employment from 22 April 2022 to 16 November 2022.

Outline of the Defence

18. ETG pleads that its investigations into the 2016 and 2017 transactions confirmed that Mr Moorkath was involved in the loss of USD 2 million by ETG and additionally that Mr Moorkath's actions reflected serious accounting irregularities and were contrary to standard and proper accounting practises. ETG says it has established grounds for termination for cause and was entitled to dismiss Mr Moorkath immediately without notice and accordingly Mr Moorkath is not entitled to three months’ salary.

19. ETG denies that it has failed to pay Mr Moorkath his end of service entitlements. ETG says that Mr Moorkath was not entitled to the child education allowance for 2022 because he had not completed the relevant year of employment. Nevertheless, ETG prorated this payment until the date that Mr Moorkath was dismissed. ETG says Mr Moorkath was not entitled to air tickets for 2022 because he had not completed the relevant year of employment. ETG says that it paid Mr Moorkath in lieu of the annual leave that he was entitled to carry forward to 2022. Accordingly, ETG says Mr Moorkath is not entitled to further payments and therefore no late payment arises, and Mr Moorkath is not entitled to any penalties for late payment of end of service benefits.

20. ETG denies that it refused to cooperate to ensure the cancellation of Mr Moorkath’s visa. ETG says that Mr Moorkath took no steps to arrange for the cancellation of the visa and did not approach the DIFC Authority or the DIFC Courts to do so. Further, ETG says that Mr Moorkath has provided no justification or evidence that he was unable to secure employment. ETG denies that Mr Moorkath has suffered any loss or damage.

21. In its skeleton argument, ETG submitted that any claim for payments arising under the Employment Law is out of time. ETG submits that the Claim Form, which was issued on 24 January 2023, was presented after the expiry of 6 months from the date of Mr Moorkath’s termination and is out of time. Therefore, the Defendant submits, the Court has no discretion to consider the claim.

Outline of the Counterclaim

22. ETG counterclaims against Mr Moorkath for damages for negligence in relation to the 2016 and 2017 transactions.

23. ETG pleads that on 15 June 2016, Mr Moorkath issued and co-signed a cheque on ETG's bank in favour of Wall Street Exchange for an amount of AED 3,677,500, and when these funds were converted into US dollars, Mr Moorkath handed this money to Mr. Awadallah Khalaf Allah Mohamed Ahmed (Mr Ahmed), an individual who had no connection with ETG or its group companies, but nonetheless, Mr Moorkath recorded this transaction as an accounting entry on 15 June 2016 as a disbursement of AED 3,677,500 in cash in favour of STG. ETG says that upon examination of STG's books of account, these funds were not paid to STG. ETG says Mr Moorkath failed to exercise reasonable care in verifying the legitimacy of the transaction and thereafter making an incorrect entry in the books of ETG.

24. ETG pleads that on 4 May 2017, Mr Moorkath issued and co-signed a bank transfer order from ETG's bank in favour of Wall Street Exchange for an amount of AED 3,679,000 in exchange for the purchase of USD 1 million, and the transaction was entered into ETG's books of account as an intergroup payment to STG, but no corresponding entry has been found in STG's accounts. ETG says Mr Moorkath failed to exercise reasonable care in verifying the legitimacy of the transaction and thereafter making an incorrect entry in the books of ETG.

25. ETG pleads that as a result of Mr Moorkath's actions, ETG has suffered an economic loss of AED 7,356,500.

26. In his defence to the counterclaim Mr Moorkath denies he owed a duty of care to ETG under Article 17 of the Law of Obligations 2005 and, if he did owe a duty of care, he denies that he breached the duty. Mr Moorkath denies that ETG has suffered any loss as a result of the 2016 and 2017 transactions and if it did and Mr Moorkath breached a duty of care he owed to ETG, he denies his breach of duty caused loss to ETG.

27. Mr Moorkath says that the payments were made at the direction and with the approval of authorised personnel within ETG - his immediate manager Mr Rahamtalla, the CEO of ETG, and Sami Yousif Mohamed (Mr Sami Yousif), the STG Vice President of Group Finance. Mr Moorkath says ETG received instructions in relation to all transactions related to the parent company, STG, and/or the group, either given to him or to Mr Rahamtalla by STG’s finance department or by Mr Sami Yousif, and on some occasions from STG Group President Mr Tarig Hamza Zain El Abdein (Mr El Abdein), who was also Chairman of ETG.

28. Mr Moorkath denies that the funds were not paid to, or at the direction of, STG. Mr Moorkath relies on email correspondence that was exchanged between himself and employees of STG confirming their knowledge and receipt of the monies, that the transactions are recorded in the statements of account and reflected in the audit balance confirmations signed by the manager of the STG finance department.

29. Mr Moorkath pleads that if ETG suffered any loss, it has failed to mitigate its loss by taking action to recover the money lost from Mr Rahamtalla, Mr Sami Yousif, or Mr El Abdein.

30. Mr Moorkath pleads that any loss suffered by ETG was contributed to by the negligence of ETG by failing to put in place proper fail-safe mechanisms preventing losses from arising; by failing to provide any or any adequate training to its employees; by failing to mitigate any losses; by failing to have in place any or any adequate measures or policies regarding transactions of the kind alleged; and by failing to contemporaneously recognise that any losses had occurred.

Evidence for the Claimant

31. Mr Moorkath gave evidence in chief by verifying his Third and Fourth witness statements. He was cross examined at length by counsel for the Defendant, Mr Doherty. He did not adduce evidence from any other witness.

32. Counsel for the Claimant, Mr Khosdel, informed me without demur from Mr Doherty, that not many facts are actually in dispute, it is more the effect of the facts that is in dispute.

33. The Defendant made few challenges to primary facts attested to by Mr Moorkath. The Defendant challenged Mr Moorkath on whether he took adequate care to ensure the 2016 and 2017 transactions were legitimate and in the interests of ETG and STG, and whether Mr Moorkath made adequate records of the transactions and properly recorded the transactions in the books of ETG in accordance with accounting principles and standards.

34. In general, I find that Mr Moorkath tried to assist the Court and tell the truth. I generally accept his evidence.

Evidence for the Defendant

35. The Defendant adduced evidence from its Deputy CEO, Mustafa Abdelmalik, and its former Director of Human Resources, Alaa Alloub.

36. Mr Abdelmalik gave evidence in chief by verifying his First witness statement. He was cross examined by Mr Khosdel.

37. From 2015 to 2020 Mr Abdelmalik was ETG’s Strategy Director. He became Deputy CEO after Mr Rahamtalla left the Company in 2020.

38. In general, I find that Mr Abdelmalik tried to assist the Court and tell the truth as he saw it. However, at times Mr Abdelmalik made the hasty generalization fallacy. He gave evidence of the payment procedure which ETG implements, and which must be followed when making payments: he produced a small number of documents which he said were examples of the procedure followed. He assumed or asserted from the existence of that small number of documents in relation to payment for goods or services to an external company that they proved the existence of a procedure for payments of cash or by transfer to or at the direction of STG. They do not. Mr Abdelmalik was not involved in the finance department in 2016 or 2017 and has no direct knowledge of the payment procedure which ETG implemented or required to be followed when making payments. The documents which Mr Abdelmalik produced do not relate to transactions involving payments to, for the benefit of, or at the direction of, STG, which Mr Moorkath said were dealt with differently than other payments made by ETG.

39. Mr Alloub gave evidence in chief by verifying his First witness statement. He was cross examined by Mr Khosdel.

40. Mr Alloub was the Director of Human Resources for ETG between August 2008 and 31 December 2019. At the time of giving evidence, he was Head of Quality and Compliance working for a company in the Group. At the request of Mr Abdelmalik, he convened an investigative committee to investigate Mr Moorkath’s conduct in relation to the 2016 transaction. In general, I accept his evidence in so far as it is evidence of facts.

Documentary evidence

41. No objection was taken to any of the exhibits, except for a report of Parker Russell, chartered accountants and business advisors, addressed to ETG which is described as an accounting consultative expert report to indicate the financial irregularities committed by ETG during the period 2016 - 2017 and to indicate the party in charge for such irregularities and the loss or waste of the Group's funds. The report was received as evidence that ETG received the report which says what it says. It is not evidence of the truth of anything in the report.

The Employment Agreement

42. Mr Moorkath graduated from Calicut University in Kerala, India, with a Bachelor of Commerce and Master of Commerce with first class honours. After completing his postgraduate degree, he joined Airtel, a telecommunications company in Kerala, as a junior accountant.

43. One year later, in 2005, Mr Moorkath moved to the UAE. Within a few days he secured employment with JC McLean International FZE, a Jebel Ali Free Zone company. In 2010 he joined Dubai World Central, a semi government entity, as a senior accountant.

44. Mr Moorkath commenced employment with ETG on 1 March 2011 with the title corporate accountant. ETG had a number of departments including Finance, HR, Admin, Legal, Marketing and Strategy, and Wholesale. Most of the departments had one or two employees and the total number of employees was 10 to 15. ETG employees directly reported to the CEO and the CEO reported directly to the Chairman of the Board. STG’s President and CEO was also Chairman of ETG’s Board. There was only one other person in the Finance Department, Abu El Gasim, who was the Director of Corporate Finance.

45. Mr Rahamtalla was STG’s Vice President of International Operation. In 2014 he became CEO of ETG.

46. Mr Moorkath started by assisting Mr El Gasim who was his line manager. Mr Moorkath’s initial contract was for two years.

47. From 1 December 2012 Mr Moorkath was employed for an indefinite term pursuant to an employment contract dated 1 December 2012. The employment contract was amended by an addendum dated 1 January 2014. Mr Moorkath and ETG made a new employment contract dated 1 January 2017, which was amended by an addendum of 1 January 2019. The employment contract of 1 December 2012, as amended by the addendum of 1 January 2014, and the employment contract of 1 January 2017, as amended by the addendum of 1 January 2019, are in the same terms except for the remuneration, the position in which Mr Moorkath was employed and the persons to whom he reported. I will refer to Mr Moorkath’s employment contract throughout the time he was employed by ETG as the Employment Agreement unless it is necessary to distinguish between the contracts of 1 December 2012 as amended by the addendum of 1 January 2014 (“the 2012 Employment Agreement”) and the contract of 1 January 2017 as amended by the addendum of 1 January 2019 (“the 2017 Employment Agreement”).

48. The Employment Agreement provides that Mr Moorkath may be required from time to time to perform certain services for associate companies forming part of the Expresso Group of Companies in the UAE or elsewhere. There is no evidence that he was ever required to perform services for STG or any other group company.

49. Under the 2012 Employment Agreement Mr Moorkath, was employed as Senior Corporate Accountant reporting directly to the Corporate Accounts Director of ETG or such other position as may be decided by ETG from time to time.

50. On 1 November 2015, Mr El Gasim was transferred to a STG subsidiary company in Guinea Conakry. From 1 November 2015 to December 2018, Mr Moorkath was the only person in the Finance Department carrying out accountancy duties. He reported to Mr Rahamtalla. At the same time Mr Moorkath was also reporting to Mr Sami Yousif, who was Vice President of Finance of STG.

51. Mr El Abdein became CEO of STG on 19 November 2013 and on the same date he also became Chairman of ETG.

52. Mr Moorkath’s uncontradicted evidence, which I accept, is that he received instructions from Mr Rahamtalla, Mr Sami Yousif, and Mr El Abdein.

53. That is consistent with the 2017 Employment Agreement, under which Mr Moorkath was employed as Director Corporate Finance, and required to report to the Vice President for International Operations, or such other person as may be agreed by Mr Moorkath and ETG from time to time.

54. Apart from his description as Senior Corporate Accountant and Director Corporate Finance, the Employment Agreement contains no job description or job duties.

55. I find that Mr Moorkath’s responsibilities were confined to accounting and financial functions within ETG. He had no responsibility for overseeing STG money handling or accounting functions.

56. The Employment Agreement provides that the agreement, the employment and any dispute or difference arising out of or in connection with it, shall be governed by and construed in accordance with the laws of the DIFC.

ETG and STG relationship

57. ETG was incorporated in the DIFC in November 2007 as a fully owned subsidiary of STG.

58. STG is a public company incorporated in the Republic of the Sudan and listed on the Khartoum Stock Exchange in Sudan and the Abu Dhabi Securities Exchange in the United Arab Emirates. The Sudanese government holds a majority interest in STG.

59. Mr Moorkath gave evidence of the financial relationship between ETG and STG which was not contradicted.

60. The USA sanctioned STG, a company controlled by the Sudan government, until some-time in 2017. As a result of the sanctions, STG had difficulty making any foreign currency transactions. STG used its subsidiary, ETG, as an intermediary to make transactions including cash transactions as a strategy to evade or get around the USA sanctions. ETG made foreign currency transactions for the Group. ETG managed the international operations of STG in West Africa. ETG acted as an intermediary between STG (as the parent company) and the subsidiaries in West Africa. ETG managed all the international agreements and contracts on behalf of STG and its subsidiaries. Most of the group’s international procurements were done through ETG.

