Case No: ARB 006/2024

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF APPEAL

BETWEEN

NEVILLE

Claimant/Respondent

and

NIGEL

Defendant/Appellant

ORDER WITH REASONS OF CHIEF JUSTICE WAYNE MARTIN

UPON the without notice Order of H.E Justice Shamlan Al Sawalehi dated 4 April 2024 granting a freezing order and disclosure of information order against the Defendant (the “Injunction Order”)

AND UPON the Defendant’s application to discharge the Freezing Order dated 7 April 2024 (the “Jurisdiction Challenge”)

AND UPON the Claimant’s application to continue the Freezing Order dated 16 April 2024 (the “Continuation Application”)

AND UPON the Order of H.E Justice Shamlan Al Sawalehi dated 22 May 2024 (i) allowing the Continuation Application; (ii) ordering that the Injunction Order shall continue until further order of the Court; and (iii) dismissing the Jurisdiction Challenge (the “Continuation Order”)

AND UPON the Defendant’s Notice of Appeal dated 28 May 2024 seeking permission to appeal the Continuation Order (the “PTA Application”)

AND UPON the Order with Reasons of H.E. Justice Shamlan Al Sawalehi dated 31 July 2024 granting permission to appeal in respect of the ground relating to jurisdiction and refusing permission to appeal in respect of the ground relating to full and frank disclosure

AND UPON the Defendant’s Renewed Application for Permission to Appeal filed on 21 August 2024, on the ground that the Judge at first instance was wrong to conclude that the Claimant had not breached its duty of full and frank disclosure (the “Renewed Application for Permission”)

AND UPON the Claimant’s submissions dated 11 September 2024 filed in opposition of the Renewed Application for Permission

AND UPON all submissions filed and recorded on the court file

AND UPON reviewing Part 44 of the Rules of the DIFC Courts

IT IS HEREBY ORDERED THAT:

1. The Renewed Application for Permission is dismissed.

2. The Defendant shall pay the Claimant’s costs of the Renewed Application for Permission to be assessed by the Registrar pursuant to RDC Part 40 unless the amount of such costs is agreed within twenty-one (21) days of the date of this order.

Issued by:
Hayley Norton
Assistant Registrar
Date of issue: 9 October 2024
Time: 11am

Summary

1. The Judge at first instance granted an application made by the Claimant without notice to the Defendant for interim injunctive relief, including a world-wide freezing order and an asset disclosure order. After the order and documents relating to the proceedings were served on the Defendant, and after hearing argument from both parties, the Judge continued the orders which he made. The Defendant applied for permission to appeal from those orders on a number of grounds falling within two general categories:

2. The Judge at first instance has granted permission to appeal on the grounds relating to the jurisdiction of the Court. However, he refused permission to appeal in respect of the grounds relating to the alleged breach of the duty of full and frank disclosure. The Defendant has made a Renewed Application to the Court of Appeal for Permission to Appeal on those grounds. For the reasons which follow the Renewed Application for Permission on those grounds has no prospect of success and must be dismissed.

Permission to appeal – legal principles

3. RDC 44.117 provides:

4. RDC 44.5 requires that an appellant obtain permission to appeal to the Court of Appeal except where the appeal is against a committal order.

5. RDC 44.19 provides:

6. It is established that “real” in the context of an assessment of the prospects of success means realistic rather than fanciful, applying the same test as is applied in an application for immediate judgment.¹

7. It is also established that a real prospect of success does not mean a probability of success, but more than mere arguability.²

8. Accordingly, in order to obtain the grant of permission a prospective appellant needs to establish more than the proposition that the proposed appeal is reasonably arguable – rather, it must be established that there is a real prospect of success.³

9. Particular principles apply to applications for permission to appeal against case management decisions and multi factorial assessments undertaken by a Judge at first instance, given the hurdles which must be overcome to obtain appellant intervention in such cases.⁴ However, as this case does not involve either an application to appeal against a procedural or case management decision, or against a multi factorial assessment by the trial Judge, it is unnecessary to essay the relevant principles in these reasons.

Procedural history

10. The proceedings were commenced on 3 April 2024. In the Claim Form the Claimant purported to invoke the jurisdiction of the Court to grant interim measures under Article 24 of the DIFC Arbitration Law (2008) and relevant Rules of Court in aid of a prospective DIAC arbitration seated in the DIFC as between the Claimant and the Defendant.

11. The application for interim measures was made without notice to the Defendant and heard by the Judge at first instance on 4 April 2024. The Judge granted the relief sought, which included a world-wide freezing order and orders for the disclosure of information relating to the assets of the Defendant.

12. On 7 April 2024 the Defendant acknowledged service of the proceedings and applied to set aside the orders made without notice. That application was heard on 17 April 2024. On 22 May 2024 the Judge made orders in which he dismissed the application to set aside the orders made without notice and continued those orders indefinitely. The Judge indicated that the reasons for his decision would be published in due course.

