Claim No: CFI 071/2025

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

AGRO RESOURCE TARIM GIDA İÇ VE DIŞ TİCARET A.Ş.

Claimant

and

PROMISING INTERNATIONAL TRADING CO. DMCC

Defendant

ORDER WITH REASONS OF H.E. JUSTICE ROGERT STEWART

UPON the Claimant’s Part 7 Claim Form dated 10 July 2025 (the “Claim”)

AND UPON the Order with Reasons of H.E. Justice Nassir Al Nasser dated 18 September 2025 dismissing the Defendant’ application for an extension of time until 30 November 2025 to contest jurisdiction and requiring the Defendant to file an application to contest jurisdiction no later than 7 days from the date of the Order

AND UPON the Defendant’s Application No. CFI-071-2025/2 dated 25 September 2025 seeking to dismiss or stay the Claim (the “Defendant’s Application”) supported by the first witness statement of Amal Niyas and the first witness statement of Daleep Kumar Singh

AND UPON the Claimant’s Objection to the Defendant’s Application dated 22 October 2025 supported by the witness statement of Aleksey Novoselkiky

AND UPON the second witness statement of Daleep Kumar Singh dated 5 November 2025

AND UPON considering the skeleton arguments for each party

AND UPON considering the initial statements of costs for each party

AND UPON hearing Counsel for the Claimant and Counsel for the Defendant at a hearing held on 4 December 2025 before H.E. Justice Roger Stewart

AND UPON considering the Defendant’s note dated 9 December 2025 together with a breakdown of English solicitor’s fees

AND UPON considering the Claimant’s supplemental written submissions dated 9 December 2025

AND UPON considering the Claimant’s submissions responding to the Defendant’s costs schedule dated 12 December 2024

AND UPON considering the Defendant’s response dated 12 December 2025 to the Claimant’s supplemental written submissions dated 9 December 2025 together with further costs claimed

AND UPON considering the Rules of the DIFC Courts (“RDC”)

IT IS HEREBY ORDERED THAT:

1. The Claim is stayed.

2. The Claimant is to pay the Defendant the costs of the Defendant’s Application assessed at AED 300,000 within 14 days from today.

Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 30 December 2025
At: 10am

SCHEDULE OF REASONS

Introduction

1. The Defendant’s Application dated 25 September 2025 is made pursuant to Rule 12 of the Rules of the DIFC Courts (“RDC”) and Article 13(1) of the DIFC Arbitration Law, DIFC Law No 1 of 2008, to dismiss or stay the action on the grounds that it is the subject of an Arbitration Agreement.

2. The central issue is whether, as contended by the Defendant, the parties agreed to submit this dispute to GAFTA arbitration or, as contended by the Claimant, the parties agreed to submit the dispute for decision by the DIFC Courts. A subsidiary issue is whether, if I consider that the parties did agree to submit the dispute to GAFTA arbitration, the action should be dismissed or stayed.

3. The parties agreed at the hearing on 4 December that costs should follow the event. They have filed various costs submissions which are, accordingly, considered.

The Facts

4. Both parties are grain traders. The Claimant is incorporated in Turkey whilst the Defendant is a DMCC licensed entity in Dubai.

5. By an export contract No. 2379-AR/VCH-240625 dated 3 June 2024 (the “contract”), the terms of which are more fully considered below, the Claimant agreed to sell 30,000 metric tonnes (+/- 10% at buyer’s option) of Russian Milling Wheat (2023 crop) to the Defendant for a price of USD 6,875,000. The Claimant alleges that the Defendant has failed to pay the full agreed price with a balance of USD 2,959,920 outstanding.

6. The Claimant submitted a mediation request to the DMCC Disputes Centre on 2 April 2025 but the same was not considered, apparently because the Claimant is located outside the DIFC. Thereafter, on the following day, the Claimant proposed an alternative mediation.

7. The Claimant issued its claim form on 10 July 2025. The Defendant filed an acknowledgment of service and then, within 14 days sought an extension of time until 30 November 2025 for its jurisdictional challenge pending a mediation.