61. As a telecommunications company, STG receives international payments from interconnections and roaming. ETG received funds, including from STG subsidiaries, on behalf of STG, in its Dubai bank account. Mostly subsidiaries would transfer cash through agents because there were not many banking facilities in West Africa and most of the time African banks lacked foreign currency. Once ETG received the funds, ETG kept the funds in its bank account until it received instructions from STG for the utilisation of the funds. If ETG received an instruction from STG, then ETG would make payments to the proposed beneficiary either by bank transfer or by cash. Restrictions were in place for foreign transactions, particularly in US dollars, and therefore transactions would be carried out in cash. Most of the STG transactions were paid by ETG in the UAE.

62. ETG managed most of STG’s international money transactions. Most of the management staff in STG and its subsidiaries received their offshore salary from ETG, which processed and paid offshore salaries.

63. Mr Moorkath’s unchallenged evidence is that on average there were 250 to 300 transactions processed by ETG in a year on behalf of STG. The total value of transactions was USD 50 million to USD 70 million per year including receipts and payments.

64. The intercompany yearly statement of accounts shows all types of STG’s operation related transactions including salary, dividends, vendor payments, asset purchase, legal fees, per diem payments, air tickets for employees, and cash payments, which were made by ETG to or on behalf of STG.

65. Mr Moorkath’s uncontradicted evidence is that there were transactions that occurred before and after the impugned transactions, which are similar in nature. STG would request ETG to arrange US dollars and later would inform ETG to handover the cash to a STG employee who was travelling to Sudan or on some other international trip. When ETG received instructions to arrange cash, sometimes ETG did not know how the cash was going to be used. ETG recorded the transaction as cash to STG, and STG recorded the transaction as the actual cost or expense.

66. There was a large cash transaction on 7 January 2016 recorded in ETG’s accounts as “Ghana Disposal cash to STG Nilein Bank, invoice 3519, debit. 1,497,910.50”. Mr Moorkath says the 2016 and 2017 transactions were not materially different from that transaction. There was also a transaction of “Cash to STG from Chinguitel” on 30 June 2016 of USD 250,000.

67. I conclude from the evidence that ETG acted like a group treasury or banker in receiving funds on behalf of the other group companies and paying out the funds on the instruction of the other group companies, particularly STG. When ETG receives funds from or on behalf of STG, the relationship between ETG and STG is that of debtor and creditor in relation to the funds received. ETG acts as the debtor because it owes STG the amount received. STG acts as the creditor because it is entitled to receive the funds.

68. During 2016 and 2017 ETG had a very substantial liability to STG. ETG owed STG USD 1,132,391,664 as at 31 December 2016 and USD 1,155,127,060 as at 31 December 2017. ETG’s account of its liability to STG shows that when it made a payment to, for the benefit of, or at the direction of, STG, ETG’s liability to STG reduced by the amount of the payment.

69. In accounting terms, the payment served as a credit entry in ETG’s books, offsetting the outstanding liability. STG, in turn, recognised the receipt of funds as a debit entry, reflecting the reduction in the amount owed by ETG.

70. Mr Moorkath did not have responsibility for safeguarding and managing the funds paid to, for the benefit of, or at the direction of STG. STG had its own, larger, finance department. At the relevant times Sadisu Barau Jibrin, who was the STG’s Director of Management Accounts, was responsible for STG’s finances and properly recording financial transactions.

71. The use to which STG put the funds paid to it, for its benefit, or at its direction, by ETG does not affect the state of the account between ETG and STG. Thus, if the funds are lost or misappropriated after payment to, for the benefit of, or at the direction of STG and acknowledged by STG, the loss, if any, is the loss of STG not ETG.

The 2016 transaction

72. On 30 May 2016, Mr Moorkath received an email from Mr Rahamtalla, the CEO of ETG and Mr Moorkath’s immediate manager, instructing him to withdraw an amount equal to USD 1 million in AED, convert that amount into USD, and then hand the cash to Mr Husham, ETG’s Admin Manager. The email said:

73. Mr Moorkath gave the following evidence about the procedure for making such a payment, which was not contradicted. If any STG transactions related to ETG, the CEO's approval was required to process the payment. Mr Moorkath produced two documents as examples of this process. If any transactions related to STG, all approval processes had to be completed by STG staff, who would then instruct ETG to facilitate the payment. Mr Moorkath produced two documents as examples of this process.

74. Mr Moorkath says that as with all of STG’s related transactions, Mr Sami Yousif received the approval from Mr El Abdein and ETG was instructed to facilitate the payment.

75. Mr Moorkath emailed Wall Street Exchange to ask about the availability of USD 1 million and the exchange rate. Mr Moorkath caused a cheque to be prepared for an amount of AED 3,677,500 in favour of Wall Street Exchange. The cheque was signed by Mr Rahamtalla and Mr Moorkath, the authorised signatories to ETG’s bank account, and was deposited into Wall Street Exchange’s bank account by an office assistant.

76. Mr Moorkath then emailed Mr Sami Yousif on the same day, 30 May 2016, and advised that ETG had deposited a cheque equivalent to USD 1 million in Wall Street Exchange’s bank account in order to receive the money in USD. At the request of Wall Street Exchange, Mr Moorkath provided a copy of his passport.

77. On 31 May 2016, Mr Sami Yousif replied stating that the plan had changed, “we need to delay receiving the money in cash”, and “keep the one million dollar in a bank account where we can have an easy access to it in 24 hours’ notice time”.

78. Mr Moorkath then informed Wall Street Exchange.

79. On 9 June 2016, Wall Street Exchange returned the funds to ETG’s bank account because they could not hold that amount for a long period of time.

80. Mr Moorkath received a verbal instruction from Mr Sami Yousif to arrange the funds. On 15 June 2016 Mr Moorkath arranged for another cheque to be deposited in favour of Wall Street Exchange, signed by Mr Rahamtalla and himself.

81. A few days later Mr Husham and Mr Moorkath collected the cash in US dollars from Wall Street Exchange.

82. Mr Moorkath then received an instruction from Mr Sami Yousif to keep the money in safe custody until further instruction.

83. After consulting with Mr Rahamtalla, Mr Husham and Mr Moorkath purchased a new safe to keep the money in ETG’s office for another two weeks.

84. On 22 June 2016 Mr Moorkath emailed Mr Sami Yousif explaining that the STG fund within ETG’s custody was as follows:

85. Mr Sami Yousif responded that he needed other balances as well.

86. Mr Moorkath replied, “Our total available balance including Ghana is US$ 2.1M only (including 250K in QNB)” and attached a detailed cash flow.

87. In early July 2016 Mr El Abdein and Mr Sami Yousif came and collected the money.

88. Before they collected the money, Mr Sami Yousif sent Mr Moorkath by Whatsapp what he describes as the Approval Memo for USD 1 million. The Approval Memo reads:

89. Mr El Abdein and Mr Sami Yousif came to ETG’s office. Mr Moorkath handed the US dollars to Mr El Abdein, in the presence of Mr Sami Yousif. There was a third person with them. Mr El Abdein gave the money to the third person who was carrying the money bag when they left ETG’s office. Mr Moorkath received a copy of the Approval Memo from Mr El Abdein. Mr El Abdein wrote on the Approval Memo, “It is deducted from the social contribution approved by the general assembly” and signed the memo.

90. A few days later Mr Moorkath received a copy of the memo with two more notes from Mr Sami Yousif as follows:

91. Mr Moorkath treated the final version of the memo signed by Mr El Abdein, as the receipt or supporting document for the transaction.

92. On 24 July 2016, Shireen Abdelrahman, who was a STG senior financial officer, emailed Mr Moorkath asking him to provide documents for the “Cash for STG” transaction for USD 1,000,680.27 and another transaction involving Changuitel. Mr Moorkath forwarded that email to Sadisu Barau Jibrin, who was the STG’s Director of Management Accounts, asking him to check with the Vice President of Finance to manage the transaction in line with a previous discussion. Mr Sadisu replied on the same day:

93. Mr Moorkath recorded the transaction in ETGs books. Exhibit FM 5a is STG’s statement of account with ETG during 2016. The account records a transaction on 15 June 2016 described as “Cash for STG” and entered as a debit of AED 3,677,500.00/ USD 1,000,680.27.

94. Mr Moorkath sent the statement to Ms Abdelrahman for her to record the transaction in STG’s accounts. Exhibit FM13 is STG’s ledger report for ETG dated 25 July 2016. It includes the following entry as a credit:

95. Mr Doherty submitted that the entry in STG’s accounts merely reflect the information given to STG by Mr Moorkath and do not verify Mr Moorkath’s entry in the ETG accounts. I do not agree. The entry in STG’s ledger is not merely a result of the records provided by Mr Moorkath to Ms Abdelrahman. On 24 July 2026, Ms Abdelrahman’s manager, Mr Sadisu, considered the transaction and in effect directed Ms Abdelrahman that it was correct. By entering the transaction in its accounts as a payment by ETG to, for the benefit of, or at the direction of, STG, STG confirmed that the payment was received by STG or made at the direction of STG. There is no evidence that STG has reversed the entry in its books of account or that STG has taken any action, or even claimed that ETG owes it USD 1,000,680 more than shown in the intercompany accounts because it did not receive the USD 1,000,680 of the 2016 transaction.

The 2017 transaction

96. The Defendant’s case is based on, or assumes, that all of the documents relevant to this transaction that existed in 2017 are before the Court. I am not able to draw that conclusion.

97. The documents relating to the 2016 transaction were produced by Mr Moorkath. Mr Moorkath says he is unable to produce documents relevant to the 2017 transaction. He was able to make some searches of his Outlook inbox which was linked to his work emails. But, he says, he was unable to search the physical records held by ETG, as he had in relation to the 2016 transaction because he had been suspended and did not have access to the physical records held by ETG.

98. Mr Doherty asked Mr Moorkath if he was aware of the existence of a transaction approval document signed by Mr Rahamtalla and himself. Mr Moorkath said he remembered there was some document regarding the bank transaction.

99. Mr Doherty put to Mr Moorkath that ETG has not maintained any records that explain this transaction. Mr Moorkath did not agree. Mr Moorkath said there would be a document or documents signed by him and Mr Rahamtalla but he was not in a position to provide that document.

100. In the document production stage of this case, the Claimant asked the Defendant to produce any and all email documents or correspondence from any individual employed or otherwise from STG regarding for the 2016 and 2017 transactions. The Defendant objected on the ground that STG is not a party to these proceedings and the Defendant does not have access to such documents.

101. The Defendant did not adduce evidence that it had conducted a search for relevant documents signed by Mr Moorkath and Mr Rahamtalla or relevant emails from STG to Mr Rahamtalla and found they did not, and had not, existed.

102. There is no, or no compelling, evidence to contradict Mr Moorkath’s evidence that there was some bank transfer approval document signed by him and Mr Rahamtalla. There is no, or no compelling, evidence that there are not relevant emails from STG to Mr Rahamtalla with instructions for the 2017 transaction.

103. Mr Moorkath says there was nothing unusual about the 2017 instruction from STG for the transfer of USD 1 million; it was a matter of arranging and processing the money on behalf of STG.

104. Mr Moorkath says that whilst he does not have the email instruction from Mr Rahamtalla, there was an instruction that came from STG to arrange the funds. He says that without an instruction he would not have been able to initiate the process. He also kept Mr Rahamtalla in copy in all emails, including those sent to Wall Street Exchange, and therefore he was kept informed of the transactions he had instructed Mr Moorkath to carry out.

105. Mr Doherty put to Mr Moorkath that there is no evidence or email chain, for example, showing that this document was ever actually sent to him at the time. Mr Moorkath agreed there was no evidence he had received it at the time. However, that does not mean Mr Rahamtalla did not receive a copy of the memo and inform Mr Moorkath of it and request that Mr Moorkath arrange the payment. Mr Rahamtalla did communicate with Mr Moorkath about the payment; they both signed the transfer order.

106. I accept Mr Moorkath’s evidence that he received an instruction from Mr Rahamtalla to arrange and make the transfer. That is consistent with the process followed in 2016. It is unlikely Mr Rahamtalla signed the transfer order without having received an instruction from an authorised STG representative to do so.

107. Mr Moorkath says he followed the same procedure of arranging US dollars from the Wall Street Exchange, as with the 2016 payment.

108. On 3 May 2017 Mr Moorkath requested and received from Wall Street Exchange the exchange rate to purchase USD 1 million and the bank details to transfer that amount.

109. Wall Street Exchange requested, and Mr Moorkath provided, a copy of Mr El Abdein’s passport. Mr Moorkath says he believes Wall Street Exchange requested a copy of Mr El Abdein’s passport because there was an authorisation letter prepared under Mr El Abdein’s name to receive the money. That is a plausible explanation for Wall Street Exchange requesting a copy of Mr El Abdein’s passport. It is likely that Mr El Abdein, or an authorised STG representative, instructed Mr Moorkath that the funds were to be provided to or at the direction of Mr El Abdein.

