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CFI 024/2016 (1) EBI SA, France (2) Ecobank Nigeria Limited (3) Ecobank Senegal v (1) Lal Mahal DMCC (2) Little Rose General Trading LLC (3) Prem Chand Gang

CFI 024/2016 (1) EBI SA, France (2) Ecobank Nigeria Limited (3) Ecobank Senegal v (1) Lal Mahal DMCC (2) Little Rose General Trading LLC (3) Prem Chand Gang

April 10, 2017

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Claim No. CFI-024-2016

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

(1) EBI SA, FRANCE

(2) ECOBANK NIGERIA LIMITED

(3) ECOBANK SENEGAL 

Claimants

and

(1) LAL MAHAL DMCC

(2) LITTLE ROSE GENERAL TRADING LLC

(3) PREM CHAND GANG 

Defendants


ORDER WITH REASONS OF H.E. JUSTICE SHAMLAN AL SAWALEHI


UPON reading the Third Defendant’s Application Notice CFI-024-2016/6 dated 13 December 2016 seeking dismissal of the claim as against the Third Defendant for lack of jurisdiction

AND UPON reviewing the Default Judgment of the Registrar dated 16 August 2016

AND UPON reviewing the Judgment of Justice Roger Giles handed down on 20 October 2016

AND UPON reviewing the submissions of the parties and the documents included in the court file

IT IS HEREBY ORDERED THAT:

  1. The Third Defendant’s Application is granted and the claim against the Third Defendant is therefore dismissed for lack of jurisdiction.
  2. There shall be no order as to costs.

Issued by:

Maha Al Mehairi

Judicial Officer

Date of Issue: 10 April 2017

At: 2pm

 

SCHEDULE OF REASONS

  1. The Third Defendant’s Application to dismiss the claim against him for lack of jurisdiction results from a series of events that have occurred in this case. The claim was filed by the Claimants on 22 June 2016 and served on 23 June 2016. Upon failure to receive a response from the Defendants, the Claimants applied for Default Judgment on 19 July 2016. Such Default Judgment was granted by the Order of Registrar Mark Beer dated 16 August 2016.
  2. All three Defendants applied shortly thereafter to have the Default Judgment set aside for a number of reasons. By a Judgment issued on 20 October 2016, Justice Roger Giles disallowed the set aside application as to the First and Second Defendants. However, Justice Giles allowed the Default Judgment to be set aside as it applied to the Third Defendant, granting the Third Defendant the ability to contest jurisdiction only and denying the Third Defendant the possibility of filing a defence.
  3. The First and Second Defendants subsequently sought to appeal the Judgment of Justice Roger Giles as it applied to them; such request for permission to appeal was denied by the Order of Justice Sir Jeremy Cooke dated 23 November 2016. However, the Third Defendant was still free to apply to have the claim against him dismissed for lack of jurisdiction, pursuant to the 20 October 2016 Judgment of Justice Roger Giles.
  4. As mentioned in the Judgement of Justice Roger Giles dated 20 October 2016:

“16. …There is, however, a difficulty in the guarantee and indemnity executed by [the Third Defendant].

