Skip to Content

CFI 019/2013 Roberto’s Club LLC Emain Kadrie Mustafa Turgul Andrea Mugavero v Paolo Roberto Rella

CFI 019/2013 Roberto’s Club LLC Emain Kadrie Mustafa Turgul Andrea Mugavero v Paolo Roberto Rella

June 22, 2015

image_pdfimage_print

Claim No: CFI 019/2013

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE
BEFORE H.E. JUSTICE OMAR AL MUHAIRI

BETWEEN

ROBERTO’S CLUB LLC

First Claimant

EMAIN KADRIE

Second Claimant

MUSTAFA TURGUL

First Part 45.7 Applicant

ANDREA MUGAVERO

Second Part 45.7 Applicant

and

PAOLO ROBERTO RELLA

Defendant


REASONS FOR THE ORDER OF H.E. JUSTICE OMAR AL MUHAIRI MADE ON 16 JUNE 2015


BACKGROUND
1. This is an application for the enforcement of Judgment CFI 019/2013 by Deputy Chief Justice Sir John Chadwick (“Judgment”) and the Judgment Order dated 10 November 2014 (“Order”). A cross-application by the Defendant is also examined in this pleading; which requests an order to stay the determination of both the Claimant’s Application CFI 019/2013/11, as well as the enforcement of the above mentioned Judgment and subsequent Order.
2. As previously presented in exhaustive detail in the preceding pleadings leading up to these applications, it is well established that Mr Kadrie and Mr Rella were shareholders in the company Roberto’s Club LLC (“the Company”), located in the DIFC. Out of 2,000 shares, Mr Rella was entitled to 600 shares and of those shares, 120 and 140 shares were to be held in trust for Mr Turgal and Mr Mugavero, respectively. In January 2013 Mr Rella’s employment was suspended and in April 2013 he was terminated. Pursuant to that termination and according to the Judgment by the Deputy Chief Justice, Mr Rella was directed to transfer 340 shares to Mr Kadrie. The Judgment refers to this issue in the relevant paragraphs laid out below:

“107. Accordingly, I hold that Mr Rella is obliged, under the provisions of Clause 3.9, to transfer to Mr Kadrie 340 of the shares in the Company now registered in his name. Unless and until the parties agree otherwise –or steps are taken by Mr Turgul and Mr Mugavero to require him to transfer the shares of which he is trustee – he will remain the registered holder of the 260 shares which he holds upon trust for Mr Turgul and Mr Mugavero.

[…]

123. For the reasons which I have set out I hold:

(2) That Mr Rella is now the legal owner of 600 shares in the Company; and that he holds 260 of those shares as trustee for Mr Turgul (as to 120 shares) and Mr Mugavero (as to 140 of those shares).

(3) That Mr Rella should be ordered to transfer to Mr Kadrie 340 of the shares of which he is now the legal owner.”

3. Mr Rella subsequently sought permission to appeal against the Judgment and Order and a stay of execution in the interim. Those applications were refused. A further application to reopen the appeal was also refused.

4. On 26 April 2015, the Claimant submitted the present application for an order to enforce the Judgment and Order, specifically, the transfer of the 600 shares from the Defendant to the First Claimant, as well as an order discharging the order of Deputy Chief Justice Sir John Chadwick dated 18 December 2013 (“the 2013 Order”).

5. Additionally, and notwithstanding the exhaustive measures already taken by the Defendant, the Defendant once more applies for an order that enforcement of the Judgment and Order be stayed pending determination of the Defendant’s application to the Attorney General of Dubai requesting that he exercise his discretion to refer the Judgment and Order to the Court of Cassation for review.

THE HEARING

6. A hearing was conducted before me on 2 June 2015 between Counsel for the Claimant and Counsel for the Defendant where both parties put forth their respective arguments.

CLAIMANT’S APPLICATION CFI 019/2013/11

7. The application submitted by the Claimant consists of three parts; an application to enforce the Judgment and Order by effecting the transfer of 340 shares in the Company from the Defendant to Mr Kadrie, an application to enforce the Judgment by effecting the transfer of 120 shares from the Defendant to Mr Turgul and 140 shares from the Defendant to Mr Mugavero and finally, an application to dismiss the order of Deputy Chief Justice Sir John Chadwick dated 18 December 2013. The application also includes a request for costs on an indemnity basis.

8. As to the transfer of 340 shares to Mr Kadrie, the Claimant maintains that the Defendant is in clear breach of all of his obligations under the Judgment and Order, including his obligation to effect the transfer of 340 shares to Mr Kadrie. The Order required the Defendant to transfer 340 shares to Mr Kadrie in the following terms:

“1. The Defendant shall transfer to the Second Claimant 340 of the shares in Roberto’s Club LLC now registered in his name within 14 days of the date of this Order.”