110. Mr Moorkath produced a copy of a resolution of a STG board of directors executive committee of 3 April 2017. The resolution is:

111. That is not evidence that Mr Moorkath knew of the resolution and approval at the time he participated in the 2017 transaction. It is evidence that the committee approved a donation to some government agencies in Guinea Conakry. It supports the proposition that Mr El Abdein or another authorised representative of STG instructed Mr Rahamtalla to make the 2017 bank transfer.

112. On 4 May 2017 a bank transfer of AED 3,679,000, which was the equivalent of USD 1 million, was made from ETG's bank account to Wall Street Exchange’s bank account. The transfer order was signed by Mr Rahamtalla and Mr. Moorkath, who were the authorised signatories for the ETG account.

113. Wall Street Exchange transferred the amount to an account electronically. There is no document before the Court evidencing the account to which the transfer was made.

114. Mr Moorkath’s evidence is that a bank transfer approval with signatures “must be there” and he remembers “there are some document[s] regarding the bank transaction”.

115. I accept Mr Moorkath’s evidence. It is not contradicted. The Defendant adduced no evidence that such documents were searched for and not found to be, or have been, in its possession.

116. The only evidence before the Court of the transfer is the accounts of ETG. Mr Moorkath recorded in ETG’s intercompany statement of account for STG the following debit entry:

117. On 20 July 2017, Mr Moorkath sent an email to Mr Sadisu outlining two transactions, one of which was the transfer of AED 3,679,000 / USD 1,001,088.43 to STG. Mr Moorkath told Mr Sadisu that he had already reported this transaction to Ms Abdelrahman and as she was asking for supporting documents, he attached a financial statement confirming the transaction.

118. There is no evidence that STG has reversed the entry in its books of account or that STG has taken any action, or even claimed that ETG owes it USD 1,001,088.43 more than shown in the intercompany accounts because it did not receive the USD 1,001,088.43 of the 2017 transaction.

Suspension and termination

119. In 2021 STG initiated an investigation into the 2016 transaction. STG requested Mr Abdelmalik to carry out an investigation. Mr Abdelmalik requested Mr. Aloub to convene an investigative committee.

120. At its first meeting on 1 April 2021, the committee suggested the following steps be taken: suspend Mr Moorkath, inform Mr Moorkath to attend an investigative hearing, ask Mr Husham to appear as a witness, set forth their findings in an investigative report.

121. The committee met Mr Moorkath on 6 May 2021.

122. The committee agreed to obtain testimony from Mr El Abdein and Mr Sami Yousif.

123. Mr Aloub informed Mr Abdelmalik that the committee recommended suspending Mr Moorkath and obtaining testimony from Mr El Abdein and Mr Sami Yousif.

124. Mr Abdelmalik gave the committee’s report to STG. He spoke to the STG CEO and legal department. The STG CEO told him not to interview Mr Sami Yousif and Mr El Abdein because legal action was being taken in Sudan. They confirmed he should suspend Mr Moorkath.

125. On 6 May 2021, by email, ETG suspended Mr Moorkath on full pay from work until further notice. The email stated that the suspension was pending investigation into an allegation of gross negligence during the period of May - June 2016 which involved the payment of a large amount of money on behalf of STG without following proper financial procedure.

126. The investigation was then taken over by STG. ETG was not involved in the further investigation.

127. STG commissioned a report from Parker Russell. The report is erroneously dated 26 September 2020. Possibly it should be dated 26 September 2021. Mr Abdelmalik says that STG sent him a copy of the report in September, October, or November 2021. Parker Russell reported financial irregularities in relation to each of the 2016 and 2017 transactions. In relation to the 2016 transaction the report recapitulated its findings based on the accounting records of ETG to be that USD 1 million was seized in 2016 by Mr El Abdein, Mr Rahmatullah, Mr Moorkath and Mr Ahmed, and in relation to the 2017 transaction, based on the accounting records of ETG, the author found that USD 1 million was seized in 2017 by Mr Rahmatullah and Mr Moorkath. No accounting records have been produced which show that those persons “seized” the funds referred to. The word “seized” may be a translation which conveys a different connotation than was intended. No accounting records have been produced that Mr Ahmed seized or received the funds referred to in 2016. As I have said the report is not evidence of the truth of its assertions.

128. At about the same time Mr Abdelmalik received a copy of the Parker Russell report, ETG made a criminal complaint to the Dubai police against Mr Moorkath. The Dubai police contacted Mr Moorkath in October 2021 and asked him to present himself for questioning.

129. On 23 March 2022, by letter signed by Mr Abdelmalik, ETG summarily terminated Mr Moorkath’s contract of employment for cause. The letter of dismissal stated:

130. Mr Abdelmalik first said that STG decided to dismiss Mr Moorkath and that he was not the one who made the decision to dismiss Mr Moorkath. He then said that the decision to dismiss Mr Moorkath was taken by STG group, legal department, STG group CEO and himself as the CEO of ETG. I find that the decision to dismiss Mr Moorkath was made by the STG CEO and adopted and formally communicated by Mr Abdelmalik.

131. On 25 March 2022, ETG paid Mr Moorkath AED 330,981 by way of end of service entitlements.

132. Mr Moorkath responded to the dismissal letter on 30 March 2022 by email. He maintained that STG did not suffer any loss as it received the money, and no loss has been suffered by ETG.

133. Mr Moorkath says that if ETG had carried out a proper investigation and interviewed him about what happened after their investigation then he would have been able to show the evidence he has submitted in these proceedings.

134. At the time ETG terminated Mr Moorkath’s employment, the police investigation was still open. On 24 August 2022 the Public Prosecution in Dubai issued an order that there is no reason to file a criminal case against Mr Moorkath and the travel ban on him was cancelled.

135. Mr Moorkath says he contacted Mr Abdelmalik and Mr Husham either on the phone or in person after he was terminated to have his visa cancelled and was advised on all occasions that they were waiting for STG to decide. Mr Moorkath requested ETG in writing to cancel his visa with ETG on 30 March 2022 and 22 September 2022.

136. ETG cancelled Mr Moorkath’s visa on 4 November 2022.

137. Mr Moorkath says that without getting a proper timeline for cancellation of the visa, he was unable to secure any other job. He was contacted by a few companies through references but when he informed them about the visa status, they asked him to wait until the visa was cancelled.

138. Mr Moorkath says that without his visa being cancelled, he was unable to apply for another job.

139. Mr Moorkath received a job offer from Ms Finacle Tax & Auditing Service LLC on 3 November 2022. This was the same day as the visa was cancelled. They were waiting for the cancellation of his visa to offer the employment. Once the visa was cancelled, he informed Ms Finacle Tax & Auditing Service LLC, and he then formally received the employment offer. His employment visa was then processed on 8 November 2022.

140. Mr Moorkath filed his claim on the Court website on 30 December 2022. His claim form was issued by the Court on 26 January 2023.

Claims are time barred

The issue

141. The Defendant submits, and the Claimant denies, that all of the Claimant’s claims, except for his claim for loss of earnings as a result of the Defendant's failure to cooperate to ensure cancellation of his visa (the “visa claim”), are time barred by Article 10 of the Employment Law.

142. It is common ground that the Claimant's claims, except for the visa claim, are claims under the Employment Law. Both parties submitted that none of the claims are claims for damages under the Law of Damages and Remedies 2005 for a breach of contract pursuant to the Contract Law 2004 and the case was argued on that basis.

143. Article 10 of the Employment Law provides that, subject to relevantly Article 20(2), a Court shall not consider a claim under the Employment Law unless it is presented to the Court not later than six months after the employee's Termination Date.

The Termination Date

144. Termination Date is defined by clause 3 of Schedule 1 to the Employment Law to mean, in relation to an Employment Contract terminated by notice, the date on which the notice period expires, and in relation to an Employment Contract terminated without notice pursuant to Article 63 (termination for cause) the date on which the termination of employment takes effect.

145. On one view, the Defendant repudiated the Employment Agreement by its termination letter, the Claimant accepted the repudiation by his first legal notice and the Employment Agreement and the Claimant’s employment terminated on 30 March 2023 and that is the Termination Date

146. On another view the Defendant terminated the Claimant’s employment on 23 March 2022 and that is the Termination Date.

147. The parties argued the case on the basis that the Termination Date is 23 March 2022. I will proceed on that basis, but it would not affect the outcome of the case if the Termination Date is 30 March 2022.

Claim was presented on 30 December 2022

148. The Claimant submitted his claim form to the Court in electronic form through the EFiling facility on the DIFC Courts website on 30 December 2022, but the Court did not issue the Claim form until 26 January 2023. The question is whether the Claimant presented his claim to the Court on 30 December 2022 or 26 January 2023

149. Subject to an exception which is not relevant, documents filed in the DIFC Courts are submitted to the Court in electronic form through the E-Filing facility on the DIFC Courts website: RDC 6.20.

150. Whether an appeal notice filed without payment of the fee is filed for the purposes of RDC 44.10 was considered by H.E. Justice Omar Al Muhairi (as he then was) in Byrne v Adham Gamal Ibrahim Saleh Rezk DIFC CFI-023-2018 (20 April 2020). After carefully analysing relevant rules and practice directions, His Excellency concluded that an appeal notice is not filed until the fee is paid and the appeal notice is issued.

151. However, the position is different when the question is whether a claim is filed or presented to the Court for limitation purposes.

152. Where the claim form as issued was received in the Registry on a date earlier than the date on which it was issued by the Court, the claim is ‘brought’ for the purposes of limitation on that earlier date: RDC 7.5.

153. The purpose of limitation periods is to protect defendants by imposing time limits to ensure that they are not perpetually exposed to the threat of being sued and provide certainty regarding their exposure to liability as well as ensuring that evidence is more likely to be available and reliable and to encourage parties to pursue claims diligently and promptly to make the administration of justice more efficient. The limitation period in Article 10 has the further object of preventing an employee delaying bringing a claim so they would receive a greater penalty pursuant to Article 19 with every day of delay. None of those objects are advanced by determining that a claim is presented to the Court when the Court issues the claim form rather than when the Claimant electronically lodges the claim form.

154. For the purposes of Article 10 of the Employment Law, a claim is presented to the Court when it is submitted to the Court in electronic form through the E-Filing facility on the DIFC Courts website and received in the Registry. The Claimant’s claim was presented to the Court on 30 December 2022.

The Defendant’s case on the limitation period

155. The Defendant submits that the Claimant’s Termination Date is 23 March 2022, the date on which the dismissal letter stated the Claimant’s termination of employment took effect. The Defendant’s primary case is that if the Claimant was entitled to the remuneration he claims, the Defendant was required by Article 19 to pay the remuneration within 14 days of the Termination Date, that is by 6 April 2022. That is more than 6 months before the claim form issued on 26 January 2023 or the Claimant filed his claim electronically on 30 December 2022 and the Court cannot consider the claims.

Article 19 does not entitle Claimant to claimed payments

156. In my opinion, the Claimant’s claimed entitlement to payment of 3 months’ salary, unpaid leave, child education allowance, air tickets allowance and additional gratuity do not arise from Article 19 of the Employment Law.

157. Article 19 contains provisions related to late payment of remuneration. Article 19 does not create an employee’s right to be paid remuneration upon termination. Instead, it focuses on the timeliness of payment. Employers are required to pay all wages and outstanding sums to the employee within 14 days of the termination of employment: If the employer fails to make payment within the 14-day period, a penalty equivalent to the employee’s daily wage is payable for each day delayed.

158. The purpose of Article 19, like its predecessor Article 18 of the Employment Law 2005 as amended by Employment Law No. 3 of 2012, is to ensure that the employer does not delay paying the employee his full entitled wages on time, see Frontline Development Partners Limited v Asif Hakim Adil [2016] DIFC CA 006 (March 20, 2017) [16]. Article 19 is to ensure that employers promptly settle all outstanding entitlements within 14 days of an employee’s termination and compensate employees for late payment by the payment of a penalty.

159. The Claimant’s claim under the Employment Law for 3 months’ salary, unpaid leave, child education allowance, air tickets allowance and additional gratuity arise not from Article 19, but from Article 67 of the Employment Law.

160. If an employer terminates an employee’s employment without cause, they must follow the notice requirements outlined in Article 62 of the Employment Law. Failure to provide the required notice constitutes a contravention of the Employment Law.

161. If an employer fails to pay an employee compensation in lieu of vacation leave as required by Articles 27 and 28 of the Employment Law, the employer contravenes the Employment Law.

162. If an employer fails to pay an employee the gratuity payment as required by Articles 27 and 28 of the Employment Law, the employer contravenes the Employment Law.

163. Article 67 of the Employment Law addresses the consequences of an employer’s contravention of the Employment Law. If an employer terminates an employee without providing the required notice, the Court may order the employer to pay the employee an amount of compensation to put the Claimant in the position he would have been in had the employer not done an act or thing that the employer is prohibited from doing, done the act or thing that the employer is required to do or otherwise not contravened the Employment Law.

