Claim No. CA 006/2026

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF APPEAL

BEFORE: H.E. CHIEF JUSTICE WAYNE MARTIN, H.E. JUSTICE ROBERT FRENCH AND H.E. JUSTICE SIR PETER GROSS

BETWEEN

(1) THE COLLECTION CLUB RESTAURANT LIMITED
(2) LAURENT BUISINE
(3) HUGO VALAT

Appellants/Defendants

and

MAG DEVELOPMENT SERVICES LIMITED

Respondent/Claimant

ORDER WITH REASONS OF THE COURT OF APPEAL

UPON the Order with Reasons of H.E. Deputy Chief Justice Ali Al Madhani dated 25 February 2026 (i) granting the Claimant’s Application to strike out part of the Defendants’ Amended Defence; and (ii) granting automatic leave to appeal (the “Order”)

AND UPON the Defendants’ Appeal Notice dated 11 March 2026, seeking to appeal the Order (the “Appeal”) and a stay of proceedings pending the determination of the Appeal (the “Stay Application”)

AND UPON the Order of H.E. Chief Justice Wayne Martin dated 25 March 2026 granting the Stay Application

AND UPON hearing counsel for the Appellants and counsel for the Respondent at the Appeal Hearing held before H.E. Chief Justice Wayne Martin, H.E. Justice Robert French and H.E. Justice Sir Peter Gross on 13 April 2026

AND UPON the Order of the Court of Appeal dated 14 April 2026 dismissing the Appeal

IT IS HEREBY ORDERED THAT:

1. The Respondent’s costs to be paid by the Appellants will be assessed on the standard basis by a process of immediate assessment in accordance with the directions which follow.

2. Within twenty-one (21) days of the date of this order the Respondent is to file a Statement of Costs together with submissions in support of the costs claimed.

3. Within twenty-one (21) days of the date of service of the Statement of Costs the Appellants are to file any submissions in opposition to the quantum of the costs claimed.

4. Within fourteen (14) days of the date of service of the Appellants’ submissions pursuant to the preceding order, the Respondent shall file any submissions in reply.

5. The quantum of the costs to be paid by the Appellants to the Respondent will thereafter be assessed on the papers by H.E. Chief Justice Wayne Martin.

Issued by:
Hayley Norton
Assistant Registrar
Date of issue: 24 April 2026
At: 10am

Introduction

1. On 13 April 2026 after hearing argument on the appeal the Court pronounced orders dismissing the appeal and ordering the Appellants to pay the Respondent’s costs of the appeal for reasons to be published in due course, together with orders relating to the assessment of costs. The reasons for dismissing the appeal and for the orders now made with respect to the assessment of costs follow.

The appeal

The claim

2. The Respondent/Claimant, Mag Development Services Limited (“Mag”) is the owner of premises situated on the 26th and 27th floors of the South Tower, Emirates Financial Towers, DIFC, Dubai (the “Premises”). Mag claims that it leased the Premises together with the right to use a car park situated on level -3 in the basement of the building in which the Premises are located to the Appellants for a term of 10 years by a lease dated 15 August 2023 (the “Lease”). Mag claims that the Lease contains provisions requiring the payment of a security deposit and annual rental throughout the term of the Lease.

3. Mag further claims that clause 30 of the Lease entitles Mag to terminate the Lease in the event of default in payment of the rental (amongst other things). Mag further claims that by clause 32 of the Lease the Appellants were given the right to terminate the Lease provided they gave one year’s prior written notice.

4. Mag claims that the Appellants defaulted in the payment of the rental payments due in March, June and September 2024.

5. In its Particulars of Claim Mag claims that the Appellants purported to issue a Notice of Termination of the Lease dated 24 June 2024. Mag asserts that the Notice of Termination would not have become effective until 23 June 2025, during which time the Appellants were obliged to continue paying rental. However, the Appellants continued to be in default of the payment of rental due under the Lease. Mag claims that on 16 September 2024 it issued notice terminating the Lease by reason of the Appellants’ default in payment of the rental with the result that the Lease terminated seven days later on 23 September 2024. Mag claims that on 7 November 2024 the Appellants vacated the Premises and returned the keys to the Premises to Mag.

