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Mr Kishanchand Gangaram Bhatia v ICICI Bank Limited [2014] DIFC CFI 018

Mr Kishanchand Gangaram Bhatia v ICICI Bank Limited [2014] DIFC CFI 018

October 30, 2014

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Claim No: CFI 018/2014

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai

 

IN THE COURT OF FIRST INSTANCE

BEFORE JUSTICE ROGER GILES

 

BETWEEN

Mr KISHANCHAND GANGARAM BHATIA

                                                                                                Claimant

and

 

ICICI BANK LIMITED

Defendant

 

Hearing:            17 September 2014

Counsel:           Arti Sangar (Diaz Reus and Targ (Dubai) LLP) for the Claimant

  Fiona Campbell (Al Tamimi & Co) for the Defendant

Submissions:    28 October 2014 Claimant filed Notice of Clarification of Claimant’s Reply

  30 September 2014 Claimant’s Reply to Defendant’s Supplemental Submissions

  24 September 2014 Defendant’s Supplemental Submissions

Judgment:        30 October 2014


 

JUDGMENT OF JUSTICE ROGER GILES


JUDGMENT

UPON hearing counsel for the Appellant and counsel for the Respondent on 17 September 2014

AND UPON reading the submissions and evidence filed and recorded on the Court file

IT IS HEREBY ORDERED THAT:

1. Dismiss the application filed on 25 June 2014.

2. Order the Defendant to pay the Claimant’s costs of the application except for the costs of the Notice of Clarification.

3. Suspend the operation of order 2 for ten days or, if an application for a different order as to costs is filed within that period, until the determination of that application.

 

Issued by:

Maha AlMehairi

Judicial Officer

Date of Issue:  30 October 2014

At: 4pm

 

REASONING

2. The Claimant is an Indian citizen resident in Dubai.  The Defendant is a major Indian bank, with branches throughout the world including in Singapore and the DIFC.  It is registered in the DIFC and licensed and regulated by the Dubai Financial Services Authority (“the DFSA”).

3. This is an application by the Defendant for an order declaring that the Court has no jurisdiction to try the claim against it; alternatively, an order declaring that the Court should not exercise any jurisdiction which it may have; and a consequential order dismissing the claim for want of jurisdiction.

The Claim

4. The proceedings were commenced by a claim form filed on 22 May 2014.  The claim form itself gave “brief details” of the claim, and was accompanied by particulars of claim.  The particulars of claim are not well drawn, but the elements of the Claimant’s case appear to be as follows.

5. In January 2008 the Claimant was contacted by Mr Sanjeev Singh, the Chief Manager or Assistant General Manager at the Defendant’s DIFC branch.  Mr Singh was marketing “units” in JM Financial India Property Fund Ltd (“the JM Fund”).

6. The Claimant informed the Defendant that he was a conservative investor who preferred safety over high returns. Mr Singh told him that the JM Fund was a safe investment suitable for risk-averse investors such as himself, and that it would be suitable for him.  The Claimant was told that he would get a profit of at least 30% of his investment annually, and that the JM Fund was “a big company involved in multiple projects”.  Mr Singh recommended that he purchase units in the JM Fund in the amount of USD 250,000.

7. On 15 January 2008 the Claimant subscribed for 2500 shares in the JM Fund at USD 100 per share, and paid USD 50,000 as the first tranche of the investment.

8. The Claimant was subsequently told by Mr Singh of a dispute between the JM Fund and Maytas Properties Ltd, in which the JM Fund had invested.  The Defendant did not respond to the Claimant’s requests for information concerning this dispute and his investment, and for that reason the Claimant did not make the further payments required to complete the subscription of USD 250,000.

9. In October 2011 the Claimant was told that his shares had been forfeited for non-payment.

10. The Claimant seeks return of his USD 50,000 or damages in that amount, plus interest of USD 25,326 calculated to 22 May 2014.  He alleges that the Defendant had acted as his financial advisor, and that he trusted it to protect his interests and support his investment goals; further, that the Defendant itself offered to sell units in the JM Fund to him.  He contends that he “was induced and convinced by the Defendant to invest in an unsuitable and improper fund” (particulars of claim, para 5).  He alleges that the JM Fund was not a suitable fund for his investment and that the Defendant should not have recommended investment in it, and in particular that the Defendant had not disclosed the dispute with Maytas Properties Ltd.

