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Claim No. SCT 225/2021

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

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

IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS

BEFORE H.E. JUSTICE MAHA AL MHEIRI

BETWEEN

LONOD

Claimant

and

LACINI

Defendant

JUDGMENT OF H.E. JUSTICE MAHA AL MHEIRI

UPON this Claim being filed on 1 August 2021

AND UPON the Defendant filing an Acknowledgment of Service intending to defend all of this Claim dated 8 August 2021

AND UPON a Consultation being held before SCT Judge Hayley Norton on 11 August 2021

AND UPON the parties failing to reach a settlement at the Consultation

AND UPON a hearing having been listed before H.E. Justice Maha Al Mheiri on 23 August 2021, with the Claimant and the Defendant’s representative attending

AND UPON reading the submissions and evidence filed and recorded on the Court file

IT IS HEREBY ORDERED THAT:

1. The Claimant’s Claims are dismissed.

2. No order as to costs.

Issued by:
Nassir Al Nasser
SCT Registrar
Date of issue: 20 September 2021
At: 1pm

THE REASONS

The Parties

1. The Claimant is Lanod, an individual filing a claim regarding his employment at the Defendant company (the “Claimant”).

2. The Defendant is Lacini, a company registered in the DIFC, DIFC, Dubai, UAE (the “Defendant”).

Background and the Preceding History

3. The parties entered into two legal agreements, an independent contractor agreement (the “First Contract”) and an employment agreement (the “Second Contract”), collectively referred to as the contracts (the “Contracts”).

4. The parties entered into the First Contract on 8 March 2021, pursuant to which the Defendant was contracted as a Manager performing the duties of Chief Investment Officer with an agreed monthly remuneration of AED 12,500 as reimbursement of the Claimant’s monthly personal expenses.

5. The parties entered into the Second Contract on 1 April 2021, pursuant to which the Defendant was hired as an Investment Manager, with an agreed monthly remuneration of AED 9,000, and, in addition, the Defendant was required to pay 50% commission of monthly generated income from the Claimant’s portfolio/business.

6. On 8 March 2021, the Claimant started to work for the Defendant remotely from his home located in Canada, and he interacted with banks and financial institutions in the role of Chief Investment Officer.

7. On 26 March 2021, the Claimant travelled to Dubai and started to work from the Defendant’s office. On 1 April 2021, the Claimant signed the Second Contract with the Defendant.

8. On 28 April 2021, the Defendant renewed the Claimant’s visit visa at the Defendant’s expense. On 24 May 2021, the Claimant submits that Lutin (“Mr. Lutin”) who is a Shareholder, Licensed Director, Senior Executive Officer at the Defendant, met with the Claimant inside his office in relation the Claimant’s remuneration payments but Mr. Lutin refused to pay and threatened the Claimant.

9. On 31 May 2021, the Claimant sent an email to Mr. Lutin to confirm that he had not received his outstanding money despite his several requests, and therefore he informed Mr. Lutin that he will file a claim with DIFC courts to resolve this dispute.

10. On 7 June 2021, the Claimant sent an email to lLuban who is a Licensed Director of the Defendant, informing him that he would like to give two days to the Defendant in order to resolve this dispute in person rather than going to courts. He also informed Luban that he would be filing a claim with DIFC courts if no response was received from the Defendant.

11. On 9 June 2021, the Claimant received an email containing a written notice from a law firm on behalf of the Defendant. The Claimant submits that, within the email, the Defendant threatened that the Claimant would not receive his money unless he withdraws his claim.

12. On 1 August 2021, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) claiming the amount of AED 84,000, comprising of the following claims:

13. On 8 August 2021, the Defendant filed an Acknowledgment of Service intending to defend all of the claim.

14. The parties met for a Consultation with SCT Judge Hayley Norton on 11 August 2021 but were unable to reach a settlement. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a Hearing held on 23 August 2021.

The Claim

15. The Claimant’s case is that he was hired by the Defendant under two Contracts, under which he held two positions, from 8 March 2021 until 15 July 2021.

16. The Claimant argues that, to date, he has not been terminated by the Defendant and he is seeking to be paid his remuneration for that period.

17. The total sum claimed by the Claimant as set out in the Claim Form is AED 84,400, in addition to payment of the court fees. The Claimant also seeks aggravated damages in an amount to be determined by the court.

The Defence

18. The Defendant argues that the Claimant has tried to misrepresent and mislead this Court with his false allegations and averments. The Defendant argues that the Claimant sought association with the Defendant by presenting false educational and professional credentials.

19. The Defendant submits that the Claimant approached the Defendant on 30 November 2020 through LinkedIn by misrepresenting himself as willing to be a business partner, whereas, now he is claiming to be a service provider. The Defendant submits that this shows that his intention was never genuine.

20. The Defendant maintains that the First Contract has not been executed as per the law and does not have signature of the other shareholder of the company, Mr. Linin, and, thus, is not binding on the Defendant.

21. In addition, the Defendant submits that the First Contract has been initiated based on false claims and misrepresentations on part of the Claimant by presenting forged or false educational documents, including a Masters Degree certificate issued by Ladya University that has now been confirmed by the University as not being conducted by them at all.

22. In addition, at the time of execution of the Second Contract, the Defendant suggests that it was discovered that the Claimant’s signatures were presented differently on the First Contract and that found on his passport. The Defendant informed the Court that when the Claimant was confronted about the difference in signatures, he stopped reporting to work. The Defendant submits that this amounts to “fraud” as per section 40 the DIFC Contract Law - DIFC Law No.6 of 2004.

