November 25, 2022 COURT OF FIRST INSTANCE - ORDERS
Claim No. CFI 098/2021
THE DUBAI INTERNATIONAL FINACIAL CENTRE
IN THE COURT OF APPEAL
BETWEEN
AL BUHAIRA NATIONAL INSURANCE COMPANY
Claimant/Respondent
and
HORIZON ENERGY LLC
First Defendant/Applicant
AL BUHAIRA INTERNATIONAL SHIPPING INC
Second Defendant
ORDER OF H.E. DEPUTY CHIEF JUSTICE ALI AL MADHANI
UPON the First Defendant’s (“D1”) Application No. CFI-098-2021/1 dated 27 December 2021 disputing jurisdiction and seeking to have the Claim Form and its service set aside, alternatively seeking to have ABNIC’s claims struck out as an abuse of process (the “Jurisdiction Application”)
AND UPON the Order with Reasons of Justice Roger Giles (the “Judge”) dated 27 April 2022 dismissing the Jurisdiction Application (the “Order”)
AND UPON D1’s Appeal Notice seeking Permission to Appeal against the Order dated 18 May 2022 (the “First PTA”)
AND UPON the Order of Chief Justice Zaki Azmi dismissing the First PTA dated 5 August 2022
AND UPON D1’s Second Appeal Notice seeking Permission to Appeal against the Order dated 26 August 2022 (the “Application”)
AND UPON the Claimant’s (“C”) Submissions in response to the Application dated 12 September 2022
IT IS HEREBY ORDERED THAT:
1. The Application is granted to the extent outlined in the Schedule of Reasons of this order (“Schedule of Reasons”)
2. Costs shall be decided by the Court of Appeal.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 25 November 2022
At: 11am
SCHEDULE OF REASONS
Introduction
1. D1 applies for permission to appeal the order of Justice Roger Giles. The Application is made on 6 grounds (“Grounds 1 to 6”). D1’s submissions are lengthy. I do not propose to discuss each and every argument made by D1, but needless to say they have all been considered. But first, there is an issue in relation to RDC r. 44.30.
RDC r. 44.30
2. Pursuant to RDC r. 44. 10, an appellant’s notice must be filed within 21 days of the challenged decision absent an alternative direction of the Court. RDC r. 44.29 provides as follows:
“Subject to Rule 44.30, an appellant’s notice must:
(1) set out the grounds of appeal relied on and
(2) include or be accompanied by a skeleton argument.”
RDC r. 44.30 provides that:
“Where it is impracticable to comply with Rule 44.29, a statement of the grounds of appeal and the skeleton argument must be filed within 21 days of filing the appellant’s notice.”
3. It is common ground that D1 did not file its grounds of appeal and skeleton argument with the appellant’s notice. These documents were instead filed in purported accordance with RDC r. 44.30. C says that D1 was required, when relying on RDC r. 44.30, to provide the Court with an explanation of why it was impracticable for it to comply with RDC r. 44.29 or else the rule would be meaningless: in every case it could merely be stated that it was impracticable to comply with RDC r. 44.29 and the Court would have no way of assessing that claim. And where it has not been established that it was impracticable to comply with RDC r. 44.29, the defaulting party must apply for relief from sanctions. D1’s primary position is that there is no such requirement in the RDC to provide reasons when relying on RDC r. 44.30; Part 44 does not provide for any mechanism for relying on the rule.
4. I am sympathetic to both parties’ positions. The term “impracticable” seems to set a high threshold for reliance on the rule. But RDC r. 44.30 equally appears to set out to make an application for relief from sanction unnecessary in relation to the late filing of grounds of appeal and skeleton arguments, at least for an additional 21 days after an appellant’s notice has been filed, which might suggest RDC r. 44.30 was intended to facilitate a more informal approach to extending the time to file these documents. And in many cases, it might be easier to establish grounds for relief from sanctions (see the considerations enumerated at RDC r. 4.49 which includes, for example, “whether there is a good explanation for the failure”) than that it was “impracticable” to file grounds of appeal and a skeleton argument with the appeal notice. In my view, the unlikelihood that RDC r. 44.30 was intended to coexist with a procedure that in many cases may be easier to rely on and also supports a less strict reading of RDC 44.30. But RDC r. 44.29 evidently wants grounds of appeal and skeleton arguments to be filed with appeal notices unless that is impracticable, which lends support to a stricter reading.
