Claim No: CA 001/2017
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 APPEAL
BEFORE JUSTICE SIR JEREMY COOKE, JUSTICE TUN ZAKI AZMI AND H.E. JUSTICE ALI AL MADHANI
KING AND WOOD MALLESONS (MENA) LLP
MEYDAN GROUP LLC
Defendant / Respondent
BANYAN TREE CORPORATE PTE LIMITED
Hearing: 8 March 2017
Counsel: Tom Montagu-Smith QC for the Appellant
Judgment: 20 March 2017
Transcribed from the oral judgment delivered on 8 March 2017, revised and approved by the Judge.
UPON considering the Claimant’s application dated 18 August 2016 seeking an order varying and clarifying the Order of the Deputy Chief Justice Sir David Steel dated 10 August 2016
AND UPON considering the Orders of Deputy Chief Justice Sir David Steel dated 15 November 2016 and 21 November 2016
AND UPON considering the Appellant’s Grounds of Appeal and Skeleton Argument dated 30 November 2016 and 14 December 2016
AND UPON considering the Skeleton Argument of the Claimant dated 28 February 2017 seeking permission to intervene in the appeal
AND UPON considering the Skeleton Argument of the Appellant dated 5 March 2017 in relation to the Claimant’s request to intervene in the appeal
AND UPON hearing counsel for the Appellant on 8 March 2017
IT IS HEREBY ORDERED THAT:
1. The Claimant’s application to intervene in the appeal is refused for lack of standing.
2. The appeal is allowed.
3. The Orders of Deputy Chief Justice Sir David Steel dated 15 November 2016 and 21 November 2016 are set aside.
4. The Claimant shall pay the Appellant’s costs of the Claimant’s application dated 18 August 2016 and of the appeal, such costs to include the Claimant’s application to intervene in the appeal.
AND IT IS DECLARED THAT:
King & Wood Mallesons (MENA) LLP ceased to act for Meydan Group LLC in claim number ARB 003/2013 by 24 December 2014.
Maha Al Mehairi
Date of Issue: 20 March 2017
JUSTICE SIR JEREMY COOKE:
1.This is an appeal by King & Wood Mallesons (MENA) LLP, to whom we shall refer hereafter as “KWM”, against two orders made by this court on 15 and 21 November 2016 which varied an earlier order made by this court on 10 August 2016.
2. The order of 10 August was phrased thus, so far as is material for current purposes:
“UPON reviewing Application Notice ARB 003-2015/5 filed by [KWM] dated 16 August 2015 seeking an order declaring that KWM has ceased to act for the Defendant, Meydan Group LLC, in these proceedings (the “Application”)
. . .
AND UPON the Registry’s direction on 24 February 2016 that the Claimant respond to the Application
AND UPON reviewing the Claimant’s response dated 1 March 2016
. . .
IT IS HEREBY ORDERED THAT:
1.The Application is granted.
2. KWM has ceased to act as the legal representative of the Defendant in the ARB-003-2013 proceedings. . . .”
3. Further orders were made involving service of the order in accordance with Rule 37.13(1) of the Rules of the DIFC Courts (hereafter the “RDC”) and requiring the Defendant within seven days from the date of the order to provide an alternative address for service on the Defendant pursuant to RDC 37.17.
4. It will be noted that the Claimant had been requested by the court to respond to the application and had done so. It will also be noted that the application was dated 16 August 2015 and was determined nearly one year later.
5. There is a substantial background history to the matter which we shall not recite save insofar as it is critical to the issues that we have to decide.
6. On 19 December 2013, the Claimant filed an arbitration claim form for recognition and enforcement of an arbitration award. We shall refer to the action as the Arbitration Claim Action.
7. An Acknowledgement of Service was filed following service of the arbitration claim form and that Acknowledgement of Service, in accordance RDC 11.8 gave the address for future service as that of KWM. That Acknowledgement of Service was filed on 7 January 2014 but the Acknowledgement of Service expressly stated that Meydan, the Defendant, was disputing jurisdiction and an application was then made to contest the jurisdiction of this court. That matter went through various stages for decision but ultimately, on 3 November 2014, the Court of Appeal dismissed the jurisdictional challenge.
