Claim No. CFI 053/2022

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF APPEAL

BETWEEN

VISION INVESTMENT AND HOLDINGS LIMITED

Appellant/Claimant

and

MAHDI AMJAD

Respondent/Defendant

AMENDED ORDER WITH REASONS OF H.E. CHIEF JUSTICE WAYNE MARTIN

UPON hearing Counsel for the Claimant and Counsel for the Defendant at the trial held before H.E. Justice Sir Jeremy Cooke on 8 April 2025 (the “Trial”)

AND UPON the Judgment of H.E. Justice Sir Jeremy Cooke dated 9 April 2025 (the “Judgment”)

AND UPON the Claimant’s Appeal Notice dated 30 April 2025 seeking permission to appeal the Judgment (the “Permission to Appeal Application”)

AND UPON the Order with Reasons of H.E. Justice Sir Jeremy Cooke dated 30 May 2025 refusing the Permission to Appeal Application

AND UPON the Claimant’s Renewed Permission to Appeal Application dated 20 June 2025 seeking permission to appeal the Judgment (the “Renewed Application for Permission to Appeal”)

AND UPON the Defendant’s submissions in opposition dated 10 July 2025

IT IS HEREBY ORDERED THAT:

1. The Renewed Application for Permission to Appeal is dismissed.

2. The Claimant is to pay the Defendant’s costs of the Renewed Application for Permission to Appeal.

3. In default of agreement as to the quantum of the costs to be paid pursuant to the preceding order, the quantum of those costs shall be assessed by the Chief Justice in accordance with the following procedure:

The quantum of costs shall thereafter be determined by the Chief Justice on the papers.

Issued by:
Hayley Norton
Assistant Registrar
Date of issue: 30 July 2025
Date of re-issue: 5 August 2025
At: 9am

Summary

1. The Claimant, Vision Investment and Holdings Limited (“Vision”) has made a Renewed Application for Permission to Appeal (the “Renewed Application”) against the dismissal of its claim against the Defendant, Mahdi Amjad (“Mr Amjad”) after trial, the Trial Judge having refused Vision’s Initial Application for Permission to Appeal (the “Initial Application”).

2. For the reasons which follow, the appeal has no real prospect of success and there is no other compelling reason why permission to appeal should be granted. The Renewed Application must be dismissed with costs.

The judgment at first instance

3. The nature of Vision’s claim, the evidence adduced in support of that claim, the facts found by the Trial Judge and the Trial Judge’s reasons for dismissing the claim can be conveniently identified in the reasons given by the Trial Judge.¹

4. Vision claimed AED 26,668,646 plus interest and costs. The claim arises out of two agreements, both of which are in Arabic. The first was described as a “Loan Settlement Agreement” dated 12 April 2018 (“LSA”) and the second was an “Addendum to Amendment of Loan Settlement Contract” dated 28 June 2018 (the “Addendum”). The parties to each of these Agreements were Town Square Investment LLC (“Town Square”), described in each Agreement as the First Party, and Khaldoun Rashid Saeed Al Tabari (“Mr Al Tabari”) described in each Agreement as the Second Party.

5. The preamble to the LSA refers to a previous Loan Agreement in an amount of AED 30m dated 17 May 2012, which expired on 31 October 2017 and recites that the loan with interest amounts to AED 37,279,129.

6. The Loan Agreement was produced in evidence. The parties to that Agreement are Town Square, described as the Borrower, Invest Bank PSC described as the Lender, and Mr Al Tabari, described as the Facilitator. The Loan Agreement provided that the Bank was to lend Town Square the total amount of AED 30m, to be drawn down in a maximum of three tranches of AED 10m each. The loan was to be repaid on 31 October 2017 and accrued interest at the rate of 10% pa.

7. Town Square undertook to assign to the Bank all of the revenues to be derived from a building project which Town Square was undertaking by way of security for the loan. By way of further security, Mr Al Tabari undertook to deposit with the Bank the amount of AED 30m at 0% interest rate for the duration of the loan and undertook to provide the Bank with a letter authorising the Bank to liquidate the deposit in full or in part upon the occurrence of an event of default.

