Claim No. CFI 055/2025

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF APPEAL

BETWEEN

GANESAN MUTHIAH

Claimant/Respondent

and

ABDUL RAHMAN MOHAMMAD

Defendant/Applicant

REASONS OF H.E. JUSTICE SHAMLAN AL SAWALEHI FOR PARAGRAPHS 8 AND 9 OF THE ORDER DATED 19 AUGUST 2025

Introduction

1. These are my reasons for paragraphs 8 and 9 of the Order dated 19 August 2025 (the “Order”). Paragraphs 1 to 7 of the Order reflect matters agreed between the parties. Paragraphs 8 and 9 determined contested issues as to (i) costs, (ii) the jurisdiction of this Court, and (iii) whether the Claim Form should be struck out.

Costs

2. In the hearing, the Defendant emphasised that there are four live issues only before the Court, namely costs, inquiry as to damages, validity of service, and strike-out.

3. The Claimant had proposed that the Default Judgment and Freezing Order be set aside with no order as to costs. The Defendant, by contrast, sought his costs on the indemnity basis and produced a detailed schedule.

4. The Claimant resisted submitting that costs should be in the case or on the standard basis only. In circumstances where the Claimant pressed for relief based on a defective Certificate of Service, obtained Default Judgment without jurisdiction, and sought continuation of a Freezing Order founded on that irregular judgment, I considered the Claimant’s proposal inappropriate.

5. Pursuant to Rule 38.7 and 38.8 of the Rules of the DIFC Courts (“RDC”), the general rule is that costs follow the event. There was no basis for departing from that rule. I therefore awarded the Defendant his costs of and incidental to these proceedings, including all applications addressed at the hearing.

6. Pursuant to RDC 38.30, I carried out an immediate assessment of those costs. Having reviewed the Defendant’s Statement of Costs, which was before the Court at the hearing. I was satisfied that the sum of AED 1,059,592.10 as reasonably and proportionately incurred and reasonable in amount.

7. The Claimant retains the right under RDC 40.14 to dispute any item in the Statement of Costs by serving Points of Dispute within 21 days of service of the Notice of Commencement. However, in exercising my discretion under 4.2, I allow this to be considered 21 days from the date of issuing the Reasons.

Jurisdiction

8. The Claimant relied on clause 28.2 of the Company’s Amended Articles of Association, which provided for disputes “arising from or connected with” the Articles to fall within the exclusive jurisdiction of the DIFC Courts. The Claimant submitted that this clause constituted an irrevocable submission to jurisdiction by both shareholders.

9. I was not persuaded that the pleaded claims, which sought salary payments, dividends, and proceeds of share sales, arose from or connected with the Articles. Properly analysed, these were contractual, employment, and shareholder disputes. A jurisdiction clause in Articles cannot create jurisdiction beyond the gateways prescribed by Article 5(A) of Dubai Law No. 12 of 2004 (as amended). As the substance of the claim did not fall within those gateways, the DIFC Courts lacked jurisdiction.

10. I also noted the force of the Defendant’s submission that the Claimant had pursued three sets of proceedings in the Dubai Courts on the same matters. This reinforced my conclusion that it would be inappropriate for this Court to exercise jurisdiction.

11. In light of these findings, I declared under RDC Part 12 that this Court had no jurisdiction, or should not have exercised its jurisdiction, to grant the Default Judgment or the Freezing Order.

Claim Form

12. The Defendant’s Set Aside Application challenged the validity of service of the Claim Form and the resulting Default Judgment. The Defendant’s Vacation Application sought discharge of the Freezing Order, a declaration that the Court lacked jurisdiction, and the strike-out of the Claim Form under RDC 4.16.

13. The Default Judgment was obtained on 14 July 2025 by reliance on a Certificate of Service dated 13 June 2025. At the hearing on 14 August 2025, I was satisfied that no valid service of the Claim Form had in fact taken place. The Certificate of Service was of no effect. Under RDC 14.1, the Default Judgment had to be set aside.

14. The Claimant argued that service was valid under RDC 9.19, on the basis that the Defendant was a “proprietor” who could be served at the Company’s business address. That submission was not persuasive. The evidence demonstrated that the Claim Form had not been served in accordance with the rules, and the assertion that it had been “posted under the door” did not amount to valid service on the Defendant.

15. The Defendant further showed that the Claimant had initially represented to the Court that service had been effected personally, whereas the Certificate of Service in fact stated delivery at a “permitted place”. This inconsistency undermined the reliability of the Claimant’s position. The Defendant also pointed to non-compliance with RDC 9.29, since no certified Arabic translation accompanied service in Dubai outside the DIFC. I accepted those points.

Conclusion

16. For these reasons, I made the orders set out at paragraphs 8 and 9 of the Order: awarding the Defendant his costs on an immediately assessed basis in the sum of AED 1,059,592.10 and declaring that this Court lacked jurisdiction and striking out the Claim Form.

Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 10 September 2025
At: 10am