May 18, 2023 SCT - JUDGMENTS AND ORDERS
Claim No: SCT 153/2023
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
BEFORE SCT JUDGE MAITHA ALSHEHHI
BETWEEN
MISTI
Claimant/Counter Defendant
and
MIPIP
Defendant/Counter Claimant
| Hearing : | 10 and 11 May 2023 |
|---|---|
| Judgment : | 18 May 2023 |
JUDGMENT OF SCT JUDGE MAITHA ALSHEHHI
UPON the Claimant’s claim having been filed on 13 April 2023
AND UPON the Defendant’s counterclaim having been filed on 4 May 2023
AND UPON a hearing having been held before SCT Judge Maitha AlShehhi on 10 May 2023 and 11 May 2023 with the Claimant’s representative and the Defendant’s representative in attendance (the “Hearing”)
AND UPON reviewing the documents and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant the amount of AED 9,819.
2. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of AED 490.95.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 18 May 2023
At: 3pm
THE REASONS
The Parties
1. The Claimant is Misti (the “Claimant”), a company registered in Dubai, the UAE.
2. The Defendant is Mipip (the “Defendant”), a company registered in Dubai, the UAE.
Background
3. On 26 September 2019, the Claimant and the Defendant entered into a supply, operation and maintenance agreement for gas systems in respect of a labour camp owned by the Claimant (the “Agreement”) and was terminated on 15 January 2021. Pursuant to the Agreement, the Defendant was required to provide services and to maintain the gas systems for the labour camp tenants.
4. On 13 April 2023, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking payment from the Defendant in respect of the royalty and maintenance fees in the amount of AED 15,888 (the “Claim”).
5. On 4 May 2023, the Defendant filed a counterclaim seeking payment from the Claimant in respect of the pending gas services in the amount of AED 23,109.6 (the “Counterclaim”).
The Claim
6. The Claimant is seeking payment from the Defendant in respect of the royalty fees as per the Agreement and the maintenance fee which it had incurred when appointing a different company to oversee the labour camp. The Claimant alleges that it had to pay for the maintenance work which was not completed by the Defendant and detected during the handover process and is therefore claiming the full amount to be refunded.
7. The Claimant relies on Clause 1 of the Agreement which stipulates the services that the Defendant (i.e., supplier) is required to perform among other things:
“a. maintenance of complete Gas System
c. complete maintenance of Gas system, piping and system including replacement parts and spares
g. Maintenance of the tank yards and common area gas works”
8. At the Hearing, the Defendant disputed the maintenance work fee on the basis that no bill or quotation was provided in support.
9. Within the Defendant’s defence dated 4 May 2023, it submits that the Claimant is eligible for the royalty fees in the amount of AED 14,547.57, however, this amount is to be set off against the Counterclaim amount of AED 23,109.67.
The Counterclaim
10. The Defendant’s Counterclaim amount represents payment in respect of the remaining value of gas available in the tank (AED 8,724.67), two months pending system check for kitchen charges (AED 7,875) and pending repairs and replacement (AED 6,510).
11. The issue that is in dispute is with regards to the unit of calculation of the value of gas; whether it should be in litre or cubic metre. The Claimant had provided the calculation in litre and cubic metre while the Defendant maintains the position that it should be in cubic metre at the price of AED 16.5, in line with the Agreement.
12. At the Hearing, the Claimant submitted that regardless of the unit of calculation, the selling price should be as per the market price and not as submitted by the Defendant which is AED 16.5 per cubic metre. Also, the Claimant further submits that it offered the Defendant the remaining gas at the market price, but the Defendant was unresponsive.
13. With regards to the system check for kitchen charges, the Claimant submits that the collection of amounts should be directly from the tenants on the basis that it is not the responsibility of the landlord (i.e. the Claimant) in line with Clause 7 of the Agreement.
Findings
14. The Agreement sets out the obligations of both the Claimant (the Client) and the Defendant (the Supplier).
15. Given that the Defendant submitted in its defence dated 4 May 2023 that the Claimant is eligible for the royalty fee I therefore find that the Claimant is also eligible for the royalty fee in the amount of AED 14,548 as per Clause 2 of the Agreement.
16. With regards to the Claim for maintenance work, I find that that the Defendant is liable to pay the Claimant the amount of AED 2,000 as it was the Defendant’s duty and responsibility to perform all maintenance work during the duration of the Agreement as per Clause 1 of the Agreement. For the interest of clarity, Clause 1 is cited at paragraph 7 of my judgment above.
17. The Court will only consider the financial limit sought within the Claimant’s Claim Form which, in this instance, is in the amount of AED 15,888 and any order I make shall be limited to a sum no greater than that.
18. In respect of the system checks, Clause 2 of the Agreement reads as follows:
“a. Gas Supply Price will vary as per the market price. Supplier to send minimum 30 days’s notice to Client before changing Gas Supply Price for Labour camp tenants. It has been agreed that the Gas price will change to AED 16.5 per cubic meter from 1 October 2019 with a rebate of AED 5 per cubic meter.
g. Supplier will charge the following charges to the Labour camp tenants; no other charges will be payable by Labour camp tenants unless approved by Client in writing and entered into as an addendum to this agreement:
iv. Monthly system check for kitchens AED 250.” [sic]
19. That being said, I find that the Defendant’s Counterclaim in relation to two months’ system check must be dismissed in line with Clause 2g(iv) of the Agreement which makes it clear that the tenants are liable for the payment of AED 7,875 and not the Claimant.
20. The gas supply price as stated in the Agreement pertains to the price that is offered to the labour camp tenants which is in the amount of AED 16.5 per cubic metre. The Agreement goes on to say that the gas supply price “will vary as per the market price”.
21. Further to the above, I find that the Claimant shall pay the Defendant the equivalent of the value of the remaining gas in the tank as per the market price in cubic metre as stated in the Clause 2 of the Agreement. I understand the Defendant’s position that it should be charged AED 16.5 per cubic metre, however, the Agreement does state that the gas supply price will be as market price which is estimated to be AED 6,069 as submitted by the Claimant.
22. Therefore, I find the Defendant’s Counterclaim in respect of the value of gas shall succeed but I have reached a different figure which is AED 6,069.
23. In respect of the pending repairs, Clause 8 of the Agreement reads as follows:
“Repairs and replacement of spare parts for the LPG system inside the Labour camp kitchens (“Repairs”) is excluded.
i. Supplier will quote and charge for these Repairs to Labour camp kitchen Tenant directly.
iii. Supplier shall always bcc copy the Client in all correspondence with all Labour camp Tenants in the Premises and submit a monthly report of such works carried out along with the payment of Repair Royalty according to Payment Terms.”
24. Further to the above, I find that the Defendant’s Counterclaim in relation to pending repairs in the amount of AED 6,510 shall be dismissed by virtue of Clause 8(i) of the Agreement which states that that the repairs are to be paid by the tenants and not the Claimant.
Conclusion
25. In light of the aforementioned, I have found that the Defendant shall be liable to pay the Claimant the amount of AED 15,888.
26. The Claimant shall be liable to pay the Defendant the sum of 6,069.
27. Accordingly, I shall offset the sums owed by the Claimant to the Defendant, therefore, it is hereby ordered that the Defendant shall pay the Claimant the sum of AED 9,819 (i.e., AED 15,888 - AED 6,069).
28. I find it appropriate that the Defendant be ordered to pay the Claimant the Court fee applicable to the judgment sum set out above, in the amount of AED 490.95.
