Claim No: CFI 057/2024

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

SIG MIDDLE EAST LLC

Claimant

and

PERFECT BUILDING MATERIALS LLC

Defendant

ORDER WITH REASONS OF H.E. JUSTICE RENE LE MIERE

UPON the Part 8 Claim Form filed on 15 August 2024 (the “Claim”)

AND UPON the Claimant’s Application No. CFI-057-2024/1 dated 15 January 2025 seeking to exclude the Defendant’s evidence (the “Application”)

AND UPON the Order with Reasons of H.E. Justice Rene Le Miere dated 29 May 2025, dismissing the Application and ordering that the Claimant is the successful party on its Claim (the “Order”)

AND UPON the Defendant’s Appeal Notice dated 19 June 2025 seeking to appeal the Order (the “PTA Application”)

AND UPON the Claimant’s submissions in opposition to the PTA Application dated 14 July 2025

IT IS HEREBY ORDERED THAT:

1. The PTA Application is dismissed.

2. The Defendant must pay the Claimant’s costs of the PTA Application on the standard basis to be assessed if not agreed.

Issued by:
Hayley Norton
Assistant Registrar
Date of issue: 6 August 2025
At: 10am

Summary

1. The Claimant, SIG Middle East LLC, brought this claim against the Defendant, Perfect Building Materials LLC, under Part 8 of the Rules of the DIFC Courts due to the Defendant's failure to adhere to a payment schedule outlined in a Final Settlement Agreement dated 20 April 2022.

2. The Claimant sought enforcement of a penalty clause in the agreement, which imposed a daily penalty of AED 3,000 for late payments, totalling AED 2,841,000 in penalties.

3. The Defendant raised several defences, including procedural impropriety, asserting that the use of Part 8 was inappropriate due to substantial factual disputes, as well as substantive defences such as discharge of obligations, waiver, estoppel, and abuse of process.

4. The Court ruled in favour of the Claimant, finding that the Defendant breached the Final Settlement Agreement by failing to make timely payments and was liable for the penalties. The penalty clause was enforceable, and the Defendant's defences were rejected.

5. The Defendant has applied for permission to appeal on five grounds, including substituted performance, waiver, procedural impropriety, misapplication of causation principles, and reliance on unverified evidence.

6. For the reasons below, the Court refuses permission to appeal on all grounds, finding that there is no real prospect of success or a compelling reason for the appeal to be heard. The Defendant's arguments are re-arguments of issues already determined, and the Court's findings were supported by evidence and legal principles.

7. The Court will order:

The Claimant’s Claim

8. The claim arose from the Defendant’s failure to adhere to the payment schedule set out in a Final Settlement Agreement dated 20 April 2022, which restructured and reduced the originally outstanding debt between the parties. Specifically, the Claimant sought enforcement of a penalty clause within the Final Settlement Agreement, which stipulates a daily penalty of AED 3,000 for late payments due under the agreement. The Claimant sought a judgment requiring the Defendant to pay the accrued contractual penalties for delays in payment, as calculated under the penalty provision of the Final Settlement Agreement.

9. The specific relief sought by the Claimant was payment of AED 2,841,000, representing the total penalties accrued for late payments as stipulated by the penalty clause in the Final Settlement Agreement. The Claimant did not pursue any claim for principal amounts (which were settled under the Final Settlement Agreement), but solely for penalties due to delay.

10. The legal basis of the claim was the express penalty clause in the Final Settlement Agreement (AED 3,000 per day for each day of delay from the due date until the payment is made).

11. The Claimant filed the claim by Part 8 procedure, on the basis that there was no substantial dispute of fact.

Defendant's Defences or Answers to the Claim

12. The Defendant raised several defences and answers to the claim, which are outlined below.

13. Procedural defence - inappropriate use of Part 8 claim: The Defendant argued that the Claimant should not have commenced the proceedings by a Part 8 Claim Form, contending that there was a substantial dispute of fact and, therefore, the case should be dismissed or transferred to a procedure more appropriate for determining disputed facts.