23. The Defendant also argues that the conduct of the Claimant throughout the period of interaction with the Defendant had been unprofessional and of a dubious nature. The Defendant submits that soon after onboarding the Claimant, he went ahead to misrepresent himself as a “Chief Investment Officer of Linti” (a sister concern company) on “LinkedIn”, while he was never in any way associated with the said Company. After being confronted with the same, the Claimant corrected the false details presented on his Linkedln page.

24. The Defendant submits that when the Claimant was asked about his suggestions in relation to a business plan for the Defendant, the Claimant stopped all forms of communication with the Defendant. He then approached one of the partners of the Defendant’s sister concern in Saudi Arabia and went on to threaten the Defendant and their partners in Saudi Arabia, bringing ill repute to the Defendant’s company so as to affect its reputation and businesses.

25. The Defendant contends that as the Second Contract was signed, and after such signing, the Defendant came to know that the credentials of the Claimant were fake, the Defendant decided not to process the Claimant’s visa.

26. Furthermore, at the time of association of the Claimant with the Defendant, the intention of the parties was limited to certain specified works to be developed by the Claimant, which never came forth from the Claimant. Within one month of engagement, the Claimant, considering himself exposed, tried to suggest a new/alternate business approach, and when requested for a business plan or model, the Claimant failed to produce any such model.

27. Hence, the Defendant submits that it cannot be held liable to pay any fee for the work that was never carried out by the Claimant. The Defendant contends that it would be evident from all of the communications and conduct that the Claimant had no intention to provide any services.

28. The Defendant’s defence to each of the Claimant’s claims are set out in the Discussion below.

Discussion

29. The First Contract signed between the parties is governed by the DIFC Law of Contract, and the relevant case law and principles concerning a breach of contract. Clause 17 of the First Contract states as follows:

The validity of the Claimant’s First Contract

30. Although the Defendant submits that the Claimant drafted the First Contract, the Defendant failed to provide any evidence to negate the validity of the First Contract. Although the Defendant seeks to argue that the Claimant falsified his educational credentials, I also note that the Claimant provided a rebuttal to that argument by providing emails, and a confirmation of an award letter from the University. In addition, the Claimant provided evidence to show that the Claimant’s degree had been testified by a lawyer and by the UAE Consulate.

31. Moreover, I find that the First Contract was signed by an authorised signatory of the Defendant’s company. The Defendant’s internal authority delegation processes regarding approvals for contracts are therefore irrelevant to this case and do not impact the validity of this Contract. The Court is of the view that if Mr. Lutin had to obtain any internal approvals from a higher body it is not material to this case, nor is this by law invalidating a valid agreement that was signed by the two parties.

32. As such the Court accepts the validity of the Claimant’s First Contract and the contractual obligations that fall under it.

33. The Claimant is claiming the amount of AED 52,900 reimbursement of personal expenses for the period between 8 March 2021 to 15 July 2021. To determine whether the Claimant would be entitled to this sum, the Court must determine whether the Claimant satisfied his obligations towards the First Contract for any payment to be triggered. Clauses 4 to 8 of the First Contract deals with this issue, and reads as follows:

34. In review of the First Contract, I note that the mechanism for payment is rather ambiguous and confusing, and only presents the situation where the Claimant generates revenue. In the hearing, the Defendant confirmed that there was no profit generated by the Claimant for the entire period of the First Contract.

35. The Court also relies on the discussions between the parties before the contract was signed, and an email from the Claimant to Mr. Lutin stating the below:

36. As such, payment is linked to the revenue generated by the Claimant, which the Defendant confirmed did not take place. I further note that the Claimant did not provide any evidence to support the ‘generated revenue’. Therefore, the Court shall dismiss the Claimant’s claim for the amount of AED 52,900.

The validity of the Claimant’s Second Contract

37. The Claimant is also requesting the amount of AED 31,500 as salary for the period from 1 April 2021 to 15 July 2021. As stated above, the Court accepts the validity of the First Contract and the contractual obligations that fall under it. The Claimant added a clause in the First Contract that deals with the validity of the Second Contract. The Claimant added a clause that suggests that the Second Contract is not legally binding as stipulated under Clause 18 of the First Contract which states the following:

38. The Clause stipulates that the Second Contract is considered null and void, because, in essence, it was only entered into for reasons of satisfying formalities for the issuance of a work visa for the Claimant. As cleared in the email between the parties:

39. Clause (e) read in conjunction with the email leads the Court to conclude that the Second Contract is to be deemed a sham contract between the parties, and, as such, the Court shall dismiss the Claimant’s claim for unpaid remuneration under the Second Contract

Aggravated damages in an amount to be determined by the court

40. The Claimant seeks payment from the Defendant of an unquantified amount as compensation for the aggravated damages that had fallen upon the Claimant as a result of the Defendant’s actions.

41. The circumstances that have fallen upon the Claimant, while unfortunate, do not meet the burden that the Claimant would have to prove in order to demonstrate that he has suffered undue damage at the hands of the Defendant. I do not find it appropriate to order any compensation to be paid to the Claimant as it is my view that the Claimant failed to provide evidence to demonstrate the damages that he has been subjected to by the Defendant.

42. Accordingly, I dismiss the Claimant’s claim for compensation for aggravated damages in an amount to be determined by the court.

43. The Claimant seeks to recover the fee that he has paid to the Court for the filing of this Claim. I am of the view that, as the Claimant has been unsuccessful on his claims, he should not be entitled to recover the fee in respect of the claims.

Conclusion

44. In light of the aforementioned, I find that the Claimant’s claims shall be dismissed.