164. The Claimant’s claims are that if the Defendant had not contravened Article 62 by terminating his employment without cause and without notice and if the employer had complied with Articles 27 and 28 by paying him compensation in lieu of vacation leave as required those Articles, and complied with Article 66 by paying him the gratuity payment for the 3 months’ notice period, the Defendant would have paid him 3 months’ salary, the unpaid leave, the child education allowance, the air tickets allowance, and the additional gratuity payment claimed.

165. Those claims are claims for compensation pursuant to Article 67.

166. In any event, whether the Claimant’s claims are under Article 19 or Article 67, the limitation period prescribed by Article 10 applies to those claims. Subject to Article 61(2) which is not relevant, and Article 20(2) which I will now consider, the limitation period prescribed by Article 10 applies to all claims under the Employment Law.

The Claimant’s case on the limitation period

167. The Claimant’s case is that his claims are claims under the Employment Law, but the limitation period in Article 10 does not apply to them.

168. The Claimant says that Article 20(2)(a)(i) applies to his claims and extends the limitation period prescribed by Article 10 beyond 6 months from the Termination Date.

169. Article 20(1) provides that an employer shall not deduct from an Employee’s Remuneration or accept payment from an employee except in specified circumstances, which do not apply in this case. Article 20(2)(a)(i) relevantly provides that in relation to claims brought by an employee that an employer has failed to pay the employee Remuneration to which the employee is entitled under their employment contract or the Employment Law, a Court shall not consider a claim under Article 20(1) unless it is presented to the Court before the end of the period of 6 months beginning with: the date on which that Remuneration should have been paid.

170. The Claimant says Article 20(2)(a)(i) applies in this way. The Claimant’s claims for

(unpaid benefits)

are claims under the Employment Law for Remuneration within the meaning of Remuneration in Article 20(2)(a)(i).

171. The date of dismissal was 23 March 2022. The unpaid benefits would be payable on 23 March plus three months (notice), that is 23 June 2022. Pursuant to Article 19(1) the employer must pay the employee the unpaid benefits within 14 days of the Termination Date. Fourteen days after 23 June is 7 July 2022. Article 20(2)(a)(i) provides that the claim must be brought within six months beginning with the date on which the unpaid benefits should have been paid, that is within 6 months of 7 July 2022 which is 7 January 2023. The Claimant presented his claim to the Court on 30 December 2022 by filing it electronically and therefore within 6 months.

172. The Claimant’s case on the limitation period is wrong for four reasons. Each of the reasons is sufficient to defeat the Claimant’s case. First, the unpaid benefits were payable on the termination of the Claimant’s employment, not three months after the Claimant’s employment was terminated. Secondly, the Remuneration payable on the termination of the Claimant’s employment is not required to have been paid 14 days later by reason of Article 19. Thirdly, the Claimant’s claims are not claims to which Article 20(2)(a)(i) applies. Fourthly, Article 20(2)(a)(i) does not extend the limitation period in respect of claims to which it does apply beyond six months from the Termination Date.

Payments claimed by Claimant were payable on the Termination Date

173. The Defendant’s primary obligation under the Employment Agreement was to pay the Claimant his monthly salary and allowances. The Defendant breached the Employment Agreement by wrongfully terminating the agreement for cause without providing 3 months’ notice in circumstances where the Defendant did not have just cause to dismiss the Claimant. On the termination of the Employment Agreement, the Defendant’s primary obligation to pay the Claimant his monthly salary and allowances was discharged. The Defendant’s breach of its primary obligation to perform the Employment Agreement gave rise to a secondary obligation to pay monetary compensation to the Claimant for the loss sustained by him in consequence of the breach: Photo Production Ltd v Securicor Transport Ltd [1980] 2 AC287, 832, Lord Diplock, or more generally a right to damages for breach of the Employment Agreement or compensation under the Employment Law for contraventions of the Employment Law.

174. The Claimant’s claim is not for his salary. The Employment Agreement was terminated. The Claimant was no longer entitled to be paid his salary under the Employment Agreement. The Claimant’s claim is for damages or compensation for lack of notice. That claim arose on the Defendant wrongfully terminating the Employment Agreement not 3 months later.

175. Article 19 does not postpone the date on which an employer is liable to pay an employee the Remuneration to which he is entitled under his contract of employment. Article 19 creates a further obligation on the employer to pay a penalty if the employer does not pay the Remuneration to which the employee is entitled on termination within 14 days of the Termination Date.

Article 20(2)(a)(i) does not entitle Claimant to claimed payments

176. Article 20(2)(a)(i), or indeed Article 20, does not create an employee’s right to be paid Remuneration.

177. Article 20(1) serves as a general prohibition against unlawful or unauthorized deductions from an employee’s remuneration. It states that an employer shall not deduct from an employee's remuneration or accept payment from an employee except in the specified circumstances.

178. Article 20(1) itself does not create a direct cause of action for employees to recover unlawfully made deductions; it forms the foundation for addressing such conduct. For example, suppose an employer deducts from an employee’s monthly salary a charge for accommodation which does not fall within the deductions permitted by Article 20(1). The deduction is prohibited by Article 20(1). The employee is entitled under his contract of employment to the full amount of his monthly salary. The unauthorised deduction does not discharge the employer’s liability to pay the employee’s monthly salary to the extent of the deduction. The employee may recover the amount of his unpaid salary as he would any unpaid salary.

179. In any event, Article 20(2)(a)(i) does not create a standalone right for employees to recover contractual benefits or benefits under the Employment Law which they were not paid on termination of their employment.

180. Article 20(2) addresses the limitation period for bringing claims related to unauthorised deductions or payments to their employer under Article 20(1). Article 20(2)(a)(i) provides:

181. Article 20(2)(a)(i) does not extend the limitation period in Article 10, it limits it.

182. The primary purpose of Article 20(2) is to limit how far back claims can be made and how far back the claims period can extend from. In the absence of Article 20(2)(a)(i), an employee could make a claim in relation to a payment deducted from his remuneration at any time within 6 months of the termination of his employment even if the deduction had occurred years before the termination of his employment A secondary purpose of Article 20(2) is to clarify that claims in relation to unauthorised deductions or payments by an employee may be brought during the employment.

183. This is confirmed by the history of the Employment Law. Before it was amended by Employment Law Amendment Law DIFC Law No. 4 of 2021, Article 20(1) was subject to the limitation period in Article 10. Article 10 did not provide an exception for Article 20(1) claims from the 6 months limitation period.

184. Consultation Paper No.1 of February 2021 in relation to amendments to the Employment Law and Regulations, explains the purpose of the insertion of Article 20(2) and the amendment of Article 10 to provide that it is subject to Article 20(2). The Consultation Paper described the changes in the amendments proposed to the then current law as follows:

185. In summary, Article 20(2)(a)(i) does not apply to extend the limitation period in relation to the Claimant’s claims beyond 6 months after the Termination Date.

186. Article 20(2)(a)(i) applies only to a claim under Article 20(1). It does not apply to claims that an employer failed to pay an employee remuneration to which that employee is entitled under their employment contract or the Employment Law, which are not claims under Article 20(1).

187. The Claimant sought to extend the reach of Article 20(2)(a)(i) beyond claims under Article 20(1) by focusing on the following words of Article 20(2):

188. Those words must be read in the context of Article 20 read as a whole. Article 20(2) provides a limitation period in relation to claims brought by an employee that an employer has engaged in conduct that contravenes Article 20(1). The words quoted are part of a description to encompass all claims that an employer has engaged in conduct that contravenes Article 20(1).

189. In any event, the limitation period prescribed by Article 20(2)(a)(i) is expressly stated to be in relation to “a claim under Article 20(1)”.

190. The Claimant’s claims are not claims for payments that the Defendant deducted from his remuneration or accepted from him. The Defendant did not deduct from the Claimant’s Remuneration, that is his wages and allowances, amounts equal to 3 months’ salary, accrued vacation leave, child education allowance, air tickets allowance, or the additional gratuity. The Claimant’s claims are not claims for payments under Article 20(1). Article 20(2)(a)(i) does not apply to those claims.

The claims under the Employment Law are time barred

191. It is common ground that the Claimant’s claims are claims under the Employment Law. Article 10 of the Employment Law provides that, subject to relevantly Article 20(2), a Court shall not consider a claim under the Employment Law unless it is presented to the Court not later than six months after the Employee's Termination Date. Article 20(2) does not apply to extend the limitation period in relation to the Claimant’s claims beyond six months after the Employee's Termination Date.

192. The Termination Date is 23 March 2022. The Claimant presented the claims to the Court on 30 December 2022. The claims are time barred by Article 10.

The time bar is binding on the Court

193. Limitation periods are usually considered as a defence rather than a strict statutory requirement. However, when a statute explicitly states that the court shall not consider a claim unless it is presented to the court within a specified time, it creates a binding constraint. The Court is obliged to adhere to the statutory limitation period. If the claim is brought after the specified timeframe, the Court cannot consider it. The language of “shall not” in Article 10 of the Employment Law leaves no room for discretion.

194. The Claimant’s claim under the Employment Law falls outside the prescribed limitation period as dictated by Article 10. The Court must dismiss the claim.

195. The Claimant’s claims for 3 months’ salary, unpaid leave allowance, child education allowance, air tickets allowance and additional gratuity fall outside the prescribed limitation period. The Court must dismiss those claims.

Claim for penalty for late payment of end of service benefits is time barred

196. Article 19(1) requires an employer to pay an employee remuneration to which the employee is entitled within 14 days after the Termination Date: Article 19(2) provides that, subject to provisions not presently relevant, an employee shall be entitled to, and the employer shall pay, a penalty for each day the employer is in arrears of its payment obligations under Article 19(1).

197. The source of the Claimant’s entitlement to a penalty is Article 19 or Article 67. The Claim is not a claim under Article 20(2)(a)(i). The claim is a claim under the Employment Law and is time barred. The claim must be dismissed.

Wrongful termination – the claim

198. It is strictly unnecessary to determine the Claimant’s wrongful termination claim because I have found it is time barred. However, I will consider the claim in case an appeal court finds that my decision that the Claimant’s claim is time barred is wrong.

199. The Claimant’s claim is that the Defendant wrongfully terminated his employment for cause without providing three months’ notice in circumstances where the Defendant did not have just cause to dismiss him.

Wrongful termination – legal principles

200. The Defendant relies on Article 63(1) of the Employment Law for its right to terminate Mr Moorkath’s employment without notice. Article 63(1) provides:

201. The relevant principles are well established. The Court will apply a two stage test, which asks: (i) whether the employee’s conduct warrants termination; and (ii) whether a reasonable employer would have terminated the employee: McDuff v Kaanuun Ltd [2014] DIFC CA 003 (14 October 2013).

202. The first stage of the test is similar to that applied at common law for summary dismissal. The question is whether there is an act fundamentally inconsistent or incompatible with the employment relationship.

203. The second stage requires a positive finding as to what a reasonable employer would do in the circumstances: Elseco Ltd v Lys [2016] DIFC CA 011 (5 July 2017) at [24]. A “reasonable employer” is an employer placed in the circumstances of the actual employer. The question is whether the hypothetical employer would have terminated the employee’s employment: McDuff at [23].

204. The Defendant says that Mr Moorkath’s conduct in relation to the 2016 and 2017 transactions warrants termination. In its defence ETG pleads that Mr Moorkath was involved in the loss of USD 2 million by ETG and Mr Moorkath’s actions reflected serious accounting irregularities and were contrary to standard and proper accounting practises.

Wrongful termination – the Defendant suffered no loss

205. The Defendant’s case in answer to the Claimant’s wrongful termination claim and its own counterclaim case are based on the following asserted facts which are fundamental to its defence and counterclaim:

206. The Defendant confuses and fails to distinguish the payments by ETG to STG from the use to which STG put the money after it received the money from ETG.

207. The Defendant’s pleaded case is that Mr Moorkath gave the money to a third party and caused loss to ETG, not that he is responsible for STG giving the money it received from ETG to a third party, or for STG suffering a loss as a result of the money being lost or misappropriated.

208. In July 2016 Mr Moorkath did not give the money to Mr Ahmed or an unknown third party, as alleged by the Defendant. He gave the money to Mr El Abdein, the President of STG in the presence of the Vice President of STG who had instructed Mr Moorkath to hand the money to himself and Mr El Abdein. STG is a company. It does not have a physical existence; it can only act through individuals. The President and Vice President, as authorised representatives of STG, acted on behalf of the company in receiving the money. The delivery of the money to the President was a payment to the company itself.