14. Substantive defences - discharge and variation of contractual obligations:

15. Legal defences - substituted performance, accord and satisfaction:

16. Defence of waiver:

(a) The Defendant contended that by agreeing to revised payment dates and methods, the Claimant had waived its right to claim damages for delay, including penalties, and had waived strict compliance with the original terms.

17. Estoppel and estoppel by convention:

18. Abuse of process / retaliatory motive:

(a) The Defendant argued that the claim was brought as an act of revenge or to disrupt the Defendant's business operations, in light of a demand for a personal payment, thereby constituting an abuse of process.

19. Factual disputes identified by Defendant:

(a) The Defendant identified as factual disputes: (1) whether the Defendant had complied with all contractual obligations to the satisfaction of the Claimant; and (2) whether the parties had mutually agreed, after the Final Settlement Agreement, on different dates and methods for payment.

Reasons for judgment

20. The Court found the Claimant had established its case and rejected the Defendant’s defences and their supporting assertions as follows.

21. Defendant’s breach of settlement agreements: The Defendant breached the Final Settlement Agreement by failing to make payments on the required dates and was liable for the contractual penalty for such delay.

22. Enforceability of penalty clause: The penalty clause, which imposes a daily fine of AED 3,000 for delay, was enforceable. The Defendant must pay AED 2,841,000 as a penalty for the delayed payments, calculated in accordance with the contract’s schedule

23. Defendant’s defences (oral modification, waiver, etc.): The Court rejected all the Defendant’s defences, finding no agreement or conduct by the Claimant that constituted a modification, waiver, estoppel or substituted performance sufficient to defeat the contractual terms or penalties. The Claimant did not accept the delayed payments as a substitute, nor did it waive the penalties.

24. Substituted performance/accord and satisfaction: The Court found no evidence of valid substituted performance or accord and satisfaction; the Claimant did not accept alternative performance in full discharge of the original obligations and penalties.

25. Defendant’s ‘retaliation/abuse of process’ argument: The Court rejected the argument that the claim was retaliatory or an abuse of process, finding no evidence to support this allegation and concluding that the motive alleged was not relevant to the enforcement of the contract.

26. Suitability of Part 8 procedure: The claim was suitable for the Part 8 procedure; the factual disputes raised by the Defendant were not substantial and were not substantiated by evidence. The Court found in favour of the Claimant without the need to convert to Part 7.

The Order

27. The Court ordered the Defendant to pay the Claimant the amount of AED 2,841,000 (the “Order”).

Permission to appeal application

28. In its Notice of Appeal, the Defendant seeks permission to appeal against the Order dated 29 May 2025 on five grounds as follows.

29. Ground1 Substituted Performance and Discharge (Articles 100 & 103, DIFC Contract Law 2004): The Defendant submits that the Court failed to properly consider its defence that the Claimant accepted substituted performance—namely, letters of credit, postponed cheques, and restructured payments—confirmed by WhatsApp communications and the return of cheques. The Defendant argues that such acceptance discharged the original contractual obligations, including time-based penalty provisions, pursuant to Articles 100 (substituted performance) and 103 (accord). The Defendant says that the Court erred in its application of DIFC Contract Law and the UNIDROIT Principles, which underpin it.

30. Ground 2 Waiver, Estoppel, and Acceptance by Conduct (Article 31, DIFC Contract Law): The Defendant argues that the Claimant’s conduct—specifically, accepting replacement cheques, initiating letters of credit processes, and accommodating delays—amounted to a waiver of strict compliance or resulted in estoppel under Article 31. The Defendant claims that the Court failed to consider the legal consequences of such conduct.

31. Ground 3 Procedural Impropriety – Misuse of Part 8 Procedure (RDC 8.1 and 8.2): The Defendant submits that the Court erred in proceeding under Part 8 of the RDC, which is appropriate only where there is no substantial dispute of fact. The Defendant points to the Claimant’s own pleadings, which included a disputed principal sum (AED 877.07), and identifies several unresolved factual issues, including:

The Defendant argues that these matters required evidentiary review and cross- examination, rendering the use of Part 8 inappropriate and procedurally irregular.