8. The extent to which the provisions of the Loan Agreement were complied with by the parties thereto was not the subject of findings by the Trial Judge nor are those matters relevant to the proposed grounds of appeal. It is however clear from the terms of the LSA that the loan had not been repaid when it matured on 31 October 2017.

9. The LSA records that Town Square paid AED 6,067,592 to Mr Al Tabari on 13 December 2017 and that Town Square issued promissory notes dated 7 December 2017 in the amount of AED 25m. and AED 6,211,573.61 which represented the outstanding principal and interest due on the loan. The preamble to the LSA also records that Town Square wished to reschedule the payment of the remainder of the loan and interest until 31 March 2019, by which time the outstanding amount would be AED 32,139,009.

10. The LSA records that Town Square was to pay that amount by:

11. The LSA further provides that a signatory authorised by Town Square was to sign off on the cheques, and Mr Al Tabari was at liberty to deposit the cheques.

12. According to the English translation used at the trial, the LSA further provided that:

“In the event of any of the abovementioned cheques bounced, (Mr Mahadi Amjad) shall by the Grantor (sic) personally responsible and undertake to pay the amount of bounced cheques within (90) days of their maturity date, where the First Party did not make such payment.”

13. The LSA also provided that Mr Al Tabari was to return the promissory notes which he had received from Town Square upon receipt of the cheques from Vision, and would pay the remaining instalments due in respect of the unit to be acquired at One The Palm Jumeirah.

14. The LSA also provided that Mr Al Tabari acknowledged that upon payment of the amounts of the cheques to be provided to him under the Loan Agreement he releases Town Square from all obligations related to the Loan Agreement, the promissory notes and the interest due on the loan.

15. The LSA was signed by Mr Amjad in the portion of the document reserved for the signature of Town Square. The LSA was also signed by Mr Al Tabari.

16. The preamble to the Addendum refers to the LSA and records that the parties to the LSA desire to amend its terms at the request of Mr Al Tabari who wishes to replace the unit at One The Palm Jumeirah with another unit in the same project and register that unit in the name of KRT IV Limited, and adjust the settlement amount from AED 32,139,009 to AED 32,178,818.

17. The Addendum provides that Town Square is to pay that amount by a payment of AED 4,474,161 to the account of KRT IV Limited with Luxury Development LLC as part payment of the purchase price of the new unit at One The Palm Jumeirah, with the balance to be paid by five post-dated cheques, including four cheques in the same amount and bearing the same dates as the four cheques payable under the LSA, together with a fifth cheque in the amount of AED 435,729 dated 31 March 2019, each to be “drawn on the United Arab Bank under the name of” Vision.

18. The Addendum also provides that Mr Al Tabari will pay the remaining instalments in respect of the unit at One The Palm Jumeirah.

19. As with the LSA, the Addendum was signed by Mr Amjad on behalf of Town Square, and by Mr Al Tabari.

20. As the Judge observed, Vision’s claim is advanced on the basis that the provision in the LSA with respect to Mr Amjad’s obligations in the event that any of the post-dated cheques provided by Vision bounced, which Vision describes as “the personal undertaking”, had the effect that Vision was entitled to payment of the amounts of those cheques by Mr Amjad, as guarantor.

21. The Trial Judge observed that there were a considerable number of hurdles which Vision had to overcome in order to make that claim good. He observed that the first and most obvious was that neither Vision nor Mr Amjad were parties to either the LSA or the Addendum which were concluded as between Town Square and Mr Al Tabari. In the Judge’s view Mr Amjad signed each Agreement as the representative of Town Square and not in his personal capacity. He also observed that Vision was not a party to either Agreement, whereas Mr Al Tabari was a party to both.²

22. This second hurdle identified by the Trial Judge was that the alleged “personal undertaking” appears only in the LSA and not in the Addendum. In the LSA the alleged “personal undertaking” was to pay the amount of “any of the abovementioned cheques” which bounced, which related to four specific cheques. In the Judge’s view, the obligations created by the Addendum replaced Town Square’s obligations under the LSA, so that the obligations imposed upon Town Square by the Addendum were substituted for the obligations imposed on Town Square by the LSA. The Addendum made no reference to what would happen if the cheques bounced, and provided for five post-dated cheques rather than four. In the Judge’s view the “personal undertaking” which was only contained in the LSA was superseded by the terms of the Addendum.