8. It is important at this stage to note the effect of RDC 12 in the context of the arguments which have arisen. Under RDC 12.1, a defendant who wishes to dispute the court’s jurisdiction to try the claim or argue that the court should not exercise its jurisdiction can apply to the court for an order declaring that it has no jurisdiction or should not exercise any jurisdiction that it does have. The defendant who wishes to do that must file an acknowledgement of service and by doing so, under the express terms of the RDC does not lose any right he may have to dispute the court’s jurisdiction.
9. The court may, on dealing with the challenge, then make a number of different orders but under RDC 12.8, if on an application to contest jurisdiction the court does not accept that challenge, the rules provide that the acknowledgement of service shall cease to have effect. The defendant may then file a further acknowledgement of service within 14 days or such other period as the court may direct. If the defendant then files a further acknowledgement of service, under the terms of RDC 12.9 he is to be treated as having accepted that the court does have jurisdiction to try the claim.
10. In consequence of the dismissal of the jurisdictional challenge by the Court of Appeal, the terms of RDC 12.8 came into play. As we have already said, this provides that, where an application for an order declaring that the court has no jurisdiction over the claim, and where the court makes no such declaration and dismisses the challenge, the defendant may file a further acknowledgement of service within 14 days or such other period as the court may direct. Self-evidently, the defendant is not bound to do so. The whole point of the system is that, having made its jurisdictional challenge, the defendant can then decide whether or not to participate in the proceedings thereafter.
11. Within about a week after the Court of Appeal decision on November 3, both the Defendant itself and KWM informed the court of two matters. First, that the Defendant would take no further part in the proceedings before the court to recognise and enforce the award. Secondly, that KWM were no longer instructed by the Defendant in the matter and would not make any further submissions to the court and were not authorised to make any representations or act for and on behalf of the Defendant. These matters were made plain in emails and letters of 4th and 9th and 10th November of 2014, those communications going both to the court and to the Claimant’s solicitors.
12. The 14-day period to which the rules referred for the filing of a second Acknowledgment of Service therefore expired on 17 November 2014 but in fact, as is indicated by the RDC, the court then expressly made an order. On 17 December, the court directed that the Defendant should file a new acknowledgement of service, if any, by 4:00 pm on 23 December 2014 and that, if it failed to do so, a hearing would be listed for January in order that the Arbitration Claim Action should proceed towards judgment.
13. The Defendant filed no further acknowledgement of service. The consequence of that is clear: the Defendant did not submit to the jurisdiction of the court in respect of Arbitration Claim Action for the recognition and enforcement of the Award. The Defendant was self- evidently not obliged to do so, nor obliged to play any further part in the proceedings. If it had wished to do so, it would have had to file a fresh acknowledgement of service with an address for service.
14. The rules require a party who is participating to give an address for service within the DIFC or Dubai whether it be a physical or email address. That can be either the party’s own address or that of its legal representatives who act for it. But when a party objects to the jurisdiction of the court and its challenge to jurisdiction fails, if it chooses not to play any further part in those proceedings, ex hypothesi, its lawyers are not authorised to accept service on its behalf of anything in that action following the failure of the challenge to jurisdiction. There is therefore no obligation at that stage to provide an address for service of the substantive proceedings.
15. In its skeleton argument on the locus of the Claimant to participate in an application by a solicitor for a declaration that it is no longer a solicitor of record for a party, KWM says this:
“[t]here was no need for KWM to apply to come off the record after Meydan’s jurisdiction complaint was rejected. That occurred automatically in December 2014 when, pursuant to RDC 12.8(1), the acknowledgement of service ceased to have effect. The only alternative is the impossible dilemma that either
(a) solicitors representing a party for the purposes of a jurisdiction dispute must remain on the record throughout the substantive proceedings or
(b) the defendant must provide an address for service within the jurisdiction (RDC 37.9) and so submit.