32. Ground 4 Misapplication of Causation Principles: The Defendant asserts that the Court wrongly attributed all delay to the Defendant, disregarding communications (including WhatsApp records) indicating that the Claimant contributed to delays, particularly in submitting documentation for letters of credit processing. The Defendant argues that the penalty calculation failed to account for this contributory conduct, resulting in an excessive and unjust award.

33. Ground 5 Reliance on Unverified Evidence: The Defendant challenges the Court’s reliance on a penalty table submitted by the Claimant, which formed the basis for awarding AED 2,841,000. The Defendant submits that this table was not subject to independent expert assessment, scrutiny of actual dates and causation, or cross- examination. The Defendant says that the absence of evidentiary verification renders the award unreliable.

Criteria for granting permission to appeal

34. Permission to appeal will be granted only if the Court is satisfied that:

35. These criteria are set out in RDC 44.19, which follows the approach adopted in many common law jurisdictions. The term "real prospect of success" means that the appeal must be realistic rather than fanciful. It does not require the applicant to show that success is more likely than not, but rather that there is a genuine and arguable basis for the appeal that could reasonably result in a different outcome if heard.

36. The Defendant submits that the grounds of appeal advanced raise substantive and arguable issues of law and fact, including the proper application of Articles 100, 103, and 31 of the DIFC Contract Law, the legal effect of substituted performance and waiver by conduct, and the procedural appropriateness of proceeding under Part 8 in the presence of unresolved factual disputes. The Defendant claims that the Court of First Instance relied on unverified evidence and failed to properly assess causation, wrongly attributing all delay to the Defendant despite communications indicating contributory conduct by the Claimant.

37. I will examine each proposed ground of appeal.

Ground1 Substituted Performance and Discharge (Articles 100 & 103, DIFC Contract Law 2004)

38. The Defendant contends that the Court erred in rejecting the defence of substituted performance and discharge. It argues that the Claimant repeatedly accepted alternative forms of payment—such as letters of credit, postponed and replaced cheques, and deferred payments—supported by WhatsApp communications and conduct, which should have been construed as substituted performance under Article 100 or accord and satisfaction under Article 103, thereby discharging the original obligations and rendering delay penalties inapplicable.

39. The Defendant further relies on a WhatsApp message in which the Claimant stated it "would not disturb the Defendant for some time" following cheque encashment, asserting this amounted to a representation of waiver or estoppel under Article 31. Supporting authorities from DIFC, UK, Singapore, and Australia are cited to establish that acceptance of alternative performance and waiver by conduct are legally recognised, even in the presence of no oral modification clauses.

40. However, the Judgment addressed these arguments in detail, finding that the Claimant consistently insisted on timely payment and enforcement of penalties, and did not accept alternative performance as discharge. The Court cited multiple WhatsApp messages evidencing the Claimant’s objections to delay and reaffirmation of the original agreement. During cross-examination, the Defendant’s witness admitted that there was no agreement to waive penalties or vary payment terms.

41. The Court also considered the No Oral Modification clause and relevant case law, concluding that the Claimant’s conduct did not preclude reliance on the written modification requirement. The Court found no evidence of reliance or representation sufficient to establish waiver, estoppel, or discharge.

42. Accordingly, the Judgment made reasoned findings against the factual and legal prerequisites for substituted performance or discharge. The Defendant’s application does not identify evidence or legal arguments that have not already been considered. This ground does not meet the threshold of a real prospect of success on appeal.

Ground 2 Waiver, Estoppel, and Acceptance by Conduct (Article 31, DIFC Contract Law)

43. The Defendant seeks permission to appeal on the basis that the trial Judge erred in rejecting its case on waiver, estoppel, and acceptance by conduct, notwithstanding the No Oral Modification clause in the Final Settlement Agreement and the operation of Article 31 of the DIFC Contract Law.

