August 31, 2022 SCT - Judgments and Orders
Claim No. SCT 254/2022
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
MARVIN LLC
Claimant
and
MALIK LLC
Defendant
| Hearing : | 22 August 2022 |
|---|---|
| Judgment : | 31 August 2022 |
ORDER WITH REASONS OF H.E. JUSTICE MAHA AL MHEIRI
UPON this Claim being filed on 23 June 2022
AND UPON the Defendant indicating their intention to contest jurisdiction and defend the entirety of the Claim by way of an Acknowledgment of Service dated 15 August 2022
AND UPON a Jurisdiction Hearing held before H.E. Justice Maha Al Mheiri on 22 August 2022, with the Claimant and the Defendant’s representative in attendance
AND UPON reading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant’s challenge to contest the jurisdiction of the DIFC Courts is denied.
2. The DIFC Courts have jurisdiction to hear and determine this claim.
3. Each party shall bear their own costs.
Issued by:
Hayley Norton
SCT Judge
Date of Issue: 31 August 2022
At: 10am
THE REASONS
The Parties
1. The Claimant is Marvin LLC (the “Claimant”), a company that supplies rental equipment and material handling, for construction sites, located in Dubai, UAE.
2. The Defendant is Malik (the “Defendant”), a company that supplies oilfield equipment incorporated in Sharjah, UAE.
Background and the Preceding History
3. The underlying dispute arises over alleged unpaid invoices pursuant to a hire agreement signed by the Claimant and the Defendant (the “Hire Agreement”), following which the Defendant failed to pay the Claimant the sums due under the Hire Agreement.
4. On 23 June 2022, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) for payment of AED 130,651.50, in addition to payment of the Court fees.
5. The Defendant responded to the claim by way of an Acknowledgment of Service on 15 August 2022 indicating its intent to challenge the jurisdiction of the DIFC Courts. The hearing pertaining to the jurisdiction dispute was listed before me on 22 August 2022 (the “Jurisdiction Hearing”). The parties duly appeared at the appointed time submitting their oral submissions. In this short judgment, I do not propose to refer to each point made by the parties. The fact that I may omit some reference to some arguments does not mean that I have overlooked it.
The Jurisdiction Application
6. As part of the Defendant’s submissions, they argued that the DIFC Courts do not have jurisdiction based on the fact that the Defendant is an entity incorporated in Sharjah, and accordingly, is not subject to the exclusive jurisdiction of DIFC Courts in accordance with the laws and rules of DIFC Courts.
7. However, the laws and rules of DIFC Courts specify that the parties could elect and/or agree in writing that the DIFC Courts may hear any dispute between the parties provided that "such agreement is made pursuant to specific, clear and express provisions".
8. The Defendant further submits that they are incorporated and must act in accordance with the UAE Companies Law. Therefore, any agreement to be executed by the Defendant must be executed by its authorised signatory, an individual authorised by the company to execute and validate agreements which may include any clauses pertaining to jurisdiction, which will also require the company seal to be affixed to such agreements.
9. The Defendant asserted that the Hire Agreements have not been signed and stamped by an authorised signatory who has the capacity to act on behalf of the Defendant.
10. Accordingly, in the absence of a properly executed agreement, enabling the jurisdiction clause in binding the Defendant to the Court, the Defendant requests the Court to dismiss the claim in its entirety due to the lack of jurisdiction.
11. In reply, the Claimant argued that the parties’ agreement to opt-in to the DIFC Courts’ jurisdiction has been clearly set out under Clause 9 of the Hire Agreement, which was sent to the Defendant, readings as follows:
“9. Jurisdiction
Any dispute, difference, controversy or claim (“Dispute”) arising out of or in connection with this Hire Agreement, including (but not limited to) any question regarding its existence, validity, interpretation, performance, discharge and applicable remedies, shall be referred to the exclusive jurisdiction of the Courts of the Dubai International Financial Centre (“DIFC Courts”). In the event a Dispute relates to a claim for an amount of AED 1,000,000/- or less (or the value of the subject matter of the claim is AED 1,000,000/- or less), the Hirer and Marvin L.L.C. agree that such claims shall be brought before the Small Claims Tribunal of the DIFC Courts.” [sic]
12. The Claimant argued that the Hire Agreement provided to the Defendant was in fact signed and stamped by the Defendant.
Discussion
13. It is important to establish that the relationship between the parties commenced after the Claimant sent the Hire Agreement to the Defendant, therefore the contractual principles of an offer and acceptance had been duly carried out between the parties.
14. A valid contract is formed “by the acceptance of an offer” (by virtue of Article 14, DIFC Contract Law). Therefore, the underlying issue is to determine whether a valid offer was given and whether it was duly accepted as allowed under the DIFC Contract Law. An “offer” to conclude a contract must be “sufficiently definite and indicate the intention of the offeror to be bound in case of acceptance” (by virtue of Article 15, DIFC Contract Law).
15. After receiving the Hire Agreement, the Defendant sent the purchase order to the Claimant. This demonstrates that a contractual relationship was established upon receipt of the Hire Agreement from the Claimant.
16. The jurisdiction of the DIFC Courts is determined by Article 5(A) of the Judicial Authority Law, Dubai Law No. 12 of 2004 (the “JAL”), (and its amendments) which outlines a list of gateways allowing the DIFC Courts to exercise jurisdiction over a claim in the following circumstances:
“(a) Civil or commercial claims and actions to which the DIFC or any DIFC Body, DIFC Establishment or Licensed DIFC Establishment is a party;
(b) Civil or commercial claims and actions arising out of or relating to a contract or promised contract, whether partly or wholly concluded, finalised 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) Civil or commercial 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; . . .
(e) Any claim or action over which the Courts have jurisdiction in accordance with DIFC Laws and DIFC Regulations. . .
(2) . . . civil or commercial claims or actions where the parties agree in writing to file such claim or action with [the DIFC Courts] whether before or after the dispute arises, provided that such agreement is made pursuant to specific, clear and express provisions.”
17. By virtue of the JAL, the DIFC Courts shall exercise its jurisdiction to hear and determine claims that are unrelated to the DIFC, provided that 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, subject to the fact it clearly demonstrates the parties’ intention to do so.
18. Based on the oral submissions and the arguments made during the Jurisdiction Hearing by the parties, I find that this dispute falls within the jurisdiction of the DIFC Courts. The burden of proof is on the Claimant to demonstrate that the DIFC Courts and the SCT have jurisdiction over the Claim, the burden of proof has been discharged based on the Hire Agreement which contains a clear clause opting-in to the jurisdiction of the DIFC Courts.
19. As such, the Defendant’s actions, by issuing the purchase order in accordance with the Hire Agreement is an indication of the Defendant’s approval to the terms of the Hire Agreement. Further, the Defendant agreeing and paying previous invoices (is a reflection of the agreeing to the terms and condition of the Hire Agreement including the opting-in to the jurisdiction of the DIFC Courts), demonstrates the Defendant’s agreement to submit to the jurisdiction of the DIFC Courts. Although the Defendant argued that its acceptance of Hire Agreement and invoices does not bind the company into a specific jurisdiction, the Court shall consider the issuance of the purchase order and payment of the invoices as implied acceptance of the terms that are set out within the Hire Agreement.
Conclusion
20. For the reasons set out above, I find that the Defendant’s challenge contesting the jurisdiction of the DIFC Courts must be dismissed. The DIFC Courts have jurisdiction over the matter.
21. Each party shall bear their own costs.