209. The fact that Mr El Abdein handed the money bag to another man to carry from the office is ambiguous. Mr El Abdein may have given the man custody of the money, that is the temporary control or safekeeping of the money without necessarily implying transfer of ownership. In this case, the third man would have had custody of the money while transporting it for Mr El Abdein on behalf of STG. Alternatively, Mr El Abdein on behalf of STG, may have transferred ownership of the money to the third person. The first alternative is plausible. USD 1 million is a lot of cash and Mr El Abdein may well have arranged for someone to safeguard its transport. But it does not matter. If Mr El Abdein transferred ownership of the money to the third person, he did so as the authorised representative of STG. That is a transaction subsequent to Mr Moorkath transferring custody and ownership of the money to Mr El Abdein on behalf of STG. If Mr El Abdein did not have authority to transfer ownership to the third man, that is a matter between Mr El Abdein and STG, it does not affect the account between ETG and STG.

210. By Mr Moorkath, on behalf of the Defendant, handing the money to Mr El Abdein as the authorised representative of STG and thereby transferring ownership of the money to STG, the Defendant discharged the debt owed by the Defendant to STG to the extent of the amount of the money transferred. The Defendant obtained a good discharge of the debt to the extent of the amount transferred. The Defendant suffered no loss.

211. Both ETG’s and STG's books of account record that the money was paid to, for the benefit of, or at the direction of, STG, and ETG’s liability to STG was reduced by the amount of the payment. Exhibit FM 5a is ETG’s account showing its liability to STG as at 31 December 2016. It records a transaction dated 15 June 2016 of “Cash for STG” with journal voucher number 3919 for the amount of AED 3,677,500, USD 1,000,680.27 which reduced ETG’s liability to STG by that amount. Exhibit FM13 includes an extract from STG’s ledger report for ETG dated 25 July 2016. It includes the following entry as a credit to ETG:

212. Exhibit FM 5a shows that as at 31 December 2017 the balance owing by ETG to STG was USD 1,132,391,664. Exhibit FM 11 is a statement of 26 February 2017 from ETG to STG. It states that the auditors, Ernst & Young, are auditing ETG's financial statements and wish to obtain direct confirmation that USD 1,132,391,664 is owed to STG as of 31 December 2016 and asks STG to compare that balance with STG’s records. The statement confirms that as at 31 December 2016 STG’s records show that the amount owing by ETG to STG was USD 1,132,391,664.00. This balance matches with ETG’s statement of account as at 31 December 2016 (Exhibit FM 5a), and ETG’s confirmation to the auditor that its records show that as at 31 December 2016 the amount owing by ETG to STG was USD 1,132,391,664.00. The confirmation is signed by Mr Sadisu, STG’s director of management accounts, on behalf of STG. This means that STG recorded the USD 1,000,680.27 transaction in their books as a receipt by STG, and a credit to ETG because if STG had not recorded in its accounts the USD 1,000,680.27 payment as a receipt by STG and credit to ETG, then the amount recorded as owing by ETG as at 31 December 2016 would not have matched the amount showing as owed by ETG to STG in ETG’s accounts.

213. The same analysis applies to the 2017 transaction. Mr Moorkath and Mr Rahamtalla, the Defendant’s CEO, transferred the money to an account of, for the benefit of, or at the direction of, STG. The Defendant discharged the debt owed by the Defendant to STG to the extent of the amount of the money transferred. The Defendant obtained a good discharge of the debt to the extent of the amount transferred. The Defendant suffered no loss.

214. There is no direct evidence that the May 2017 payment was recorded in STG’s ledger or, if it was, how it was recorded. STG’s ledger for May 2017 was not produced.

215. However, the evidence before the Court is that the transaction was recorded in STG’s books of account as a payment from ETG to, for the benefit of, or at the direction of, STG.

216. Exhibit FM 18 is a statement of 12 March 2018 from ETG to STG. It states that the auditors, Ernst & Young, are auditing ETG's financial statements and wish to obtain direct confirmation that USD 1,155,127,060 is owed to STG as of 31 December 2017 and asks STG to compare that balance with STG’s records. The statement confirms that as at 31 December 2017 STG’s records show that the amount owing by ETG to STG was USD 1,155,127,060. This balance matches with ETG’s statement of account as at 31 December 2016 (Exhibit FM 5b) and ETG’s confirmation to the auditor that its records show that as at 31 December 2017 the amount owing by ETG to STG was USD 1,155,127,060. The confirmation is signed by Mr Sadisu, STG’s director of management accounts, on behalf of STG. This means that STG recorded the USD 1,001,088.43 transaction in their books as a receipt by STG, and a credit to ETG because if STG had not recorded in its accounts the USD 1,000,680.27 payment as a receipt by STG and credit to ETG, then the amount recorded as owing by ETG as at 31 December 2016 would not have matched the amount showing as owed by ETG to STG in ETG’s accounts because exhibit 5b shows that the balance of USD 1,155,127,060 in ETG’s accounts takes into account as a debit USD 1,000,680.27 on 3 May 2017 for “Fund transfer for STG”.

217. I reject Mr Doherty’s submission that the entries in STG’s accounts merely reflect the information given to STG by Mr Moorkath and do not verify Mr Moorkath’s entries in the ETG accounts for the same reason I reject that submission in relation to the 2016 transaction.

218. I reject Mr Doherty’s submission that ETG has suffered a loss because the USD 1 million was paid to a third party and STG can assert that the accounts between them should be adjusted accordingly for the same reason I reject that submission in relation to the 2016 transaction.

219. The Defendant does not allege that Mr Moorkath misappropriated the money or acted fraudulently in either transaction.

220. The Defendant did not attempt to prove that the funds were misappropriated by anyone after the cash was handed to Mr El Abdein in 2016 or the money was transferred by bank transfer in 2017. There is reference in documents to queries about the 2016 and 2017 transactions and money intended for the Republic of Mauritania. But there is no evidence that the cash handed over in 2016 or the money transferred in 2017 was misappropriated by anyone. There is no evidence that STG has reversed the entries in its books of account which record that ETG made the 2016 and 2017 payments to, for the benefit of, or at the direction of, STG and that ETG’s liability to STG was reduced by the amount of the payments.

Employment was wrongfully terminated

No serious financial or accounting irregularities

221. The Defendant has not established its allegation that Mr Moorkath’s conduct involves serious financial or accounting irregularity.

222. Prior to both the 2016 and 2017 transactions, ETG received funds from and on behalf of STG and paid funds to, for the benefit of, or at the direction of, STG. The 2016 and 2017 transactions differed from other transactions only in the amounts involved.

223. Mr Moorkath received instructions to make the payments, and how they were to be made, from ETG’s CEO and STG’s Vice President, from whom, consistently with his Employment Agreement, he received instructions and to whom he was required to report.

224. Not only did Mr Moorkath act on instructions from his CEO, but both transactions were effected by a cheque or bank transfer co-signed by the CEO.

225. In July 2016 Mr Moorkath gave the money to Mr El Abdein, who was President of STG and Chairman of ETG in the presence of the Vice President, who was one of the people to whom he reported and who had issued instructions for the payment. Mr El Abdein had apparent authority to receive the payment on behalf of STG. Indeed, the Defendant has produced no evidence that he did not have actual authority to receive the money on behalf of STG.

226. There are few documents in relation to the 2017 transaction. For the reasons I have stated, that does not mean documents did not exist at the time. I have found on the balance of probabilities that there were instructions from STG and Mr Rahamtalla to make the bank transfer. I find, on the balance of probabilities, that the transfer was made on the instructions of STG and the instructions were given by someone with apparent, if not actual authority, to give the instruction. I find that the transfer was received in an account at the direction of STG.

No breach of standard and proper accounting practises

227. The Defendant alleges that Mr Moorkath’s actions were contrary to standard and proper accounting practises. That allegation must be considered in the context of ETG’s policies, procedures, and practices in relation to facilitating the withdrawal and disbursement of large payments in cash or by transfer order in favour of STG.

228. The only written policy or procedure produced by ETG is the Company Authorization Matrix of 29 May 2008, which refers to authorities and limits. The Authorization Matrix says that it becomes an integral part of the relevant Company’s bylaws upon its approval by the Board of Directors. The document is not signed and there is no evidence that it was approved by the Board of Directors. Notwithstanding that observation, I will assume, as the parties did, that the Authorization Matrix applied to ETG in 2016 and 2017.

229. Mr Doherty cross examined Mr Moorkath in relation to section 4 of the Authorization Matrix that requires approvals or authorisations for transactions involving “Creation of Liability”. Mr Doherty put to Mr Moorkath that each of the 2016 and 2017 transactions required approval by the ETG executive committee because they involved the creation of a liability of more than EUR 500,000. Mr Moorkath said that the transactions did not require approval from the ETG executive committee because they did not involve the creation of any liability of ETG.

230. Mr Moorkath is right. When ETG received a payment from, or on behalf of, STG, the funds were deposited to ETG’s bank account. As I have said, that gave rise to a relationship of debtor and creditor. ETG was indebted to STG for the amount it had received from or on behalf of STG. When ETG paid an amount to, for the benefit of, or at the direction of, STG, that did not create a liability. The payment of a debt discharges a liability, it does not create one. A payment to, for the benefit of, or at the direction of, STG discharged the debt it owed to STG to the extent of the amount of the payment.

231. The transactions appear to come within section 10 of the Authorization Matrix “Cash Disbursements”. Mr Doherty appeared to accept that Mr Moorkath and Mr Rahamtalla complied with those requirements, which require the joint signatures of the CEO and Corporate Accounting Director for disbursements up to EUR 1 million.

232. In his witness statement Mr Abdelmalik asserts a payment procedure which he says ETG requires to be followed when making payments. Mr Abdelmalik produced some emails, money transfer instructions, domestic wire transfer confirmations, and debit notes in support of his assertion.

233. That evidence does not establish a payment procedure which applied to the 2016 and 2017 transactions. First, the documents are not sufficiently comprehensive to make out Mr Abdelmalik's claim. Secondly, Mr Abdelmalik was not involved in the finance department or in making payments in 2016 or 2017. Mr Abdelmalik’s evidence is not evidence of a payment procedure in 2016 or 2017. In cross examination he confirmed that his reference to standard practice was standard practice based on his experience from 2020. That is after Mr Rahamtalla had left. Thirdly, as Mr Moorkath pointed out, none of the documents relate to a cash disbursement transaction. Fourthly, none of the documents relate to a payment to, for the benefit of, or at the direction of, STG.

234. It was not contrary to any rule or procedure for ETG to make cash payments to or at the direction of STG. Mr Abdelmalik agreed in cross examination that there were occasions where STG required ETG “to gather cash for STG’s use”.

235. The Defendant has not established that there was a procedure that Mr Moorkath was required to follow when participating in the disbursement of funds in the 2016 and 2017 transactions. Mr Moorkath’s evidence is that most of the time, ETG’s employees received instructions from STG to make the payment and how it was to be made. That evidence is not contradicted, and I accept it.

236. The Defendant submits that Mr Moorkath was responsible for overseeing the payment of substantial sums, about USD 2 million, to unknown third parties without following ETGs normal payment procedures or conducting any independent due diligence on those transactions, ETG has not recovered those sums and, as such, has lost a considerable amount of money as a consequence of Mr Moorkath’s actions.

237. Those allegations are not made out.

238. For the reasons I have stated, I find that ETG has not suffered any loss as a result of the 2016 or 2017 transactions.

239. As I have found, Mr Moorkath did not oversee the payment of substantial sums to unknown third parties. Mr Moorkath handed the cash in July 2016 to Mr El Abdein, who had actual or apparent authority to receive the money on behalf of STG. Mr El Abdein signed the approval memo as a receipt that the money had been received by STG which intended to apply the money for the purpose set out in the Approval Memo. Mr Moorkath and Mr Rahamtalla made the 2017 bank transfer on instructions of STG to, for the benefit of, or at the direction of, STG.

240. I do not accept that Mr Moorkath made the payments without following ETGs normal payment procedures. ETG has not established any normal payment procedures or practice for disbursing cash to STG, or transferring money to, for the benefit of, or at the direction of, STG by bank transfer. Mr Moorkath’s evidence that the transactions followed normal payment procedures for paying cash to STG or transferring money to, for the benefit of, or at the direction of, STG by bank transfer, has not been contradicted by evidence.

241. Paying USD 1 million in cash is not a common transaction in most contexts but this transaction took place in circumstances where STG was subject to USA sanctions. Cash payments were part of STG’s strategy for evading or working around the sanctions.

242. I do not accept that the circumstances required Mr Moorkath to conduct an independent due diligence on the transactions. The transactions must be viewed in the context of the USA sanctions and the practice of STG to make payments and transfers, including in cash, through ETG. The 2016 payment was not the first time Mr Moorkath had facilitated payments in cash to STG representatives and he had not been told or alerted that doing so was irregular. Indeed, as I have already noted, even Mr Abdelmalik who was not involved in payments in 2016 agreed that sometimes STG required ETG “to gather cash” for STG’s use.

243. The instruction to make the payment came in permanent form, an email, from ETG’s CEO. In addition, Mr Moorkath received emailed instructions from the STG Vice President of Finance to make the payment. The cheque to obtain the US dollars was co-signed by ETG’s CEO. The STG Vice President made the arrangements by email to collect the money with STG’s CEO and Group President.