8. The application was determined by the Order with reasons of H.E. Justice Nassir Al Nasser dated 18 September 2025 which dismissed the application and required the application to contest jurisdiction to be made within 7 days which was duly done.

9. Thereafter, the parties filed evidence and made submissions prior to a hearing before me on 4 December 2025.

The Contract

10. The following are relevant express terms of the contract:

11. The GAFTA Rules No 125 materially provide:

12. The GAFTA Contract No 49 provides:

The Applicable DIFC Law

13. There is no dispute as to the relevant provisions of the DIFC Arbitration Law:

“(1) If an action is brought before the DIFC Court in a matter which is the subject of an Arbitration Agreement, the DIFC Court shall, if a party so requests not later than when submitting his first statement on the substance of the dispute, dismiss or stay such action unless it finds that the Arbitration Agreement is null and void, inoperative or incapable of being performed.”

14. RDC Part 12 permits a Defendant to apply to the Court for an order declaring that the Court has no jurisdiction and further provides that such an application must be filed within 14 day after the filing of an acknowledgement of service.

The Defendant’s Submissions

15. The Defendant submits:

The Claimant’s Submissions

16. The Claimant submits:

Discussion

17. I do not consider that there is any merit in the Claimant’s procedural point that no challenge to jurisdiction was entered within 14 days of the acknowledgment of service as required by the RDC with the consequence that there was a deemed submission to the jurisdiction of the Courts of the DIFC.

18. RDC 4.2(1) permits time to be extended by the Court for any procedural step. The application for extension of time for submission of a jurisdictional challenge was issued within the 14 day period permitted by the Rules and the Order with reasons dated 18 September revised the period within which a challenge could be made. That revised period was complied with by the Defendant.

19. In such circumstances, I consider it plain that the Defendant cannot be said to have been deemed to submit to the jurisdiction of the DIFC Courts. Not only did it make it plain that it was not submitting, but the Court permitted it extra time to make its application. Any other conclusion would be to allow an inflexible deadline which would be likely to work injustice. Accordingly, I proceed to determine this application on its merits.

20. There is no doubt but that:

21. That does not, however, mean that just because the clauses, if read by themselves, would point to opposite results, that they are in conflict. The parties are, correctly, agreed that the contract is subject to English law. English law, like the law of the DIFC, seeks to find the meaning of the parties’ bargain from all of the terms which they have agreed. A particular term, if read by itself, may have one effect but, when read with the other terms which were agreed, may be found to have a quite different effect.

22. The authorities make it clear that the task of a court or tribunal, when seeking to understand the terms of a bargain which parties have made in relation to dispute resolution, just as in relation to any other contentious issue, is to look at all the terms of the bargain. Thus, the ordinary and well known principles applicable to the construction of any contractual provisions apply to what the parties have agreed in relation to dispute resolution: see Melford Capital v Wingfield Digby.¹

23. These contractual principles of interpretation have been summarized in a passage which is frequently cited from the judgment of Popplewell J in The Ocean Neptune²

24. Where dispute resolution provisions contain an arbitration clause or provisions apparently requiring mediation as a pre-condition to either arbitration or mediation or provisions providing for both arbitration and the exclusive jurisdiction of an identified Court, a Court applying English law construction principles will take into account a number of matters.

25. First, it is well established that an arbitration agreement will constitute an agreement which is separate and distinct from the contract in which it is embedded. As was pointed out by Moore-Bick L.J in SulaIamerica CIA Nacional de Seguors S.A v Enesa Engenhari S.A.³ this doctrine of separability ”simply reflects the parties’ presumed intention that their agreed procedure for resolving disputes should remain effective in circumstances that would render the substantive contract ineffective. Its purpose is to give legal effect to that intention, not to insulate the agreement from the substantive contract for all purposes”.