6. Mag claims the rental due under the Lease, together with damages for breach of the Lease, including amounts paid to terminate the prior lease of the Premises, commission paid to an agent in relation to the Appellants’ leasing of the Premises, costs incurred reinstating the Premises to their original condition and the cost of finding a replacement tenant.

The Amended Defence

7. By their Amended Defence the Appellants assert that the Premises were leased in order that they could be used to provide a luxury club tailored to high net worth individuals with a passion for prestigious automobiles and collectibles. The business plan included offering 100 parking bays to members which it was expected would be used for the storage of prestige vehicles.

8. The First named Appellant was incorporated in the DIFC for the purpose of carrying out the business plan, and the Second and Third named Appellants are shareholders in the First named Appellant. They assert that there was an agreement to amend the terms of the Lease to provide that the Lease agreement would provide that only the corporate Appellant would be a party to the Lease after a license for the conduct of business was obtained. As this issue is not germane to the issue raised by the appeal, no more needs to be said about it.

9. The Appellants admit that they defaulted in the payment of rental due in March and June 2024.¹

10. The Appellants contend that they explained to Mag that they were depending upon an investor to back the development of the Dubai business. However, the investor backed out after inspecting the Premises following flooding which occurred in April 2024 with the result that the carparking area on level -3 in the basement was severely flooded.

11. The Appellants claim that by reason of the flooding, and more particularly the inability of Mag to ensure that the flooding would not recur they were deprived of the financial backing which they needed to implement their business plan.

12. The Amended Defence contains various assertions relating to the Lease and its provisions which are irrelevant to the issues in this appeal and which it is unnecessary to note.

13. Relevantly to the appeal, the Appellants allege that their purported termination of the Lease “was based on the inability to meet financial obligations due to the extreme financial distress caused by force majeure events”.² The breadth of this assertion is noteworthy.

14. It is also worthy of note that the force majeure event is not said to be the flooding itself, which was a temporary condition, but rather, the realisation of the possibility of another flooding event which caused a prospective investor to not provide financial support for the project.

15. The Appellants assert that their Termination Notice on 24 June 2024 was effective, and that the requirement for the provision of one year’s notice is inconsistent with Article 57 of the DIFC Contract Law – another issue which is not relevant to the issues in this appeal.

16. Later in the Amended Defence the Appellants reiterate that the financial hardship arising from the flooding of the premises constituted a force majeure event which is said to have made it impossible for the Appellants to fulfil their contractual obligations.³

17. The Amended Defence contains the following assertion:

“This situation engages the principle of frustration of contract, which under DIFC Law (see Article 82 of DIFC Law no. 6 of 2004) may relieve parties from performance when obligations become impossible or radically different to supervening events.”⁴

18. This is the only reference to frustration in the Amended Defence. However, it is said to arise from the application of Article 82 of the DIFC Law of Contract which, as will be seen, is concerned only with force majeure and not frustration, as that word is used to describe a principle of English law. Force majeure as embodied in Article 82 of the DIFC Law of Contract, and frustration as known to English law, are quite different concepts and cannot be equated. Many of the submissions advanced on behalf of the Appellants ignore this fundamental proposition.

The decision under appeal

19. On 26 January 2026 Mag applied to strike out that part of the Appellants’ Amended Defence which relied upon force majeure and/or for immediate judgment in respect of that part of the Appellants’ Amended Defence. The Judge granted both applications. In relation to the application to strike out portions of the Defence, the Judge did not identify particular paragraphs of the Amended Defence which should be struck out but rather ordered that:

“The Defendants’ force majeure defence, insofar as it relates to the obligation to pay rent and other monetary sums under the Lease Agreement, is struck out.”

20. On the hearing of the appeal, it was common ground that it would be extremely difficult to identify the portions of the Amended Defence which relate only to the Appellants’ defence of force majeure, given the discursive style of the pleading.