5. I will leave it to the Court of Appeal to decide the proper construction and application of RDC r. 44.30, for which I am unaware there is DIFC Court authority.
Ground 1
6. D1 submits that the Judge erred, on the question of the proper construction of the jurisdiction clauses within the relevant contracts, both in identical terms (the “Jurisdiction Clause”), by shifting the burden of proof onto D1 to demonstrate that the Jurisdiction Clause did not give rise to a choice of jurisdiction in favour of the DIFC Courts.
7. The relevant approach taken by the Judge is reasoned at [5] to [26] of the Order. D1’s case is not that the DIFC Court authorities which the Judge applied are wrong, but rather that the Judge applied them wrongly. In my judgment, D1 is plainly incorrect in its analysis. The Judge’s approach seems to me to be entirely in accord with the most recent Court of Appeal judgments: see Goel v Credit Suisse (Switzerland) Ltd [2021] DIFC CA 002 at [89] and Laabika v Ladu [2021] DIFC CA 008 at [39] to [42].
8. It has not been disputed by D1 that parties can by the use of phrases like “the courts of the UAE” and “the courts of Dubai” intend to include the DIFC Courts. D1 says, however, that where it is disputed that such a phrase includes the DIFC Courts and where the Court is tasked with construing it, there is a burden on the party invoking the DIFC Courts’ jurisdiction to prove that the proper interpretation of the clause includes reference to the DIFC Courts. But what if there is nothing other than the words in the jurisdiction clause which that party might rely on; what if there is nothing in the “particular facts and circumstances” of the case or no “clear connecting link between the DIFC and the parties” (I take these phrases from D1’s skeleton argument in support of the Application) which points to the DIFC?
9. If the party invoking the jurisdiction of the DIFC Courts has a burden to prove the meaning of the jurisdiction clause with evidence other than the jurisdiction clause itself, would this not create a requirement, additional to any derived from Article 5(A)(2), that there be a connecting link between the parties and the DIFC? And to the extent that it would, would this not be at odds with a primary purpose of opt-in clauses, namely to function as a sufficient connecting link, so to speak, such that no other need exist? I think the approach derived from Goel and Laabika and applied by the Judge, namely to assess whether the relevant term is capable of meeting the requirement of Article 5(A)(2) before assessing whether there is any constructional indication that points to a different conclusion is a better approach.
10. In any event, Ground 1 is dismissed.
Ground 2 and Ground 5
11. Under Ground 2 of the Application, D1 says that the Judge erred in finding that the DIFC Courts constituted “the [in fact ‘a’] competent Court of First Instance” within the meaning of Article 110 of Federal Law No. 6 of 2007 (as amended) (the “Insurance Law”) and/or that parties to insurance contracts governed by the Insurance Law can make a choice of the “competent court” in any event.
12. This ground appears to me to be mostly academic. It is D1’s primary case that the competent Court of First Instance for the purposes of Article 110 of the Insurance Law was the Sharjah Court. D1 made its challenge to the decision (the “Decision”) of Insurance Authority committee in the Sharjah Court. The Order did not prevent that challenge from happening and nor does purport that the Sharjah Court cannot hear the challenge much less bind it in any way.
13. There is one element of Ground 2 which is not necessarily academic, however. If it is supposed that the competent Court of First Instance under Article 110 of the Insurance Law cannot be the DIFC Courts and/or that parties to insurance contracts governed by the Insurance Law cannot make a choice of “competent court,” are these factors which ought to have led the Judge to conclude that phrase “the courts of the United Arab Emirates” in the Jurisdiction Clause means the federal courts of the UAE and, more specifically, the Sharjah Court, as D1 argues?