9. According to the Defendant, Mr Rella has failed to comply with multiple demands to transfer the shares to Mr Kadrie and has not advanced any credible explanation for his failure to comply with his obligations under the Order.

10. As for the shares in trust to Mr Mugavero and Mr Turgul, the Claimant maintains that the Defendant has also failed to comply with repeated demands that he transfer the shares to Mr Mugavero and Mr Turgul and that although Mr Mugavero and Mr Turgul were not originally parties to the litigation, RDC 45.7 provides that they are entitled to enforce the Judgment as if they were parties to the litigation, which reads as follows:

“If a judgment or order is given or made in favour of or against a person who is not a party to proceedings, it may be enforced by or against that person by the same methods as if he were a party.”

11. As a result, the Claimants submit that it is appropriate for the Court to make a vesting order to enforce the obligations of the Defendant to transfer shares to the Applicants or alternatively, that it is appropriate for the Court to appoint another person to sign share transfer forms in place of the Defendant pursuant to RDC 48.21.

12. Finally, the Claimants apply for the 2013 Order to be discharged. The 2013 Order requires the Claimants to treat the Defendant as if he remains a Manager and shareholder of the Company:

“1. Until determination of the counterclaim or further Order in the meantime the affairs of the First Claimant, Roberto’s Club LLC (‘the Company’) are to be conducted on the footing that the Defendant remains a Manager (Director) and Member of the Company;”

13. The Claimants maintain that there is no legitimate basis for the Defendant to continue to be treated as a Manager or shareholder of the Company in view of the fact that the Defendant’s counterclaim was dismissed in the Judgment and by the Order and that the determination is not subject to any further appeal as well as the fact that internal board meetings of the Company named a new manager of the Company and ratified, confirmed and approved the removal of Mr Rella as Manager of the Company.

14. In response to this application, the Defendant challenges the procedure in which the Claimant applied for enforcement of the Judgment and Order in addition to arguing that Mr Turgul and Mr Mugavero are not entitled to seek an order for the transfer of shares held in trust by Mr Rella because they are not parties in the proceedings. Additionally, the Defendant posits that it would be sensible to continue to preserve the 2013 Order pending his application to the Attorney General.

CONCLUSION OF APPLICATION CFI 019/2013/11

15. Notwithstanding the Defendant’s improper challenge to the Claimant’s enforcement application procedure, the Defendant is ordered to transfer the 340 shares to Mr Kadrie as the legal and beneficial owner of those shares. The Claimant’s application arises subsequent to numerous attempts at enforcing the Judgment and subsequent Order outside of court. Due to unsuccessful attempts to appeal the Judgment and Order, the transfer has been substantially delayed. At this juncture, the Defendant is devoid of any further remedy and must abide by the final and binding Judgment and Order of the Deputy Chief Justice.

16. The Defendant is also ordered to transfer the 120 and 140 shares to Mr Turgul and Mr Mugavero as the legal and beneficial owners of those shares, respectively. The Claimants are correct to acknowledge Mr Turgul and Mr Mugavero as parties to the proceedings pursuant to RDC 45.7. The Judgment makes plain that Mr Rella holds in trust 120 and 140 shares to Mr Turgul and Mr Mugavero, respectively. The Judgment also acknowledges the consent and mutual agreement underlying those shares held in trust. It is clear that Mr Turgul and Mr Mugavero no longer wish to have those shares held in trust for them by the Defendant and it is evidenced in the pleadings that they have made numerous attempts to request that the Defendant transfer the shares. Their unsuccessful attempts at transferring the shares held in trust to them is what led to this application as Part 45.7 Claimants. As such, the Defendant is ordered to transfer the 120 and 140 shares to Mr Turgul and Mr Mugavero, respectively, without delay.

17. As to the 2013 Order, the aforementioned order of Deputy Chief Justice Sir John Chadwick was made prior to the Judgment and Order of 29 October 2014 and is automatically discharged. No further consideration need be deliberated on this point.

DEFENDANT’S APPLICATION CFI 019/2013/12

18. The second application to be deliberated is CFI 019/2013/12, submitted by the Defendant. The Defendant applies for a court order to stay the Claimant’s enforcement application (CFI 019/2013/11) as well as the Judgment and Order generally, pending determination of the Defendant’s application to the Attorney General of Dubai requesting his exercise of discretion to refer the Judgment and Order to the Court of Cassation for review.

19. Mr Rella’s position is that his rights have been infringed under Article 21 of the UAE Constitution, which states,
“No one shall be deprived of his property except in circumstances dictated by the public benefit in accordance with the provisions of the law and in consideration of a just compensation.”

