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Claim No. TCD 009/2020

THE DUBAI INTERNATIONAL FINANCIAL CENTRE

IN THE COURT OF FIRST INSTANCE

BETWEEN

FIVE REAL ESTATE DEVELOPMENT LLC

Claimant

and

REEM EMIRATES ALUMINIUM LLC

Defendant

ORDER WITH REASONS OF JUSTICE SIR RICHARD FIELD

UPON the application by the Defendant dated 15 March 2021 to strike out the whole of the Claimant’s Claim (“the “Claim”) herein pursuant to RDC 4.16 (1); alternatively for immediate judgment on the Claim pursuant to RDC 24 (1) (a)

AND UPON reading the Particulars of Claim, the Defence, the Counterclaim and the Reply to Defence

AND UPON reading the Witness Statement of Athanasios Karvelis dated 10 March 2021

AND UPON noting that the Claimant notified the Court on 31 January 2021 that it did not propose to file submissions responsive to this application

AND UPON reading the Claimant’s application dated 24 April 2021 to amend its Particulars of Claim and the witness statement of Mr Raj Kumar filed in support of the Claimant’s said application

IT IS HEREBY ORDERED THAT:

1. The Defendant shall have immediate judgment on the whole of the Claimant’s claim pursuant to RDC 24.1 (a))

2. The Claimant will pay the costs of the dismissed claim and the costs of the Defendant’s application herein such costs to be assessed by the Registrar on the standard basis unless otherwise agreed.

Issued by:
Nour Hineidi
Registrar
Date of issue: 4 May 2021
At: 9am

SCHEDULE OF REASONS

The background to the application

1. The Claimant is the developer and owner of a hotel project located at FIVE Jumeirah Village Circle, known as Five Palm Jumeirah (the “Project”). Under a Sub-Contract Agreement dated 29 May 2018 (the “Sub-Contract”) the Defendant agreed with the Claimant (the “Employer”) to design, supply, deliver and install aluminum and glazing works as part of the Project. Clause 4.14, the Sub-Contract stated that the contract was based on the terms and conditions set out in the Conditions of Contract for Construction for Building & Engineering Designed by the Employer, First Edition 1999 Revision 04 published by la Fédération internationale des ingenieurs-conseils (“FIDIC 1999”). The adjusted contract price was AED 49, 179,350.60 plus VAT.

2. In a determination dated 4 March 2020 (the “Determination”) made by the Engineer appointed under the Sub-Contract, it was stated that the sum due to be paid to the Defendant was AED 41,334,961.90. The essential elements of the Determination were as follows:

3. On 27 October 2020, the Claimant issued its Claim Form claiming AED 7,744,388.00 “compromising the descoping/cost savings, liquidated damages and contra charges” and averring that the Defendant was in breach of Clause 3.5 of FIDIC for failing “to give effect to the Determination”.

4. In its Statement of Defence, the Defendant pleads, inter alia, that the Determination does not entitle the Claimant to claim the said sum of AED 7,744,388.00 on the ground that, by the Determination, the Engineer declared that the Defendant was entitled to be paid AED 41,334,961.90 of which AED 1,811,884.48 remained outstanding.

5. On 21 February 2021, the Defendant served a Counterclaim on the Claimant claiming, inter alia: (i) AED 1,811,884.48; (ii) damages for loss caused by the delay on the part of the Claimant in progressing the Works; (iii) damages for loss caused by the Claimant’s failure: (a) to make timely payment of sums due to the Defendant; (b) to extend the performance guarantee; (iv) an order for the issuance of the Taking Over Certificate and the Defects Liability Certificate both deemed to have been issued on 16 September 2020; and (vii) an order that the performance guarantee AHLG1800329, and the advance payment guarantees AHLG1600217 and AHLG1600218, be released.

6. On 25 April 2021, the Claimant filed an application to amend its Particulars of Claim together with a supporting witness statement signed Mr Raj Kumar. The amendments which the Claimant wishes to make are to add: (i) a claim for an indemnity against the Defendant in respect of a claim made by the owner of the project, Unlimited 1 Limited in respect of losses suffered by the delay in completing the Project; and (ii) a claim for defects.

7. In my judgment, there is nothing arising out of Claimant’s application to amend its Particulars that constitutes an answer or defence to the Defendant’s application before the Court.

The case advanced by the Defendant on this application

8. The Defendant’s submissions are advanced in Mr Karvelis’ witness statement.

9. In the first place, the Defendant contends that the Claimant has no real prospect of succeeding on its claims that the Defendant is indebted to the Claimant in the sum of AED 7,744388.70 and on its averment that the Defendant has failed, refused and\or neglected to give effect to the Determination.

10. I accept on the evidence that it is beyond challenge and indeed is common ground that the Engineer stated in the Determination that the Defendant was entitled to be paid AED 41,334, 961.90. I further find that the Claimant has paid the Defendant only AED 39,523,077.42 (excl VAT). In addition I conclude on the evidence set out in paragraphs 21, 22 and 23 of Mr Karvelis’ witness statement that the AED 7,744,388.70 claimed by the Claimant is in fact the total of three sums awarded against the Defendant in the Determination, namely (AED 3,162,901.82) (Disputed Variations), (AED 4,516,644.88) (Delay Penalty) and (AED 64,842.00) (Contra Charges), all of which items were taken into account by the Engineer when arriving at the figure of AED 41,334, 961.90 that was due to the Defendant. It follows, and I so find, that the Claimant has no viable case based on the Determination on which it relies for its claim that the Defendant owes the Claimant the AED 7,744,388.70.

11. I accept Mr Karvelis’ contention that the Claimant has mistakenly based its claim on items 1, 2 and 4 in the Determination, respectively, Original Contract Value -- AED 47,000,000, Agreed Variations – 1,329,350 and Fire Incident Compensation – AED 750,000.00, in the erroneous belief that the Claimant had paid the Defendant AED 49,079,350.60.

12. It follows that the Claimant’s averment that the Defendant has acted in breach of contract in failing to give effect to the Determination is misconceived and without foundation.

13. RDC 24.1 (a) provides that the court may give immediate judgment on the whole of a claim if it considers that the claimant has no real prospect of succeeding on it. For the reasons I have given above, I find that the Claimant has no prospect, let alone a real prospect, of succeeding on its claim for AED 7,744,388.00 or on its claim that the Defendant was in breach of Clause 3.5 of FIDIC for failing “to give effect to the Determination”. I therefore order that the Defendant be awarded immediate judgment dismissing the whole of the Claimant’s claim.