The unpalatable prospect of submission by disputing jurisdiction was precisely the reason the equivalent rules in the English CPR were introduced.”
16. That summary accurately reflects the position both in the DIFC and in England and Wales, where the rules are to the same effect and upon which the DIFC rules were based.
17. In fact both the Claimant and the courts appear to have proceeded on the basis that KWM remained on the record for the Defendant until an alternative address for service was provided. That was a mistaken basis on which to proceed. The provisions of RDC 37 deal with changes of legal representatives and have no application whatsoever to the position which arises under RDC 12.8. Neither KWM nor the Defendant was obliged to provide an address for service in the Arbitration Claim Action where there had been a challenge to jurisdiction which had failed and when the decision was then taken both that KWM should cease to act and that the Defendant should not participate.
18.It was in fact because of the stance adopted by the courts and by the Claimant that the application was made by KWM, specifically, in fact, in response to a direct request from the court on 25 June 2015. The application itself, made, as we have said, on 16 August 2015, reads insofar as material as follows:
“KWM ceased to act for Meydan Group LLC in these proceedings on 17 December 2014. All documents for service on the Meydan Group LLC must be served on Meydan Group LLC pursuant to Part 9 of the DIFC Court Rules or further order of the Court (if any).”
19. The application was to be heard on paper, as is ordinarily the case. The application set out in clear terms the history to which we have just referred, including the exchanges in November 2014 following the Court of Appeal rejection of the Defendant’s jurisdiction challenge. The application included a statement that a solicitor who has been disinstructed in the matter may not be used as a medium to continue to effect service on the litigant, referring to the decision in Re Creehouse Ltd  1 WLR 77.
20. The grounds of the application and evidence for it concluded that the acknowledgement of service which had been filed with its express challenge to jurisdiction had expired at the latest by 17 December 2014. Reference was then made to the decision in Re Creehouse Ltd (ibid). We need not recite that decision in any detail but it is plain from that decision that, first, a solicitor who has been disinstructed may not be used as a medium to continue to effect service on the litigant concerned, and, secondly, it is inappropriate for the solicitor for such a litigant and for the court to make any opposing litigant privy to matters that are internal to the question of continued representation by a solicitor of his client. A solicitor on the record is shown to the world to be in charge of the litigation. If he is in charge of the litigation, he is responsible for its proper conduct and it would be inconsistent with the position of a solicitor in relation to his duties that he should be shown as being in charge of litigation and responsible for it when in fact he was not or was nothing more than a convenient post box. As a matter of general principle, if he is not in charge of the litigation, he cannot be made to stay on the record in order to facilitate service on his client.
21. In the application, it was then said that it followed from those principles that, once an acknowledgement of service ceased to have effect so that a defendant was no longer participating, the solicitor who was formerly the agent for service equally ceased to be on the record.
22. The draft order that was attached to the application referred to a declaration that KWM ceased to act for the Respondent on 17 December 2014 in the proceedings. The form of order sought follows the classic form that has been adopted in common law countries and that set out in RDC 37.11:
“A legal representative may apply for an order declaring that he has ceased to be the legal representative acting for a party.”
23. The application is not generally for an order for a solicitor to come off the record, but for a declaration that the solicitor has ceased to be the legal representative acting for a party. As such, the declaration can refer to any date, including a past date when that event took place.
24. The terms of RDC 37.12 and 37.13 themselves follow the principles set out in Re Creehouse in providing that, first, notice of any application under RDC 37.11 must be given to the party for whom the legal representative was acting unless the court directs otherwise; secondly, where an order is made, a copy of the order must be served on the other parties to the proceedings after it has been made; and thirdly, the order takes effect when it is served. But as the order takes the form of a declaration, it can, and in our judgment often would, or perhaps ordinarily would, specify the date when the solicitor ceased to act, which may well be a past date and would have been so here had the principles of RDC 12 been followed.
