THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
1. The claimant is Caden, residing in Dubai United Arab Emirates. (Litigant in person)
2. The First Defendant is Caitlin LLC, is a DIFC Company DIFC, Dubai, United Arab Emirates.
3. The Second Defendant is Cailean LLC, is a non DIFC Company Located in Dubai, United Arab Emirates.
4. I will refer in my Judgment to the first Defendant and the Second Defendant as the Defendants.
5. On 23 November 2011 the Claimant brought this Claim before the Small Claims Tribunal (SCT) stating that on June 2006 he started working for the first Defendant (Caitlin); part of Cailean, the financial services investments arm of D.
6. In April 2008 the Claimant received a bonus letter from the First Defendant (Caitlin), in respect of his 2007 discretionary incentive bonus. The letter stated that the bounus would be paid in 3 instalments as stated:
– An intial cash payment of 50% during April 2008
– 25% in January of 2009;
– 25% in January of 2010
– The differed element would be invested in a shadow fund that will have a return by reference to the aggregate performance of Cailean.
7. The Claimant recived the full payment of April 2008 (USD 175,000). The payment scheduled for January 2009 was reduced by 30%to USD 61,250, however the Claimant has not recieved anything regarding the payment of January 2010 from the defendant due to bad equity return in 2009 which led in differing bonuses for prior years as stated by the Defendants.
8. On 15 December 2011, the Defendants submitted an application to dispute the jurisdiction of the DIFC Courts.
9. As per the Defendants, the claim is related to Caden employment contract and bonus arrangements which were concluded outside the DIFC and between non-DIFC entities (the Second Defendant) which is outside the jurisdiction of the DIFC Courts.
10. The Defendants stated that the Claimants initial contract between the first Defendant -Caitlin- did not include a clause about the provisions of a bonus, and the bonus clause was stated in the Claimants replaced contract with the second Defendant Cailean in 30th October 2008,furthermore the new contract stated that we are pleased to confirm your transfer of employment in accordance with the terms and condition. therefor any claim regarding the bonus under Cailean contract lies against Cailean. The Defendants name exists under the contract due to administrative matters since the Defendant had had payroll information about the Claimant.
11. There was therefore no contract between Caden and Caitlin regarding the payment of a bonus. The scheme was operated by Cailean. The amount of the deferred portion of the bonus was determined by reference to the performance of Cailean and its operating subsidiaries.
12. This is not an establishment licensed to operate in the DIFC. Performance by Cailean i.e. payment under the bonus scheme, was carried out by Cailean outside of the DIFC. it is an entity that was established, and operates outside the DIFC, as a result it is considered outside the jurisdiction of the DIFC Courts.
13. The Claimant attended in person while the Defendants was represented, according to authorization letter from Defendants.
14. Moreover, the Claimant requested to dismiss Defendants Application to contest the jurisdiction of the DIFC for reason that the first Defendant was carrying on business within DIFC, the Bonus letter was issued by the first defendant, he transfer his employment contract to the second defendant in November while the the bonus letter was issued by the first defendant before the transfer which is related to the jurisdiction of the DIFC Courts.
15. The Defendants denied and argues and stated that The Initial Contract was replaced in its entirety in October 30 2008 by a contract of employment with Cailean (the “Ultimate Contract”). At this time the claiment place of work moved to the Cailean offices. The claiment worked under this contract until he left Cailean on 13 September 2009. Any obligations on his employer were transferred to Cailean under the Ultimate Contract as is clear from clause 2 of the contract, “leave and other discretionary entitlements will be transferred from Caitlin.” Clause 8 of the contract also reaffirms the discretionary nature of the bonus which may be paid by Cailean.
16. Cailean is an entity which at all times is and was established, domiciled and operating outside of the DIFC. Its registered address is Emirates, Dubai, United Arab Emirates. It is not, and never has been, established or licensed to operate in the DIFC.
17. the relevant provisions of DIFC Law identifying the scope of the Court’s jurisdiction are set out in Article 5(A1) of the Judicial Authority Law (No. 12 of 2004) which was amended by Dubai Law (No. 16 of 2011 in respect of DIFC Courts) provides as follows:
The Court of First Instance shall have exclusive jurisdiction to hear and determine:
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.
d. Appeals against decisions or procedures made by the DIFC Bodies where DIFC Laws and DIFC Regulations permit such appeals.
e. Any claim or action over which the Courts have jurisdiction in accordance with DIFC Laws and DIFC Regulations.
And Article 19(1) of DIFC Law No 10 of 2004 which provides as follows:
“The DIFC Courts of First Instance has original jurisdiction pursuant to Article 5(A) of the Judicial Authority Law to hear any of the following:
(a) civil or commercial cases and disputes involving the Centre or any of the Centre’s Bodies or any of the Centre’s Establishments;
(b) civil or commercial cases and disputes arising from or related to a contract concluded or a transaction concluded by any of the Centre’s Establishments or the Centre’s Bodies;
(c) civil or commercial cases and disputes arising from or related to a contract that has been executed or a transaction that has been concluded, in whole or in part, in the Centre or an incident that has occurred in the Centre; and
(d) Any application over which the DIFC Courts has jurisdiction in accordance with DIFC Laws and Regulations.”
18. In the present case it is shows from the employment contracts that the Claimant was joined the first Defendant (Caitlin the financial services investments arm of D) on June 2006, however this contract was replaced in its entirety in 30th October 2008 by a contract of employment with the Second Defendant Cailean (the “Ultimate Contract”). Under this contract Any obligations on the employer were transferred to the second Defendant Cailean under the Ultimate Contract as is clear from clause 2 of the contract, “leave and other discretionary entitlements will be transferred from Caitlin.” Clause 8 of the contract also reaffirms the discretionary nature of the bonus which may be paid by Cailean.
19. Which mean that the claimant employment rights have been transferred by the second contract from the first defendant (DIFC Company) to the second defendant Non DIFC Company) as a result of that transferred the legal position that there was no contract setting out any bonus entitlement with Caitlin that was performed in the DIFC. There is no basis for a claim against Caitlin.
20. Furthermore, the Second Defendant Cailean is an entity which at all times is and was established, domiciled and operating outside of the DIFC. Its registered address is Emirates Towers, Dubai, United Arab Emirates which is physically located outside of DIFC jurisdiction. It is not, and never has been, established or licensed to operate in the DIFC. As stated in the copy of the current Commercial License issued by Department of Economic Development in Dubai.
21. So, the parties in this case not to any such contract or transaction or the cause of action arose from or related to a contract that had been wholly or partly executed of preformed in the Centre or arose from or related to a transaction that had been concluded in the Centre or from an incident that had occurred in the Centreand. Also the parties did not agree in writing to elect to use the DIFC Courts.
22. In my judgment there is no doubt that this Court has no jurisdiction under Article 5A1 as discussed above.
FOR THE ABOVE MENTIONED REASONS IT IS ORDERED THAT:
1. The Defendants application to contest jurisdiction is accepted.
2. The Court has no jurisdiction to hear and determine this claim.
3. All parties to pay their own costs.
H.E. Justice Omar Almuhairi
Date of Issue: February 2012