21. The Judge’s Order striking out the force majeure defence insofar as it relates to “rent and other monetary sums under the Lease Agreement” begs the question of what “other monetary sums” are comprehended within the order. Neither counsel at the hearing of the appeal was able to identify any such sums other than the amounts claimed as a result of the alleged breach of the Appellants’ obligation to pay rent. However, force majeure is not pleaded as a defence to those claims, other than in the sense that it is relied upon as a defence to the allegation of breach in the form of non-payment of the rent. If that defence is struck out, it follows that non-payment of the rent cannot be justified by reference to force majeure and, unless some other defence prevails, the amounts due under the Lease in the event of termination by Mag will be payable, together with damages for breach of the Lease.

22. It may be that the reference to “other monetary sums under the Lease Agreement” in the Judge’s Order was included out of an abundance of caution. In any event, neither party contends that the terms of the Judge’s orders are not appropriate to reflect his conclusion that the defence of force majeure had no real prospect of success. It is therefore unnecessary to say any more about those terms for the purposes of this appeal, though if the matter proceeds to trial (minus the defence of force majeure), they will require further consideration by the trial Judge

23. In his reasons for decision the Judge directed himself with respect to the test to be applied to an application for immediate judgment by reference to the principles enunciated in Easy Air Ltd v Opal Telecom Ltd.⁵ The Appellants do not assert that the Judge misdirected himself in this regard, but do assert that he failed to properly apply the principles to the circumstances before him.

24. After summarising the competing submissions of the parties, the Judge expressed his conclusion that the Appellants’ obligation to pay rental was “a mere obligation to pay that cannot be protected by force majeure under Article 82”.

25. At this point it is appropriate to set out Articles 82 and 83 of the DIFC Contract Law⁶ for convenient reference:

26. The Judge set out his reasons for concluding that the obligation to pay rent was a “mere obligation to pay” succinctly in the following paragraphs of his reasons:

27. The Judge also expressed views in relation to the time at which the first rental default occurred, being prior to the occurrence of the floods, in the following terms:

28. The Appellants complain that these observations are contrary to the constraints imposed upon the grant of immediate judgment in accordance with the principles accepted by the Judge, in that the reasons for the failure to pay rental both in March and when subsequent instalments fell due raise fact sensitive issues appropriate for determination only after trial.

29. It is not pellucidly clear whether the Judge was simply observing that the Appellants would face issues of a factual character in relation to their Defence of force majeure if the defence was allowed to stand, or whether he was relying upon those issues as an independent and alternative reason for granting immediate judgment in respect of the force majeure defence. In any event, it is unnecessary to determine this question for reasons which will be explained below.

The issues in the appeal

30. The Judge granted the Appellants permission to appeal at the time he delivered his decision in the hope that the appeal could be heard and determined prior to the scheduled trial. However, that hope was dashed when the Appellants inexplicably took 14 days to file their Notice of Appeal, and it was necessary for the trial to be adjourned.

31. The Notice of Appeal was not accompanied by any Grounds of Appeal. It was accompanied by a witness statement provided by the lawyer representing the Appellants. The witness statement did not contain any assertions of fact, but was confined to legal argument. This Court has many times deprecated the practice of lawyers including legal arguments in their witness statements, without any apparent effect upon this ubiquitous and undesirable practice. However, at least in this case, the witness statement was followed by the filing of a skeleton argument in virtually identical terms.

32. Although the skeleton argument purported to contain the Grounds of Appeal, there was no clear enunciation of those grounds in a form which would be familiar to common law lawyers. Rather, the discursive document contained a series of headings, six in number, under which argument was presented. One might have thought that the headings should be taken as the Grounds of Appeal, but for the fact that counsel for the Appellants advised the Court in the course of oral argument that there were three Grounds of Appeal, not six.

33. Assuming that counsel’s oral submissions can be taken as the last word in relation to the Appellants’ Grounds of Appeal, the grounds that were identified by counsel, are:

The grounds of appeal

Ground 1

34. Ground 1 contends that the Judge imposed a construction upon the provisions of the Lease Agreement that was harsh, unusual or burdensome in the absence of clear and unambiguous words, contrary to provisions in the DIFC Contract Law. In particular, it is said that the Judge adopted an interpretation of the Lease which obliged the Appellants to pay rent irrespective of whether Mag had complied with its obligations under the Lease. Put another way, the Appellants contend that the Judge erred by not holding that the obligation to pay rent was interdependent upon Mag’s performance of its obligations under the Lease.