44. Article 31 provides that a contract in writing that contains a clause requiring any modification or termination by agreement to be in writing may not be modified or terminated otherwise. However, a party may be precluded by its conduct from asserting such a clause to the extent that the other party has acted in reliance on that conduct. The Court correctly identified this provision as analogous to estoppel and held that the Defendant bore the burden of proving:

45. The Judgment contains detailed and reasoned findings of fact, including:

46. The Defendant now contends that the Court failed to properly evaluate the Claimant’s conduct—such as accepting late cheques, issuing letters of credit, and sending messages such as “I will not disturb you for some time”—as indicative of waiver or estoppel. The Defendant cited authorities including MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, Charles Lim Teng Siang v Hong Choon Hau [2021] SGCA 43, and GEC Marconi Systems Pty Ltd v BHP IT Pty Ltd (2003) 128 FCR 1 in support of the proposition that practical acceptance and representations by conduct may suffice, even in the presence of a No Oral Modification clause.

47. However, the Defendant does not identify any evidence that was overlooked or misunderstood. Instead, it seeks to reargue the legal significance of evidence that has already been considered. The Court made clear and comprehensive findings that the Claimant did not make any clear and unequivocal representation, nor did the Defendant rely on any such conduct to its detriment. The Court expressly found that the cited message was a temporary expression of forbearance, not a waiver of rights.

48. The Court gave the Defendant a proper opportunity to present evidence and address the WhatsApp correspondence. The authorities relied upon by the Defendant require both unequivocal representation and reliance—neither of which was found on the facts.

49. The Court applied the correct legal test under Article 31 and made detailed factual findings adverse to the Defendant’s case. The Defendant’s proposed ground amounts to a re-argument of issues already determined and does not disclose any real prospect of success on appeal.

50. Permission to appeal on this ground is refused.

Ground 3 Procedural Impropriety – Misuse of Part 8 Procedure (RDC 8.1 and 8.2)

51. The Defendant contends that the claim was improperly brought under Part 8 of the RDC, asserting that substantial disputes of fact—particularly concerning variation, waiver, causation, and debt calculation—rendered the matter unsuitable for determination without a full trial. The Defendant further alleges that the withdrawal of the AED 877.07 component of the claim reflects a substantive dispute, and that the Judge resolved contested issues without full cross-examination, resulting in procedural unfairness.

52. The procedural record and the Judgment do not support these assertions. The Defendant was given multiple opportunities to present evidence, including the late filing of a witness statement and re-examining its witness (Mr. Charles Abi Abboud) at the adjourned hearing. The AED 877.07 claim was explicitly withdrawn on the record and was no longer in issue at the time of the decision.

53. The Defendant’s claim that the Claimant was not cross-examined is not supported by the Judgment, which records the oral proceedings and the opportunity for both parties to be heard. The Defendant was present at both hearings but did not apply to cross- examine the Claimant’s witnesses, nor did it provide credible evidence to support the alleged disputes.

54. The Judgment outlines the procedural history in detail, including the Defendant’s initial objection to the use of Part 8 and the Court’s directions for evidentiary steps. The Court found that the disputes raised were not substantial, lacked support from the evidence, and did not justify transfer to Part 7. The Court considered the WhatsApp correspondence, written witness evidence, and oral testimony, and concluded that no genuine factual controversy remained.

55. The Defendant’s arguments on appeal amount to a recharacterisation of issues already ventilated and resolved. The Judgment reflects adherence to procedural fairness, with the Defendant given ample opportunity to adduce and challenge evidence. The Court’s determination that the matter was suitable for Part 8 was reasoned and consistent with the RDC.

56. Permission to appeal on this ground is refused.

Ground 4 Misapplication of Causation Principles

57. The Defendant requests permission to appeal on the grounds that the Court erred in attributing all delay-related penalties to the Defendant without adequately considering the Claimant’s alleged contributory conduct—particularly regarding documentation for letters of credit. The Defendant argues that this led to an excessive and unjust penalty and a misapplication of causation principles.