13. On 27 May 2024 amended orders continuing the injunctive orders and dismissing the application to set aside those orders were issued.

14. On 28 May 2024 the Defendant applied for permission to appeal from those orders.

15. The Grounds of Appeal contained grounds grouped under two headings being “Ground 1 – Jurisdiction” and “Ground 2 – Full and Frank Disclosure”. As permission to appeal has been granted in respect of the issue relating to the jurisdiction of the Court, it is unnecessary to consider those grounds.

16. In relation to the grounds set out under the heading “Full and Frank Disclosure” it is asserted that the Judge erred by failing to discharge the freezing order in its entirety by virtue of the Claimant’s breach of its duty of full and frank disclosure. That assertion is followed by a paragraph (8) which purports to particularise the ground. However, the paragraph is devoid of particulars and replete with generalisations such as:

17. I digress to observe that the ground of appeal expressed in these terms is manifestly deficient. No attempt is made within the ground to identify the information, legal authorities, facts or evidence which it is asserted the Claimant failed to disclose in breach of its obligation of disclosure.

18. It is established that where, as in this case, an allegation of breach of the duty of full and frank disclosure is directed to a failure to disclose legal argument, it is tantamount to an allegation of professional misconduct.⁵ Consequently, sufficient particulars and sufficient notice are required.⁶ It is not acceptable for an unparticularised allegation of breach of the obligation of full and frank disclosure to be developed progressively, and at times differently, in submissions.⁷ As will be seen, this is precisely what has occurred in this case.

19. On 3 June 2024 the Defendant filed a skeleton argument in support of its application for permission to appeal. In that skeleton argument the Defendant asserted that the Claimant failed to disclose:

20. On 2 July 2024 the Judge published his reasons for continuing the injunctive orders and dismissing the challenge to the jurisdiction of the Court. On the subject of full and frank disclosure the Judge emphasised the importance of the performance of the duty.¹⁰ He also observed, correctly, that:

“Not every failure to point to every detail or the failure to characterise a disputed issue or legal authority akin to how the Respondent itself would have characterised it amounts to a material non-disclosure.”¹¹

21. After referring to the allegations of non-disclosure made in the skeleton argument provided by the Defendant, the Judge observed:

“From the outset of this case, a potential lack of the DIFC Courts’ jurisdiction, the competing interpretations of the terms “Dubai arbitration” within the broader context of the DIFC legal authorities, Decree 34, the DIAC Statute and the DIAC Rules 2022 were readily apparent to me. Equally, the ongoing debate surrounding the interpretation of the terms “Dubai” or “Emirate of Dubai” both in the context of arbitration agreements and jurisdiction clauses was also apparent to me.”¹²

22. In other words, the Judge stated, clearly and unequivocally, that he was well aware of the authorities which it is said were not disclosed and all relevant statutory provisions and rules, including the DIAC Rules which were said not to have been disclosed. There is no reason whatsoever to doubt this assertion. The Judge is a very experienced Judge of this Court and has supervised the Court’s Arbitration List for a number years. There have been many cases before the Court dealing with the meaning to be given to different descriptors including the word “Dubai” in the context of arbitration provisions and jurisdiction clauses. The line of authorities dealing with those issues is well-known to experienced Judges of the Court, including the Judge who heard these proceedings.

23. The Judge went on to observe that because of the particular approach which he had taken to the issue of jurisdiction, for the reasons he had given, the authorities upon which particular reliance was placed, namely Dhir, IGPL and Gaetan had limited application to the circumstances of the case before him.¹³

24. Following publication of the Judge’s reasons on 10 July 2024 the Defendant filed a supplemental skeleton argument in support of its application for permission to appeal. In that skeleton, the Defendant failed to deal with the Judge’s unequivocal assertion that he was aware of all the matters which it was said the Claimant failed to disclose.

25. On 31 July 2024 the Judge granted permission to appeal in respect of the ground relating to jurisdiction and refused permission to appeal in respect of the ground relating to full and frank disclosure. In his reasons for refusing permission the Judge stated:

26. The Renewed Application for Permission was filed on 21 August 2024. The revised grounds of appeal filed in support of the Renewed Application are as deficient as the original grounds. In relation to breach of the duty of full and frank disclosure, essentially all that is said is:

“Neville failed to draw the Court’s attention to legal authority/argument which it could have reasonably anticipated Nigel would have wished to make and failed to fairly represent the same.”¹⁵

27. A skeleton argument was filed with the Renewed Application for Permission. The manifest deficiency of the ground of appeal in respect of which permission is sought is exacerbated by the Defendant’s failure to identify clearly and specifically in the skeleton argument precisely what matters it is asserted the Claimant failed to disclose in breach of its duty. Rather, the skeleton argument is a lengthy and discursive document replete with rhetorical argument but short on particulars. To the extent that the matters which it is said were not disclosed in breach of duty can be winkled out of the skeleton, no reference is made to the DIAC Rules, the omission of reference to which was relied upon in support of this ground of appeal in the first skeleton.

