Claim No: CFI 001-2016
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 H.E. JUSTICE SHAMLAN AL SAWALEHI
ANDREINO CIAN SEREN
Claimant / Appellant
LUTFI & CO. ADVOCATES AND LEGAL CONSULTANTS
Defendant / Respondent
Hearing: 23 February 2016
Counsel: Mark Fraser (Taylor Wessing) for the Appellant
Sreehari Vadukumchery instructed by Harikrishnan Ravindran (Lutfi & Co.) for the Respondent
Judgment: 28 February 2016
JUDGMENT OF JUSTICE SHAMLAN AL SAWALEHI
UPON hearing Counsel for the Appellant and Counsel for the Respondent on 23 February 2016
AND UPON reading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
Date of Issue: 28 February 2016
1. The Appellant, Mr. Andreino Cian Seren is an employee of the Respondent, Lutfi & Co. Advocates and Legal Consultants, a law firm registered in Dubai, United Arab Emirates.
2. On 28 February 2011, the parties entered into a partnership agreement, subsequently amended on 31 October 2011. On 12 January 2014 the Respondent served notice of intention to terminate the partnership effective from 15 May 2014. Thereafter, on 18 February 2014 the parties entered into an exit agreement establishing the terms and conditions for the ending of the partnership.
3. On 11 April 2011 the Respondent had hired the Appellant as an employee under employment contract AIA3095KDK01E, registered with the Ministry of Labour (the “MoL”) for an unlimited period. The parties subsequently entered into a new employment agreement on 1 June 2014 (the “Agreement”) which was not registered with the MoL.
4. The Agreement provided that its terms would supersede any previous agreement and be governed by the laws of the DIFC. Under the Agreement the Appellant was employed as Executive Director of the Respondent’s offices in Dubai and Sharjah for a fixed term, to expire on 31 May 2017.
5. The Appellant filed a claim with the Small Claims Tribunal on 9 November 2015 following a dispute with the Respondent over unpaid salary between February and October of 2015. The Respondent succeeded in contesting the jurisdiction of the DIFC Courts following a Hearing before Judicial Officer Nassir Al Nasser on 7 December 2015 (“SCT Hearing”).
6. It was decided in the judgment of 17 December 2015 that as the Respondent was not an establishment having a place of business within the DIFC, or an entity created by Law No. 9 of 2004 within the meaning of Article 4 of the DIFC Employment Law (DIFC Law No. 4 of 2005), the DIFC Employment Law did not apply to the Appellant.
7. Furthermore, the parties had failed to specifically, clearly and expressly agree for the DIFC Courts to have jurisdiction to hear and determine the case as required by Article 5(A)(2) of Dubai Law No. 16 of 2011, they only provided that the Agreement would be governed by the laws of the DIFC, therefore the DIFC Courts could not have jurisdiction.
8. The Order of H.E. Justice Omar Al Muhairi on 10 January 2016 granted permission for the Appellant to appeal. On 23 February 2016 the appeal hearing took place before H.E. Justice Shamlan Al Sawalehi.
9. The grounds of appeal submitted by the Appellant are summarised as follows:
(a) That there has been a material change in circumstances since the SCT Hearing of 7 December 2015 as the Respondent registered a DIFC branch of their firm on 16 December 2015 and therefore, is now a DIFC establishment. Accordingly, Article 5(A)(1)(a) of Dubai Law No. 16 of 2011 applies:
“The Court of First Instance shall have exclusive jurisdiction to hear and determine…Civil or commercial claims and actions to which the DIFC or any DIFC Body, DIFC Establishment or Licensed DIFC Establishment is a party”;
(b) In any event, it was the intention of the parties at the time of entering into the Agreement that any dispute arising out of it would be dealt with in English by the DIFC Courts rather than in Arabic in the Dubai Courts. The DIFC governing law was incontrovertibly chosen by the parties and referred to in and throughout the Agreement. Accordingly, Article 5(A)(2) of Dubai Law No. 16 of 2011 should have been found to apply in the circumstances:
“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”; and
(c) As the Agreement was not registered with the MoL, if the DIFC Courts do not accept jurisdiction the Appellant will be left without recourse to an alternative jurisdiction. It is submitted that following the SCT Hearing, the principle of forum non conveniens was not properly considered and that a stay of jurisdiction should only be granted where the court is satisfied that there is another available forum, having jurisdiction, which is the appropriate forum.
10. The Respondent’s main submissions supporting the dismissal of the appeal are summarised as follows:
(a) The Respondent denies being an establishment having a place of business in the DIFC, or an entity created by Dubai Law No. 9 of 2004 and the Appellant is not an employee ordinarily based or working within the DIFC therefore, pursuant to Article 4 the DIFC Employment Law, this Law cannot apply;
(b) According to Article 5(A)(2) of Dubai Law No. 16 of 2011, in the absence of any specific, clear and express provision in the Agreement nominating the DIFC Courts as the dispute resolution forum, the DIFC Courts cannot have jurisdiction; and
(c) The Dubai Civil Court is the appropriate forum for dispute resolution in the circumstances.
11. In light of the material change of circumstances argument pursued by the Appellant it is my opinion that the main issue here is to determine the proper interpretation of Article 5(A)(1)(a) of Dubai Law No. 16 of 2011. Namely, whether the current status of the Respondent satisfies the definition of a:
“DIFC Body, DIFC Establishment or Licensed DIFC Establishment.”
12. I have had sight of a printout produced at the hearing which supports the claim that since the SCT Hearing, the Respondent has registered a branch of its law firm in the DIFC and this was not disputed by the Respondent. The DIFC registered branch currently has a ‘non-regulated’ commercial license which I understand does not permit it to carry on business as a law firm in the DIFC until it is registered with the DFSA under Article 60 of the DIFC Regulatory Law (DIFC Law No. 1 of 2004) which is hoped to be completed in the coming months.
13. As the DIFC branch is not currently authorised to operate as a law firm I struggle to find that it can be a DIFC Body or Establishment within the intended meaning of Article 5(A)(1)(a), as it is not in its present form able to perform the duties it was created for, rather it is merely an office premises not capable of satisfying the definition.
14. The cited case of Corinth Pipeworks SA v Barclays Bank Plc [CA 002-2011] is distinguishable from the present one as the bank’s branch in that instance was authorised by the DFSA to provide financial services, however the branch in the present case is not authorised to conduct its activities in accordance with the DIFC laws.
15. Furthermore, I agree with the findings from the SCT Hearing that the parties failed to specifically, clearly and expressly provide in the Agreement that the DIFC Courts would be the platform for any dispute resolution as required under Article 5(A)(2) of Dubai Law No. 16 of 2011 in order for the DIFC Courts to have jurisdiction. Therefore, although the parties agreed for the Agreement to be governed by the laws of the DIFC, they were not clear in “opting in” to the jurisdiction of the DIFC Courts.
16. In addition, as the original contract made on 11 April 2011 is registered with the MoL the Appellant should have recourse to the Dubai Courts for dispute resolution.
17. It may be that the question of jurisdiction could be revisited if and when the Respondent successfully registers as a DIFC establishment in future, as mentioned above.
18. The Respondent is not a DIFC body or establishment at present and the parties have failed to “opt in” to the jurisdiction of the DIFC Courts. Therefore, the findings of the SCT Hearing are upheld and the appeal is dismissed.
Date of Issue: 28 February 2016
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