26. Secondly, the existence of a separate arbitration agreement means that there can be a number of possibly different relevant laws to consider including:

27. Thirdly, the existence of the above different laws allows the Court, in appropriate circumstances, to find that contracts providing both for reference to arbitration and for the exclusive jurisdiction of a particular court are reconcilable on the basis that the clause specifying the jurisdiction of the particular court provided for the law of the seat of the arbitration or the proper law of the arbitration or both. This conclusion has been reached in a large number of cases starting with the decision of Steyn J in Paul Smith v H & S International Holding Inc⁵ .

28. Fourthly, although it is always possible that parties will agree that particular types of disputes will be dealt with in particular ways (so as to provide, for example, that a dispute as to quantum will be dealt with differently from one as to liability or that claims in respect of a loan agreement is dealt with in a different forum from wider disputes), the general expectation is that parties, as rational businessmen will intend their disputes are dealt with in a single forum ⁶.

29. Mustill & Boyd at paragraph 3.56, goes so far as to suggest that where there is a conflict “between an arbitration and a jurisdiction clause, the English courts have come to adopt a special rule of contractual interpretation in such situations, which prioritises the arbitration agreement, and confines the scope of the jurisdiction agreement to ancillary issues”.

30. I consider, with respect to the learned authors, that this statement goes too far. The English courts have utilized conventional methods of contract construction to arrive at a conclusion as to what the parties intended. This does, indeed, arrive at the result which is indicated but it does not arise because of a “special rule”. Furthermore, were it to exist, such a “special rule” would have a flawed jurisprudential base. It is true, however, that the application of ordinary rules of construction, in the circumstances which I have sought to describe, will often lead to the outcome where the jurisdiction clause is limited to dealing with ancillary matters whilst the main dispute is determined by arbitration.

31. It should not, of course, be forgotten that parties do not always operate arbitration agreements. Parties may expressly or impliedly agree not to operate them or one party may institute a court action and the other party fail to seek to dismiss or stay the action within the permitted period with the consequences that the party submits to the jurisdiction of the Court to determine the main dispute. As already set out, a party is required to issue an application challenging jurisdiction in the DIFC Courts within 14 days of the Acknowledgement of Service in the absence of an extension of time. In England a party is required to issue an application under section 9 of the Arbitration Act 1996.

32. Fifthly, if a contract provides for mediation (or another form of alternative dispute resolution) as a pre-condition to either arbitration or litigation, that provision will be enforced providing that matters essential to the process do not remain to be agreed – see Cable & Wireless v IBM⁷ and Holloway v Chancery Mead⁸

33. Applying the principles which I have identified above, I consider that there would be no real difficulty in reconciling clauses 14 and 16 had clause 16 referred to the Courts of England rather than the DIFC. This is because, in those circumstances:

34. The difficulty in this case is that the reference to the exclusive jurisdiction of the Courts of Dubai apparently conflicts with the choice of England as the law of the seat of the arbitration. That leads to four possible interpretations:

35. I consider the first option to be an unlikely construction. The fact that the parties decided to operate a mediation appears to have no bearing on whether a dispute should be arbitrated or litigated.

36. In support of its construction, the Claimant sought to rely on the decision of Saville J in Union of India v McDonnell Douglas, [1993] 2 Lloyds Law Rep. 48. In that case, the underlying contract had an Indian jurisdiction clause. The parties provided for arbitration to be conducted in accordance with the procedure set out in the Indian Arbitration Act 1940 but with the seat of the arbitration being London, UK. The Judge reconciled the provisions by finding that the parties intended the internal conduct of the arbitration to be that set out in the Indian Act but the regulation and supervision to be that of the English Court as that of the selected seat.

37. I do not consider this decision assists the Claimant. It is an example of construing the agreed provisions so as to reach a sensible commercial result.

38. The second construction would give primacy to the words actually contained in the directly agreed contract terms but would provide for a direct conflict between the GAFTA rules and the terms of clause 16 in circumstances where the GAFTA rules were clearly incorporated. Furthermore, clause 14 provides that the parties admit to having knowledge of and accept the GAFTA rules. The justification for affording priority to clause 16 is, accordingly, at the most, very slender.