23. The Trial Judge observed that it was significant that, as translated, the obligation attributed to Mr Amjad was to pay the amount of cheques which bounced, rather than guarantee that the cheques would be met on presentation. In the view of the Judge that was significant because the undertaking appeared in an agreement between Town Square and Mr Al Tabari relating to the repayment of the balance of the loan by Town Square, with the consequence that any obligation to pay was owed to Mr Al Tabari and not to Vision, which was not a party to the Agreement. In the view of the Trial Judge, if the LSA imposed any obligation upon Mr Amjad (which he did not accept) it would be an obligation owed to Mr Al Tabari, not to Vision.

24. In the Judge’s view it followed that there could not be any question of any entitlement by Vision as a “third party beneficiary” entitled to rights under a contract to which it was not a party pursuant to Article 252 of the UAE Civil Code. In this context the Judge noted that there was no provision in the LSA requiring Mr Amjad to pay the amount of the bounced cheques to Vision, and in the absence of any such provision, reiterated his view that any obligation assumed by Mr Amjad would have been an obligation owed to Mr Al Tabari.

25. The Judge also considered that Articles 1088 and 1099 of the UAE Civil Code provided an insuperable obstacle in the path of Vision’s claim. Article 1088 provides that “If a creditor receives a satisfaction of his debt by (accepting) another thing, the principal obligor and the surety shall both be discharged” and Article 1099 provides that suretyship terminates on the cessation of the contract by virtue of which the right against the principal obligor arose.

26. In this context, if, contrary to the Judge’s view, the personal undertaking was to be construed as a guarantee, the debt owed to Mr Al Tabari under the LSA was satisfied by his acceptance of the different obligations imposed by the Addendum, and the Addendum necessarily resulted in the cessation of the LSA and any guarantees which were to be found within its terms.³

27. As the Judge observed, the effect of the Addendum was to impose a greater indebtedness upon Town Square and to require Town Square to provide Mr Al Tabari with an additional post-dated cheque. The Judge cited authority from the Dubai Commercial Cassation Court⁴ in which it was observed that a guarantee cannot:

“Extend to a new, modified or renewed debt unless the guarantor expressly consents to a new guarantee or to the renewal of the previous one, treating it as a new guarantee for a new debt requiring fresh acceptance.”

28. The Judge also referred to various defences advanced on behalf of Mr Amjad which he considered it was unnecessary to determine.

Permission to appeal – legal principles

29. RDC 44.117 provides:

30. 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.

31. RDC 44.19 provides:

32. RDC 44.19 provides that permission to appeal may only be given where the appeal would have a real prospect of success or there is some other compelling reason why the appeal should be heard.

33. In the context of an assessment of the prospects of success “real” means realistic rather than fanciful and involves the same test as is applied in applications for immediate judgment.⁵

34. A real prospect of success does not mean a probability of success, but more than mere arguability.⁶

35. “Some other compelling reason why the appeal should be heard” may include the public interest in clarifying the meaning and scope of relevant practice and provisions of DIFC and wider UAE law.⁷

36. In this case Vision asserts that there is some other compelling reason for the grant of permission to appeal in that an appeal would resolve certain contentious issues of law. However, as will be seen, the issues of law relied upon would not arise or require determination in any appeal.

37. 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.⁸

38. It is also established that a real prospect of success does not mean a probability of success, but more than mere arguability.⁹

39. 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.¹⁰

40. 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.¹¹ 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.

