August 18, 2022 SCT - JUDGMENTS AND ORDERS
Claim No: SCT 184/2022
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE SMALL CLAIMS TRIBUNAL
BETWEEN
LEROY FZE
Claimant
and
LENNY LLC
Defendant
ORDER WITH REASONS OF SCT JUDGE DELVIN SUMO
UPON reviewing the Claim Form submitted by the Claimant dated 6 June 2022 (the “Claim”)
AND UPON this Claim having been called for a Consultation before SCT Judge Delvin Sumo on 16 August 2022
AND UPON the Claimant’s representative attending the Consultation and the Defendant failing to attend although served notice of the claim
AND UPON considering the case file and submissions contained therein
IT IS HEREBY ORDERED THAT:
1. The Claim shall be dismissed.
2. The DIFC Courts do not have jurisdiction over this Claim.
3. Each party shall bear their own costs.
Issued by:
Hayley Norton
SCT Judge
Date of Issue: 18 August 2022
At: 9am
SCHEDULE OF REASONS
The Parties
1. The Claimant is LEROY FZE, a company registered in Sharjah, UAE (the “Claimant”).
2. The Defendant is LENNY LLC, a company registered in Abu Dhabi, UAE (the “Defendant”).
Discussion
3. Rule 53.2 of the Rules of the DIFC Courts (the “RDC”) sets out that the Small Claims Tribunal (the “SCT”) can only hear cases that fall within the jurisdiction of the DIFC Courts. The relevant wording is set out below:
“The SCT will hear and determine claims within the jurisdiction of the DIFC Courts:
(1) where the amount of the claim or the value of the subject matter of the claim does not exceed AED 500,000; or
(2) where the claim relates to the employment or former employment of a party; and
all parties elect in writing that it be heard by the SCT (there is no value limit for the SCT’s elective jurisdiction in the context of employment claims); or
(3) which do not fall within the provisions of sub-paragraph (1) or (2) above, but in respect of which:
a. the amount of the claim or the value of the subject matter of the claim does not exceed AED 1,000,000; and
b. all parties to the claim elect in writing that it be heard by the SCT, and such election is made in the underlying contract (if any) or subsequent to execution of that contract.”
4. The jurisdiction of the DIFC Courts is determined by Article 5(A) of the Judicial Authority Law, Dubai Law No. 12 of 2004, as amended (the “JAL”), which provides a number of limited gateways through which the DIFC Courts may exercise jurisdiction over a claim, which are, as relevant:
“1. The Court of First Instance will have exclusive jurisdiction to hear and determine:
a. The civil, commercial and labour claims and actions to which the DIFC or any DIFC body, DIFC establishment or licensed DIFC establishment is a party.
b. The civil, commercial and labour claims and actions arising out of or relating to a contract or promised contract, whether partly or wholly concluded, finalized or performed within DIFC or will be performed or is supposed to be performed within DIFC pursuant to express or implied terms stipulated in the contract.
c. The Court of First Instance shall have exclusive jurisdiction to hear and determine the civil, commercial and labour claims and actions arising out of or relating to any incident or transaction, which has been wholly or partly performed within DIFC and is related to DIFC activities;
d. Appeals against decisions or procedures made by DIFC bodies where DIFC Laws and DIFC Regulations permit such appeals and claim;
e. Action over which the Courts have jurisdiction in accordance with DIFC Laws and DIFC Regulations.
2. The Court of First Instance may hear and determine any civil or commercial claims or actions where the parties agree in writing to file such claim or action with it whether before or after the dispute arises, provided that such agreement is made pursuant to specific, clear and express provisions.
5. Pursuant to Article 5(A)(2) of the JAL, the DIFC Courts can exercise its jurisdiction over a matter that is unrelated to the DIFC, where the parties have agreed in writing that any dispute arising between them would be referred to the DIFC Courts for adjudication. Such a provision would allow the parties to ‘opt-in’ to the DIFC Courts’ jurisdiction, provided that it clearly demonstrates the parties’ intention to do so.
6. The Claimant filed its Claim with the SCT seeking the payment of sums allegedly owed to the Claimant by the Defendant pursuant to a purchase order entered into between the parties dated 22 October 2017 (the “Agreement”). Moreover, in support of its Claim, the Claimant has submitted various tax invoices issued to the Defendant which set out the terms and conditions as agreed between the parties (the “Invoices”).
7. Upon reviewing the Invoices, it appears that the terms and conditions set out in the Invoices do not contain an express clause by virtue of which the DIFC Courts would be able to exercise jurisdiction over this Claim in accordance with Article 5(A)(2) of the JAL. Instead, it appears that the Invoices contain a clause which sets out the parties’ intention for any disputes relating to the Agreement and the Invoices to be subject to “UAE court jurisdiction”. The relevant wording of the clause is set out below:
“All disputes settled subject to UAE court jurisdiction”.
8. In light of the aforementioned, I am of the view that, in absence of a clear written opt-in clause to the DIFC Courts’ jurisdiction between the parties, the DIFC Courts cannot hear or determine this Claim. Moreover, the DIFC Courts do not have default jurisdiction over this claim as all parties are based outside of the DIFC and the other gateways of the JAL do not apply.
9. Therefore, I dismiss the Claimant’s Claim for AED 50,264.50 on the grounds that the DIFC Courts lacks jurisdiction over this Claim.
Conclusion
10. The Claimant’s Claim is dismissed due to the Courts’ lack of jurisdiction.
11. Each party shall bear their own costs.