14. I think an affirmative answer to this question would be tantamount to rendering redundant the Jurisdiction Clause as, on D1’s case, whether the Jurisdiction Clause exists or not, the parties will apparently end up with the same result. In my view, D1’s case is, in not so many words, not only that the Jurisdiction Clause should be read in light of the Insurance Law but actually that a proper construction has it saying the same thing as the Insurance Law which perhaps is another way of saying that it says nothing much at all. Yet the Jurisdiction Clause was the result of negotiation; on the question of governing law it opts for English law; and it makes reference to an arbitration agreement, albeit that there was no such agreement. The Jurisdiction Clause seems to have set out to do something.
15. With that said, I am unable to say, if the DIFC Court cannot be the competent Court of First Instance under Article 110 of the Insurance Law and/or if parties to insurance contracts governed by the Insurance Law cannot make a choice of “competent court,” that D1 does not have a real prospect of successfully establishing that “the courts of the United Arab Emirates” in the Jurisdiction Clause means the federal courts of the UAE and, more specifically, the Sharjah Court, rather than the DIFC Court. Permission to appeal on Ground 2 is granted to this extent.
16. Ground 5 is related to Ground 2. D1 says that the Judge erred in concluding that engaging the dispute resolution procedure set out in Article 110 could not constitute a basis for the application of the lis alibi pendens doctrine. Ground 5 is allowed on the basis that it has a real prospect of success.
Ground 3
17. D1 contends that the Judge erred in concluding that the proper construction of the Jurisdiction Clauses was to confer jurisdiction on the DIFC Courts by, first, failing to give adequate weight to the factors connecting the parties to the Emirate of Sharjah and the impact of such factors on the consideration of the lack of any link to the DIFC and, second, failing to give adequate weight to the general prohibition on primary insurance activities within the DIFC.
18. The first basis is intertwined with and seems to rely on the success of D1’s arguments under Ground 1 which I have rejected and so is rejected also.
19. For the second basis, D1 extracts public policy from UAE law. That same law made possible the financial free zones and their legislations and courts. If the DIFC Court can hear and determine insurance-related disputes—which D1 has not and in my view cannot argue would be a type of insurance “activity”—then it is unclear why, applying D1’s analysis, that would not be a manifestation of public policy also. And so the question is, in my judgment, whether anything prevents the DIFC Court from hearing and deciding such disputes. D1 has not demonstrated that there is. I do not think a party should be denied access to a court without clear authority, much less a court whose jurisdiction the party opted into, a question which will be decided in this appeal under Ground 2.
20. Ground 3 is rejected also.
Ground 4
21. D1 argues that the Judge erred in concluding that the Claim was not an abuse of process because Article 110 of the Insurance Law only permits insureds to bring proceedings before the onshore Insurance Authority/Insurance Dispute Resolution Committees.
22. If the parties opted into the jurisdiction of the DIFC Court—a question that will be decided under Ground 2—by issuing these proceedings C was exercising a contractual right to commence proceedings in the DIFC Courts and it is difficult to see why the same should amount to an abuse of process.
23. Ground 4 is dismissed.
Ground 6
24. D1 argues that the Judge failed to recognise and anticipate the likelihood that C would seek to leverage any finding in favour of the DIFC Courts’ jurisdiction to stymie the pre-existing and prior proceedings before the Insurance Authority committee, and had he done so he would have found that C was invoking the DIFC Courts’ jurisdiction in an abusive manner.
25. In my view, and as a matter of principle, the Judge cannot be criticised on the basis of C’s conduct after he made the Order and on the basis of the Insurance Authority’s Decision to the extent it was affected by the Order. If C used the Order as leverage after it was made and if the Insurance Authority’s decision was influenced by C’s invocation of it, neither would mean necessarily the Judge failed or erred in any way in the Order amenable to appeal. If the Insurance Authority was wrong in its decision, D1 was able to—and did—appeal that decision. If C has conducted itself in an abusive manner, no doubt that can be addressed in the appropriate context. I do not think that the Judge can be criticised for not finding abusive conduct on the basis of what would have been, at that point in time, speculation and potentially significant speculation.
26. Ground 6 is dismissed.