Claim No: CFI 073/2024

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

LXT REAL ESTATE BROKER L.L.C

Claimant/Respondent

and

SIR REAL ESTATE L.L.C

Defendant/Appellant

ORDER WITH REASONS OF H.E. JUSTICE ANDREW MORAN

UPON the Order of H.E. Justice Andrew Moran dated 9 January 2026 dismissing the Defendant’s Strike Out Application of 16 December 2024 (the “Order”) and reasons given on 20 January 2026 (the “Reasons”)

AND UPON the Defendant’s Appeal Notice dated 10 February 2026 seeking permission to appeal the Order and Reasons (the “Permission to Appeal Application” or the “Application”)

AND UPON the Parties’ agreement that the Permission to Appeal Application in the Appeal Notice be determined upon the Documents filed in support of the Application and in response thereto

AND UPON the Claimant’s submissions in opposition dated 28 April 2026

AND PURSUANT TO the Rules of the DIFC Courts (the “RDC”)

IT IS HEREBY ORDERED THAT:

1. The Permission to Appeal Application is refused.

2. The Defendant shall pay the Claimant’s costs of the Application in any event

Issued by:
Delvin Sumo
Assistant Registrar
Date of Issue: 19 June 2026
At: 3pm

Introduction

1. By the Order recited above and for the Reasons given, the Court, inter alia, dismissed SIR’s Strike Out Application in relation to LXT’s claim, for additional damages under Article 40(2) of the DIFC Law of Damages and Remedies (DIFC Law No. 7 of 2005) – hereafter simply referred to as Article 40 (2) - in respect of SIR’s alleged breach of the Partnership and Services Agreement executed by the parties on 14 June 2020.

2. By the Permission to Appeal Application, SIR now seeks permission to appeal that decision and refusal to strike out that claim on Grounds contained in a separate document filed with the Application. The short and simple reasons for refusing to strike out that claim are given in paragraphs 105 and 106 of the Reasons.

A preliminary complaint

3. Whilst it does not appear to be a discrete ground of appeal, I deal first with the apparent complaint that I relied on an authority in dismissing the Application, that had not been relied upon by either of the Parties in their respective submissions. That is not entirely correct. Whilst neither party produced the authority itself, I was of course taken to the relevant rules in the so-called “Blue Book” and the comprehensive notes of applicable principles and the authorities they derive from. The high authority (from what is still the apex court of several highly respected Commonwealth and common law jurisdictions) and the guidance (or warning) in it which I heeded and followed, are found in those notes. Parties and their leading counsel should be in no doubt that if I (or probably any Judge) am/is taken to such notes of authorities and principles deriving from them, they may well be known to me or any other Judge; or read if not known and seem to be applicable; and may be relied upon or followed as may be appropriate. In my Reasons, I took the trouble to extract and analyse the principles and explain my approach to dealing with the Strike Out Applications, before explaining at paragraph 75 of the Reasons that:

“Rather than copy the principles, considerations and references to authorities from which they derive verbatim into this judgment, I consider it more helpful to highlight and extract those which have actuated my decisions which follow.”

4. I proceeded to do just that in paragraph 76 of the Reasons. I found the guidance and warning of Lord Collins in the case cited in the Blue Book notes (which I was familiar with), to be both salutary and apt in the circumstances of this important case. This includes for the reason of determining the claim for additional damages on a clear factual basis as would be found, after hearing and seeing all relevant evidence; and incidentally providing authoritative guidance from this Court and, if there is an appeal, from the Court of Appeal, on the legislative intention in Article 40 (2) of the DIFC Law of Damages and Remedies and in what factual circumstances it will apply.

The Rule and relevant principles applied

5. The rule and legal principles governing applications for permission to appeal are clear and not in dispute. They may be taken substantially verbatim from SIR’s skeleton argument as follows:

I have applied the rule, followed the guidance in the authorities and, in determining whether there is a real, meaning a realistic as opposed to a fanciful prospect of success on an appeal, considered whether the Court of Appeal would consider my refusal to strike out the Article 40 (2) claim was wrong in all the circumstances of the case.

6. I have had regard to RDC 44.27 which enables me to consider whether:

7. I have also applied the test on appeal against case management decisions as set out in Fidel v Felicia [2015] DIFC CA 002 (23 November 2015) at [24] (Hwang CJ):

“As a general rule, a case management decision should not be interfered with by an appellate court unless it is satisfied that the judge below had: (a) erred in principle; (b) taken into account irrelevant matters; (c) failed to take into account relevant matters; and/or (d) come to a decision so plainly wrong that it must be regarded as outside the generous ambit of the discretion entrusted to the judge”

which dictum was very recently re-inforced by the decision of the Court of Appeal of 8 June 2026, in the case of Abramenko and Misevich v Igor Chuprin CA 009/2026 under the heading “Appellate Restraint” at paragraphs 23-25.