11. The asserted causes of action are misrepresentation, deceit, breach of fiduciary duty and breach of various provisions of the Collective Investment Law 2010, DIFC Law No. 2 of 2010 (“the CIL”), and of the DFSA Collective Investment Rules.

The Application

12. The Defendant’s application was filed on 25 June 2014.  It is made on three grounds, expressed in the application –

“(1)  Pursuant to Article 30 [sic] of the DIFC Courts Law (Law No.10 of 2004), the Claim Form is a nullity and does not disclose or initiate a civil or commercial claim, dispute or cause of action arising from events occurring less than six years prior to its issue on 22 May 2014.  Consequently, the Court has no jurisdiction pursuant to Article 5(A)(1) of the Judicial Authority Law (Dubai Law No. 12 of 2004, as amended by Dubai Law No. 16 of 2011).

(2) Further, neither the Claim Form nor the Particulars of Claim disclose a valid or viable claim or action over which the Court has jurisdiction in accordance with the DIFC Laws therein stated.  In particular, the DIFC Collective Investment Law (Law No. 2 of 2010) has no application to the Defendant or the events complained of and cannot form the basis of any claim.  Consequently, the Court has no jurisdiction pursuant to Article 5(A)(1)(e) of the Judicial Authority Law.

(3) The parties have contractually opted out of the DIFC jurisdiction and executed valid and binding law and jurisdiction agreements for the laws and courts of Singapore.  Singapore is the chosen and natural forum to exercise jurisdiction in respect of the issues stated by the Claimant and has not declined to exercise jurisdiction.  Consequently, the Court has no jurisdiction pursuant to DIFC Law No. 10 of 2005 and Article 5(A)(3) of the Judicial Authority Law.”

The DIFC Courts’ Jurisdiction

13. Article 5(A) of The Law of the Judicial Authority at Dubai International Financial Centre, Law No. 12 of 2004, as amended by Law No. 16 of 2011 (“the JAL”), relevantly provides –

“Article 5

Jurisdiction

(A)           The Court of First Instance:

(1)        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 the 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 the DIFC and is related to DIFC Activities;

(2)        …

(3)        The Court of First Instance may hear and determine any civil or commercial claims or actions falling within its jurisdiction if the parties agree in writing to submit to the jurisdiction of another court over the claim or action but such court dismissed such claim or action for lack of jurisdiction.

(4)        …”

14. The Claimant relied on each of paras (a), (b), and (c) of Article 5(A)(1).  The Defendant accepted that it is and at all material times had been a DIFC Establishment, (see Corinth Pipeworks SA v Barclays Bank PLC, CA 002/2011, 22 January 2012), and its arguments that there was nonetheless no jurisdiction pursuant to para (a) applied equally to jurisdiction pursuant to para (b) or para (c). Accordingly, attention can be focussed on jurisdiction through para (a).

Ground 1

15. This ground was founded on Article 38 of the DIFC Courts Law 2004, DIFC Law No. 10 of 2004 (“the Court Law”), which provides –

“38. Limitation on proceedings

Subject to any other DIFC Law, a proceeding must not be commenced more than 6 years after the date of the events that give rise to the proceedings.”

16. A relevant other DIFC Law is The Law of Obligations 2005, DIFC Law No. 5 of 2005 (“the Obligations Law”), Article 9(1) of which provides that notwithstanding Article 38 of the Court Law –

“…where a cause of action arises as a result of fraud by the Defendant there is no time limit before which the action must be commenced.”

17. The Defendant submitted that the events that gave rise to the proceedings occurred in January 2008, when the Claimant made his investment.  The filing of the claim form on 22 May 2014, more than 6 years thereafter, was commencement contrary to Article 38, and was a nullity; being a nullity, there was no claim or action to which the Defendant (albeit a DIFC Establishment) was a party within para (a) of Article 5(A)(1) of the JAL.  Equally, there was no claim or action within para (b) or para (c).  This was so, it was submitted, even so far as the Claimant asserted a cause of action in deceit, because the particulars of claim did not particularise that claim as required under the Rules, and for that reason there was no claim or action within para (a).

18. The Defendant submitted that the jurisdiction conferred by Article 5(A)(1) was not over a party, but over a claim or action of the relevant kind, and that there was no claim or action by force of Article 38 or, so far as a cause of action in deceit was asserted, because the assertion was defectively pleaded.

