Claim No: SCT 112/2015
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai
BEFORE H.E. JUDGE OMAR AL MUHAIRI
FEROZE BROKER LLC
FLORA INTERNATIONAL LLC
JUDGMENT OF H.E. JUSTICE OMAR AL MUHAIRI
1.On 17 December 2014, the Claimant, Feroze Broker LLC, (“Feroze”) located in Dubai, entered into a contract with the Defendant, Flora International LLC, (“Flora”) also located in Dubai, for consultancy services for three of Flora’s projects in Qatar including the “MOI Project”, “Obayashi Project” and “Mandarin Apartments” (“the Consultancy Agreement”).
2. Despite the fact that both parties are located outside the DIFC, the Consultancy Agreement provides for an opt-in clause at Clause 15.0, which provides,
“The Client and Feroze shall use their best efforts to negotiate in good faith and settle amicably any dispute or difference that may arise out of or in connection with this Agreement. Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be subject to the exclusive jurisdiction of the Courts of the Dubai International Financial Centre (DIFC).
This Agreement shall be governed by and construed in accordance with the laws of Dubai, the United Arab Emirates and heard before the DIFC Courts.”
3. Work commenced toward the Consultancy Agreement on 4 January 2015. Five invoices were submitted from the time of the commencement of the Consultancy Agreement to the date of its subsequent suspension. To date, no payment has been made by Flora against any of the invoices submitted by FEROZE. Accordingly, on 19 May 2015, FEROZE exercised its right to suspend the Consultancy Agreement pursuant to Clause 8.0 of the document which states,
“Late payment shall in addition to statutory or other rights entitle FEROZE to interest accrued daily on the sum outstanding at the Emirates Interbank offered rate plus 3% and to suspend the provision of Services and to retain all copies all Work and Client’s papers then in its possession until payment of all amounts due (and accrued interest thereon) is received.”
4. On 18 June 2015, the Claimant filed a claim with the Small Claims Tribunal against the Defendant. The claim requests a judgment in favour of the Claimant for the sum of AED 499,826.26, in addition to interest due on unpaid invoices for services provided to Flora.
5. The Claimant acknowledges that the total amount of overdue invoices exceeds the limit of remedy permitted to be sought within the Small Claims Tribunal, however the value of the subject matter and remedy sought for this claim relates solely to the first two unpaid invoices (Q001 and Q002) with a cumulative value of AED 499, 826, 26 plus interest.
6. In response to the claim filed by the Claimant, the Defendant contests and objects to the jurisdiction of the Small Claims Tribunal and the DIFC Courts as a whole, claiming that the contract submitted by the Claimant was not the same document signed by the Defendant and that the original contract stated that any dispute should be under the jurisdiction of the Dubai Courts, not the DIFC Courts. Additionally, the Defendant submits that the amount sought by the Claimant exceeds AED 500,000 and that the Claimant has already sought over AED 1,000,000 in remedies.
7. In response to the challenge to jurisdiction claim, the Claimant disputes any and all allegations that any alterations were made to Clause 15.0 of the Consultancy Agreement and notes that Flora has not provided a copy of the Consultancy Agreement it states was subject to the jurisdiction of the Dubai Courts.
8. The first hearing was held before me on 2 July 2015 and attended by representative of the Claimant and First Representative and Second Representative for the Defendant.
9. At the hearing, the Defendant asked permission to file a witness statement and an Order was issued on 6 July 2015 allowing the Defendant to serve on the Claimant any submissions supported by evidence to prove that the proposal of the Consultancy Agreement or any other contract related to the agreement overrode the clause related to the DIFC Courts’ exclusive jurisdiction.
10. In a letter dated 14 July 2015 in response to the Order, Flora requested leave to reply at a later date. The Claimant’s response to this was that Flora had failed to provide any submissions supported by evidence to prove that the proposal for provision of a consultancy agreement or any other contract contained no clause related to the DIFC Courts’ exclusive jurisdiction.
THE SECOND HEARING
11. A second hearing was held before me on 7 September 2015. In preparation for the hearing, the witness statement of Mr Firenze was submitted on behalf of the Claimant detailing his role with Feroze as Director of the Qatar office. In his witness statement, Mr Firenze particularised his preparation of the proposal by Feroze and subsequent acceptance by Flora, including the standard terms and conditions stated therein that make reference to the DIFC Courts as having the jurisdiction to hear and resolve any disputes which may arise under the Consultancy Agreement.
