Claim No. SCT 008/2014
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 SHAMLAN AL SAWALEHI
JUDGMENT OF H.E. JUSTICE SHAMLAN AL SAWALEHI
1. The Claimant is Edvin, had been in a partnership with the Defendant Edwige, for five years at SAM.
2. In October 2013, both parties mutually accepted that the Defendant Edwige no longer wished to maintain his interests within the business and therefore the Claimant Edvin agreed to purchase the Defendant’s interests within the business and the Defendant agreed to transfer all assets associated with the business to the Claimant.
3. On 14 November 2013, a contract to this effect was signed by both parties produced by a legal firm that named the DIFC as the appropriate jurisdiction in the event of a dispute arising between the Parties in connection with the Agreement.
4. Per the agreement, the Claimant alleges he fulfilled his duties by paying the Defendant his fees referred to in section three of the Interest Transfer Agreement in the amount of AED 1,150,000.
5. In November 2013, the Claimant and the Defendant reviewed the informal accounting records of the Business which reflected AED 1,669,517 in cash assets. Of the AED 1,669,517 in assets, only AED 1,445,102 was transferred by the Defendant to the Claimant.
6. On 22 January 2014, the law firm, on behalf of the Claimant, produced a “First and Final Demand for Payment” letter to the Defendant indicating that a balance of AED 220,753 was still owed to the Claimant.
7. On 4 February 2014, the Claimant filed this claim with the Small Claims Tribunal alleging that the Defendant has not transferred the remaining balance in assets in the amount of AED 212,000.
8. The claim is heard by the Small Claims Tribunal under RDC Part 53(3)(a) & (b) which states that the SCT will hear and determine claims within the jurisdiction of the DIFC Courts of which,
“(a) the amount of the claim or the value of the subject-matter of the claim does not exceed AED 500,000; and (b) all parties to the claim elect in writing that it be heard by the SCT.”
9. The Defendant asserts that the Interest Transfer Agreement did not explicitly include the claimed amount of AED 212,000 and that there is no mention of the Business’s assets including any amount of cash anywhere in the Agreement.
10. The parties to this case took part in a consultation meeting, but no settlement was reached.
11. An SCT hearing was held on 6 April 2014. The Claimant and the Defendant attended in person and put forth their respective arguments.
The Claimant’s Position
12. The Claimant Edvin alleges he is entitled to the remaining balance of AED 214,415 in assets due from the Defendant’s interests in the company. The Claimant introduced this new figure at the hearing, with no objection by the Defendant or the Judge.
13. The Claimant filed a third party Expert Surveyor Report by United Auditing that claimed some expenditures were noted for the difference amount of AED 214,415, but were not at all conveyed or agreed as deductible expenses from the available bank balance and were not agreed to be deducted as per the Interest Transfer Agreement.
14. The Defendant filed his defense claiming that the Interest Transfer Agreement did not explicitly included the claimed amount of AED 212,000 and that had the assets of the Business include the amount claimed by the Claimant, it should have been listed in the Agreement.
15. The Defendant filed a Supplemental Report, the General Accountant at HIJ which purports that the withheld amount of AED 214,415 was the sum of the Business’s receivables, prepaid expenses and cash physically present at the Business’s office, as of 31 October 2013.
16. Specifically, this amount refers to third party monies including visa deposits, security deposits for leasing the Business office, DEWA deposits and funds deposited with other third parties in addition to prepaid expenses including trade license fees, sponsor fess and rent for the Business office in addition to cash physically in the Business’s possession.
17. The total sum of the entire third party monies amount to AED 214,414, the amount withheld from the AED 1,669,517 figure originally agreed upon as owed to the Claimant.
18. The Defendant’s expert alleges that Edwige was not in possession of this additional amount, rather, it was in the possession of the Business at all times and that the Claimant received the AED 214,414 when he gained Edwige interest in the Business.
19. The Court holds that the Claimant did not put forth sufficient evidence to establish that the remaining AED 214,414 was in fact owed to him. Absent any mention of the AED 1,669,517 figure whether in the Interest Transfer Agreement or Schedule 1 thereto, the figure is open to interpretation under Section Two; particularly considering the fact that the AED 1,150,000 due to the Defendant was explicitly laid out in Section three.
20. Additionally, the Defendant put forth sufficient evidence to establish that the withheld amount of AED 214,414 consisted of third party monies amounting to Business receivables, prepaid expenses and petty cash not in the Defendant’s possession and that it was justified in deducting that amount from the total assets.
21. For the reasons stated above, it is ordered that the claim be dismissed.
Nassir Al Nasser
Date: 17 April 2014