19. The language of “must not be commenced” in Article 38 of the Court Law is found also (without the “not”) in Article 9(1) of the Obligations Law.  It is similarly found in Article 123(1) of the Contract Law 2004, DIFC Law No. 6 of 2004 which provides that an action for breach of any contract “must be commenced within 6 years after the cause of action has accrued…”

20. In the Limitation Act 1980 of England and Wales the language is that an action “shall not be brought” after the expiration of a time period (see s2 (tort); s5 (contract); analogous language of “no action shall be brought” and “may not bring an action” is used in other provisions).  In relation to that language, it is well established that the expiry of the period bars the remedy by action and does not extinguish the right: see Royal Norwegian Government v Constant (1960) 2 LI R 431; C&M Matthews Ltd v Marsden Building Society (1951) Ch 758. In Horton v Sadler [2006] UKHL 27; (2006) 3 All ER 1182 at [7]; 1182 Lord Bingham said succintly –

“Despite the language used, this has not been taken to mean that the bringing of an action after that time is prohibited but that the Defendant has a statutory defence of time-bar in such a case.”

21. Hence it is necessary that the defendant plead a limitation defence:  Kettleman v Hansel Properties Ltd (1987) AC 189.  That has been the position, with exceptions, since at least the Limitation Act 1623, 21 Jac 1 c16, and it was maintained as the common law position by the Wright Committee in its examination of the law concerning limitations (Law Revision Committee, Fifth Interim Report (Statutes of Limitation), 1936, Cmd 5334, paras 23-4).

22. Article 38 prohibits commencement of a proceeding, but does not state the consequences of commencement contrary to the prohibition and in particular does not ascribe nullity to the proceeding.  It will sometimes be unclear, and there is not infrequently dispute, as to when a limitation period commences to run, which cannot be decided at the time of commencement of a proceeding.  Retrospective nullity upon a decision in the proceeding, rather than the Court determining whether the limitation period had expired in the exercise of its jurisdiction, is unlikely to have been intended, particularly against the background of the English legislation.

23. Although using different language, Article 38 of the Court Law and ss 2 and 5 of the Limitation Act are alike in stating a prohibition.  In my opinion, the language “must not be commenced” in Article 38 should be given the same meaning as the language to like effect in the Limitation Act.  Had it been intended to depart from the centuries-old position under language of that kind, clear words of departure would have been used.

24. In my opinion, if the claim form was filed more than six years after the date of the events giving rise to the proceedings, there is nonetheless a claim or action within Article 5(A)(1) of the JAL.

25. As to the submission in relation to a cause of action in deceit, the Defendant initially submitted that there was no claim in deceit in the claim form and that, absent such a claim, the cause of action in deceit asserted in the particulars of claim had to be ignored.  In fact the claim form included that the Defendant “made deceptive statements”, the particulars of claim were served together with it, and the Defendant retreated to the submission that the pleading was defective because it did not sufficiently detail the deceit (see RDC 17.43 (1)).  It said that the claim in deceit was therefore “a fiction”.

26. The Defendant shrank from the proposition that if a statement of case is struck out because it discloses no reasonable grounds or there has been failure to comply with a rule (RDC 4.16), that exercise of jurisdiction is in truth a holding that the Court has no jurisdiction; although that would appear to be entailed in its argument.  I do not accept the submission.  Even if the pleading of a case is defective, there is a claim or action.  It may be a claim or action which will in due course suffer a sorry fate, but it is not a fiction and it exists as a claim or action in the Court in which that fate is debated and ruled upon.

27. It may be added that it is eminently arguable that the events that gave rise to these proceedings did not conclude until October 2011, when the Claimant’s shares were forfeited.  The Claimant does not sue in contract, and loss is an element in his causes of action.  When did he suffer loss?

28. The Defendant submitted that the loss was suffered when the Claimant subscribed for the shares in the JM Fund and (so it said) forfeiture became an inevitable consequence of his subsequent failure to pay the further tranches; it referred in particular to Pegasus Management Holdings SCA v Ernst and Young [2010] EWCA Civ 181; (2010) 2 All ER (Comm) 191 and Green v Eddie [2011] EWHC 824.  The matter may arise in the course of the proceedings and, it being unnecessary to express a final view for the purposes of the application, it is preferable that I do not do so, but I doubt that that is a correct analysis.  Forfeiture was not inevitable, but depended on subsequent events. The shares taken up in January 2008 may have been worth what the Claimant paid, his investment being subject to a contingent loss suffered only when the contingency of forfeiture was fulfilled, see the discussion in Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514, to which the Claimant referred, at [16] – [31]. There may be a causation issue, but that is another matter: I do not think it can be found at this interlocutory stage of the proceedings that the claim is statute-barred.