25. Following delay for which KWM were not responsible, on 11 February 2016, in an email from KWM, the latter referred to its application of 16 August 2015, seeking an order declaring that it ceased to be on record, without prejudice to its position that such an application was otiose given the acknowledgement of service that had been originally made had lapsed. In the email, KWM said they were not aware of any order being made, that something ought now to be done, and therefore, though the application was to be dealt with on paper, if the Registry was not minded to a make an order in the terms sought, but rather order that the firm ceased to be on record from the date of such an order, they would request an oral hearing to be listed in front of a judge.
26. There was then further delay, that delay being in part attributable to the illegitimate involvement of the Claimant which should not have known of the application nor been permitted to make submissions thereon, as the decision in Re Creehouse makes plain. KWM raised the matter again with the Court and in due course the order was made on paper on 10 August 2016 as we have already said.
27. The order took the form that we have recited at the outset of this judgment and simply said that KWM had ceased to act as the legal representative of the Defendant in the Arbitration Claim Action for recognition and enforcement, without specifying any particular date. Once the order was made, applications were then made by the Claimant for amendment of that order.
28. The Claimant’s application sought that the order made should be “varied and clarified”. The requirement for clarification was said to be the need to specify that KWM ceased to act as the Defendant’s legal representatives with effect from the date of the order or the date on which notice was to be given to the Claimant of the new address for service on the Defendant.
29. The evidence that was put forward in support of the application included a reference to the slip rule, to RDC 36.4, to RDC 36.46 and especially to RDC 36.5, which was relied on as empowering the court to vary its orders to make the meaning and intention of the court clear. It was said that it would create uncertainty and potentially cause serious and unjust prejudice to the Claimant if the order were not varied and clarified to say that KWM ceased to act as at the date of the order. It was noted that, although the application had referred to ceasing to act with effect from 17 December 2014, that had not been included in the order made by the court.
30. On 14 September, KWM wrote to the court stating that the Claimant’s application was seeking to rewrite the order that had been made and that this was not permissible under the slip rule. KWM sought an opportunity to make submissions orally and in writing, in the event the court was minded to allow the Claimant’s application to proceed further. The Claimant denied that it was doing anything other than seeking amendment under the slip rule.
31. On 15 November 2016, the court issued a new order which provided that “KWM ceased to act as the legal representative of the Defendant . . . with effect from the date on which an alternative address for service was provided by the Defendant, being 10 August 2016 pursuant to RDC 37.13.” We should say that we have seen nothing at all that suggests that any alternative address for service has been provided on 10 August and the basis upon which this first amendment to the order was made is unknown to us.
32. On 20 November, the Registrar then wrote to the parties stating that:
“[T]he order requires amendment to make its meaning clear, and that power can be exercised by the Court pursuant to rule 36.5. Accordingly, it is directed that the order be reissued by the Registry such that numbered paragraph 2 of the Order reads: 2. KWM ceased to act as the legal representative of the Defendant . . . with effect from the date of service of the Order of the Deputy Chief Justice dated 10th August 2016 on the Defendant, being 17th August 2016, in accordance with RDC 37.13.”
The Locus of the Claimant
33. We deal first with the question of the locus of the Claimant before deciding the appeal. That issue is connected to the appeal, because, of course, it was the Claimant who had applied to the court for amendment of the original order and sought and obtained the order of 15 November directly and perhaps less directly the order of 20 November 2016. The same issue as to its locus arises for today and the appearance of the Claimant to argue the matter.
34. The Claimant in fact submitted a 35-page skeleton argument in which it contended that it had locus to appear at the hearing on essentially three grounds. Those grounds were maintained in a letter to the court of 7 March but in that letter the Claimant said that it would not appear to argue the case today for reasons of costs and proportionality. The Claimant said in its written submissions that it was directly interested in the application and therefore entitled to make submissions. There were three bases for that. First because it was the original Claimant and Judgment Creditor which had obtained judgment on the award in the Arbitration Claim Action. Secondly it was the Applicant who had sought correction of the order of 10 August 2016 and thirdly it was a party on whom the order had to be served pursuant to the rules of court.