28. Doing the best one can to identify the breaches of duty in the skeleton served in support of the Renewed Application, it seems that objection is taken to:

Analysis

29. I have received the benefit of a detailed skeleton argument from the Claimant traversing the relevant authorities and responding in detail to the many and varied propositions advanced on behalf of the Defendant in its skeleton. I agree with much of what has been put in the Claimant’s skeleton. However, my reasons for concluding that the proposed ground of appeal has no prospect of success can be put rather more succinctly.

30. First, as noted, the ground of appeal is manifestly deficient in either of its iterations. No attempt is made to particularise the matters which it is said the Claimant failed to disclose in breach of its duty and the precise way in which the breaches of duty have been enunciated differ from skeleton to skeleton. The manifest deficiency of the ground of appeal is, of itself, sufficient to sustain the conclusion that permission should be refused.

31. Second, the Judge at first instance has stated unequivocally, twice, that he was well aware of the matters which it is said the Claimant failed to disclose. There is no reason to doubt those assertions. As the Judge noted, the purpose of the obligation of full and frank disclosure is to ensure that the Court is not misled. If the Court was aware of and considered the matters which were not disclosed, clearly the Court was not misled. Neither of the skeletons served on behalf of the Defendant since the Judge made these statements responds in any way to the obviously significant effect of those assertions.

32. It is inconceivable that the Court of Appeal would uphold an appeal on the ground of breach of the obligation of full and frank disclosure in circumstances where the Judge at first instance has unequivocally asserted that he was aware of and considered the matters which it is said were not disclosed.

33. Third, it is well established that even if the Court is satisfied that there was a breach of the duty of full and frank disclosure and discharges an injunction previously granted by reason of that breach, the Court may re-order the injunction immediately on the basis of the evidence and materials then before it – see Ithnar Capital v 8 Investment FZE.¹⁸ In this case the Defendant has not contested the grant of the injunctive relief on any ground other than jurisdiction. It is not asserted, for example, that the evidence provided in support of the application did not sustain the grant of relief in the terms ordered by the Judge. All of the matters which it is asserted were not disclosed in breach of duty go only to the question of jurisdiction. All of those matters were drawn to the attention of the Judge at the hearing of the application to extend the injunctive order. After taking those matters into account, the Judge determined that the Court had jurisdiction and continued the injunctive orders on that basis.

34. It follows that even if the Judge had determined that there had been a breach of the duty of full and frank disclosure, it would have provided no basis for refusing the continuation of the injunctive relief because the matters which it is said were not disclosed had no bearing upon the merits of that relief but went only to jurisdiction. Having decided that the Court had jurisdiction after taking into account the matters said not to have been disclosed, there would have been no reasonable basis upon which the Judge could have refused to immediately re-order the injunctive relief.

35. Fourth, by parity of reasoning, there is no basis upon which the Court of Appeal would ever entertain the proposed ground of appeal. The Court of Appeal will determine whether the Court has jurisdiction on the basis of all arguments presented to it. If the appeal succeeds and it is determined that the Court lacks jurisdiction, there would be no reason for the Court to consider whether there had been a breach of the duty of full and frank disclosure. Conversely, if the Court of Appeal decides that the Court has jurisdiction, there would be no reason for the Court to discontinue the continuation of the injunctive relief on the basis of allegations of non-disclosure of matters that go only to the question of jurisdiction.

36. Fifth, it follows that there can be no other compelling reason why permission to appeal should be granted on this ground. Although the Defendant asserts that the grant of permission to appeal would help to clarify the principles relating to the obligation of full and frank disclosure:

37. Sixth, leaving aside all of the above, the basis upon which the ground appears to be advanced is completely lacking in merit. As the Judge observed, failure to refer to each and every possible authority dealing with an issue does not amount to a breach of the obligation of full and frank disclosure, especially in circumstances in which a party might reasonably (and in this case correctly) infer that the Judge was well aware of the issue and the cases bearing upon it. Further, for the reasons he has given, the authorities upon which reliance is placed did not bear directly upon the reasoning which the Judge applied to sustain his conclusion that the Court has jurisdiction. Similarly, the fact that the Claimant did not draw the attention of the Judge to the argument with respect of jurisdiction in precisely the terms in which the Defendant would have put the argument does not amount to material non-disclosure, especially in circumstances in which the Judge was alive to and considered the issues.

Conclusion

38. For these reasons the proposed ground of appeal has no prospect of success and the Renewed Permission Application must be refused with costs.