August 13, 2025 court of first instance - Orders
Claim No: CFI 038/2023
IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
ALAWWAL CAPITAL JSC
Claimant
and
RASMALA INVESTMENT BANK LIMITED
Defendant
ORDER WITH REASONS OF H.E. JUSTICE ROGER STEWART KC
UPON the Judgment of H.E. Justice Roger Stewart K.C. dated 12 June 2025
AND UPON the Defendant’s Appeal Notice dated 3 July 2025, seeking permission to appeal the Judgment pursuant to Part 44.6(2) of the Rules of the DIFC Courts (“RDC”) (the “PTA Application”)
AND UPON the Claimant’s submissions in opposition dated 25 July 2025
IT IS HEREBY ORDERED THAT:
1. The PTA Application is refused.
2. The Defendant shall pay the Claimant’s costs of responding to the PTA Application.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 13 August 2025
At: 3pm
SCHEDULE OF REASONS
1. By RDC 44.19, permission to appeal may only be given when the lower court considers that the proposed appeal would have a real prospect of success or there is some other compelling reason why the appeal should be heard.
2. I do not consider that the grounds of appeal, taken individually or collectively, are such that any appeal has a real prospect of success
Ground 1
3. Ground 1 alleges that there was no pleaded or argued basis for finding that there no reasonable grounds to support the statement that the Fund was a suitable investment for Alawwal Capital JSC (“Alawwal”) having regard to the Alawwal Investment objectives.
4. This is not correct:
(a) In the Amended Particulars of Claim dated 1 October 2024, Alawwal alleged:
(i) At paragraph 29 that the relevant representation was one of the Oral Fund Risk Representations;
(ii) At paragraph 66 that, inter alia, the Oral Fund Risk Representations “were false and were made negligently.”
(b) Paragraph 5 of the Agreed List of Issues recorded at sub-paragraph (1) as an agreed issue “Whether the alleged Oral Fund Risk Representations... were false and made negligently.”
(c) There is no material difference in this case between making a representation negligently and having no reasonable grounds to support the statement.
5. The Defendant’s main case at trial was that the suitability representation was never made – because, on its case, it was made clear that the investment was high-risk. This plainly made an alternative case that there were reasonable grounds for making the suitability representation very difficult. The apparent suggestion that it was denied the opportunity to put forward evidence in support of such a case is inconsistent not only with the pleadings but also with the nature and basis of its case at trial.
6. The Claimant did seek to argue that the suitability representation was a statement of fact but this was rejected in the Judgment. It did not, however, abandon a case that the statement was made negligently. The Defendant knew that it was meeting such a case - see paragraph 20 of its Outline Closing Submissions where it said that the Claimant would have to prove that the statement was either dishonest or made without reasonable grounds but could not do so in the light of various matters which it put forward.
7. The Defendant did not assert that such a case was not open to the Claimant on the pleadings or that it was unable to meet such a case.
Ground 2
8. This alleges that there is a finding in the Judgment at paragraph 94 that a disclaimer in the Offering Memorandum was relevant only to written representations.
9. That paragraph does not refer to the disclaimer in the Offering Memorandum but rather to disclaimers (which were by the Defendant) in the RFP and the PowerPoint Presentation.
10. The disclaimer sought to be relied on in the proposed grounds was contained in the Offering Memorandum for which the directors of the Fund (and not the Defendant) were responsible. The disclaimer was accordingly on behalf of the directors of the Fund and sought to preclude reliance on authorization by the Fund. The statements relied on by Alawwal were, however, on behalf of the Defendant.
11. The Defendant was, at all times, anxious to make clear the difference between itself and the Fund.
12. The error is shown in sub-paragraph 6(4) of the Grounds where it is said that the disclaimer had the effect that the Defendant did not assume responsibility for and Alawwal did not reasonably rely upon the Oral Suitability Representation. However, this was not what the Offering Memorandum provided.
13. Given that there is no relevant statement by or on behalf of the Defendant that Alawwal was not entitled to rely on the Oral Suitability Representation made by a servant of the Defendant there are no compelling reasons for an appeal to be heard.
Ground 3
14. This alleges that the Court erred in confining its analysis as to whether the Defendant acted negligently to the question of whether the Defendant had reasonable grounds to support the Oral Suitability Representation.
15. This is incorrect as is apparent from the Judgment:
(a) Paragraph 78 identifies the legal requirements for the claim set out in Articles 17 and 20-21 of the Law of Obligations in DIFC Law no 5 of 2005;
(b) The Grounds assert that there was no express finding of an assumption of responsibility so as to establish a duty of care;
(c) The requirements for an assumption of responsibility and the imposition of a duty of care are set out in paragraph 78 namely:
(i) The Defendant knew, or ought to have known, that the statement would be communicated to the claimant for the purpose for which the statement was made; and
(ii) The defendant intended, or the Claimant reasonably believed that the Defendant intended, for the Claimant so act.
(d) The Judgment contains clear findings that the Oral Suitability Representation was communicated by the Defendant to Alawwal in order to induce investment by the Claimant and the Defendant intended and Alawwal reasonably believed that the Defendant intended Alawwal to rely on it by investment – see:
(i) Sub-paragraph 57(c) – Mr Zografos would have been keen for Alawwal to invest in the Fund;
(ii) Paragraphs 58 and 59 where Alawwal’s investment objectives were explained to the Defendant and it was made clear that unless the Fund matched those objectives, Alawwal would not object;
(iii) Paragraph 60(a) and (c), 61, 69, 86 and 88 where the findings are made as to the representations being made directly to Alawwal; and
(iv) Paragraph 93 where the importance of the matters is identified.
16. The suggestion that the statement in the OM on behalf of the Fund would have precluded a duty of care is dealt with in relation to Ground 2.
Ground 4
17. This is a direct challenge to a primary finding of fact. As such, it could only succeed if it plainly wrong and one which no reasonable judge could have reached. The challenge goes no higher than stating that particular pieces of evidence should have been expressly taken into account. There is no real chance of this succeeding.
Ground 5
18. This is contingent on one or more of the previous grounds succeeding. In fact, even if one or more of the grounds were to succeed it does not follow that the finding in respect of Rule 3.2.1 would be wrong.
Ground 6
19. This is in respect of costs and depends upon one or more of the other grounds succeeding.