35. The fundamental problem with this ground is that the Judge did not express any conclusions with respect to the independence or interdependence of the respective obligations of lessor and lessee under the Lease. Rather, he expressly held, correctly, that the issue was irrelevant to the question of whether the obligation from which the Appellants sought relief by reason of force majeure was an obligation only for the payment of money, or some other form of obligation.

36. Ground 1 fails because it proceeds on a false assumption as to the Judge’s conclusions.

Ground 2

37. Ground 2 goes to the essential reason why the Judge dismissed the defence of force majeure and to the heart of this appeal.

38. As the Appellants’ skeleton argument is written in the same discursive style as the Amended Defence, it is difficult to identify with clarity what the Appellants contend is the meaning of the expression “mere obligation to pay”. The closest one gets is the proposition in the skeleton argument is that the expression: “…refers only to a situation where someone is legally bound to pay a debt or sum of money but does not have any beneficial interest in the payment.”

39. That proposition is, with respect, very difficult to comprehend. The payer of funds will almost always have a beneficial interest in the funds the subject of the payment, and if legally bound to make the payment has a beneficial interest in the outcome of the payment, in the form of the discharge of the debt or other obligation.

40. When invited to explain the concept counsel for the Appellants suggested the example of the advancement of funds by way of loan. However, consideration for the advance of a loan is invariably provided in the form of a promise to repay the loan and usually also by consideration in the form of a promise to pay interest on the loan while outstanding. Accordingly, there is no difference between the corresponding obligations which arise under a loan, and the corresponding obligations which arise under a lease, where rental is paid in consideration of the promise to provide exclusive possession (amongst other things).

41. At other points in the argument on behalf of the Appellants, it is contended that a “mere obligation to pay” does not include a circumstance in which the obligation to pay is dependent upon the performance of other obligations by the payee. This proposition suffers from the flaw identified by the Judge – namely, the question which arises under Article 82 concerns the characterisation of the obligation from which a party seeks relief by reason of force majeure. The focus of the Article is upon that obligation and whether it involves something more than the mere payment of money. There are no words in the Article, nor does its subject matter suggest that the question of whether the obligation to pay is contingent upon performance by the other party is relevant to the application of the defence of force majeure.

42. At other points in the argument, it was suggested that the expression “mere obligation to pay” excludes an obligation to pay contained in an agreement which contains other obligations on the part of the payer. That proposition would limit the operation of the phrase to agreements in which the only obligation imposed upon a party by the agreement was an obligation to pay money. The flaw in the proposition lies in the fact that the Article is concerned with the characterisation of the obligation from which relief is sought, rather than the characterisation of all the obligations owed under an agreement.

43. Further, it is not possible to identify any reason of policy which would sustain the view that the legislator intended that the availability of the defence of force majeure would depend upon whether the agreement under which the obligation to pay arose contained other obligations as well as the obligation from which relief was sought by reason of force majeure. On the other hand, there is every reason to suppose that the legislator intended to differentiate between the mere payment of money (a fungible), when it is inherently unlikely that there would ever be a circumstance beyond the control of the payer which would prevent payment, as compared to acts or services where there may well be circumstances beyond the control of the party obliged to perform which provide an impediment to performance.

44. Put another way, it may be that the qualification to Article 82 excluding a “mere obligation to pay” from the obligations the performance of which can be excused by force majeure (a qualification which is particular to the DIFC Contract Law and which is not found in the UNIDROIT principles of International Contract Law upon which the DIFC Contract Law is modeled) was included precisely for the purpose of preventing a party from claiming that financial hardship caused by matters beyond their control prevented them from fulfilling their obligations to pay, which is of course this case.

45. The skeleton argument in support of Ground 2 is replete with references to the English law of frustration, and counsel for the Appellants attempted to make similar submissions to the Court during the hearing. Those submissions are misplaced because:

46. Accordingly, it is unnecessary to say any more about the submissions advanced with respect to frustration.

47. At other points in the argument in support of this ground attention was focused upon the merits of the defence of force majeure and the evidence to support that defence. Those matters would be relevant if the defence was available to the Appellants. However, the effect of the Judge’s ruling is that the defence is not available to the Appellants, and so its merits, and the evidence in support of the defence, are irrelevant.

