March 20, 2024 SCT - JUDGMENTS AND ORDERS
Claim No. SCT 068/2024
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 TRIBUNAL OF DIFC COURTS
BEFORE H.E JUSTICE MAHA AL MHEIRI
BETWEEN
NAVEEN
Claimant
and
NED
Defendant
| Hearing : | 7 March 2024 |
|---|---|
| Judgment : | 20 March 2024 |
ORDER WITH REASONS OF H.E JUSTICE MAHA AL MHEIRI
UPON this Claim being filed on 9 February 2024
AND UPON the Defendant filing an Acknowledgment of Service indicating its intention to contest the jurisdiction of the DIFC Courts dated 16 February 2024 (the “Jurisdictional Challenge”)
AND UPON a Jurisdiction Hearing having been held before SCT Judge Maha Al Mheiri on 7 March 2023, with the Claimant and the Defendant’s representative in attendance
AND UPON reading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Jurisdictional Challenge is dismissed.
2. The DIFC Courts have jurisdiction to hear and determine this claim.
3. Each party shall bear their own costs.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of Issue: 20 March 2024
At: 8am
THE REASONS
The Parties
1. The Claimant is Naveen (the “Claimant”), an individual filing a claim regarding his employment at the Defendant company.
2. The Defendant is Ned (the “Defendant”), a company located in the DIFC, Dubai, UAE.
Background and the Preceding History
3. The underlying dispute arises over the employment of the Claimant by the Defendant pursuant to an Employment Contract dated 1 October 2022 (the “Employment Contract”).
4. On 9 January 2024, the Claimant resigned from his position as Business Development Coordinator. The Claimant submits that he has pending dues with the Defendant which were not paid.
5. On 9 February 2024, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) claiming the sum of AED 93,156.55 with respect to various claims relating to his employment entitlements.
6. The Defendant responded to the Claim on 16 February 2024 indicating its intent to contest the jurisdiction of the DIFC Courts (the “Jurisdictional Challenge”). On 7 March 2024, I heard the parties’ arguments at a Jurisdiction Hearing.
The Jurisdiction Application
7. The Defendant submits that the signed Employment Contract makes reference to ‘Dubai Law’ instead of ‘DIFC Laws’, as set out below:
“7.6 Governing Law: This Agreement and the Employment shall be subject to the United Arab Emirates Federal Labour Law No. 8 of 1980 and DIFC regulations concerning employment in DIFC. Any and all disputes arising under this Agreement, whether as to interpretation, performance or otherwise, shall be subject to the exclusive jurisdiction of the Courts of Dubai, United Arab Emirates (excluding the DIFC Courts) and each of the parties hereto hereby irrevocably attorns to the jurisdiction of the Courts of Dubai, United Arab Emirates (excluding the DIFC Courts) and each of the parties hereto hereby irrevocably attorns to the jurisdiction of the Courts of such place.”
8. The Defendant argues that it is clear from the contents of the Employment Contract that the parties intended for UAE labour law to govern the contract. Moreover, the Defendant argues that the Employment Contract makes no reference to the jurisdiction of the DIFC Courts, nor to the application of the DIFC Employment Law.
9. In reply, the Claimant submits that he is a DIFC employee with a DIFC visa and that the laws of the DIFC should apply over this case.
Discussion
10. 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, namely:
“(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.”
11. Based on the submissions and the arguments at the Jurisdiction Hearing, I find that this dispute clearly falls within the jurisdiction of the DIFC Courts.
12. The Defendant is a DIFC registered and licensed entity. The Claimant is and was, at all material times, an employee of the Defendant. The claim at hand is a dispute that is governed by the DIFC Employment Law and therefore this claim falls within the jurisdiction of the DIFC Courts.
13. Article 5(A) of the JAL reads that the DIFC Courts shall have jurisdiction over civil claims that arise out of or relate to a contract that was performed or was to be performed within the DIFC. It also states that the DIFC Courts has jurisdiction over claims to which any DIFC body is a party. As the Defendant is a DIFC registered entity, and as the Employment Contract central to the Claim was performed in the DIFC, the DIFC Courts have automatic jurisdiction over this claim.
14. I find that while the Employment Contract states ‘Law of Dubai’, the DIFC Courts maintains its jurisdiction due to the location and registration of the Defendant. Article 5(A) states that the jurisdiction of the DIFC Courts stems from the Claim at hand, not from the individual parties associated with the Claim. This Claim relates to the Claimant’s Employment Contract and the Claimant’s allegation that the Defendant has not paid him his alleged dues.
15. Furthermore, Article 5(A) of the JAL, with emphasis on wording relevant to the finding, states as follows:
“1. The Court of First Instance will have exclusive jurisdiction to hear and determine:
a. The civil, commercial and labour claims and actions to which the DIFC or any DIFC body, DIFC establishment or licensed DIFC establishment is a party.
b. The civil, commercial and labour claims and actions arising out of or relating to a contract or promised contract, whether partly or wholly concluded, finalized 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. The Court of First Instance shall have exclusive jurisdiction to hear and determine the civil, commercial and labour 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;
d. Appeals against decisions or procedures made by DIFC bodies where DIFC Laws and DIFC Regulations permit such appeals and claim;
e. Action over which the Courts have jurisdiction in accordance with DIFC Laws and DIFC Regulations.
2. The Court of First Instance may hear and determine any civil or commercial claims or actions where the parties agree in writing to file such claim or action with it whether before or after the dispute arises, provided that such agreement is made pursuant to specific, clear and express provisions.
3. The Court of First Instance may hear and determine any civil, commercial and labour claims or actions falling within its jurisdiction if the parties agree in writing to submit to the jurisdiction of another court over the claim or action but such court dismisses such claim or action for lack of jurisdiction. The Court of First Instance may not hear or determine any civil, commercial and labour claim or action in respect of which a final judgment is rendered by another court.” (emphasis added)
16. The above confirms that civil, commercial, and labour claims which are related to the DIFC fall within the jurisdiction of the DIFC Courts by default.
17. For the above cited reasons, I find that the Defendant’s Jurisdictional Challenge must be dismissed as the DIFC Courts have jurisdiction over the matter.
18. Each party shall bear their own costs as to the Jurisdictional Challenge.
