March 26, 2024 SCT - JUDGMENTS AND ORDERS
Claim No: SCT 046/2024
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 LEASING TRIBUNAL OF DIFC COURTS
BEFORE SCT JUDGE MAITHA ALSHEHHI
BETWEEN
NABIHA
Claimant
and
NOELL
Defendant
| Hearing : | 14 March 2024 |
|---|---|
| Judgment : | 26 March 2024 |
JUDGMENT OF SCT JUDGE MAITHA ALSHEHHI
UPON the claim having been filed on 29 January 2024 (the “Claim”)
AND UPON the Defendant’s defence dated 5 February 2024 (the “Defence”)
AND UPON the Claimants’ further reply dated 12 February 2024
AND UPON a hearing having been listed before SCT Judge Maitha AlShehhi on 14 March 2024 with the Claimant’s and the Defendant’s representatives 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 outstanding amount of USD 10,567 plus interest at the rate of 6% which shall accrue from 29 January 2024 until the date of full payment.
2. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of USD 528.32.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 26 March 2024
At: 11am
THE REASONS
Parties
1. The Claimant is Nabiha (the “Claimant”), a corporate service provider company registered in Abu Dhabi, the UAE.
2. The Defendant is Noell (the “Defendant”), an individual who entered into a legal service agreement with the Claimant.
The Claim
3. The Claimant and the Defendant entered into a legal service agreement dated 4 December 2023 (the “Agreement”). In accordance with the Agreement, the Claimant was to provide legal services and support in respect of incorporation of a Special Purpose Vehicle “SPV” company in Abu Dhabi in favour of the Defendant.
4. The Claimant submits that the Defendant wanted to enter into the Agreement as a matter of urgency, as it wanted to incorporate the company before the end of the year. The Claimant argues that this prompted the Claimant to perform the services under the Agreement, such as drafting a short business plan, updating the model articles, preparing a resolution for the incorporation and much more.
5. At the Hearing, the Claimant confirmed that despite completing all the necessary steps for the incorporation of the SPV and having fulfilled their obligations under the Agreement, they did not proceed with finalising the procedure on the relevant portal as the Defendant failed to pay the outstanding amount and disappeared after signing the Agreement.
6. The Claimant submits that it had been informed that the Defendant incorporated a different company elsewhere.
7. The Claimant adds that the Defendant did not explicitly request to stop the process and argues that it informed the Defendant about its intention to proceed with the process, therefore, the Claimant submits that the Defendant is obligated to pay the full outstanding amount.
8. Further to the above, the Claimant argues that it was the other party in the Agreement who inquired about the possibility of having his son listed as the sole shareholder of the SPV after its incorporation, which is why the Claimant proceeded to confirm to the Defendant that it will proceed with the process.
9. As such, the Claimant is requesting payment form the Defendant as per the Agreement in the amount of USD 10,567/AED 38,805 plus interest at the rate of 6% and the DIFC Courts’ filing fee. The Claimant takes the position that it is eligible to receive this amount as the fee does not include any expenses for Abu Dhabi.
The Defence
10. The Defendant refutes the Claimant’s claim and submits that the Claimant did not fulfil all of its obligation under the Agreement and the Defendant is therefore not entitled for the full payment.
11. The Defendant further submits that it asked the Claimant to halt the process on 12 December 2023 to explore the option of establishing a SPV in a different jurisdiction, however, the Claimant failed to do so.
12. In support of this, the Defendant submitted a screenshot of a WhatsApp conversation in German, however, he failed to submit an authorised translation or any other translation of the conversation.
13. As evidenced by the Defendant’s submissions, the intention of this conversation is to demonstrate to the Court that the Defendant requested the Claimant to stop the process by way of message sent on the WhatsApp group.
14. The Defendant asserts that the Claimant could not have fulfilled all of its obligations towards him as it only sent him KYC documents, and a source of declaration form which it alleges is a straightforward document and does not constitute the full process.
15. The Defendant further submits that the Agreement was not fulfilled as the SPV had not been incorporated, therefore, he should not be liable to pay the full outstanding amount.
Jurisdiction
16. Rule 53.2 of the Rules of the DIFC Courts requires that the Small Claims Tribunal (“SCT”) hear only cases that fall “within the jurisdiction of the DIFC Courts” which are set out below:
“(1) where the amount of the claim or the value of the subject matter of the claim does not exceed AED 500,000 or;
(2) where the claim relates to the employment or former employment of a party; and all parties elect in writing that it be heard by the SCT (there is no value limit for the SCT’s elective jurisdiction in the context of employment claims); or
(3) which do not fall within the provisions of sub-paragraphs (1) or (2) above, but in respect of which:
(a) the amount of the claim or the value of the subject matter of the claim does not exceed AED 1,000,000; and
(b) all parties to the claim elect in writing that it be heard by the SCT, and such election is made in the underlying contract (if any) or subsequent to execution of that contract
(c) where they have been filed with the Small Claims Leasing Tribunal
(4) such other claims as may be ordered or directed by the Chief Justice to be heard by the SCT from time to time.”
17. 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 perform 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 inwriting 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.”
18. The governing law clause is set out in Article 12 of the Agreement which reads as follows:
“This Agreement shall be governed by the Laws of the UAE as applicable in Dubai and the DIFC Courts shall have non-exclusive jurisdiction in the case of ay dispute as outlined in the Terms of Engagement. The DIFC Small Claim Tribunal shall have jurisdiction till an amount in dispute of AED 1,000,000. The attached Terms of Engagement constitute an integral part of this Agreement.”
19. Therefore, I am of the view that the DIFC Courts have jurisdiction to hear and determine this claim in accordance with the above and Article 5(A)(2) of the JAL.
Discussion
Has the Claimant performed all of its obligations?
20. The Agreement sets out the services to be performed by the Claimant as below:
“Nabiha shall provide the following services:
a. application of the Company Name Approval,
b. Application for the required approvals,
c. Draft of all documents required for the set-up,
d. Provision of a registered address.”
21. In respect of the company name approval, the Claimant submitted evidence that the approved name was “Nissa” “”.
22. The Claimant also submitted evidence of the proposed draft business plan of the SPV, a draft of the updated articles, and the resolution for the incorporation.
23. The Defendant failed to submit anything to prove otherwise and the time to do so has expired. I must note that the Defendant requested for an extension of time to file further submissions 20 minutes before the given deadline which I rejected as no sufficient explanation was provided to the Court for the delay in filing submissions, and the request for an extension was submitted at a very late stage in proceedings.
24. The Claimant maintains its position that no formal request was initiated by the Defendant to stop the process, therefore, it proceeded with the application and informed the Defendant of its intention, and no disapproval was shown by the Defendant.
25. The terms of the Agreement stipulate that it can be terminated by either party by giving one month notice in writing or email and I find that the Defendant failed to meet this requirement. Therefore, the terms of the Agreement are enforceable given that the Claimant fulfilled its obligations.
26. Although the SPV had not been officially incorporated on the portal, and due to the services rendered by the Claimant, I am of the view that the Claimant fulfilled its obligations under the Agreement and is therefore entitled to receive the full amount.
27. Accordingly, I shall order the Defendant to pay the Claimant the amount of USD 10,567, plus interest.
Findings
28. In light of the aforementioned, I find that the Defendant shall pay the Claimant the amount of USD 10,567 plus interest at the rate of 6% which shall accrue from 29 January 2024 until the date of full payment.
29. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of USD 528.32.