58. The Judgment and the evidentiary record do not support this ground. The Court made clear and reasoned findings that the Defendant failed to make payments in accordance with the Final Settlement Agreement. The agreed payment dates and bank records confirmed the delays, and the Court found no evidence of any agreed variation or waiver of the payment terms. The Court reviewed the WhatsApp correspondence in detail and found it did not support the Defendant’s assertions.

59. The Judgment expressly rejected the contention that the Claimant caused or contributed to the delays. The Court found that the Claimant consistently pressed for timely payment, issued warnings regarding penalties, and did not engage in conduct that could reasonably be interpreted as accepting late performance or waiving rights. The Defendant’s witness confirmed under cross-examination that no alternative payment dates were agreed.

60. The Defendant’s argument that the Claimant delayed letters of credit documentation is not substantiated by specific evidence, nor does the application identify any material finding or legal principle that was overlooked or misapplied. The Court’s findings on causation were based on a review of the communications, witness evidence, and contractual terms.

61. The Defendant’s submissions amount to a disagreement with the Court’s factual conclusions, not a viable ground of appeal. No new evidence or legal argument has been advanced that would justify appellate intervention.

62. Permission to appeal on this ground is refused.

Ground 5 Reliance on Unverified Evidence

63. The Defendant argues that the Court erred in awarding delay penalties based on a table created by the Claimant, claiming that it was “self-generated,” lacked independent verification, and was not supported by documentary evidence. The Defendant contends that the penalty was based on untested calculations and that the Court did not properly examine the underlying data, leading to an unfair outcome.

64. This ground is without merit. The Judgment expressly addresses the basis for the penalty calculation, noting that the table summarised payment due dates, actual payment dates, days of delay, and daily penalties as stipulated in the Final Settlement Agreement. The Court did not treat the table as stand-alone evidence, but rather as a demonstrative summary underpinned by primary documents—namely, the Final Settlement Agreement and bank statements that verified the dates on which payments were credited.

65. The Judgment confirms:

“The payment due dates are in accordance with the Final Settlement Agreement. The Claimant’s bank statement verifies the dates of payments credited to the Claimant’s bank account.”

66. Both parties were afforded the opportunity to file evidence and cross-examine witnesses. The Defendant did not object to the table’s use at trial, nor did it demonstrate that the underlying documents were unavailable or untested. The Claimant’s submissions further clarify that the same calculations were set out in the Particulars of Claim and supported by contemporaneous exhibits. The Defendant’s witness conceded under cross-examination that no alternative payment dates were agreed

67. The Defendant’s assertion that the penalty table was uncorroborated is contradicted by the Judgment’s references to the supporting evidence. No specific evidentiary omission or procedural unfairness has been identified. The table was not the sole basis for the penalty award; it served as a summary tool used in conjunction with verified contractual and financial records.

68. Accordingly, Ground 5 does not disclose any material error of law or fact, nor any procedural irregularity. The Court’s reliance on the penalty table was reasoned, supported by admissible evidence, and subject to adversarial testing.

69. Permission to appeal on this ground is refused.

No real prospect of success

70. For the reasons stated, none of the Defendant’s proposed grounds of appeal has a real prospect of success.

No other compelling reason appeal should be heard

71. The Defendant sets out several allegations which, if accepted at face value, are capable of constituting “compelling reasons”—specifically, alleged serious procedural irregularity. These include: the use of an inappropriate summary procedure despite live factual disputes, denial of cross-examination, adjudication based on untested evidence, and a portion of the claim not addressed in the Judgment. Each such allegation is presented as a flaw in fair process or natural justice rather than simply a dispute on the merits.

72. However, for the reasons already stated, none of those assertions is supported by the judgment or procedural record.

73. There is no other compelling reason the appeal should be heard.

Conclusion

74. The appeal would have no real prospect of success. There is no other compelling reason why the appeal should be heard.

75. The Defendant’s PTA Application must be dismissed.

76. There is no reason to depart from the usual order as to costs, that the unsuccessful party pay the successful party’s costs. The Defendant must pay the Claimant’s costs of the PTA Application on the standard basis to be assessed if not agreed.