  1. That guarantee and indemnity provided in cl[ause] 21 that it was governed by French law and for submission to the jurisdiction and competence of the French courts and tribunals. It added, ‘But with full liberty for you to resort to the courts of any other country where jurisdiction may exist or be established’. That left it necessary that the jurisdiction of this Court exist or be established; that is, that the claim against [the Third Defendant] fall within Article 5 (A) (1) or (2) of the Judicial Authority Law, DIFC Law No 12 of 2004.
  2. [Counsel for the Claimants] submitted that it fell within sub-Article (2), which provides that the Court may hear and determine a claim ‘where the parties agree in writing to file such claim or action with it. . .provided that such agreement is made pursuant to specific, clear and express provisions’. It was submitted that cl[ause] 21 of the guarantee and indemnity was such an agreement in writing, and it was said in support of that submission that there was a nexus with Duabi in a number of respects.
  3. I am unable to see that the matters said to provide a nexus assist. It does not seem to me that cl[ause] 21 is an agreement to file a claim or action with this Court, certainly not a specific, clear and express provision to that end. In my view there is a real doubt whether this Court had jurisdiction in relation to the claim against [the Third Defendant], and that is not something which can be overlooked because the Court should not allow a judgment to stand if it did not have jurisdiction to order the judgment. I consider that [the Third Defendant] should be able to mount a challenge to jurisdiction.”
  4. Having had the opportunity to review the Judgment of Justice Giles, the Third Defendnat then applied to dismiss the claim against him for lack of jurisdiction on 13 December 2016. The Third Defendant’s submission essentially reiterated the arguments suggested by Justice Giles in the Judgment of 20 October 2016.
  5. The Claimants provided a submission in response to the Third Defendant’s Application. However, their submission was not clear as to their position on the Application. The Claimants argue that the Default Judgment “against the Third Defendant was set aside on jurisdictional basis and Counsel for the Third Defendant was given a right to challenge this on jurisdictional basis only in any future proceedings and may not otherwise file a defense to the claim against the Third Defendant.” Furthermore, the Claimants stated that they do not “move for any further hearing before the DIFC Court[s]” as the matter has now become “Res Judicata.” Finally, the Claimants state that “If the Third Defendant has any cause of action, they have to file a new Claim before the DIFC Court and it has to be served to us as the Defendants” and that the Claimants “prays to the Honorable Court to dismiss the case.”
  6. The Claimants seem to misunderstand the effect of Justice Giles’ Judgment of 20 October 2016 and the subsequent denial of the First and Second Defendants’ request for permission to appeal. Justice Giles did comment that the Third Defendant may be successful on an application to contest jurisdiction, however he made no finding as to jurisdiction.
  7. In any event, the Claimants seem not to contest the Third Defendant’s application and in fact they request that I dismiss the case. However, given the misunderstanding apparent on the face of the Claimants submissions, I was reluctant to take their aquiesance into account without offering the opportunity for the Claimants to clarify their position. Having been given an additional opportunity to respond to the Application and claify their position, the Claimants declined to make any further submissions and thus I shall rely on their initial submission alone.
  8. Therefore, based on the submissions of the parties and a reiview of the case file, I find that the claim against the Third Defendant must be dismissed for lack of jurisdiction. I agree with the reasoning suggested by Justice Giles that:
    • The relevant agreement between the Third Defendant and the Claimants is the Personal Guarantee and Indemnity agreement dated 7 April 2015;
    • Clause 21 of that agreement governs dispute resolution and it states that such disputes should be filed in French courts or in any other country “where jurisdiction may exist or be established”;
    • The wording “may exist or be established” requires that the jurisdiction of the DIFC Courts must be otherwise established pursuant to Article 5(A)(1) or (2) of the Judicial Authority Law;
    • Clause 21 itself cannot be said to be a valid opt-in clause under Article 5(A)(2) of the Judicial Authority Law as it is not spefic, clear and expressed as to its intent to subject the parties to the jurisdiction of the DIFC Courts; and
    • There is otherwise no apparent nexus to the DIFC upon which jurisdiction can be based pursuant to Article 5(A)(1) of the Judicial Authority Law.
  9. Therefore, the DIFC Courts do not have jurisdiction over the claim against the Third Defendant.
  10. The Claimants have not made any argument to justify swaying from the Justice Giles’s intitial assessment. In fact, even upon being given additional time and a request to clarify their position, the Claimants provided no arguments to contest the Application and seem instead to ask that the Court dimiss the case.
  11. The Third Defendant has made his Application with the request for “the cost of this defendant” which I take to mean a costs award to the Third Defendant as against the Claimants. The Claimants, who seem to be of the view that the Third Defendant’s Application is uncessary, asks that the “Defendants shall pay the costs.” Considering that the Third Defendant failed to timely respond to the claim when filed and considering that the Claimants seem to have misfiled their case as regards the Third Defendant, I find it appropriate to use the power granted to me pursuant to Rules 38.6 and 38.7 of the Rules of the DIFC Courts to order that the costs shall lie where they fall.
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