39. The third construction would give no effect at all in relation to an express provision of the contract.

40. The fourth construction is, I consider, supported by clause 15 of the contract which deletes the provisions of the domicile clause of the GAFTA 49 contract. That provision provides for service provisions as well as deemed presence in England. That provision is most relevant to ensuring that parties could be served as well as establishing a close and real connection to England. Its deletion suggests that the parties contemplated enforcement, in particular, being necessary outside of England. Read with the deletion of the domicile clause, clause 16 reinforces the idea that the parties contemplated the necessity of enforcement in Dubai and the DIFC.

41. It is therefore apparent that the parties turned their mind to and considered the above matters. In the circumstance, I consider that if arbitration was inoperable for any reason or the parties chose not to operate it, it was valuable for the parties to choose a jurisdiction where their dispute could be determined. Neither party could object to the jurisdiction of the DIFC Courts except in favour of arbitration (or, in certain circumstances, mediation). Further I consider that the provision grants jurisdiction to the DIFC Courts to declare the dispute arbitrable and, if appropriate, to enforce the Award directly rather than pursuant to the New York convention.

42. In the circumstances, it is the fourth construction which I consider to be correct. It gives effect to the totality of the parties’ bargain and can be seen both to accommodate the parties’ language and to serve a sensible commercial purpose.

43. It follows that the Defendant is entitled to relief under Article 13 of the DIFC Arbitration law.

44. The remaining question is as to whether the action should be dismissed or stayed. I invited the parties to investigate as to whether there was any authority which considered when a dismissal would be appropriate and when a stay. There appears to be no relevant authority.

45. I therefore approach the matter as a matter of principle. In general, an action is dismissed when it is finally determined and there is no possibility of it being revived. By contrast, an action will be stayed when there is at least some prospect of the action being revived.

46. Had there been no prospect of the Courts of the DIFC having any jurisdiction in relation to this matter, I would consider it appropriate to dismiss it. However, in the present case there is the prospect of the action being revived, either because the parties do not operate the agreement or in order to enforce an award.

47. In the circumstances, I consider the correct relief is to grant a stay.

Costs

48. Each party submitted a costs schedule and accepted that costs should follow the event. The Claimant’s total cost schedule amounted to AED 77,000. The Defendant’s initial schedule amounted to AED 550,531.01 of which AED 156,301 represented local counsel’s fees, AED 381,732.01 represented English solicitors’ fees and AED 12,320 was described as “Counsel’s fee for attending the Application Hearing.

49. The English solicitors’ fees were simply described in one line as a disbursement. At the Hearing, I accordingly asked the Defendants to provide:

50. The Defendant duly provided a breakdown of the English solicitors’ fees which showed that the applicable charge out rates for the relevant partner was approximately USD 1,160 per hour and the senior associate approximately AED 895 per hour.

51. The Defendant also sought additional fees as a result of the post hearing matters and, in particular in responding to submissions which went beyond the scope of that permitted by me at the hearing. The total additional amounts sought were AED 22,847 in respect of local fees and AED 40,714.11 in respect of English solicitors fees. The overall total sought by the Defendant accordingly amounts to AED 614,092.12.

52. The Defendant provided a helpful note which:

53. The Claimant:

54. I accept that the DIFC Courts can award costs for overseas lawyers’ work provided that the requirements of need, proportionality and reasonableness are met. The DIFC Courts are operating in an international market and, as a matter of principle, such costs should be recoverable if properly incurred. I consider that a party seeking such costs should provide details similar to those provided for local lawyers so that they can be considered and assessed.

55. In relation to the quantum of fees sought:

56. In the circumstances, I assess the Defendant’s costs recoverable costs at AED 300,000. This represents a substantial discount from the amount sought reflecting the matters set out above and leads to the recovery of the sum which I consider to be necessary, reasonable and proportionate for the work done