The grounds of appeal

41. There are four grounds of appeal.

Ground 1

42. The first ground is that: “The Learned Judge erred in finding that as a matter of law the Claimant had no actionable right against the Defendant to claim under the personal guarantee described in the Loan Settlement Agreement (LSA) because neither the Claimant nor the Defendant were Parties to the LSA.”

43. In the argument advanced in support of this ground extensive reference is made to provisions of UAE Law and decisions of the UAE Union Supreme Court which enable and recognise the capacity of a person who is not a party to a contract to acquire rights under the contract as a third party beneficiary. It is unnecessary to consider those legislative provisions or court decisions in any detail, as for the purposes of the Renewed Application it may be accepted, without being taken to have determined, that under UAE Law third parties may acquire rights under contracts to which they are not parties. I note that there are statutory provisions to similar effect in many common law jurisdictions.

44. However, the question in this case is not whether, as a matter of law, Vision could acquire rights as a third party beneficiary to a contract to which it was not a party, but rather whether there is any provision in the LSA which purported to confer such a benefit upon Vision. The answer to that question is unequivocally negative, as the Trial Judge correctly held.

45. Town Square borrowed AED 30m from a bank which was facilitated by Mr Al Tabari and in particular by his provision of the deposit of an equivalent amount as security for the loan. Mr Al Tabari was in turn given a security by Town Square in the form of promissory notes, against the contingency that Town Square might not repay the loan and the Bank would then apply Mr Al Tabari’s deposit to the satisfaction of its debt.

46. Under the LSA Town Square and Mr Al Tabari agreed that the promissory notes would be replaced by a part payment and by the provision to Mr Al Tabari of four post-dated cheques drawn on Vision’s account at a bank. The LSA provided that in the event that any of those cheques was not met when presented (by Mr Al Tabari) Mr Amjad would make good the payment. It follows that any obligation imposed by Mr Amjad was to make good Vision’s default by not honouring the cheque drawn in favour of Mr Al Tabari and pay to Mr Al Tabari the amount of the dishonoured cheque.

47. It follows that the Trial Judge was correct to hold that in the circumstances of this case, no question of third-party beneficiary rights arises. If the LSA imposed any obligation upon Mr Amjad, it was not an obligation owed to Vision but rather to Mr Al Tabari, who was a party to the LSA.

48. In support of this ground Vision submits that:

“The Claimant is identified in the Personal Guarantee as the entity to which the outstanding loan and interest amount are due. The LSA requires the issued cheques to be delivered to the Claimant, who was also the payee. The total outstanding amount under the LSA was described as being "in favour of Vision". The LSA contains no ambiguity: the financial benefit and underlying repayment obligation were both directed to the Claimant.”¹²

49. Every proposition in this passage is incorrect. Vision is not identified in the LSA as the entity to which the outstanding loan and interest amount are due. To the contrary, Mr Al Tabari is identified as the person to whom Town Square’s obligations are owed under the LSA. Vision is identified as an entity which may discharge the obligations owed to Mr Al Tabari by Town Square. The Judge made no findings as to the relationship between Town Square and Vision but if and to the extent that the Agreement might infer that Vision was taking the place of Town Square through the LSA, it was taking Town Square’s place as debtor, not creditor.

50. The LSA does not require the issued cheques to be delivered to Vision or provide that Vision was the payee of the cheques. To the contrary, the LSA expressly requires Vision to draw the cheques on its account and provide them to Mr Al Tabari, who it can be inferred, was intended to be the payee.

51. The LSA does not describe the “total outstanding amount” as being “in favour of Vision”. The passage in the LSA to which reference is made provides:

“The total sum of hereinabove payments shall be AED32,139,009 which represents remaining amount of the loan and interest thereof in favour of Vision …”

52. It is the loan which is said to have been made in favour of Vision, perhaps supporting the view that Vision has replaced Town Square as the borrower, but there is nothing whatsoever in the LSA which is capable of suggesting that Vision had any entitlement to be paid the amount of the loan or the interest due on the loan.