20. In response to this, the Claimant argues that the application is misconceived and amounts to an attempt to delay enforcement and an abuse of process. The Claimant maintains that the Judgment, Order and decision of the Court of Appeal to deny the Defendant permission to appeal (or reopen the appeal) are final and not subject to any further appeal processes whether in this Court or in the UAE Courts. The Claimant cites the Constitutional, Federal, Dubai and DIFC laws including Dubai Law No. 12 of 2004, in respect of the Judicial Authority at Dubai International Financial Centre as amended:

“Article 5: Jurisdiction

[…]

(B) The Court of Appeal:

(1) The Court of Appeal shall have exclusive jurisdiction to hear and determine:

(a) appeals filed against judgments and decisions made by the Court of First Instance;

[…]

(2) Judgments rendered by the Court of Appeal shall be final and conclusive, and shall not be subject to appeal by any means of appeal.”

CONCLUSION OF APPLICATION CFI 019/2013/11

21. I agree with the Claimant that this application to stay the proceedings is at the very least, misconceived. Rather than crafting a sound legal argument in support of their attempted proceedings in the Dubai Courts, the Defendant sidesteps this by citing irrelevant cases elucidating the grounds for a stay within the jurisdiction of the DIFC. Surely, the cases cited by the Defendant contemplated the grounds for a stay during an appeals process or some other delay within the jurisdiction of the DIFC Courts, not some other jurisdiction. As previously elucidated, the appeals process has been thoroughly exhausted by the Defendant and therefore Mr Rella’s erroneous arguments are at the very least, fruitless.

22. As to Article 21 of the UAE Constitution, it is merely contended that, “Mr Rella’s position is that this finding infringed his right under the UAE Constitution, Article 21, to be compensated for any confiscation of his property.” The burden is on the applicant to put forward adequate grounds for a stay, and in this case, put forth a valid argument that implicates Article 21 to the already adjudicated Judgment and Order of Deputy Chief Justice Sir John Chadwick. The Defendant has failed to do so.

23. I accept the Claimants’ submission in that the UAE Civil Procedure Code (CPC) does not apply to these proceedings.

24. Even so, if I am to apply Article 174 of the UAE CPC in theory, the Defendant must apply to the Dubai Cassation Court for a stay, not to the DIFC Courts, according to Article 175 of CPC which clearly states (as translated from Arabic) that:

“(1) A contest at cassation shall not entail the suspension of the implementation of the ruling provided it is not connected with possession of an immoveable property or its vacation. The court may however order the suspension of implementation temporarily if the contestant requests this in the contest document, fearing that the implementation may lead to gross detriment which would be impossible to repair. The president of the circuit which has jurisdiction shall appoint a session for hearing this request and the contestant shall notify his adversary of this and of the contest document. The Attorney General shall be informed.

(2) When ordering the suspension of implementation the court shall require the lodging of a security or shall order whatever it considers necessary as a guarantee to protect the right of the person against whom the contest is filed. The Order issued for the suspension of implementation of the ruling shall apply to Procedures for implementation taken by the person in whose favour the ruling was given on the basis of the contested ruling from the date of the request for suspension of implementation.

(3) If the request is refused the contestant shall be responsible for the costs.”

25. In any case, the application is devoid of merit. I am wholly unconvinced that the Defendant is entitled to a stay pending determination of their application to the Attorney General. Accordingly, the application is dismissed.

COSTS

26. The final issue to be decided is the question of costs. In accordance with RDC 38.7, if the Court decides to make an order on costs, the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party. I am satisfied that the Defendant, as the unsuccessful party in this case, should pay the costs, and be subject to a detailed assessment if not agreed.

Issued by:
Natasha Bakirci
Assistant Registrar
Date of issue: 22 June 2015
At: 11am

 

X

Privacy Policy

The Dispute Resolution Authority and all its affiliates are committed to preserve the confidentiality, integrity and availability of client data and personal information.

Dispute Resolution Authority and all its affiliates employees, vendors, contract workers, shall follow Information Security Management System in all the processes and technology.

  1. DRA's Top Management is committed to secure information of all our interested parties.
  2. Information security controls the policies, processes, and measures that are implemented by DRA in order to mitigate risks to an acceptable level, and to maximize opportunities in order to achieve its information security objectives.
  3. DRA and all its affiliates shall adopt a systematic approach to risk assessment and risk treatment.
  4. DRA is committed to provide information security awareness among team members and evaluate the competency of all its employees.
  5. DRA and all its affiliates shall protect personal information held by them in all its form.
  6. DRA and all its affiliates shall comply with all regulatory, legal and contractual requirements.
  7. DRA and all its affiliates shall provide a comprehensive Business Continuity Plan encompassing the locations within the scope of the ISMS.
  8. Information shall be made available to authorised persons as and when required.
  9. DRA’s Top Management is committed towards continual improvement in information security in all our processes through regular review of our information security management system.