244. There are no documents before the Court recording instructions to make the 2017 bank transfer or the account to which the funds were transferred. However, as I have found, that does not mean that such documents did not exist.

245. I note that the members of the investigative meeting held a discussion on 6 May 2021 before they interviewed Mr Moorkath. One member, Abuelgasim Osman Ahmed, explained, without being contradicted, that:

That is what Mr Moorkath did.

246. ETG says Mr Moorkath failed to adhere to basic accounting procedures and standards.

247. There is no evidence of basic accounting procedures.

248. Mr Moorkath says, and I accept, that he received instructions from STG and Mr Rahamtalla to make the 2017 payment. The transfer order to Wall Street Exchange was co-signed by Mr Rahamtalla. Wall Street Exchange transferred the amount to an account. There is no document evidencing the account to which the transfer was made. Mr Moorkath says the payment was transferred to an account of or at the direction of STG.

249. The money is recorded in ETG’s intercompany statement of account for STG as a debit on 3 May 2017 of “Fund transfer for STG” for AED 3,679,000 / USD 1,001,088.43.

250. STG’s accounts have not been made available to the Court, but it can be seen from the statement to the external auditors that the payment was recorded in STG’s accounts as a credit to ETG for the amount of the payment having been received or paid at the direction of STG.

Inadequate records do not justify termination without notice

251. The Defendant alleges that Mr Moorkath’s termination without notice is justified because he failed to maintain proper or adequate records of the transactions.

252. There is no evidence of proper or appropriate accounting standards of record keeping. In most cases, expert evidence will be required to support a claim that an accountant failed to maintain proper or adequate records.

253. Mr Doherty referred to Article 122 of the Companies Law 2018 which provides that every Company shall keep Accounting Records which are sufficient to show and explain its transactions so as to:

254. ETG’s accounts and STG’s accounts were audited by external auditors. There is no evidence that the auditors found the records in relation to the transactions to be insufficient until STG’s auditors in 2019 questioned whether the money had been paid to the Republic of Mauritania as approved by the STG Board. If it was not, that is not a failure by Mr Moorkath. He was tasked to give the money to STG’s President and Vice President, which he did.

255. Nevertheless, the records available fall short of what I would expect of a senior corporate accountant or director of corporate finance. I would expect a senior corporate accountant or director of corporate finance to obtain and retain on an appropriate file or in permanent and accessible form, an instruction or request from STG signed by an officer or employee with appropriate authority instructing or requesting that ETG pay a specified amount to a nominated person or account and a receipt signed by the person who received the money stating that he had received the stated amount on the stated date or a document from the transferring bank attesting to the amount transferred and the account to which the money was transferred.

256. The records made and retained by Mr Moorkath in connection with the 2016 and 2017 transactions fall short of that standard.

257. However, that failure does not warrant Mr Moorkath’s summary dismissal in the circumstances. Those relevant circumstances include the following.

258. Payments to, for the benefit of, or at the direction of, STG were, and were treated, differently, from other payments made by ETG. This is in the context that ETG was a wholly owned subsidiary of STG and acted like a group treasury or banker for STG, at least in part to evade or work around USA sanctions.

259. ETG provided no training or guidance to Mr Moorkath in relation to effecting and recording payments of a large amount of cash or a bank transfer to or at the direction of its parent company.

260. ETG had no accounting or financial procedures for approval, disbursement, receipt, and record keeping for cash payments and bank transfers notwithstanding that ETG was required to make such payments and transfers by its parent company.

261. Mr Moorkath was instructed to effect the payments by the most senior managers in ETG and STG and the persons to whom he was instructed to report.

262. The transactions were effected with the knowledge of, indeed on the instructions of, the CEO of ETG and with the knowledge of STG’s manager of accounts as well as its President and Vice President Finance. Those executives required Mr Moorkath to arrange the payments on the basis of instructions in the manner and form they provided.

263. Mr Moorkath recorded the transactions in the accounts of ETG which have been audited by external accountants who raised no objections or questions about the transactions. It was only STG’s auditors who queried the transactions some years later. When the query was raised in 2019, the STG board approved the payments to the Republic of Mauritania. The subsequent query was whether the money had been applied in accordance with the approval of the board. That was the responsibility of officers or employees of STG. Although Mr Moorkath took instructions from the CEO and Vice President Finance of STG and provided information about the transactions to STG’s accounting department, he was not the accountant for STG. STG had its own accounting department and manager of financial accounts. It was their responsibility to maintain the STG accounts properly, including obtaining and retaining source documents to explain and verify its accounts. That was not Mr Moorkath’s responsibility.

Termination not justified by Employment Agreement

264. ETG submits that it's entitlement to terminate for cause “was augmented” by the terms of the Employment Agreement. Clause 12.1 of the Employment Agreement provides relevantly that ETG reserves the right to terminate Mr Moorkath’s employment without notice if Mr Moorkath commits a fault resulting in substantial material loss to ETG provided that ETG notifies the labour department of the incident according to the DIFC laws.

265. Mr Moorkath’s conduct did not result in substantial material loss to ETG.

Claimant’s conduct not incompatible with employment relationship

266. An employee’s conduct warrants termination where his acts or omissions are fundamentally inconsistent or incompatible with the employment relationship. An employee’s acts or omissions are fundamentally inconsistent or incompatible with the employment relationship where his behaviour or actions are in direct conflict with his duties and obligations as outlined in his employment contract. An employee’s conduct is incompatible when it significantly hinders his ability to fulfil his job responsibilities. If an employee’s behaviour erodes the essential trust and confidence required for a productive work environment, it becomes a ground for dismissal. This could involve actions that damage the employer-employee relationship.

267. Mr Moorkath’s conduct was not inconsistent or incompatible with the employment relationship with the Defendant.

268. Mr Moorkath’s acts were to fulfil one of the principal duties of an employee – to obey the lawful and reasonable instructions of his employer. He carried out the instructions of his CEO and Chairman and of the persons he was required to report to. He carried out their instructions in the manner they instructed. There is no evidence that their instructions were unlawful. In the circumstances in which they were given, it has not been established that he had a duty to refuse to carry them out or question them.

269. Mr Moorkath entered the transactions in ETG’s books of account. The books were audited. The relevant entries (or lack of) were not criticised or questioned.

270. What Mr Moorkath did (and did not do) was done (and not done) with the full knowledge of the CEO and Chairman. Their knowledge is relevantly to be attributed to ETG. The relationship of trust and confidence between Mr Moorkath continued for four or five years until the senior management of ETG and STG appear to have changed.

Reasonable employer would not have dismissed Claimant

271. A reasonable employer would not have terminated Mr Moorkath’s employment without notice.

272. Mr Moorkath was employed by ETG for 11 years with an apparently exemplary record. He was successively promoted and received pay raises during those years.

273. Mr Moorkath’s conduct was not contrary to any procedures of the company. His conduct was on and in accordance with the instructions of the CEO and Chairman of the Defendant and the persons to whom he reported.

274. ETG retained Mr Moorkath in his position for five or six years after the transactions notwithstanding that the transactions and Mr Moorkath’s part in them were known to ETG through its CEO and Chairman. In those circumstances, termination is disproportionate to the misconduct, if his conduct amounted to misconduct. Dismissal is excessive and overly harsh.

Termination was wrongful

275. Mr Moorkath’s conduct does not warrant termination of his employment. A reasonable employer would not have terminated his employment. Mr Moorkath’s employment was wrongfully terminated.

276. The Claimant has made out his claim that his employment was unlawfully or wrongfully terminated because it was terminated without notice and without just cause. The Claimant is, therefore, subject to his claim being time barred, entitled to compensation. The appropriate compensation is the salary for the period of notice to which he was entitled - 3 months - and any ancillary benefits.

277. However, the Claimant’s claim is time barred. It must be dismissed.

Child education allowance entitlement

278. It is strictly unnecessary to determine the Claimant’s claim for the payment of the child education allowance because I have found the claim is time barred. However, I will consider the claim in case an appeal court finds that I am wrong in finding that the claim is time barred.

279. The Claimant says that on his termination he was entitled to be paid the child education (schooling) allowance for the year 2022. He claims AED 77,121 (USD 21,000).

280. The Defendant says the Claimant is not entitled to the Child Education Allowance for the year 2022 because he did not finish the year of employment and was employed for less than one month in 2022. The Defendant pro-rated the Claimant's entitlement towards the Child Education Allowance and paid the Claimant USD 5,250.

281. The Employment Agreement provides:

282. The Employment Agreement specifies that the allowance is granted once a year but does not say when the allowance is paid or when the entitlement to the allowance accrues. The entitlement for each year might accrue and be payable at the beginning of each year, in which case the employee becomes entitled to the allowance as soon as the year of employment begins. Alternatively, the entitlement for each year might accrue and be paid at the end of each year, in which case the employee becomes entitled to the allowance on the last day of the year of employment or immediately after the last day of the year of employment. In the further alternative the allowance might be paid in equal parts for each pay period over the year of employment.

283. Article 49 of the Contract Law 2004 provides that a contract shall be interpreted according to the common intention of the parties and if such an intention cannot be established, the contract shall be interpreted according to the meaning that reasonable persons of the same kind as the parties would give to it in the same circumstances. Article 51 provides that in applying Article 49 regard shall be had to all the circumstances, including

284. There is no evidence of any of those matters except the nature and purpose of the contract.

285. The entitlement to the Child Education (Schooling) Allowance for each year depends on the terms of the Employment Agreement.

286. Whether the employee must work the whole year to be entitled to the allowance depends on the contract language. If the contract does not address partial-year entitlement, the employee might not receive any allowance for the year.

287. The contract specifies that the allowance is granted once a year. Therefore, the entitlement for the year would typically accrue at the beginning of that year. In other words, the employee becomes eligible for the allowance as soon as the year of employment begins.

288. The purpose of a child education allowance is to support employees with the educational expenses of their children. The payment schedule for private school fees can vary depending on the school’s policies. However, it is common for schools to require parents to pay the full annual tuition fee at the beginning of the school year although some schools may offer the option to pay fees on a term-by-term basis. The object of supporting employees with the educational expenses of their children would be advanced by paying the allowance at the beginning of the year of employment to enable the employee to apply the allowance to the payment of the school fees.

289. Further, Article 54 provides that If contract terms supplied by one party are unclear, an interpretation against that party is preferred. It is apparent on the face of the Employment Agreement and its terms that the agreement was supplied by the Defendant.

290. For those reasons, I interpret the Employment Agreement to mean that the Child Education (Schooling) Allowance is payable at the beginning of each year of employment.

291. The Defendant should have paid the Claimant the whole of the allowance for the employment year beginning in March 2022, that is USD 21,000. The Defendant underpaid the Claimant (USD 21,000 - USD 5,250) USD 15,750. However, as the Claimant’s claim is time barred the Claimant’s claim for the underpaid Child Education (Schooling) Allowance must be dismissed.

No entitlement for payment in lieu of air tickets

292. The Claimant claims AED 30,000 for round trip air tickets (Business Class) to India for himself, his spouse and their three children.

293. In its defence the Defendant pleads that the Claimant was entitled to this payment once a year upon the completion of a full year of employment, the Claimant’s employment was terminated in March 2022 and he was therefore not entitled to the allowance for the year 2022.

294. In its skeleton argument the Defendant submits that the Employment Agreement does not assign a cash value to the air tickets entitlement, properly construed, it is a “use it or lose it” entitlement and there is no contractual term which says that the Claimant was entitled to payment in respect of unused allowances.

295. The Employment Agreement provides:

296. In Musaab Tag Elsir Abdelsalam v Expresso Telecom Group Limited [2019] DIFC CFI 015 (12 May 2023). Sir Jeremy Cooke held (at [22]-[25]) in relation to a similar provision in an employment contract, that there was no entitlement to payment in lieu of an unused airfare.

297. I respectfully agree with Sir Jeremy Cooke. The Employment Agreement creates a legal obligation on the employer to provide, and an entitlement of an employee to receive, air tickets once every year. That is a non-cash entitlement, in contrast to the child education allowance which is a cash allowance paid directly to the employee.

298. The Claimant has no entitlement to cash in lieu of air tickets. If the Claimant has not received air tickets for the year of employment in which his employment is terminated, he has no entitlement to the cash value of the air tickets not used. The entitlement to air tickets is a use it or lose it entitlement. Such benefits or entitlements must be used within the employment year. If the employee does not use the entitlements during that time, he forfeits them.

299. The claim for AED 30,000 for air tickets must be dismissed.

No additional entitlement for unpaid annual leave

300. Article 28(1) of the Employment Law provides that where an employee's employment is terminated, the employer shall pay the employee an amount in lieu of Vacation Leave accrued but not taken up to and including the Termination Date.

301. In accordance with Article 28(3) the Claimant’s annual leave entitlement was 24 working days as provided by Clause 7 of the Agreement.

