October 23, 2023 SCT - JUDGMENTS AND ORDERS
Claim No: SCT 372/2023
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE SMALL CLAIMS TRIBUNAL
BETWEEN
MORUK
Claimant
and
MIKRI
Defendant
ORDER WITH REASONS OF SCT JUDGE HAYLEY NORTON
UPON this claim having been filed on 26 September 2023 (the “Claim”)
AND UPON this Claim having been called for a Jurisdiction Hearing before SCT Judge and Assistant Registrar Hayley Norton on 17 October 2023 with the Claimant’s and the Defendant’s representatives in attendance (the “Jurisdiction Hearing”)
AND UPON reviewing the case file and submissions contained therein
IT IS HEREBY ORDERED THAT:
1. This Claim be dismissed due to lack of jurisdiction.
2. Each party shall bear their own costs.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of Issue: 23 October 2023
At: 10am
THE REASONS
The Parties
1. The Claimant is Moruk, a company registered in Dubai, the UAE (the “Claimant”).
2. The Defendant is Mikri, a company registered in Dubai, the UAE (the “Defendant”).
Background
3. On 26 September 2023, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking sums allegedly owed by the Defendant in relation to an undated social media management retainer agreement signed by the parties (the “Agreement”). The Claimant is seeking payment from the Defendant in the amount of AED 11,310.
4. The Defendant, in its acknowledgment of service dated 6 October 2023, has indicated its intention to contest jurisdiction. The Defendant challenges the DIFC Courts’ jurisdiction to hear and determine this claim on the grounds that the Agreement states that the Dubai Courts shall have exclusive jurisdiction to hear this dispute, not the DIFC Courts.
5. The parties do not dispute the existence of the Agreement. In addition to the Agreement, the Claimant has also filed with the Court evidence in the form of invoices raised and sent to the Defendant for payment (the “Invoices”).
The jurisdiction of the DIFC Courts
6. Rule 53.2 of the Rules of the DIFC Courts (“RDC”) requires that the SCT hear only cases that fall “within the jurisdiction of the DIFC Courts”. 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 have jurisdiction over a claim, which are, as relevant:
“(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.”
7. For cases to be heard in the SCT they must first fall within the DIFC Courts’ jurisdiction by engaging any of the jurisdictional gateways set out in the abovementioned Article.
8. Upon review of the case file and submissions contained therein, I find that neither party is, or was, a DIFC registered or licensed entity and there is no evidence to suggest that the transactions were partly or wholly performed within the DIFC or related to DIFC activities. In the absence of a sufficient nexus between the Claim and the DIFC, the DIFC Courts may still have jurisdiction over the Claim if it can be shown that the parties sought to ‘opt in’ to the jurisdiction of the DIFC Courts, pursuant to Article 5(A)(2) of the JAL.
9. In order to successfully opt in to the DIFC Courts jurisdiction, Article 5(A)(2) of the JAL requires that the “parties agree in writing to file such claim or action with [the DIFC Courts] whether before or after the dispute arises”.
10. Clause 9 of the Agreement states as follows:
“Governing Law
This Agreement shall be governed by and construed in accordance with the applicable laws of the Emirate of Dubai, UAE and the disputes if any shall be subject to the exclusive jurisdiction of Dubai Courts.”
11. Upon review of the above clause, I find it clear that the parties have agreed for Dubai Courts to have the exclusive jurisdiction to hear and determine any disputes arising from the Agreement.
12. From analysing the Agreement, the Invoices, and the parties’ submissions, I see no evidence to suggest that the parties sought to ‘opt in’ to the jurisdiction of the DIFC Courts, pursuant to Article 5(A)(2) of the JAL, and therefore I find that the parties have failed to “agree in writing” for the DIFC Courts to have jurisdiction.
13. Accordingly, for the reasons I have set out above, I find that the DIFC Courts do not have jurisdiction to hear and determine this Claim.
14. Each party shall bear its own costs.