29. In my opinion, the first ground for the Defendant’s application fails.

Ground 2

30. As developed in submissions, this ground was confined to the causes of action for breach of the CIL. The Defendant submitted that the investment was made in 2008, when the CIL was not in force; that the Claimant therefore could not have a cause of action for its breach; and that the claim in that respect “does not exist and is a nullity”.

31. The CIL replaced the Collective Investment Law 2006 (“the CIL 2006”). It may be that the CIL 2006 is the correct or a more appropriate Law, although there are transitional provisions of some obscurity in the CIL which may underlie the Claimant’s invocation of that Law; the Claimant’s response to the Defendant’s submissions in this respect was not entirely clear, but included that the law had not changed and also that the CIL applied because it was in force when the shares were forfeited.

32. Nonetheless, the Defendant’s submission is misconceived, for reasons similar to those expressed in relation to a cause of action in deceit.  Let it be assumed that the claim for breach of provisions of the CIL will fail because that Law was not relevantly in force.  That does not mean that the Court lacks jurisdiction.  There is still a claim or action in which the Claimant asserts breach of provisions of the CIL, albeit (on the above assumption) that it is a claim or action which will fail.  The Court has jurisdiction to hear and determine it and decide that it fails.  That decision is not a decision that the Court lacks jurisdiction, but a decision in the exercise of its jurisdiction.

33. The Defendant also submitted that the Court “does not have jurisdiction over matters arising under” the CIL because powers or jurisdiction were conferred on certain regulatory authorities under Parts 9, 10 and 11 of that Law.  It is sufficient to say that nothing in those provisions negates or detracts from this Court’s jurisdiction to hear and determine the proceedings.

34. In my opinion, the second ground for the Defendants’ application also fails.

Ground 3

35. Although the ground as expressed was that the Court had no jurisdiction, the Defendant’s submissions included that the Court should decline to exercise jurisdiction.

36. The Defendant relied on what it said were four contractual “opt outs”.

37. One was contained in an Investor Services Agreement (“the ISA”) dated 6 January 2008 made between the Claimant and the Defendant, the Defendant signing by Mr Singh.  It recorded the Claimant’s agreement that the ISA “governs the terms & conditions of my relations with ICICI Bank relating to my Investments”, and under the heading “Appointment as Servicing Agent” provided –

“I hereby appoint you as my agent for servicing all Investment transactions on my behalf including but not limited to purchases, sales, subscriptions, transfers, switching, conversions and redemptions.  You may enter into investment transactions as agent for and on my behalf and for my sole risk and account (including by transacting in investments in your own name or in the name of a nominee, but for my sole risk and account).  As my servicing agent, you may, in your sole discretion, establish limitations, restrictions, charges and other terms for the Relationship, which may be different from those, which apply to other investors service by you and to investors through other servicing agents.  Except as otherwise agreed in writing, your appointment as a servicing agent will be governed solely by this Agreement and you shall have no responsibility to me other than as stated in this Agreement.”

38. The provision on which the Defendant relied was cl 18 under the heading “Governing Law”, reading –

“This Agreement is governed by the laws of Singapore and the parties submit to the jurisdiction of the courts of Singapore in all matters pertaining thereto.”

39. The second was contained in a lengthy document entitled “ICICI Bank Limited Singapore Branch General Terms and Conditions Governing Accounts and Secured Facilities” (“the Singapore Terms”).  It said that it contained “the terms and conditions applicable to: (a) the establishment and operation of accounts with the Bank, which may be opened from time to time by the Customer with the Bank; and (b) Facilities by the Bank to the Borrower [sic].” The ISA included that the Claimant had received and read a copy of the Singapore Terms and that he agreed to be bound by them, and that in the event of inconsistency with the ISA, the ISA would prevail.

