September 17, 2024 SCT - JUDGMENTS AND ORDERS
Claim No. SCT 319/2024
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
BETWEEN
NIRVED
Claimant
and
NEHA
Defendant
ORDER WITH REASONS OF H.E. JUSTICE MAHA AL MHEIRI
UPON this Claim being filed on 29 July 2024 (the “Claim”)
AND UPON a jurisdiction hearing held before H.E. Justice Maha Al Mheiri on 20 August 2024 with the Claimant and the Defendant’s representative in attendance (the “Jurisdiction Hearing”)
AND UPON reading the submissions and evidence filed and recorded on the Court file
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:
Delvin Sumo
SCT Judge and Assistant Registrar
Date of Issue: 17 September 2024
At: 2pm
THE REASONS
The Parties
1. The Claimant is Nirved (the “Claimant”), an employee of the Defendant.
2. The Defendant is Neha (the “Defendant”) LLC, a company registered in DIFC, Dubai.
Background and the Preceding History
3. The underlying dispute arises over the employment of the Claimant by the Neel pursuant to an Employment Contract dated 1 January 2022 (the “Employment Contract”), however the contractual terms were agreed effective from 15 May 2021 and initially agreed between the Claimant and the Defendant, which is a sister company of Neel.
4. The Claimant was hired as a ‘Consultant’ with a monthly salary of USD 10,000. On 25 April 2024, the Claimant received an email for non-renewal of his services which was set to expire on 15 May 2024. The Claimant submits that he did not receive all of his employment entitlements, which he tried to reach a amicable solution with the Defendant on with no results.
5. On 29 July 2024, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) claiming AED 222,850 with respect to various claims relating to his employment entitlements.
6. On 5 August 2024, the Defendant filed an Acknowledgment of Service indicating its intent to contest the jurisdiction of the DIFC Courts.
7. In line with the rules and procedures of the SCT, this matter was listed before me for a jurisdiction hearing held on 20 August 2024 with the Claimant and the Defendant’s representative in attendance (the “Jurisdiction Hearing").
The Jurisdiction Application
8. In its submissions, the Defendant submits that the Claimant is employed by Neel, a sister company of the Defendant. Neel is not a “DIFC Body, DIFC Establishment or Licensed DIFC Establishment”. The Defendant also adds that neither Neel nor the Claimant is a DIFC Establishment or Licensed DIFC Establishment.
9. The Defendant submits that the DIFC Courts is the incorrect forum for determining the Claim, as the Neel is an onshore company and as such, any claim (such as payment of salary, payment of validated expenses or respecting employment contracts terms for proper termination) related to the Employment Contract shall be heard and determined by the competent authority for resolving disputes concerning employment relationships in mainland Dubai.
10. In reply, the Claimant submits that he has been an employee of the Defendant for 3 years, starting from 15 May 2021 to 15 May 2024, arguing that for the whole period of his employment, he was working from the Defendant’s office located in DIFC, as evidenced by his DIFC access card. The Claimant further submits that his monthly salary was paid by the Defendant for most of the employment period and was only paid by Neel for the last months of his employment.
Discussion
11. 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.”
12. There is no contractual agreement between the Claimant and the Defendant. the Claimant was working under the Defendant due to the fact that Neel was not established yet and the Claimant was part of the team working on establishing Neel. The Defendant submits that the Claimant’s monthly salary was paid by the Defendant until Neel was established and then all his monthly salaries were transferred from Neel.
13. In addition, the Defendant submits that their sister company, Neel, does not have an office and all their employees work from the Defendant’s office which is located in the DIFC, but that does not mean that the Claimant is the Defendant’s employee.
14. Neel is a company registered and licensed in mainland Dubai (not the DIFC free zone). The Claimant was, at all material times, an employee of the Defendant. Although the Claimant states that he worked at all times in the Defendant’s office located in DIFC, Neel does not have a separate office and is sharing an office with the Defendant.
15. The Claimant is an employee of Neel which is incorporated in Dubai mainland and under their employment visa issued from Dubai.
16. The Court agrees with the Defendant that the Claimant is not an employee of the Defendant, meaning that there is no contractual obligation towards the Defendant. This is also clarified in the wording of Claimant’s Employment Contract, which states:
“This Consulting Agreement, dated 1st January, 2022 (this "Agreement"), is made and entered into by and among Neel (the "Company") and Nirved (the "Consultant". The agreement is formally signed up on 1st January 2022 however the contractual terms were agreed effective from 15th May 2021 and initially agreed by Neha which is a sister concern of Neel.”
17. I find that the DIFC Courts has no jurisdiction over this dispute due to lack of connection between the parties.
18. Therefore, for the reasons set out above, I hereby order that the DIFC Courts lack jurisdiction to hear and determine this Claim, and thus the Claim must be dismissed henceforth.
19. Each party shall bear their own costs.