35. So far as concerns its locus to make submissions on the application of KWM in the first place, and to seek correction of the order of 10 August, the Claimant contended that, as original Claimant and Judgment Creditor who had obtained judgment on the award, it was a person directly affected by the order since it impacted on its entitlement to serve KWM with applications in the Arbitration Claim Action. The point can be put succinctly by referring to paragraph 63 and 64 of their skeleton, where it said this:
“63 At its most basic, the Claimant’s interest in the appeal arises from the fact that, if the Claimant did not know when KWM ceased formally (i.e. in accordance with the RDC) to appear on the record for Meydan . . . then the Claimant would not be aware of the representative to be served on behalf of Meydan in the proceedings. It is no doubt for this reason that RDC 37.13 requires that where the court makes an order that a legal representative has ceased to act, a copy of the order must be served on every party to the proceedings, and the order takes effect when it is served. It was pursuant to RDC 37.13 that the Claimant was served with the Original Order and the Corrected Orders. For the same reason, there is also a requirement under RDC 37.17 that the party for whom the legal representative was acting must give a new address for service, but this was not done.
64 Meydan has indeed sought to take advantage of any uncertainty as to when KWM came off the record for Meydan . . . by claiming that all documents served on KWM after the date it claimed to cease acting for Meydan (but before the Original Order or Corrected Orders were issued) are invalid. This argument by Meydan goes to the heart of why the Claimant is directly affected by the proceedings appealing the Corrected Orders. If the Corrected Orders are set aside and the Original Order is restored, notwithstanding the effect of RDC 37.13 and the lack of retrospective effect, the Claimant anticipates that Meydan will use/continue to use the Original Order in the proceedings between the parties in the Dubai Courts to suggest that the DIFC Recognition Judgment and Recognition Order are invalid.”
36. The Claimant went further in submitting that the Defendant and KWM were acting in a way that abused the process of the court.
37. On all these points, the arguments of the Claimant are in our judgment misguided, even though the court had invited submissions from it. For the reasons which we have already set out, first KWM ceased to act as solicitors for the Defendant in the Arbitration Claim Action by at latest 24 December 2014. Secondly, the Claimant was not a party directly affected by the application by KWM for a declaration that they had ceased to be the solicitors acting for the Defendant. Thirdly, its status as Claimant in an action where the Defendant had instructed KWM solely for the purpose of contesting jurisdiction did not give it any interest in the solicitor/client relationship between the Defendant and KWM which was a privileged relationship into which it was not entitled to enquire. Fourthly, the terms of RDC 37 did not give it any such interest; see by way of analogy the decision in Re Creehouse Ltd, where the principles are established, albeit in relation to a different rule. Fifth, it should not have been invited to make submissions on a matter between the Defendant and KWM.
38. We are clear, therefore, that the Claimant accordingly has no locus today and had none at any other earlier stage to make submissions on the orders sought and obtained by KWM.
39. We turn then to the orders in question against which the appeal is made. It is clear in our judgment that the First Instance Court had no power to change its order of 10 August 2016. The Claimant relied on RDC 36.41 to RDC 36.46 as justifying such amendment.
40. RDC 36.41 provides that:
“The Court may at any time correct an accident slip or omission in a judgment or order.”
41. RDC 36.45 provides that:
“The Court has an inherent power to vary its own orders to make the meaning and intention of the Court clear.”
42. The rules again follow those of the English court quite closely, where the notes and cases referred to in the White Book reveal the limits of the scope of the particular power to amend under the slip rule as it is commonly referred to.