40. The provision of the Singapore Terms on which the Defendant relied was cl 13.1, reading –

“The products and services of the Bank entail only a relationship between the customer and the Bank in Singapore and not with any other office or branch of ICICI Bank Limited.  The customer hereby waives any right of action against any of the other offices or branches of ICICI Bank Limited.  The other offices of ICICI Bank Limited shall not in any manner be liable for any delays, losses, damages, claims or expenses of whatsoever nature arising in relation to any customer’s relationship with the Bank.  The customer further waives any claims or actions that the customer may have in any jurisdiction outside Singapore.  With specific reference to customers in the United Arab Emirates, the customer hereby agrees and confirms that ICICI Bank Representative Office, Dubai, UAE is only a marketing office and shall not be liable or responsible for any delays, losses, damages, claims or expenses of whatsoever nature and the customer has no right of action against ICICI Bank Representative Office, Dubai, UAE.  And the customer expressly waives any claims or actions in the United Arab Emirates.”

41. The third was also contained in the Singapore Terms.  The provision on which the Defendant relied was cl 21, reading –

“These terms shall be governed by, and construed in accordance with Singapore Law.  The customer or the Borrower, as the case may be, hereby irrevocably submits to the non-exclusive jurisdiction of the Singapore courts in connection with any action or proceeding that may arise out of or in connection with these Terms.  Such submission shall not prejudice the Bank’s right to commence action against the customer or the Borrower in any other court of competent jurisdiction.”

42. The fourth was a provision in the document signed by the Claimant when subscribing for the shares in the JM Fund (“the Subscription Agreement”).  It was said to express an agreement between “the Fund” and “the Subscriber”.  The Defendant was referred to as “the lead arranger”, but was not a party.  The provision on which the Defendant relied, under the heading “Miscellaneous,” was –

“(b) Governing Law; Jurisdiction.  This Agreement shall be construed in accordance with, and its validity, construction and performance shall be governed by, the laws of the Singapore [sic].  The Investor hereby irrevocably consents to the exclusive jurisdiction of the courts of Singapore for the purposes of any proceeding relating to this Agreement and waives any objection to the convenience of any such court.”

43. For his part, the Claimant referred to a further document entitled “ICICI Bank Limited DIFC Branch General Terms and Conditions Governing Relationship” (“the DIFC Terms”).  It was said to contain “the terms and conditions applicable to the establishment of relationship and operation of relationship with the Bank which may be opened from time to time by the Client with the Bank”, from earlier reference “the Bank” being the DIFC branch of the Defendant.  It said also –

“No other agreement entered into with ICICI Bank Limited, the Bank its branches, representatives offices or affiliated companies (together the “ICICI Group”), or any document executed in favour of the ICICI Group, shall be replaced hereby and if there is any conflict, these Terms shall prevail.  Specific products and services availed of by the Client shall be governed by the specific terms and conditions for such product or service.”

44. Clause 3 of the DIFC Terms recorded that the Bank would offer “Investment Services” to the Client, the Investment Services being described at some length but including providing information on investments and accepting instructions and orders to undertake investments and arranging for the execution of those instructions.  The specific provision to which the Claimant referred, under the heading “General Provisions”, was cl 9 –

“The Terms shall be governed by, and construed in accordance with the laws of the DIFC.  The Client hereby irrevocably submits to the non-exclusive jurisdiction of the DIFC courts in connection with any action or proceeding that may arise out of or in connection with the Terms.  Such submission shall not prejudice the Bank’s right to commence action against the Client in any other court of competent jurisdiction.”

45. Some of these documents appeared to have members of the Claimant’s family as parties.  Their position as co-investors is unclear; no point was taken as to parties.

46. The evidence concerning the various documents was scant.  The Claimant said that he was told that he would have to open an account in Singapore, that he was rushed into signing non-negotiable documents, and that he did not have time to read or understand what he signed and was not given copies other than of the Subscription Agreement.  Mr Singh denied that there was any rush or pressuring.  According to the Defendant’s evidence, the Claimant and his wife and daughter opened investment accounts in Singapore “via the DIFC”, then a USD call account, and the ISA was signed and the Singapore Terms and the DIFC Terms were “expressly agreed”.  There is no greater clarity.  There was no cross-examination, and I am unable to make meaningful findings as to the circumstances in which the various documents were signed or otherwise came to be part of the contractual relations between the Claimant and the Defendant or as to their inter-relationship.  It is clear enough, however, that whatever happened occurred in Dubai and not Singapore, and there is a real possibility that the document governing the investment by the Claimant is the DIFC Terms.

