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Claim No: SCT 051/2024

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

BEFORE SCT JUDGE MAITHA ALSHEHHI

BETWEEN

NOEL

Claimant

and

NORBERT

Defendant

JUDGMENT OF SCT JUDGE MAITHA ALSHEHHI

UPON the claim having been filed on 31 January 2024 (the “Claim”)

AND UPON the Defendant’s defence dated 7 February 2024

AND UPON the Order with Reasons of H.E Justice Maha Al Mheiri dated 6 May 2024 ordering that the DIFC Courts have jurisdiction to hear and determine the Claim

AND UPON the Claimant’s further submissions dated 22 May 2024

AND UPON the Defendant’s reply to the Claimant’s further submissions dated 28 May 2024

AND UPON a hearing having been listed before SCT Judge Maitha AlShehhi on 30 May 2024 with the Claimant’s representative and the Defendant’s representative 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 amount of USD 31,926.24.

2. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of USD 1,596.31.

Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 5 June 2024
At: 1pm

Parties

1. The Claimant is Noel (the “Claimant”), a company located in Abu Dhabi, the UAE.

2. The Defendant is Norbert (the “Defendant”), a company registered in the DIFC, Dubai, the UAE.

The Claim

3. The Claimant and the Defendant entered into an agreement dated 6 November 2022 for the Claimant to provide the Defendant with set up services for the provision of security trustee, delegate administration/paying agent services and accounting services (the “Agreement”).

4. The Claimant submits that the Agreement does not include structuring or legal services to be provided to the Defendant.

5. The dispute pertains to the pending invoice dated 28 February 2023 in the amount of USD 19,687.50, which is in relation to the set-up services performed by the Claimant and invoice dated 27 April 2023 in the amount of USD 12,238.74, which is in relation to expenses incurred by the Claimant on behalf of the Defendant, including communication with the DIFC Authority, Dubai Economic Department, and notary and attestation services, (the “Invoices”) pursuant to the Agreement.

6. The Claimant submits that as a service provider it performed all of its contractual obligations within the scope of work under the Agreement while the Defendant remains in breach of the Agreement for non-payment of the outstanding amount which fell due within 14 days of the date of the Invoices in accordance with the clause 2.4.7 of the Agreement.

7. The Claimant adds that the Defendant did not object to the Invoices being issued nor to the work performed prior to filing the case with the DIFC Courts and despite multiple follow ups, the Defendant remains in default of payment.

8. Furthermore, the Claimant submits that the Defendant was willing to settle the expenses invoice, which according to the Claimant, means that the Defendant also acknowledges that work had been done in accordance with the Agreement, otherwise it would not have agreed to pay the expenses.

9. The Claimant’s stance is that the Defendant admits that the terms of Agreement had been fulfilled by the Claimant on the basis that the Defendant initially proposed an instalment payment plan on 20 October 2023 which it did not adhere to, thus, prompting the Claimant to proceed with legal action. Therefore, the act of proposing the payment plan, according to the Claimant, is an indicator that work has been done.

10. The Claimant relies on the Defendant’s email dated 4 September 2023, wherein it confirmed that the transaction was unsuccessful due to other external factors and not the fault of the Claimant. The email states as follows:

“As we always found in good faith to continue the relationship with NOEL. But unfortunately our issuance got stuck with CREST Regulatory Issue. However we are finding a way to release the Debt Securities to the Market by issuing Conventional Bond instead SUKUK.”

11. Regardless of whether the transaction was successful or not, the Claimant asserts that payment should have been made in full in accordance with clause 2.4.2 of the Agreement which states “…The Set-Up Fees and any related legal fees and expenses are due even if the transaction does not close.”

12. As for the security package issue, the Claimant contends that this issue has no relevance as it occurred in October 2023 while the subject matter of the Claim pertains to services provided in March 2023 and not paid for to date.

13. Consequently, the Claimant is seeking payment as per the Invoices in the amount of USD 31,926.24 in accordance with the terms of the Agreement.

The Defence

14. The Defendant takes the view that the Claimant did not perform all of its duties as mandated within the Agreement and submits that there has been a gap in communication between them which resulted in a breakdown of trust and the need for justification of the payments due in order for the Defendant to make the payment.

15. The Defendant’s representative stated at the Hearing that he was compelled or forced to sign the Agreement.

16. The Defendant states that the Claimant failed to quantify and expressly mention the expenses that could be incurred within the Agreement and submits that this means that the Claimant is not up to standard, as such amounts should have been mentioned in the Agreement.

17. The Defendant argues that it was ready to pay after clearing some doubts and having a discussion with the Claimant to clarify certain points, however, it submits that the Claimant refused to have this meeting. As such, the Defendant adds that it needs justification to understand what kind of work was exactly done as the transaction was not successful.

18. The Defendant further asserts that if any work was completed by the Claimant, then it was due to the Defendant’s intervention and assistance in terms of completing the groundwork in order to set up the Claimant as the delegate. In other words, the Defendant completed the majority of the work while the Claimant is taking credit for it.

19. As a result of the Defendant’s board having been changed, the Defendant asserts that the security pack has been affected which is why the Defendant is reluctant to pay without having a proper justification from the Claimant on the next steps to be taken in respect of this.

Discussion

Is the Defendant eligible to pay the outstanding amount in the Invoices?

20. I set out below the relevant provisions from the Agreement in respect of the expenses and payment of fees:

21. Further to the above clause, it is clear that the Claimant is entitled to be reimbursed within 14 days of the date of the invoice.

22. Notwithstanding the Defendant’s argument as to the suitability of the expenses to be claimed, I find that the expenses provision was mentioned within the Agreement at clause 2.4.6 where it sets out the type of expenses that can be incurred, however, without mentioning the exact figure. Although the Agreement is silent in this regard, the fees might be subject to change depending on the time and circumstances and by providing an exact figure, this might limit the Claimant’s ability to perform its duties diligently.

23. The Defendant asserts that it had incurred significant losses and has no income generating due to the Claimant’s actions of failing to render the services as required by the Agreement.

24. As to the Defendant’s argument of being forced to sign the Agreement, I find that the Defendant failed to submit any evidence to support its allegation that the Defendant’s representative was forced to sign the Agreement. Therefore, I shall reject this assertion for lack of evidence.

25. To support its Claim, the Claimant submitted evidence of the work completed such as payment made to the DIFC Authority and Emirates Integrated Registries Company LLC.

26. The Invoices have remained outstanding for over a year and as per the email correspondence submitted by the parties, I find that the Defendant did not raise any objection to the work or quality of work conducted by the Claimant.

27. On the contrary, the emails demonstrate the Defendant’s willingness in attempting to resolve the issue by trying to negotiate a payment plan in respect of the Claimant’s services and expenses incurred.

28. I am of the view that despite the Claimant’s rejection of the Defendant’s request for a call to negotiate a further settlement, apart from the one already proposed, this does not mean that the Defendant can refrain from payment. The fact remains that the amount is due and payable and in accordance with the Agreement the Claimant is not obliged to offer or accept any payment plan and all dues should be paid within 14 days of the issued invoice.

29. Moreover, clause 2.4.2 of the Agreement gives the Claimant the right to receive payment even if the transaction fails and this provision had been agreed by the Defendant upon entering into the Agreement.

30. For my reasons stated above, the Defendant is liable to pay the outstanding sums set out within the Invoices to the Claimant, and the Claimant’s rejection to negotiate further is not a valid reason to withhold payment as a previous payment plan was proposed and not honoured.

Findings

31. The Defendant shall pay the Claimant the amount as per the Invoices in the amount of USD 31,926.24.

32. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of USD 1,596.31.