December 31, 2024 court of first instance - Orders
Claim No: CFI 057/2024
IN THE DUBAI INTERNATIONAL FINANCIALCENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
SIG MIDDLE EAST LLC
Claimant
and
PERFECT BUILDING MATERIALS LLC
Defendant
ORDER WITH REASONS OF JUSTICE RENE LE MIERE
UPON the Claimant’s Part 8 Claim Form and Particulars of Claim dated 15 August 2024 (the “Claim” or “Part 8 Claim”)
AND UPON the Defendants’ Acknowledgement of Service dated 5 September 2024
AND UPON hearing Counsel for the Claimant and Counsel for the Defendant in a hearing held before Justice Rene Le Miere on 30 December 2024 (the “Hearing”)
IT IS HEREBY ORDERED THAT:
1. The Defendant shall file its evidence by no later than 4pm (GST) on 13 January 2025.
2. The Claimant shall file its evidence in reply by no later than 4pm (GST) on 20 January 2025.
3. A witness who has given written evidence should attend the next hearing for crossexamination unless the parties agree otherwise.
4. A further hearing shall be listed on 27 January 2025.
5. The costs of the Hearing shall be reserved.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 31 December 2024
At: 9am
SCHEDULE OF REASONS
1. This Part 8 claim is brought by SIG Middle East LLC (the “Claimant”) against Perfect Building Material LLC (the “Defendant”). Both parties are both registered in the United Arab Emirates.
2. The conflict arises from a series of contractual agreements and subsequent breaches by the Defendant. Initially, the parties entered a contract on June 6, 2011, where the Claimant was to supply materials to the Defendant, who failed to make the agreed payments, resulting in an outstanding amount of AED 4,141,254.76. To address this, a First Settlement Agreement was reached on 21 July 2019, reducing the amount to AED 2,441,254.00, with the Claimant waiving part of the debt to maintain good relations. However, the Defendant breached this agreement by making only partial payments.
3. In response to these breaches, the parties negotiated a Final Settlement Agreement for AED 1,200,000.00 on 20 April 2022. The agreement included a structured payment plan secured by six postdated cheques.
4. The Defendant again failed to adhere to the payment schedule, leading to further breaches. The Claimant seeks enforcement of the penalty clause stipulated in the Final Settlement Agreement, which imposes a daily penalty of AED 3,000 for delayed payments.
5. The Claimant has filed the claim under Part 8 of the Rules of the DIFC Courts (“RDC”), seeking a decision on the outstanding payments and penalties, stating that there are no substantial factual disputes.
6. The Defendant submits that the Claim should not have been brought as a Part 8 Claim because there is a substantial dispute of fact, and the claim should be dismissed.
7. The Claim was heard on 30 December 2024 (the “Hearing”).
8. For the reasons which follow, the Court will give directions as follows:
(a) The Defendant will file any evidence opposing the Claim on or before 13 January 2025.
(b) The Claimant will file any evidence in reply on or before 20 January 2025.
(c) The Court will hear the Claim on 27 January 2025.
(d) A witness who has given written evidence should attend the next hearing for crossexamination unless the parties agree otherwise.
(e) The costs of the Hearing will be reserved.
The claim
9. The Final Settlement Agreement establishes the jurisdiction of the DIFC Courts to hear the Claim. It provides that any dispute arising out of or in connection with the contract shall be subject to the jurisdiction of the DIFC Courts.
10. The Claimant maintains that the Claim is properly brought as a Part 8 Claim, there is no substantial dispute of fact, and judgment should be entered for the Claimant.
Defendant’s position
11. The Defendant filed an acknowledgement of service on 5 September 2024 and a document dated 4 September 2024 entitled Statement of Reasons to Dismiss the Part 8 Claim (Statement of Reasons).
12. The Statement of Reasons submits, amongst other things, that the Part 8 Claim may be dismissed because of a substantial dispute of fact. The disputes of fact include:
(a) The Defendant has complied with its contractual obligations to the satisfaction of the Claimant.
(b) The parties have mutually agreed on different dates and payment methods following the Final Settlement Agreement.
13. At the Hearing, counsel for the Defendant, Mr Nabeel, submitted that the parties had orally agreed on different dates and payment methods, and after the Defendant had paid the Claimant the settlement amounts in accordance with the varied dates and payment methods, the owners of the Defendant and the owners of the Claimant orally agreed that all payment obligations of the Defendant to the Claimant had been fulfilled and no further amounts, whether penalties or otherwise, were owed by the Defendant to the Claimant.
14. Counsel for the Claimant submitted that the Claimant had not agreed to waive the penalties due under the Final Settlement Agreement.
Part 8
15. RDC 8.17 provides that where the defendant contends that the Part 8 procedure should not be used because there is a substantial dispute of fact, he must state his reasons when he files his acknowledgment of service. If the statement of reasons includes matters of evidence, it should be verified by a statement of truth.
16. RDC 8.18 provides that when the court receives an acknowledgement of service and any written evidence, it will give directions on the future management of the case.
17. If the Defendant alleges that the parties agreed to vary the payment dates and methods and to discharge the Defendant from payment of penalties or other obligations under the Final Settlement Agreement, the evidence must condescend to the details of conversations or email communications alleged to constitute the agreement.
18. The Defendant’s evidence must include detailed descriptions of the oral conversations or other communications alleged to constitute the variation agreement.
19. The Statement of Reasons stated that there is a substantial dispute of fact and the Defendant’s reasons. It did not include evidence but only conclusory statements that the alleged variation agreements had been made between the Defendant and the Claimant, verified by a statement of truth.
20. The Claimant asserts that the Defendant has avoided payment obligations and that the case should be resolved expeditiously.
21. The Defendant should be allowed to file any witness statement or other evidence supporting its case in opposition to the Claimant’s claim.
22. To ensure that the resolution of the claim is not delayed any more than is necessary, the Defendant must file its evidence within 14 days of the Hearing, that is, by 13 January 2025. The Claimant will have 7 days, that is, until 20 January 2025, to put on evidence in reply. The Court will hear the Claim on 27 January 2025. A witness who has given written evidence should attend the hearing for cross-examination unless the parties agree otherwise.