302. The Claimant claims unpaid annual leave of 41 days if dismissal was without cause. calculated as follows:

303. There are two sources of entitlement to carry over leave from one year to the next. Clause 7.3 of the Employment Agreement provides that:

That provision does not entitle the Claimant to carry forward beyond March 2021 any leave accrued but not taken in 2020.

304. Article 27(3) of the Employment Law provides:

305. The first sentence of that provision deals with the period for which the employee may carry forward accrued but untaken vacation leave. The second sentence deals with the amount of accrued but untaken vacation leave that an employee may carry forward. An employee may carry forward accrued but untaken vacation leave for a maximum period of 12 months after which any unused leave shall expire.

306. The Claimant was not entitled to carry forward leave accrued but not taken in 2020 beyond 2021. He has no entitlement to leave accrued but not taken in 2020.

307. The Claimant accrued but did not take 24 days leave in 2021. Under Clause 7.3 of the Employment Agreement, he was entitled to carry forward those 24 days leave but not beyond March 2022.

308. Counsel for the Defendant submitted that not beyond March 2022 means up to the end of February 2022. I do not agree. In the context of an employment contract, the phrase, “Leave accrued but not taken in any year shall not extend beyond March of the following year”, more naturally means that the leave must be utilised by the end of March in the following year. In other words, employees should use any accrued leave before the start of April in the subsequent year. So, if you have any unused leave from the current year, it should be taken by the end of March in the next year to avoid forfeiting it.

309. Further, Article 54 provides that if contract terms supplied by one party are unclear, an interpretation against that party is preferred. It is apparent on the face of the Employment Agreement and its terms that the agreement was supplied by the Defendant.

310. Clause 7.3 of the Employment Agreement should be interpreted to mean that the leave must be used by the end of March in the following year. The Claimant was entitled to carry forward 24 days leave into 2022.

311. In accordance with Article 28 (3) the Defendant was obliged to pay the Claimant an amount in lieu of leave accrued but not taken up to and including the Termination Date, not a date which would have been the Termination Date if the Claimant had been given 3 months’ notice. The Defendant was obliged to pay the Claimant an amount in lieu of leave accrued but not taken up to and including 23 March 2022. The leave accrued but not taken in 2022 was 6 days.

312. The Defendant was obliged to pay the Claimant an amount in lieu of 30 days leave accrued but not taken, that is 24 days carried forward from 2021 and 6 days accrued in 2022 up to 23 March 2022.

313. The Defendant paid the Claimant for 34 days untaken leave. The Claimant’s claim for unpaid leave benefits must be dismissed.

Penalty claim made out but time barred

314. Mr Moorkath says that a penalty, equal to his daily wage, is payable for each day that ETG had not paid the Remuneration to which he was entitled.

315. Upon review of clause 3 of Schedule 1 (Interpretation) of the Employment Law, the Defendant’s failure to pay the child education allowance to which the Claimant was entitled is an “Allowance” which is also considered to be a “Wage” and therefore “Remuneration”.

316. As ETG has not paid the child education allowance in full, Mr Moorkath is entitled to receive the penalty for this reason. Mr Moorkath would be entitled to the payment of a penalty for the unpaid amount of the 2022 child education allowance. However, I have found the claim is time barred.

Gratuity claim made out but time barred

317. This claim is for payment of AED 8,581.42, in respect of the difference in gratuity payable if the Claimant had a notice period, on the basis that the Employment Agreement should not have been terminated without notice.

318. The Claimant’s employment was terminated for cause without notice in circumstances that did not justify his dismissal.

319. The Claimant would be entitled to the claimed difference in gratuity if his claim was not time barred. However, the claim is time barred.

The visa claim

The claim

320. The Claimant’s claim is inadequately pleaded. In his claim form the Claimant claims damages for loss of opportunity of employment and states that the law governing the dispute is the Employment Law and the Law of Damages and Remedies.

321. In his particulars of claim the Claimant pleads Article 57 (3) of the Employment Law which provides that an employer and the employee must cooperate to ensure the cancellation of the employee's UAE residency visa as soon as reasonably practicable following the termination date and by no later than 30 days following the Termination Date. The Claimant says that the Defendant should have cancelled his visa no later than 22 April 2022, but despite the Claimant’s requests the Defendant did not take steps to cancel his visa until it was cancelled on 4 November 2022. The Claimant says he was unable to secure alternative employment from 23 March 2022 until 16 November 2022 because of the Defendant's failure to cooperate to ensure the cancellation of his visa. The Claimant claims damages under Article 23 of the Law of Damages and Remedies for the loss of opportunity to obtain employment from 22 April 2022 to 16 November 2022.

322. In his oral submissions counsel for the Claimant, Mr Khoshdel, submitted that the Claimant’s claim was for damages for negligence under the Law of Obligations giving rise to a right to damages under Article 23 Law of Damages and Remedies.

323. Article 17 of the Law of Obligations provides that a defendant is liable in negligence to a claimant if and to the extent:

Duty of care

324. The existence of a duty of care depends on the criteria in Article 18(1) of the Law of Obligations which provides that subject to Articles 18(2) and (3), a defendant owes a duty of care to a claimant where:

325. The Claimant appears to have assumed that the existence of the statutory duty of the employer created by Article 57(3) of the Employment Law gives rise to a coextensive common law duty owed by an employer to an employee.

326. However, a statutory duty does not automatically create a coextensive common law duty of care. It is necessary to consider the criteria in Article 18.

327. Further a common law duty of care in the terms of Article 57(3) of the Employment Law is untenable. The duty in Article 57(3) is, amongst other things, to cooperate to “ensure” the employee’s visa is cancelled within 30 days. Whatever their scope, all common law duties of care are to be discharged by the exercise of reasonable care. They do not impose a more stringent or onerous burden: Roads and Traffic Authority (NSW) v Dederer (2007) 234 CLR 330, [43]. A duty of care calls for the taking of reasonable care towards a result and does not promise the result.

328. The appropriate common law duty, if at all, would be something like a duty to take reasonable care to avoid harm to the employee by cooperating to cancel the employee’s visa as soon as possible.

329. It is reasonably foreseeable that the Defendant's failure to cooperate to cancel the employee’s visa as soon as possible could cause loss to the Claimant by preventing or delaying the Claimant obtaining alternative employment. The criterion in Article 18(1) is satisfied.

330. The relationship between the Defendant and the Claimant is sufficiently proximate for a duty of care to exist. The Defendant was the Claimant’s sponsor, and the Claimant could not have his visa cancelled, and be able to obtain alternative employment, without the Defendant’s cooperation. The criterion in Article 18(2) is satisfied.

331. I find the criterion in Article 18(3) is not satisfied. It is not fair, just, and reasonable that the Defendant should owe the Claimant a duty to take reasonable care to cooperate to cancel the employee’s visa as soon as possible in circumstances where the Defendant is subject to the statutory duty under Article 57(3).

332. At common law, a duty of care must not be inconsistent with the intention of the legislature. In Tan Juay Pah v Kimly Construction Pte Ltd [2012] 2 SLR 549 at [53] the Court of Appeal of Singapore stated:

333. A common law duty of care will not arise where there are remedies under the statute which evinces an intention to exclude alternative remedies.

334. The Employment Law comprehensively regulates the relationship of employers and employees including obligations on employers on the termination of employment. Part 7 deals with employer’s obligations. Article 57(3) prescribes an employer’s duty to cooperate to ensure the cancellation of the employee’s visa on termination of employment.

335. Article 67, as well as providing for a penalty for contravening provisions of the Employment Law, such as Article 57(3), gives the Court a discretion to order compensation to be paid to an employee affected by the contravention.

336. A claim by an employee in relation to an employer's failure to cooperate to cancel his visa is incompatible with the statutory scheme. The existence of a common law duty could lead to multiple proceedings against an employer arising out of the same failure to cooperate to cancel an employee’s visa. That is not fair, just, and reasonable.

337. The requirements of Article 17 are not met. It is unnecessary to consider the further requirements of Article 20 for a defendant to owe a duty of care to the claimant where, as here, the Claimant claims to have suffered only pure economic loss as a result of the Defendant's conduct.

338. However, if it was necessary, I would find that the requirements of Article 20 are met. The Defendant assumed a responsibility to the Claimant when it sponsored him and obtained the visa for him. The Claimant relies on the Defendant for the cancellation of his visa, he cannot obtain its cancellation without the cooperation of the Defendant. For the same reason, it is reasonable for the Claimant to rely on the Defendant to cooperate to obtain the cancellation of his visa.

Breach of duty of care

339. It is unnecessary to consider whether the Defendant breached his duty of care to the Claimant; and whether the Defendant's acts or omissions in breach of his duty of care to the Claimant caused loss to the Claimant. However, I will do so in case an appeal court determines, contrary to my findings, that the Defendant does owe a relevant duty of care to the Claimant.

340. In his first Legal Notice dated 8 May 2022, the Claimant requested the Defendant to cancel the Claimant’s residence visa pursuant to the Employment Law. The Claimant wrote to the Defendant again on 22 September 2022 and repeated his request to cancel the residency visa. The Defendant ignored those requests, and did nothing to cancel the Claimant’s visa, until an email of 28 September 2022 by which the Defendant informed the Claimant that it needed to cancel his visa, and that it needed the Claimant to cancel the visa of his family first so it could proceed with his and asked the Claimant to inform the Defendant when that was completed.

341. The Claimant then delayed in cancelling his family visa and the Claimant’s visa was cancelled on 3 November 2022.

342. If the Defendant owed to the Claimant a duty to take reasonable care to cooperate to cancel the Claimant’s visa as soon as possible, the Defendant’s failure to respond to the Claimant’s first request, and doing nothing until 28 September 2022 was a breach of that duty.

Loss and causation not established

343. The Claimant bears the onus of proving that the Defendant’s conduct caused the losses claimed and to quantify those losses.

344. The Claimant adduced no evidence that he had applied for and did not obtain any job except statements at such a high level of generality that he has not discharged his onus.

345. In his witness statement the Claimant said that he was contacted by a few companies through references but when he informed them about the visa status, they asked him to wait until the visa was cancelled.

346. In cross examination Mr Moorkath said:

347. The Claimant agreed he did not have any evidence of communications with any prospective employers. When he was asked for evidence that says that a single company, at any time between March and November 2022, told him, "We are not going to employ you because of your visa status" Mr Moorkath said:

348. Later Mr Moorkath said:

349. Mr Moorkath said he received a job offer from Ms Finacle Tax & Auditing Service LLC (“Ms Finacle”) on 3 November 2022, the same day as the visa being cancelled, and that they were waiting for the cancellation of his visa to offer the employment and once the visa was cancelled, he informed Ms Finacle, and he then formally received the offer.

350. Mr Moorkath did not say when he received the offer from Ms Finacle. That is significant because the Defendant started to cooperate to cancel the Claimant’s visa on 22 September 2022 and the delay thereafter in cancelling his visa was principally caused by the Claimant’s delay in cancelling his family visa rather than a failure of the Defendant to cooperate. If there was an offer or indication from Ms Finacle before 22 September 2022 that the firm would employ the Claimant once his visa sponsored by the Defendant was cancelled, that would be evidence of loss caused to the claimant by the Defendant’s failure to cooperate to cancel his visa. But there is no evidence of that.

351. I am not satisfied that the Claimant has discharged the onus on him of proving that he suffered loss of earnings between 23 March (or 22 April) 2022 and 16 November 2022 which was caused by the Defendant’s failure to cooperate to cancel his visa.

352. The Claimant’s claim for loss of earnings must be dismissed.

The counterclaim

The Defendant’s counterclaim

353. The Defendant counterclaims for damages for pure economic loss it claims it has suffered as a result of the Claimant’s negligence. The Defendant pleads that the Claimant failed to exercise reasonable care in verifying the legitimacy of each of the 2016 and 2017 transactions and thereafter making an incorrect entry in the books of the Defendant as a result which, the Defendant has suffered an economic loss of AED 7,356,500, that is the amount disbursed in the two transactions.

354. Article 17 of the Law of Obligations provides that a defendant to the claim (in this case the Defendant to the counterclaim, the Claimant) is liable in negligence to a claimant (in this case the Claimant to the counterclaim, the Defendant) if and to the extent that the defendant owed a duty of care to the claimant; the defendant breached his duty of care to the claimant, and the defendant's acts or omissions in breach of his duty of care to the claimant caused loss to the claimant.

Defendant has not proved actionable loss

355. The issues of duty, breach, and causation are usually approached in their historical order, as the order in which they are stated in Article 17 indicates. However, before the claim may be brought the Defendant must have suffered a loss resulting in damage which is actionable. Damage is the gist of the action of negligence, as Lord Scarman put it in Sidaway v Board of Governors of the Bethlem Royal Hospital and the Maudsley Hospital [1985] AC 871, 883H. No action lies for a wrong which has not resulted in some loss, injury or damage of a kind that was reasonably foreseeable for which the claimant can sue.

