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Claim No. SCT 390/2023

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 NASSIR AL NASSER

BETWEEN

NIYANIYA

Claimant

and

NUBAL

Defendant

JUDGMENT OF H.E JUSTICE NASSIR AL NASSER

UPON this Claim being filed on 6 October 2023;

AND UPON a hearing having been held before H.E Justice Nassir Al Nassir on 28 November 2023, with the Claimant and the Defendant’s representative in attendance;

AND UPON reviewing the documents and evidence filed and recorded on the Court file;

IT IS HEREBY ORDERED THAT:

1. The Claimant’s claim shall be dismissed.

2. There shall be no order as to costs.

Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 22 December 2023
At: 11am

THE REASONS

The Parties

1. The Claimant is Niya (the “Claimant”), an individual filing a claim against the Defendant regarding her employment.

2. The Defendant is Nubal (the “Defendant”), a company registered and located in the DIFC, Dubai, United Arab Emirates.

Background and the Preceding History

3. The underlying dispute arises over an Employment Settlement Agreement dated 2 June 2022.

4. On 6 October 2023, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking the payment of an additional settlement amount and counsel fees in the sum of AED 250,039.85.

5. On 13 October 2023, the Defendant filed an Acknowledgment of Service with the intention to defend the all of the claim.

6. On 30 October 2023 and 1 November 2023, a consultation was held before SCT Judge Hayley Norton, following which the parties failed to settle the claim amicably.

7. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a hearing held on 28 November 2023 (the “Hearing”). The Claimant and the Defendant’s representative attended.

The Claim

8. The Claimant submits that the Claim relates to an Employment Agreement dated 1 March 2010 (the “Agreement”). Pursuant to the terms of the Agreement, the Claimant joined the Defendant as Head of Compliance.

9. On 22 March 2022, the Defendant terminated the Agreement with the end of notice period on 30 September 2022. Subsequently, the parties entered into a Settlement Agreement (the “Settlement Agreement”) dated 2 June 2022.

10. The Claimant submits that the parties have agreed in the Settlement Agreement at clause 3.2, that an additional amount of AED 150,000 will be paid to the Claimant no later than 60 days after the final report of the on-going investigation of the Defendant with Dubai Financial Services Authority (the “DFSA Investigation”) subject to certain conditions mentioned in clause 3.2 of the Settlement Agreement. The Claimant submits that the Defendant after receiving the final investigation report from the DFSA (around August 2023) has refused to pay the additional settlement amount to the Claimant based on allegations of non-performance of duties during the employment period.

11. The Claimant adds that pursuant to clause 3.3 of the Settlement Agreement, the Defendant has also agreed to pay a maximum amount of AED 200,000 to the Claimant as a legal representation fee (“Counsel Fee”) for the purpose of retaining legal counsel in the enforcement procedure opened by the DFSA. However, the Claimant submits that the Defendant has refused to pay the counsel fee in the sum of AED 100,039.85 without providing a concrete reason except for stating that as far as the Defendant is concerned the investigations are concluded which is contrary to communications with the DFSA.

12. In addition to the above, the Claimant also claims the sum of AED 50,000 due to the mental trauma and stress caused by the Defendant’s actions.

13. The Claimant claimed the total sum of AED 250,039.85 being the additional settlement amount and the counsel fee. In addition to AED 50,000 for mental trauma and stress.

The Defence

14. The Defendant submits that clause 3.2 and 3.3 of the Settlement Agreement provides the following:

15. The Defendant submits that it had settled all of its obligations in respect of the amounts due under the Settlement Agreement. Furthermore, the Defendant adds that any additional settlement amount captured within the Settlement Agreement is entirely discretionary and therefore not a guaranteed payment.

16. The Defendant submits that the second limb of clauses 3.2 and 3.3 of the Settlement Agreement relates to the findings of the DFSA investigation. The publicly available information as released by the DFSA states the matter as settled. The Defendant can also confirm that a confidential Settlement Agreement has been signed by the Defendant and the DFSA.

17. The Defendant also adds that the publicly available decision notice highlights serious failings of the Defendant’s compliance policies and procedures which was the ultimate responsibility of the Claimant in her capacity as the head of compliance and risk. Further findings of the DFSA have been shared with the Defendant on a confidential basis. As a result of the failings, the Defendant has been fined USD 2,047,500. In light of the decision set out in the DFSA Decision Notice, the Defendant has taken the decision not to grant the discretionary additional settlement amount.

18. The Defendant also submits that the Claimant is not eligible for any additional settlement amount towards its legal expenses. Firstly, the additional settlement amount is discretionary. Secondly, the Claimant is not entitled to legal costs for the reasons set out in paragraph 17 above. Thirdly, the Defendant asserts that the Claimant is not entitled to any funds for incurred fees in relation to the DFSA Enforcement action as the Claimant has not provided any evidence to substantiate this claim for legal fees.

19. The Defendant also submits that in relation to the Claimant’s claim for mental trauma and stress, the Defendant submits that the Claimant failed to provide evidence to substantiate her claim.

20. For the reasons set out above, the Defendant requests the Court to dismiss the Claimant’s claim, a declaration that the Claimant has received all of her dues since termination of the Claimant’s employment, and the Claimant shall bear all the costs and any additional or other relief as may be just at the discretion of the SCT.

Finding

21. The Claimant submits a letter from the DFSA which it relies on dated 15 September 2022. The letter requires the Claimant to attend a compulsory interview to answer questions about an investigation it is conducting, and give the DFSA any assistance she is able to give about the investigation. The DFSA required the Claimant’s attendance for a compulsory interview because it considered that she may be able to give information which may be relevant to the investigation.

22. The DFSA’s letter to the Claimant was during the course of her employment with the Defendant pursuant to the Settlement Agreement which confirms that the Claimant’s end of notice period is on 30 September 2022. Therefore, it is compulsory for the Claimant to attend during this period.

23. The Claimant failed to provide any letters requiring her to attend an investigation following her employment with the Defendant. The emails provided by the Claimant reflect an enquiry made by her in relation to the conclusion of the investigation with the DFSA. Therefore, the Claimant failed to provide evidence that she incurred legal costs as set out in clause 3.3 of the Settlement Agreement.

24. Hence, I dismiss the Claimant’s claim for counsel fees in the sum of AED 100,039.85.

25. In relation to the Claimant’s claim for the additional settlement amount of AED 150,000. The Defendant provides that clause 3 of the Agreement provides that depending on the findings of the DFSA with regards to the DFSA investigations and any resulting actions, the employer reserves the right to reduce the additional settlement amount at its entire discretion or rescind the entire amount.

26. The Defendant, pursuant to the Settlement Agreement, has the right to reduce or rescind the entire additional settlement amount at its entire discretion. Therefore, the Defendant in accordance with the outcome of the DFSA investigation, which was concluded by a settlement between the Defendant and the DFSA by paying an amount to the DFSA, the Defendant within its right under the Settlement Agreement rescinded the entire amount at its entire discretion.

27. Therefore, I find that the Defendant acted within its right in accordance with clause 3 of the Settlement Agreement.

28. In relation to the Claimant’s claim of AED 50,000 for mental trauma and stress. Firstly, the Claimant failed to quantify this sum within the total claimed value and secondly, the Claimant failed to provide evidence to support its claim. Therefore, I shall dismiss the Claimant’s claim for AED 50,000 in compensation for mental trauma and stress.

Conclusion

29. In light of the aforementioned, I find that the Claimant’s claim shall be dismissed.

30. There shall be no order as to costs.