8. I am satisfied that in deciding as I did, I was exercising my powers of case management, as illustrated by the English decisions referred to by LXT at paragraphs 6 and 7 of its skeleton argument, which is not necessary to cite in this ruling.

The grounds of appeal and opposition

9. The first ground of appeal is that I erred in law in relying on the decision in AK Investment CJSC v Kyrgyz Mobil Telephone Ltd [2012] 1 WLR 1804 to reach the conclusion that I should not decide that Article 40(2) damages were not in principle available for breach of contract claims, on the basis that this was an area of law where there was limited authority and where the facts at trial may be relevant to the determination of the legal issue.

10. The second ground is that I should have decided that damages under Article 40(2) were not available in a claim for breach of contract of the sort pleaded in the Claimant’s own draft Amended Statement of Claim, and in failing to conclude that (1) the basic principle for damages for breach of contract is compensatory, as confirmed in the DIFC Law of Damages and Remedies; and/or (2) ‘exemplary damages’ are not available in DIFC law or at common law for claims for breach of contract (save in very rare or exceptional cases and for modest amounts); and/or (3) Article 21 of the UAE’s Constitution prohibits the deprivation of a person’s private property arbitrarily or except in such circumstances as may be required in the public interest, in accordance with the provisions of Law, and for equitable consideration.

11. These grounds are expanded in the Skeleton Argument, and I have carefully considered all that is advanced in support of them and all of the claims of error on my part in refusing to strike out this claim. It is not necessary for me to summarise them in dealing with this Application.

12. In its skeleton argument opposing the grant of PTA, LXT has analysed SIR’s grounds from its Appeal Notice, the separate Grounds of Appeal document and its Skeleton Argument, as comprising three grounds and addresses them seriatim. In short summary, it contends that refusal to strike out the Article 40 (2) claim was a case management decision and since no error of principle is identified in my approach to making it is identified, there is no real prospect of the Court of Appeal interfering with it. It submits this is a threshold question with an answer that dispenses with the proposed appeal in its entirety.

13. As for the second ground it identifies, that Article 40 (2) damages are unavailable as a matter of principle for breach of contract claims (based on the part of the relevant Law in which it is found), LXT contends that this is an untenable structural argument which is deeply flawed because other remedies that appear in that same Part 4, include in the same Chapter 3, declarations, injunctions, recission and rectification, all of which are obviously available in contractual claims.

14. As for the Third Ground it identifies that SIR’s conduct, even as pleaded, could not satisfy the particularly egregious or offensive requirement of the Article, it is submitted that this is a question of fact that plainly cannot be decided summarily in this case. It is a matter for trial after proper disclosure and witness evidence, as I found. It is further submitted by LXT, that SIR’s proposition that such damages are only available “in truly exceptional cases and for modest amounts” is not what the legislation states.

15. These submissions are then expanded to demonstrate the proper characterisation of my judgment (§§5-12), showing that it was a case management decision that is unlikely to be interfered with at the appellate level and was a proper exercise of my discretion in the application of principles for the granting of summary judgment. Again, it is not necessary for me to summarise all these arguments in these reasons, which I have weighed carefully in refusing permission to appeal.

Decision

16. I was not prepared to decide on a summary basis for the reasons I gave, that LXT has no real prospect of success in its claim under Article 40 (2). The Claimant’s attempts in the Application now before me, to re-argue its case in its skeleton argument (with additional submissions and authorities not placed before me); and LXT’s opposing submissions including those based, inter alia, on the unrestricted terms of Article 40 (2) and first instance DIFC authority in Al Khorafi v Bank Sarasin -Alpen (ME) Ltd [2009] DIFC CFI 026 (7 October 2015) – although dismissed as irrelevant by SIR; and its pointing out that the statutory factual grounds for an award of such damages are vigorously disputed and cannot be determined without the full process of a trial (which will have to take place in any event to determine if there were breaches of the Agreement); all serve to reinforce my view and decision. It was a decision taken in the exercise of my discretion, in pursuit of attainment of the overriding objective, that the subject issue should be decided at and after a trial in which all the facts are established and there is full and measured argument on this important issue, for the Parties and for clarification of DIFC Law. It was not appropriate to grasp the nettle of deciding the issue on the basis of what was placed before me; and what was in dispute and could only be determined at trial.

17. I accept the overriding thrust of LXT’s submissions that SIR has failed to demonstrate that it has a real or realistic prospect of success in persuading an appeal court that I was wrong in the exercise of my discretion in making the evaluative case management decision I made, that there should be a full trial of the issue SIR sought to have determined on a summary basis. I am not persuaded that the well-established principle of Appellate Restraint would be overcome if permission to appeal were granted. I do not consider that there is any realistic prospect of persuading an appeal court there was any manifest error in the exercise of my discretion such as acting on a wrong principle, or allowing any extraneous or irrelevant matter to guide my decision, mistaking of facts, failing to take account of a material consideration or that my decision was so plainly unreasonable or unjust that a failure to properly exercise my discretion could and would be inferred.

18. I have consequently concluded that permission to appeal should be refused.