47. The Claimant foreshadowed challenges to the documents or parts of them as binding upon him.  The Defendant accepted that the DIFC Terms were “part of the contractual matrix”.  I proceed on the assumption that the ISA, the Singapore Terms and the DIFC Terms have contractual effect between the Claimant and the Defendant.  The Defendant accepted that the Subscription Agreement did not have contractual effect between them, but said that it “falls within the matrix of facts…that all roads lead to Singapore”.

(a) No jurisdiction

48. The Defendant submitted that this Court had no jurisdiction because in the provisions on which it relied the Claimant had agreed on the jurisdiction of another court, and the Law relating to the Application of DIFC Laws 2004, as amended and restated in DIFC Law No. 10 of 2005 (“the Application Law”), mandated giving effect to an agreement on jurisdiction and precluded the Court from exercising jurisdiction itself.  This was so, it was said, whether or not the submission to the jurisdiction of another court was to the exclusive jurisdiction of that court; a plain submission to jurisdiction was sufficient, and submission to the exclusive jurisdiction of another court was not necessary for and added nothing to its argument.

49. For the present I assume that one or more of the provisions catches the Claimant’s claim; that is, that there is a submission to the jurisdiction of the Singapore courts in relation to the claim.

50. The Defendant’s submissions included reference to Article 9 of the Application Law, but it is concerned with choice of law and not jurisdiction.  The argument rested on Article 13, providing –

            “13.  Effectiveness of express submission to jurisdiction or arbitration

            (1) A submission to the courts of a jurisdiction in a contract shall be
effective.

            (2) A submission to arbitration in a contract shall be effective”

51. The Defendant submitted that the stipulation that a submission to the courts of a jurisdiction be effective required that there be no jurisdiction in this Court.  The short answer is that it does not, even as a matter of language.  As a longer answer, as explained in Al Khorafi v Bank Sarasin Alpen (ME) Ltd (CA/003/2011, 5 January 2012) at [92]-[93], the purpose of Article 13(1) was to preserve the effectiveness of a submission to another jurisdiction when the DIFC Courts would otherwise have exclusive jurisdiction by force of Article 5(A)(1) of the JAL.  It does not entail that the Court loses its jurisdiction.

52. The Defendant relied on Article 5(A)(3) of the JAL as suggesting jurisdiction in all cases only when the foreign court has declined jurisdiction, pointing out that prior to the amendments bringing the Article to its present form Article 5(A)(2) had provided that parties “may agree to submit to the jurisdiction of any other court in respect of the matters listed under paragraphs (a), (b) and (c) of this article”.  Article 5 (A) 3 was noted in Al Khorafi v Bank Sarasin-Alpen (ME) Ltd at [89].  It was regarded as a concomitant of Article 13 (1) of the Application Law, reflecting a right to contract out of the exclusive jurisdiction of the DIFC Courts.  It does not connote exclusive jurisdiction of the other court.

53. Al Khorafi v Bank Sarasin-Alpen (ME) Ltd is otherwise against the Defendant’s submission.  It was held that there was an effective agreement to confer jurisdiction on Swiss courts (at [108]), but that the proceedings should continue in the DIFC Courts (at[119]); that could not be so if the DIFC Courts had been deprived of jurisdiction by the submission to the jurisdiction of the Swiss courts.  The Defendant said that the present question had not been argued in Al Khorafi v Bank Sarasin-Alpen (ME) Ltd.  Even so, the Court’s explanation convincingly undermines the Defendant’s submission, which I do not accept.

54. The Defendant submitted that a passage in the judgment of the Chief Justice in Corinth Pipeworks Ltd SA v Barclays Bank PLC supported its argument.  The Chief Justice said at [68] –

“It is entirely within the control of the banks and other enterprises carrying on business in the DIFC and the wider Emirate of Dubai as to whether they choose to subject their business within the wider Emirate to the jurisdiction of the DIFC Courts – if they do not wish to do so, they can either trade through separate corporate vehicles in the DIFC and the wider Emirate or (even more simply) include jurisdiction clauses in their contracts choosing where they allocate jurisdiction over any disputes.”

55. I do not think that the passage assists the Defendant, which reads too much into it.  It was part of the rejection of a “floodgates” argument mounted against jurisdiction over a bank in all its branches, when carrying on a business by a branch in the DIFC brought it within Article 5(A)(1)(a) of the JAL.  The Chief Justice should not be taken to mean that contractual choice of a different jurisdiction would deprive the DIFC Courts of jurisdiction.  Choice of an exclusive alternative jurisdiction would permit an application that the DIFC Courts not exercise jurisdiction.