43. It is often said that the slip rule is “there to do no more than correct typographical errors in a judgment or order”. In practice, the boundaries of the rule are not defined but there can be no doubt that the operation of the rule is limited to “accidental slips or omissions”, as numerous cases make plain. The court does have an inherent power to vary its own orders to make the meaning and intention of the court clear but it is a fundamental principle that this does not enable a court to have second or additional thoughts. There cannot be a change in the substance of an order that has been made. If it is subsequently thought that the substance is wrong, then this is a matter for correction by way of appeal to an appellate court and does not fall within the ambit of the slip rule. Here what was sought was not just clarification to make the meaning and intention of the court clear. The effect of the alteration sought and given was to change a declaration that KWM had ceased to act as the Defendant’s legal representative in the Arbitration Claim Action without a specified date to a declaration that:
a. By the order of 15 November, KWM had ceased to act from 10 August 2016, which was said to be a date on which an alternative address for service was provided by the Defendant. That, as we say, appears to be a fiction in itself.
b. By the order of 1 November, KWM had ceased to act from 17 August 2016, being the date of service of the order of 10 August.
44. There was also another amendment which simply put right the claim number of the form in the order which was indeed an amendment of the kind that the slip rule envisages, but both of the amendments to dates were not accidental slips or omissions and neither clarified the intention of the court which, as appears from the terms of the order which we have recited, was to grant KWM’s application. In our judgment, the intention of the original order was plain in granting that application for a declaration that it had ceased to act for the Defendant. Although no date was specified, KWM’s first draft had referred to 17 December 2014. Later a consent order had been submitted on 24 February signed by both KWM and Meydan which specified 24 December 2014. The intention of the court was to grant the application of KWM. The court could only have had in mind in so doing those dates which had been specified, 17 December or 24 December, or we suppose just conceivably no date at all, because it was unclear as to what was the relevant date.
45. The court could not, however, on any view have intended to include a date that had never been put forward as at the time of making the order, namely 10 August itself or 17 August, being the date of service, as it subsequently turned out to be, but which was not then known. KWM had made it plain that, if an order was to be granted in terms other than which it sought, it wished to be heard on the matter. The Court had not required it to be heard and “granted the application”.
46. There is no appeal against the original order, but we think it right to make it clear for the avoidance of further argument and debate that KWM did cease to act for the Defendant as solicitors on record by 24 December 2014. It had acted for the Defendant in the jurisdiction challenge and in the absence of the provision of another address for service and compliance with the terms of RDC 37, service could have been effected upon KWM in matters concerning the jurisdictional challenge up until the time that a fresh acknowledgement of service was required for participation in the substantive proceedings. The effect of RDC 37.1 to 37.10 appears to us to have that effect, whatever the Creehouse decision may say. Those provisions have, however, no impact on the position in relation to the Arbitration Claim Action once the jurisdictional challenge was over. The time for the new acknowledgement of service and acceptance of the court’s jurisdiction for the Arbitration Claim Action for recognition and enforcement expired at 4:00 pm on 23 December by virtue of the First Instance Court’s order. There was therefore no lawyer on the record for the Arbitration Claim Action at that stage. Moreover, on 9 and 10 November, both the Defendant and KWM had made it plain that the Defendant would not participate in that action and that KWM had no authority to act for the Defendant in it.
47. In our judgment therefore, KWM had no authority to accept service or act for the Defendant in any respect in relation to the Arbitration Claim Action where the substantive issue of recognition and enforcement was concerned. Once the jurisdiction challenge had failed, that was that.
48. In those circumstances, we are satisfied that there was no jurisdiction in the First Instance Court to amend the order that had been made on 10 August 2016 and the appeals must therefore succeed and the two succeeding orders must therefore be set aside. It may be that it would be sufficient simply to set aside the third order, that dated 21 November 2016, because that in itself subsumed the second order of 15 November 2016, but we set aside both orders, so that there can be no doubt. This appeal must be allowed.
JUSTICE TUN ZAKI AZMI:
H.E. JUSTICE ALI AL MADHANI:
Maha Al Mehairi
Date of Issue: 20 March 2017