May 30, 2023 SCT - JUDGMENTS AND ORDERS
Claim No: SCT 388/2022
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE SMALL CLAIMS TRIBUNAL
BETWEEN
MURUK
Claimant
and
MISLI
Defendant
ORDER WITH REASONS OF H.E. JUSTICE MAHA AL MHEIRI
UPON the Consent Order of H.E. Justice Maha Al Mheiri dated 15 November 2022 (the “Order”)
AND UPON reviewing the Defendant’s Application No. SCT-388-2022/1 dated 11 May 2023 seeking to set aside the Order (the “Application”)
AND UPON reviewing the Claimant’s reply to the Application dated 15 May 2023
AND UPON considering Rules 53.35, 53.39 and 53.37 of the Rules of the DIFC Courts (“RDC”)
IT IS HEREBY ORDERED THAT:
1. The Application be granted.
2. The Order be set aside.
3. The SCT Registry shall list a new date for the Jurisdiction Hearing.
4. Each party shall bear their own costs.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of Issue: 30 May 2023
At: 4pm
SCHEDULE OF REASONS
The Parties
1. The Claimant is Muruk (the “Claimant”) an individual located in Dubai, the UAE.
2. The Defendant is Misli (the “Defendant”), a company located in Dubai, the UAE.
Background
3. The underlying dispute arises over an alleged unpaid loan agreement dated 31 August 2022 signed by the Claimant and the Defendant.
4. On 1 November 2022, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking payment from the Defendant for the unpaid loan in the amount of AED 250,000.
5. On 2 November 2022, the Defendant responded to the Claim by filing an Acknowledgement of Service intending to contest the jurisdiction of the DIFC Courts.
6. In light of this, a Jurisdiction Hearing was listed before me on 15 November 2022 at which both parties attended (the “Hearing”). At the start of the Hearing, I explained to the parties the specific issue that I would be required to determine, namely, whether the DIFC Courts has the jurisdiction to hear and determine the Claim at hand. Following my explanation as to the purpose of the Hearing, the Defendant confirmed that he longer intended to pursue his jurisdictional challenge and verbally agreed for the Claim to be heard and determined by the DIFC Courts (the “Verbal Agreement”).
7. In light of the Defendant’s Verbal Agreement and following the procedures of the Small Claims Tribunal, I asked the parties whether they would wish to utilise the time allocated for the Hearing to engage in settlement discussions to attempt to resolve the dispute. The parties agreed and a settlement was reached, resulting in a consent order being issued on 15 November 2022 (the “Consent Order”).
8. On 21 November 2022, the Defendant emailed the SCT Registry requesting that the Consent Order be set aside as he was confused throughout the settlement discussions (the “Email”). I directed that the Defendant file its request by way of a formal application.
9. Rule 53.34 of the Rules of the DIFC Courts (“RDC”) state that “a party who was neither present nor represented at the consultation and against whom the claim has been decided in accordance with Rule 53.32 or Rule 53.33 may apply for that order to be set aside and the claim reinstated”.
10. Pursuant to RDC 53.35, where a party applies for an order to be set aside in accordance with RDC 53.34, the application must be made not more than 7 days after the day on which the notice of the order was served on him. The SCT judge who’s Order is subject to an application to set aside may extend the time for the filing of an application to set aside an order.
11. On 11 May 2023, the Defendant filed its application seeking to set aside the Order and requested that it determined without a hearing (the “Application”). I note that the Application was filed some 6 months after the Consent Order was issued by the Court,
12. Although the Defendant has filed the Application significantly after the 7 day period, I note that the Defendant initially sent the Email to the Registry on 21 November 2022 which is within 7 days of the Consent Order being issued. As such, pursuant to the discretionary power provided to me under RDC 53.35, I have extended the time for the Defendant to file this Application.
Discussion
13. It is important to note that the Order was issued without any judicial determination as to the merits of the Claim.
14. In review of the Defendant’s Application and RDC 53.36(2), the Defendant submits that it is not aware of the rules and procedure of the DIFC Courts. In particular, the Defendant seeks to rely on the fact that:
“…Claimant had no authority to sign the loan agreement on behalf of the Defendant/Applicant by way of use of the company seal of the Defendant/Applicant plus by way of forging the signature of Mr Misil, the representative of the Defendant/Applicant.
…In the absence of authority described above, the loan agreement is not binding on the Defendant/Applicant and the submission to the jurisdiction of the Small Claims Tribunal is not effective.
…At no time during the hearing did the representative of the Defendant/Applicant agree to the jurisdiction of the Small Claims Tribunal.…On the contrary, following the issuance of the Consent Order the representative of the Defendant/Applicant emailed the Small Claims Tribunal on 21 November 2022 and expressed concern about the manner in which the hearing had been handled. In particular, the email stated I am troubled by the online hearing which was transformed hastily from what I understood from be jurisdiction hearing to an ad ho mediation without prior notice. This left me very confused.
…Notwithstanding the issue of the Small Claims Tribunal's jurisdiction in this matter, the email dated 21 November 2022 is also evidence that no agreement was reached between the parties as to the terms of any settlement arising for the hearing on 15 November 2022. In particular, the email contained an offer to make repayment of a 24-month period, not the 12-month period specified in the Consent Order.”
15. Having reviewed the Defendant’s Application and the Claimant’s reply, I find that the Defendant has demonstrated a real prospect of success in the small claim and should therefore be given the chance to present its case before the Court.
13. Accordingly, I grant the Defendant’s Application pursuant to the requirement under Rule 53.36(2) which states as follows:
“53.36
The SCT may grant an application under Rule 53.34 only if the applicant:
(1) had a good reason for not attending the consultation; or
(2) has a real prospect of success in the small claim.”
Conclusion
14. For the above reason, I find that the Defendant’s Application must be granted pursuant to RDC 53.36(2), and the Order be set aside.
15. The SCT Registry shall list a new date for the Jurisdiction Hearing.
16. Each party shall bear their own costs.