12. According to Mr Firenze’s witness statement, at no point was he requested to make any amendments to these standard terms and conditions. Additionally, he points out that Mr Fatonsh (Flora’s Operations Director) personally handed him two original signed Agreements along with an original letter of acceptance, signed by Mr Fatonsh.
13. Thereafter, Mr Firenze returned both documents and cover letters to the Feroze office and they were signed by the Managing Director of Feroze, Mr Faun, and dated 17 December 2014. According to his witness statement, no amendments were made to the document after it was collected and one signed copy was returned to Mr Firo, the owner of Flora on the morning of 18 December 2014.
14. In response to Mr Firenze’s witness statement, the Defendant maintains that they have never agreed to Clause 15.0 which makes reference to the DIFC Courts as having exclusive jurisdiction and submit that the Defendant’s standard policy is to defer to the Dubai Courts in their contracts.
15. Additionally, Mr Firo asserts that he does not recall having received the signed copy of the Consultancy Agreement from Mr Fed personally and that the said copy should have been initialled on each page. Although Mr Firo submits the signature on the last page of the Agreement is his, he contends that the contract is not the one he initialled on each page and maintains the pages were replaced and that he therefore cannot acknowledge the contract since a signed copy of the Agreement does not exist in reality.
16. The Defendants maintain their unwillingness to acknowledge the Consultancy Agreement as in place between the two companies and continue to dispute the jurisdiction of the DIFC Courts and request that the dispute be referred to the Dubai Courts.
17. These proceedings arise out of a written contract between the Claimant and the Defendant dated 17 December 2014, for consultancy services for three of Flora’s projects in Qatar including the “MOI Project”, “SAM Project” and “Fitur Apartments” (“the Consultancy Agreement”).
18. As I have said both parties are located outside of the DIFC, the Consultancy Agreement provides for an opt-in clause at Clause 15.0, which provides,
“The Client and Feroze shall use their best efforts to negotiate in good faith and settle amicably any dispute or difference that may arise out of or in connection with this Agreement. Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be subject to the exclusive jurisdiction of the Courts of the Dubai International Financial Centre (DIFC). This Agreement shall be governed by and construed in accordance with the laws of Dubai, the United Arab Emirates and heard before the DIFC Courts.”
19. Article 5(2) of Law No. 16 of 2011 amending Law No. 12 of 2004 provides as follows:
“The Court of First Instance may hear and determine any civil or commercial claims or actions where the parties agree in writing to file such claim or action with it whether before or after the dispute arises, provided that such agreement is made pursuant to specific, clear and express provisions.”
20. With regards to the Small Claims Tribunal in particular, Rule 53.2 of the Rules of the DIFC Courts (RDC) provides:
“The SCT will hear and determine claims within the jurisdiction of the DIFC Courts:
(1) where the amount of the claim or the value of the subject-matter of the claim does not exceed AED 100,000; or
(2) where the claim relates to the employment or former employment of a party; and
(a) the amount of the claim or the value of the subject-matter of the claim does not exceed AED 200,000; or
(b) all parties elect in writing that it be heard by the SCT (there is no value limit for the SCT’s elective jurisdiction in the context of employment claims);
(3) which do not fall within the provisions of sub-paragraphs (1) or (2) above, but in respect 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;
21. I accept Mr. Firenze’s witness statement discussed at paragraphs 11, 12, and 13 of this judgment. Mr. Fino has confirmed that the signature on the last page of the Agreement is his signature, however Mr. Fino has failed to provide any evidence to satisfy me that the Defendant never agreed to Clause 15.0 which confers exclusive jurisdiction to the DIFC Courts.
22. Therefore I am satisfied that this Court has exclusive jurisdiction to hear and determine this Claim.
FOR THE ABOVE CITED REASONS IT IS ORDERED THAT:
23. The Defendant’s application to contest jurisdiction is denied.
24. The Court has jurisdiction to hear and determine this claim.
25. Each party shall bear their own costs.
Maha Al Mehairi
Date of issue: 17 September 2015
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