356. Without proof that as a result of the acts or omissions of the Claimant, the Defendant suffered some loss that the law recognises as actionable, no tort has been committed. Determining whether the Defendant has suffered actionable loss is therefore logically prior to any issue of causation, and in this case, it is sensible to consider whether the Defendant has suffered the loss alleged by the Defendant to have been caused by the acts or omissions of the Claimant before considering the issues of duty, breach, and causation.

357. I am not satisfied the Defendant has suffered the loss of AED 7,356,500 alleged by the Defendant, or any loss, as a result of the Claimant’s participation in paying USD 1,000,680.27 in 2016 or transferring USD 1,001,088.43 in 2017 or incorrectly entering those transactions in the Defendant’s books. I make those findings for the reasons I stated in discussing whether the Claimant’s dismissal without notice was justified. Again, the question is not whether STG has suffered any loss but whether the Defendant suffered any loss.

358. For that reason, the Defendant’s counterclaim must be dismissed. However, in case an appeal court finds that I am wrong, I will set out my findings in relation to the issues of duty of care, breach, and causation.

Duty of care

359. It is relatively uncommon for employers to sue employees for property damage or loss caused during the course of employment. However, employers can bring claims in negligence for loss against their employees. In Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555 the House of Lords famously upheld the right of an insurer to bring an action by way of subrogation against a negligent employee of its insured.

360. Counsel for the Defendant helpfully referred the Court to the decision of the Court of Session (Inner House, First Division) of Scotland in Peebles Media Group Ltd V Reilly (2021) SCLR 328 where the pursuers raised an action, against their former credit controller for damages arising out of a fraud by a third party which caused the pursuers loss. The Lord President said that in that case an employee has a duty to act with care when dealing with an employer's funds. In the New South Wales case of Bolton Gems v Grigoire (1995) BC 9501839, an employed sales representative of a gem wholesaler was required to transport a bag of gems around to various jewellers. She was trained and instructed not to leave this bag unattended. Despite this she left the gems unattended in her vehicle and, on return to her car, she discovered the gems had been stolen. The employer successfully sued the worker for the cost of the stolen gems. The employer alleged that she had breached her employment conditions and disobeyed the policy that stipulated that the gems not be left unattended.

361. A notable feature of those cases is that the employee acted contrary to their employer’s instructions, training, or procedures.

362. In its counterclaim the Defendant does not identify with any precision the duty of care said to be owed by the Claimant to the Defendant. The Defendant pleads the duty of care, breach, causation, and loss in rolled up pleas that the Claimant failed to exercise reasonable care in verifying the legitimacy of each of the 2016 and 2017 transactions and thereafter making an incorrect entry in the books of the Defendant as a result which, the Defendant has suffered an economic loss of AED 7,356,500, that is the amount paid by the Defendant in the two transactions.

363. The concept of duty of care refers to the legal obligation that a person has to take reasonable care to prevent foreseeable harm to others or their property.

364. In an employment relationship, the terms of the employment contract play a significant role in determining the scope and content of the duty of care that an employee owes to their employer. Express terms can define the specific duties an employee must perform. Employees’ main duties are to carry out the tasks assigned to them effectively and efficiently, to exercise reasonable care and skill in performing their functions and to obey reasonable instructions from their employer. This includes following company policies and procedures.

365. The relevant duty of care owed by the Claimant is a duty to exercise reasonable care to avoid loss to the Defendant in performing his employment duties. A duty of care to that effect satisfies the criteria in Articles 18 and 20 of the Law of Obligations.

366. I am prepared to find the further requirements of Article 20 of the Law of Obligations for a defendant to owe a duty of care to the claimant where, as here, the Defendant claims to have suffered only pure economic loss as a result of the Claimant's conduct are satisfied. The Claimant had responsibility towards the Defendant in his capacity as a senior corporate accountant and Director of Corporate Finance and was one of two signatories of the Defendant's bank account. The Defendant relied upon the Claimant to honestly and properly make or arrange the disbursement of funds on behalf of the Defendant. It was reasonable for the Defendant to rely upon the Claimant given his duties with the Defendant and being a signatory to its bank account.

No breach of duty of care

367. In its counterclaim the Defendant pleads that on 15 June 2016, the Claimant issued and co-signed a cheque on the Defendant's bank in favour of Wall Street Exchange for an amount of AED 3,677,500, and after these funds were converted into US dollars, the Claimant handed this money over to Mr Ahmed, who had no connection with the Defendant or its group companies. The Defendant pleads that the Claimant recorded this transaction as an accounting entry on 15 June 2016 as a disbursement of AED 3,677,500 in cash in favour of STG, the shareholder of the Defendant but upon examination of STG's books of accounts, these funds were not paid to STG.

368. In relation to the 2017 transaction, the Defendant pleads that on 4 May 2017, the Claimant issued and co-signed a bank transfer order from the Defendant's bank in favour of Wall Street Exchange for an amount of AED 3,679,000 in exchange for the purchase of USD 1 million dollars and entered the transaction into the Defendant's books of account as an intergroup payment to STG, but no corresponding entry has been found in STG’s accounts.

369. In relation to both transactions the Defendant pleads that the Claimant failed to exercise reasonable care in verifying the legitimacy of the transaction and thereafter making an incorrect entry in the books of the Defendant.

370. In its skeleton argument the Defendant submits in relation to the 2016 transaction that the Claimant’s act in co-signing the cheque in favour of Wall Street Exchange and causing a misleading accounting entry on 15 June 2016 in the Defendant’s accounts was a breach of his duty to the Defendant causing a loss of money through the misapplication of that sum to an unknown third party.

371. In relation to the 2017 transaction the Defendant submits that the Claimant’s act in cosigning the bank transfer to Wall Street Exchange and causing a misleading accounting entry on 3 May 2017 in the Defendant’s accounts was a breach of his duty to the Defendant causing a loss of money through the misapplication of that sum to an unknown third party.

372. In relation to both transactions the Defendant submits the Claimant acted in breach of his duty of care in that:

373. Many or most of the factual assertions in those pleas or submissions have not been established.

374. In 2016 the Claimant did not hand the money over to Mr Ahmed or an unknown third party. The Claimant handed the money to Mr El Abdein, on behalf of STG. The payment made to the President was a payment to the company itself.

375. The Claimant did not transfer the bank transfer in 2017 to an account unconnected with STG. The Claimant and the Defendant’s CEO transferred the money at the direction of STG by transferring the money to the account directed by the STG Vice President.

376. It is not correct that the Claimant committed breaches of the Defendant’s processes and procedures. The Defendant produced no written processes and procedures in relation to making payments, let alone making payments of cash to STG. The Defendant did not establish that there was a process or procedure for dealing with payments to STG by cash or bank transfer for the reasons I have stated. Mr Moorkath’s evidence is that he followed the same procedure as on previous occasions and no one had instructed him to follow a different procedure. Indeed, the procedure for both the 2016 and 2017 transactions was directed by the Defendant’s CEO who signed the cheque to Wall Street Exchange to purchase the cash in 2016 and the bank transfer for the 2017 bank transfer.

377. I do not agree that the transactions ought to have raised red flags, that the situation or action should have triggered suspicion or caution, a warning signal that the instruction was illegal or risked loss to the Defendant.

378. If the payment instruction was unusual, risky, or inconsistent with normal practice, it may be that it ought to have raised a red flag. if the instruction was out of the ordinary, it may be that it ought to have raised a red flag for further investigation.

379. But, I accept Mr Moorkath’s evidence that for him, this was like a normal process, even before this transaction, sometimes he got instructions to arrange USD 100,000, sometimes USD 50,000; this was a similar transaction, but the only difference was that it was a larger amount.

380. I do not accept that Mr Rahamtalla’s instruction to keep it confidential ought to have raised a red flag that something needed further investigation. Mr Moorkath said he did not understand the instruction to mean something to the effect to keep it secret from the auditors. He understood the instruction to mean that it needs to be treated with high level of confidentiality until finalising the transaction. He added:

381. In the circumstances, a reasonable person in Mr Moorkath’s situation would not have understood the instruction “to keep it confidential” to convey an illicit, clandestine transaction, but rather to inform or remind Mr Moorkath that it was necessary to keep it confidential because obtaining, holding, and delivering a large amount of cash is a security issue. It was not secret. Mr Moorkath involved others in the transaction, including Mr Husham, the admin manager, and the clerk who took the cheque to Wall Steet Exchange.

382. I am not satisfied the Claimant breached a duty of care by obtaining and disbursing the cash in 2016 largely for the same reasons I find that termination of his employment without notice was not justified on that ground.

383. The Claimant’s actions in obtaining and disbursing the USD 1 million cash must be seen in the context that the Defendant had no written or prescribed procedures for paying money to STG or its representatives. The Claimant was instructed to make the payment by the CEO and the Chairman of the Defendant and the Vice President international Operations. At the relevant times the Claimant reported to the CEO and the Chairman of the Defendant and the Vice President International Operations, that is the three people who instructed him to make the payment. The amount of the payment was unusually large but there was otherwise nothing abnormal about the transaction. Payments in cash to STG’s officers or employees was not unusual as a result of the USA sanctions that STG was subject to and making payments in cash was a way STG and the Defendant conducted their business in the context of the sanctions. The Claimant delivered the money to the President and Vice President of STG as he was instructed. It was not part of his responsibilities to enquire what STG did with the money.

384. I am not satisfied the Claimant breached his duty of care by failing to properly record the USD 1 million cash payment in 2016 largely for the same reasons I find that termination of his employment without notice was not justified on that ground.

385. The Defendant had no written or prescribed procedures for recording payments of money to STG or its representatives. The Claimant recorded the transaction in the same way as he had previously recorded payments to, or at the direction of, STG. Neither the CEO or Chairman of the Defendant or the Vice President International Operations had taken issue with the way in which the payments were recorded. The Defendant’s accounts were subject to external audit. The Defendant’s auditors had not criticised or questioned the Claimant’s recording of such payments. The journal entry disclosed the transaction in sufficient detail, that is a cash payment for STG. The Claimant was not an employee of STG. He assisted STG’s accounts department by providing details of the payment, but it was not his responsibility to record what STG did with the money.

386. I am not satisfied the Claimant breached his duty of care by transferring funds by the bank transfer in 2017, again substantially for the same reasons I find that termination of his employment without notice was not justified on that ground.

387. The Claimant’s actions in transferring the funds by bank transfer must be seen in the context I have referred to in relation to the 2016 transaction. The Claimant transferred the money at the direction of STG as he was instructed and as was the practice. It was not his responsibility to enquire why STG directed that payment or the ultimate use to which STG intended to put the money.

388. I am not satisfied that the Claimant breached his duty of care by failing to properly record the bank transfer in 2017. The transfer is recorded in the Defendant’s journal. I am not able to conclude that there were no other record of the instruction to make the transfer or other records in relation to it because the Defendant did not adduce evidence that the Defendant did not have, and had not had, any documents or electronic records in relation to the transaction other than the documents before the Court.

389. Again, the evidence is that the Defendant’s auditors did not question the transaction at the time and still have not. As in relation to the 2016 transaction any questions about the transaction have come from STG’s auditors and their questions are about how the funds directed to be paid by STG were ultimately applied. As I have said, that was not the Claimant’s responsibility.

No loss or causation

390. The Defendant has not established that the Claimant’s acts or omissions caused loss to the Defendant. The Defendant failed at the first hurdle - it has not proved that it suffered any loss by reason of the 2016 or 2017 transactions.

391. It is unnecessary and undesirable to consider whether the acts of Mr El Abdein, Mr Sami Yousif, Mr Rahamtalla or anyone else constituted an intervening or supervening act to the extent that Mr Moorkath is not responsible for ETG’s loss, if ETG suffered any loss.

Contributory negligence, failure to mitigate

392. It is unnecessary, and undesirable, to consider whether the Defendant failed to mitigate its loss or contributed to its loss by its own negligence. It is unnecessary because the counterclaim must be dismissed in any event. It is undesirable because it would be necessary to make assumptions about where the cash went after it was handed to Mr El Abdein in 2016 or where the funds transferred in 2017 went after they had been transferred, whether that was authorised by Mr El Abdein, Mr Sami Yousif, the board of STG, or other persons authorised to do so on behalf of STG and what the loss, if any, was suffered by ETG or STG. There is insufficient evidence to determine what assumptions should be made.

Counterclaim is dismissed

393. The counter claim must be dismissed.

Costs

394. My provisional view is that the Defendant should not have the costs of the claim because it succeeded on the ground that the claims are time barred but did not raise that argument until it filed its skeleton argument and failed on its argument that its termination of the Claimant’s employment without notice was justified.

395. My preliminary view is that the Claimant should have the costs of the counterclaim because it successfully resisted the counterclaim.

396. However, the parties should have an opportunity to make submissions, supported by relevant evidence, in relation to the costs issues.

Conclusion

397. The Claimant’s claims must all be dismissed.

398. The Defendant’s counterclaim must be dismissed.

399. The parties should file a minute of proposed orders in relation to costs together with submissions and any supporting evidence within 14 days from the date of this Judgment.