48. The Judge was correct to conclude that the purpose of the exclusion of a “mere obligation to pay” from the operation of Article 82 was to differentiate between mere payments of money on the one hand, and the performance of acts or services on the other. That conclusion is supported by the natural and ordinary meaning of the word “mere” – synonyms for which are “solely”, “only”, or “simply”. So, if the obligation to pay money is linked or connected to an obligation to do or achieve something else, and the doing or achievement of that other thing is precluded by force majeure, the defence may be available. To take an example given by the Court during argument, if a lease provided that the tenant was obliged to pay a nominated contractor the amount required for the contractor to perform a particular service, and the service could not be performed for some reason, the tenant could argue that the obligation to pay was suspended until such time as it was possible for the service to be performed.

49. In this case, the obligation to pay rent is not linked to or connected to or accompanied by any other obligation on the part of the Appellants to do or achieve anything. Rather, as the Judge correctly observed, it is the price which the Appellants agreed to pay for their entitlement to the exclusive possession of the premises for a period of ten years, which right they acquired by reason of the Lease. The allegation that those premises lack the characteristics or qualities which they expected and required is incapable of giving rise to any assertion of force majeure.

50. For these reasons the Judge was correct to conclude that on the undisputed facts in this case Article 82 and the defence of force majeure had no application and to make orders which precluded the Appellants from pursuing that defence at trial.

51. Ground 2 must be dismissed.

Ground 3

52. Ground 3 contends that the Judge erred by misapplying the principles relating to the limited circumstances in which immediate judgment would be granted, or a pleading would be struck out. In support of the ground, it is contended that there are fact sensitive issues relating to the defence of force majeure which could only be determined after evidence had been led at a trial. It was also contended that there were important issues relating to the consequences of the Dubai floods which justified the case going to trial.

53. The fact sensitive issues identified in support of this argument are essentially the matters that would be argued if the defence of force majeure was available to the Appellants. In essence, the argument came down to the proposition that there would be evidence to support the defence if the Appellants were allowed to run their case.

54. However, that proposition, with respect, misses the point of the Judge’s ruling and this appeal, which is directed to the question of whether it is open to the Appellants to rely upon the defence, given the qualification to Article 82. That is a short point of law which can be, and has been, resolved by reference to undisputed facts which arise from the unambiguous terms of the Lease Agreement relating to the payment of rental. This is an entirely appropriate case for the exercise of the power of summary dismissal in accordance with the principles enunciated in the authorities on this topic.

55. For the same reason allowing the defence to proceed to trial would resolve no issues arising from the Dubai floods, because the defence would simply be dismissed on the ground that Article 82 is not available to the Appellants.

56. In this context the Appellants draw attention to the observations of the Judge with respect to the occurrence of default in the payment of rent prior to the floods and contend that the circumstances in which such default occurred are relevant to the inferences or conclusions to be drawn from it and are therefore matters appropriate for determination at trial.

57. As already noted, it is not immediately clear whether the Judge was merely making a passing observation as to some potential problems with the defence, or was expressing an alternative reason, independent of the construction of Article 82, for not allowing the defence to go forward to trial. It is unnecessary to resolve that question, or whether the issue did give rise to a question for trial because on any view it is clear that the Judge’s conclusion that the payment of rent was a “mere obligation to pay” was quite sufficient to sustain the orders which he made.

58. Put another way, even if this Court were of the view that the conclusions properly drawn from the occurrence of default in the payment of rent prior to the floods was a matter for trial rather than immediate judgment, it would not alter the outcome of the appeal because the Judge’s decision would still be upheld on the basis of the primary ground for his determination, which is that Article 82 of the DIFC Contract Law has no application to the circumstances of this case.

59. For these reasons ground 3 must also be dismissed.

Conclusion

60. For the reasons outlined above the appeal was dismissed.

The assessment of costs

61. Neither party filed a Statement of Costs up to and including the hearing of the appeal. However, it remains desirable for the Respondent’s costs to be assessed by way of immediate assessment, rather than detailed assessment, and orders will be made to enable that to occur on the basis that the assessment will be undertaken by the Chief Justice as delegate of the Court of Appeal.