56. My assumption that the Claimant’s claim is caught by one or more of the provisions on which the Defendant relied may not be correct.

57. Whatever its effect as some kind of release, cl 13.1 of the Singapore terms is not jurisdictional.  The Defendant is not a party to be Subscription Agreement.  Only cl 18 of the ISA or cl 21 of the Singapore Terms could catch the claim, on the further assumption that they are not displaced by the DIFC Terms.  It is necessary that the claim be a “matter pertaining to” the ISA, or that it “arise out of or in connection with” the Singapore Terms.

58. As earlier noted, the Claimant does not sue in contract; in particular, he does not say that the Defendant was in breach of the ISA.  It is not self-evident that his causes of action pertain to the ISA, or that they arise out of or in connection with the Singapore Terms which were concerned with the operation of the accounts.  These matters received passing attention in submissions, and in the state of the evidence earlier described are not susceptible of sensible resolution.  It is not necessary to resolve them.

(b) Exercise of jurisdiction

59The Defendant expressly did not rely upon principles of forum non conveniens.  It accepted that if the submissions it made in reliance on the submissions to jurisdiction of the Singapore Courts did not find favour, it could not submit that this Court was an inappropriate forum (see Spiliada Maritime Corp v Cansulex Ltd (1987) AC 460).

60. The first step in the Defendant’s argument was that the Claimant had submitted to the exclusive jurisdiction of the Singapore courts.

61. Clause 18 of the ISA is in terms no more than a submission to the jurisdiction of the courts of Singapore; cl 21 of the Singapore Terms is expressly a submission to the non-exclusive jurisdiction of the Singapore Courts.  The Defendant submitted that they should be construed as submissions to the exclusive jurisdiction of the Singapore courts.  It relied on the submission in the Subscription Agreement for an exclusively Singaporean ambience, and on BNP Paribas SA v Anchorage Capital Europe LLP [2013] EWHC 3073 (Comm.).  In that case it was said (at [88]) that the question is whether the clause obliges the parties to resort to the relevant jurisdiction, irrespective of whether the word “exclusive” is used, and whether the commencement and pursuit of proceedings in another jurisdiction is something a party has promised not to do under the clause.  Anchorage had agreed with BNP to “irrevocably submit to the jurisdiction of the English courts in respect of any matter arising out of this agreement…”, and Males J held that bringing proceedings in New York was in breach of the clause because –

“The clause provides that BNPP is entitled to litigate its claim here if it wishes to.  By attempting to litigate in New York, Anchorage is seeking to deprive BNPP of that right or, at the least, to render it worthless… It would make no sense, in my judgement, to construe the clause as permitting Anchorage, so long as it submits to the jurisdiction of the English court, also to bring a claim of its own in New York in respect of essentially the same matters as arise here”.

62. Clause 21 of the Singapore Terms cannot be construed as the Defendant would have it; it is expressly a submission to the non-exclusive jurisdiction of the Singapore courts.  The exclusively Singaporean ambience must also fade away in the light of that clause, and of the DIFC Terms: all roads do not lead to Singapore.  The Defendant’s argument rests on cl 18 of the ISA.  Again, I assume that it would catch the Claimant’s claim.

63. By the choice of law in the ISA, cl 18 should be construed in accordance with Singapore law.  Neither party adverted to this, or provided evidence or submissions concerning Singapore law.  Accordingly, I apply Part 5 of the Contract Law 2004, DIFC Law No 6 of 2004, and the law of England and Wales.

64. With respect, I have some difficulty with the reasoning of deprivation of a right in BNP Paribas SA v Anchorage Capital Europe LLP.  A right to have a dispute submitted to the jurisdiction of a named court does not necessarily carry with it a right not to have the dispute litigated in another court.  Otherwise every submission to jurisdiction would be to exclusive jurisdiction, which is not so:  see for example the submission in Deutsche Bank v Highland Crusader Offshore LP [2009] EWCA Civ 729, a clause similar to that in BNP Paribas v Anchorage Capital Europe LLP and regarded as a non-exclusive jurisdiction clause.