53. Of course, if Vision had repaid Town Square’s debt at Town Square’s request, that may have given rise to a claim by Vision against Town Square for indemnity. But that is not the claim which is being brought in these proceedings.

54. It is incorrect to assert that the financial benefit and underlying repayment obligation of the LSA were both directed to Vision – to the contrary, the only provisions referring to Vision in the LSA imposed obligations upon Vision, not benefits.

55. Ground 1 misconceives the terms and effect of the LSA. It has no prospect of success.

Ground 2

56. The second ground is that: “The Learned Judge erred in finding that the LSA could not create an actionable right in favour of the Claimant as third-party beneficiary against the Defendant as guarantor, the nature and extent of the guarantee being that described in the LSA, by failing to acknowledge the Defendant’s ability to sign in his capacity as agent for Town Square as well as in his personal capacity”.

57. Unless ground 1 succeeds, ground 2 is irrelevant. That is because even if, contrary to the view of the Trial Judge, Mr Amjad had signed in his personal capacity as well as in his capacity as the authorised representative for Town Square, for all the reasons given in relation to ground 1, the LSA does not create any rights capable of being enforced by Vision against Mr Amjad.

58. In any case the Judge was plainly correct to find that Mr Amjad had only signed the LSA in his capacity as authorised representative of Town Square. He could only have signed in a personal capacity if he was a party to the LSA, but quite clearly he was not. There are only two parties to the LSA – Town Square and Mr Al Tabari.

59. Ground 2 has no prospect of success but in any event it would not be considered by an Appellate Court because it would be unnecessary to determine the issue unless it was arguable that the LSA conferred a benefit upon Vision which could be enforced against Mr Amjad, and that proposition is unarguable.

Ground 3

60. The third ground is that: “The Learned Judge misapplied UAE Law in finding that for any actionable right in favour of the Claimant as third-party beneficiary against the Defendant as guarantor to have arisen, such guarantee must have been in writing, and/or failed to consider whether the guarantee could otherwise have been created in all the circumstances”.

61. This ground seeks permission to appeal against a ruling which the Judge did not make. The Judge made no ruling with respect to the requirement for a guarantee to be in writing under UAE Law.

62. In any event this ground is as irrelevant as ground 2 because it depends upon the success of ground 1, and in particular the success of the proposition that the LSA rendered Mr Amjad guarantor of a debt due to Vision when there is no basis upon which the LSA could be construed in that way.

Ground 4

63. The fourth ground is that: “The Learned Judge erred in finding that, as a matter of law, the Claimant had no actionable right against the Defendant to claim under the personal guarantee described in the LSA because any guarantee provided by the Defendant would have been extinguished by the Amended Loan Settlement Agreement (ALSA)”.

64. Like the previous two grounds, this ground depends upon the success of ground 1. The question of whether the Addendum extinguished any claim which Vision had against Mr Amjad would only arise for determination if it were held that the LSA created such a claim. As ground 1 has no prospect of success, this ground, like the two preceding grounds, would never be considered by an Appellate Court.

65. In any event, as with ground 2, the Trial Judge was plainly correct to hold that the Addendum materially altered the rights and obligations pertaining to any guarantee given by Mr Amjad through the LSA with the result that his express consent to the alteration of those rights and obligations was necessary. There is no reference to any obligation on the part of Mr Amjad in the Addendum and therefore no basis upon which he could be held to have consented to the alteration of any rights and obligations imposed upon him by the LSA.

Other compelling reason

66. Vision contends that there is some other compelling reason why the appeal should be heard, being the clarification of UAE Law with respect to:

67. It will be apparent from the reasons already given that none of these questions would arise if permission to appeal were granted. To the contrary, the appeal would fail on the facts, and in particular the fact that the LSA is incapable of being construed as conferring any rights upon Vision as against Mr Amjad.

Conclusion

68. As none of the grounds of appeal has any prospect of success and there is no other compelling reason why permission should be granted, the Renewed Application must be dismissed with costs.