January 26, 2024 SCT - JUDGMENTS AND ORDERS
Claim No. SCT 496/2023
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE SMALL CLAIMS TRIBUNAL
BETWEEN
NAJEE
Claimant
and
NASH
Defendant
ORDER WITH REASONS OF SCT JUDGE MAITHA ALSHEHHI
UPON the claim having been filed on 14 December 2023 (the “Claim”)
AND UPON the Defendant filing its acknowledgement of service setting out its intention to contest the DIFC Courts’ jurisdiction dated 22 December 2023 (the “Defendant’s Jurisdictional Challenge”)
AND UPON the Claimant’s reply to the Defendant’s Jurisdictional Challenge dated 2 January 2024 (the “Claimant’s Reply”)
AND UPON the Defendant’s response to the Claimant’s Reply dated 11 January 2024
AND UPON the Claim having been called for a hearing before SCT Judge Maitha AlShehhi on 22 January 2024 with the Claimant and the Defendant’s representative in attendance (the “Hearing”)
AND UPON reviewing the case file and submissions contained therein
AND PURSUANT to Part 53 of the Rules of the DIFC Courts (the “RDC”)
IT IS HEREBY ORDERED THAT:
1. The Defendant’s Jurisdictional Challenge shall be granted.
2. The DIFC Courts does not have jurisdiction to hear and determine the case.
3. Each party shall bear its own costs.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of Issue: 26 January 2024
At: 9am
THE REASONS
1. The Claimant Is Najee (the “Claimant”), an individual who purchased a policy (Super Secure Savings Plan) with BANK which was offered by Union Insurance (P.S.C) (the “Policy”).
2. The Defendant is Nash (the “Defendant”) a company registered in Dubai, the UAE.
3. On 14 December 2023, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) requesting that the Policy be rendered void and seeking a return of the amounts paid in the sum of AED 180,000.
Does the DIFC Courts have jurisdiction to hear and determine this Claim?
4. I have delivered my judgment orally at the Hearing, however, in the interest of transparency, I set out below how I arrived at my decision.
5. RDC 53.2 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
or
(4) such other claims as may be ordered or directed by the Chief Justice to be heard by the SCT from time to time.”
6. For cases to be heard in SCT, first, they must first fall within the DIFC Courts’ jurisdiction by engaging any of the jurisdictional gateways set out in Article 5(A) of the Judicial Authority Law, Dubai Law No. 12 of 2004, as amended (the “JAL”) 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 performe 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. 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.
8. 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 demonstrates the parties’ intention to do so.
9. The dispute resolution clause is encompassed in clause 35 of the Policy which reads as below:
“ Arbitration
1. This agreement and any dispute or claim arising out of or in connection with or its subject matter, interpretation, formation, performance, existence, validity, nullification, invalidation or termination (including non- contractual disputes or claims) (“Disputes”) shall be governed by and construed in accordance with the law of the United Arab Emirates.
2. Any dispute arising out of this Agreement, shall be settled in the first instance, if possible, by amicable negotiations within 21 days.
3. In the event the parties fail to resolve matters pursuant to Clause 2, all disputes shall be referred to and settled exclusively and finally by arbitration in the manner set out below.
4. Arbitration shall be conducted in accordance with the provisions set forth in the arbitration Rules of Dubai International Arbitration Centre (“DIAC” Rules”) from time to time in force, which Rules are deemed to be incorporated by reference to this clause.
5. The Parties shall appoint a mutually agreed single Arbitrator and in event the parties do not agree on the name of the single arbitrator, the Arbitral Tribunal shall comprise of three arbitrators, one appointed by each of the Parties and a third one, who shall preside the Arbitral Tribunal shall be elected by the arbitrators appointed by parties.
6. The Arbitration shall take place in Dubai. Arbitration shall be conducted in English language and the award of the Arbitral Tribunal shall be written in English with an official translation in Arabic.
7. The governing and substantive law applicable to the arbitration shall be laws applicable in the United Arab Emirates.”
10. The Defendant is of the opinion that clause 35 is clear that the matter ought to have been referred to arbitration and not the DIFC Courts. As such, the Defendant submits that the DIFC Courts does not have jurisdiction to determine the Claim.
11. Additionally, the Defendant submits that, as a matter of law, this claim must be adjudicated first before the Insurance Dispute Committee.
12. While on the other hand, the Claimant submits that he approached the Defendant on many occasions to enquire whether he had to proceed to the DIFC Courts in order to lodge a case against them to no avail.
13. The Claimant concedes that he understood from the context of the Policy that the DIFC Courts is the eligible forum to resolve disputes and such assumption was not rectified by the Defendant prior to him filing this Claim.
14. At the Hearing, I asked the Claimant whether he is aware of the difference between arbitration and litigation, and he confirmed that he could not distinguish between them.
15. 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”. Upon review of the submissions filed in support of this Claim, 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.
16. It is imperative to note that arbitration is an alternative dispute mechanism used to settle disputes which is a wholly separate and distinctive process from court proceedings.
17. Having reviewed clause 35 of the Policy and the documents filed in support of the Claim, it appears that none of these documents contain an express clause by virtue of which the DIFC Courts would be able to exercise jurisdiction over this Claim. Furthermore, clause 35 is a clear indication that the parties’ have elected for disputes to be settled by commencing arbitration proceedings.
18. Therefore, I find that the parties have failed to “agree in writing” for the DIFC Courts to have jurisdiction and have instead opted in for arbitration.
19. I find that the dispute resolution clause is valid as it identifies a seat, an arbitral institution, the constitution of the tribunal and how the same was to be appointed.
20. In light of the aforementioned, I find that the Claim shall be dismissed on the basis that the DIFC Courts do not have jurisdiction to hear and determine this Claim.
21. Accordingly, the Defendant’s Jurisdictional Challenge shall be granted.
22. Each party shall bear its own costs.