65. A submission to the jurisdiction of a named court will generally oblige the submitting party not to dispute the jurisdiction of that court, and will generally preclude the submitting party from contending that the court is an inappropriate forum.  The obligation of the submitting party is to submit to the jurisdiction of the named court if the opposite party sues in that court, and without something more that is the extent of the corresponding right of the opposite party.  An expressly non-exclusive jurisdiction clause obliges the submitting party to have the dispute submitted to the named court, and is not worthless because the dispute can be submitted to another court.

66. In the present case the submission, unlike that in BNP Paribas SA v Anchorage Capital Europe LLP, is mutual and non-emphatic.  The parties were relevantly in Dubai, and agreed in the associated Singapore Terms and DIFC Terms on non-exclusive jurisdiction of the Singapore courts and the non-exclusive jurisdiction of the DIFC Courts.  Clause 18 of the ISA is in the terms that the parties submit themselves to the jurisdiction of the Singapore courts, not that they submit their disputes to that jurisdiction; pace Males J at [90], that is some indication that the obligation of the submitting party is only to submit if the opposite party sues in those courts (see for example Cannon Street Entertainment Ltd v Handmade Films (Distributors) Ltd (Hobhouse J, 11 July 1989, cited in Sabah Shipyard (Pakistan) Ltd v The Islamic Republic of Pakistan [2002] EWCA Civ 1643; (2003) 2 Ll R 571 at [33] – [34], and the latter case at [35]).

67. In my opinion, and notwithstanding the choice of Singapore law, the Claimant did not agree (nor did the Defendant agree) to litigate only in the courts of Singapore in matters pertaining to the ISA.  I do not accept that, assuming that the claims are caught by the clause, his proceedings in this Court are something he promised not to do.

68. As the second step in its argument the Defendant relied on the principles for giving effect to a foreign jurisdiction clause recently adopted in Al Khorafi v Bank Sarasin – Alpen (ME) Ltd at [113] – [115], citing from The Eleftheria (1969) 1 Ll R 237.  They apply, however, where there is an exclusive jurisdiction clause.  The argument depended on success in its first step.  In the absence of a promise not to bring proceedings in a jurisdiction other than the named jurisdiction, the relevant principles are those of forum non conveniens. The submissions to the jurisdiction of the Singapore courts could be material in applying principles of forum non conveniens but, as I have said, the Defendant did not rely on those principles.

69. As a final submission, the Defendant suggested that this Court should decline to exercise jurisdiction because “the game is not worth the candle”.  The words came from Dow Jones & Co Inc v Jameel [2005] EWCA Civ 75 at [69] and before that Schellanberg v BBC [2000] EMLR 296.  In Dow Jones & Co Inc v Jameel a defamation claim was stayed on the ground, amongst others, that the damage was minimal and costs would be out of all proportion; it was said that it would be an abuse of process to allow the action to proceed (at [70]).

70. The Defendant submitted that the Claimant’s claim was liable to be struck out because it was poorly pleaded and because it should at best be seen as weak.  However, whatever fate may be foreseen on a strike-out application pursuant to RDC 4.16, it is not to be imposed (and in Dow Jones & Co Inc v Jameel the stay was not imposed) by declining to exercise jurisdiction.  If an application is made to strike out the claim, it will be determined in the exercise of jurisdiction.

71. In my opinion, the third ground for the Defendant’s application is not made out either as to no jurisdiction or as to exercise of jurisdiction.

A procedural matter

72. At the hearing of the application leave was given to file supplementary written submissions on the issue of when loss was suffered, on a timetable concluding on 1 October 2014.  Submissions were filed.  On 24 October 2014 the Claimant filed, without leave or a request for leave, a “Notice of Clarification” additional to its supplementary submissions.

73. It is appropriate to remind practitioners that litigation is not a never-ending process in which they can file submissions at will.  The time for submissions is the hearing.  Leave is necessary to file further submissions.  Further submissions should not be filed without leave or pursuant to a request for leave.  I have not had regard to the Notice of Clarification.

The Result

74. The application should be dismissed.  As at present advised I see no reason why costs should not follow the event, whereby the Defendant should be ordered to pay the Claimant’s costs of the application accept for the costs of the Notice of Clarification.  I will so order, but in case the Defendant wishes to submit to the contrary, I will suspend the operation of the order for ten days or, if an application is made for a different order as to costs within that period, until the determination of that application.

 

Issued by:

Maha AlMehairi

Judicial Officer

Date of Issue:  30 October 2014

At: 4pm

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