Claim No: CFI 098/2023

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

 

IN THE COURT OF FIRST INSTANCE
BEFORE H.E. JUSTICE MICHAEL BLACK KC

BETWEEN

MR NANCY

Claimant

and

NARCISSA DIFC

Defendant

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JUDGMENT OF H.E. JUSTICE MICHAEL BLACK KC

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UPON the Part 7 Claim Form filed on 29 December 2023 (the “Claim”)

AND UPON hearing counsel for the Claimant and counsel for the Defendant at the Trial on 11 to 13 June 2025 before H.E. Justice Michael Black KC

IT IS HEREBY ORDERED THAT:

1. Judgment is entered in favour of the Claimant in the sum of AED 4,000.

2. All other claims are dismissed.

3. There shall be an immediate assessment of costs. The parties shall serve and exchange their submissions on interest and costs by no later than 4pm on Wednesday, 13 August 2025, with any responses to be filed by no later than 4pm on Wednesday, 20 August 2025.

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

SCHEDULE OF REASONS

INTRODUCTION

1. The Claimant (“Mr Nancy”) is a senior Private Equity (“PE”) professional who makes various claims against the Defendant, his former employer.

2. Common features of the PE business are that a PE house (“PEH”) will invest in “portfolio companies” often through special purpose vehicles (“SPVs”) in the form of investment funds incorporated in jurisdictions like the Cayman Islands where the law and regulatory environment has developed to facilitate the business. The PEH will offer investors the opportunity to purchase units (shares) in the investment funds in order to participate in the investments in the portfolio companies.

3. Such funds are often structured whereby there is a general partner (“GP”) acting as investment manager. The investment manager may be an SPV owned or controlled by the PEH. The investors will be limited (or silent) partners (“LPs”).

4. Employees of the PEH/investment manager may be assigned as directors or managers of the portfolio companies in order to oversee the investment with the intention of achieving an ultimate sale of the portfolio company (“exit”), hopefully recouping the investment and making a capital profit. Prior to the exit the portfolio company may pay dividends that may be distributed to the investors.

5. The PEH will likely be remunerated in the following ways. It will receive a management fee. It may also receive “carried interest”. Carried interest will be a share in the profit on the divestment of the investment in the portfolio company. It will vest over a period of time and may be subject to a “hurdle rate”. The hurdle rate is a return on the investment payable to the investor. The hurdle rate may be calculated by reference to the Net Asset Value (“NAV”) of the fund at a particular point in time. It is only if the hurdle rate is exceeded that carried interest will accrue.

6. Employees of PE houses are frequently remunerated in addition to their salaries through a share in the carried interest (or colloquially referred to as “Carry”). Under a typical employee Carry scheme, an employee will be allocated a number of “points” (representing a proportion of the “Carry Pool”, which itself will be a proportion of the carried interest earned by the PEH). The Carry Pool will accrue over time as and when the carried interest is earned by the PEH. Not only may employees not achieve their entitlement to Carry if they leave the employ of the PEH before it has fully accrued but the circumstances of their departure may also affect their entitlement.

FACTUAL BACKGROUND

7. On 18 June 2005 Mr Nancy began work as a Financial Analyst employed by Newland Investment House, Kuwait (“NED”) in its Kuwait office. Over the next 6 years he received a number of promotions to the position of Executive Vice President. In around 2009 he had been appointed a fund manager for a fund called N1 (“N1”) and was give a place on its investment committee.

8. He was offered the opportunity to move to Dubai in late 2011 which entailed managing Nera (“NERA”), a Dubai-headquartered company which had multiple businesses, including medical clinics and diagnostic laboratories. Although he was to receive a UAE employment visa sponsored by NED, setting up an entity in Dubai took time. Initially his visa was sponsored by a portfolio company, subsidiary of NERA. On 5 February 2014 Mr Nancy entered into an employment agreement with Newland Partners Limited (“NASH”) which designated him as “Vice President (Level C) – Private Equity”. Although the employment agreement was signed on 5 February 2014, it was stated that his employment began on 1 January 2014.

9. On 18 September 2014 Mr Nancy was provided with a DIFC visa sponsored by Newland Investment House DIFC.

10. Around 2014-15 he was also appointed to the investment committees of the funds (i) N2 (“N2”); (ii) N3 (“N3”); and (iii) N4 (“N4”). He said that his role included evaluating the performance of N1, N2, N3, and N4 (collectively, “Funds”), as well as monitoring the underlying investments and performance of the various portfolio companies of NED and NASH. His role also included managing various portfolio companies in addition to NED, including overseeing day-to-day operations, looking after the management information systems, reviewing budgets and ensuring that the companies operate within those budgets, approving payments as the bank signatory, and verifying audits. All these tasks were undertaken with a view for the Funds eventually to divest. He also used to attend investment committee meetings which would generally take place once every quarter for each of the Funds.

11. On 6 April 2016 Mr Nancy was inducted into a “Private Equity Carried Interest Incentive Plan” (the “Carry Plan”/”Carry Agreement”) introduced by NED. I will return to the terms of the Carry Plan/Agreement below.

12. In around early 2018 Mr Nancy learned that NED was to undergo an acquisition by merger with a Kuwaiti publicly listed company called NOX Investment Company KSC (“Narcissa”).

13. Upon the merger of NED’s business with that of Narcissa all Newland entities and products were rebranded as NOX.

14. At this time the four Funds were moving towards liquidation and looking to exit the portfolio companies. Mr Nancy says that he was involved in a number of the exits. Meanwhile the COVID-19 pandemic struck. This delayed and disrupted the exits. Particularly affected was Neil (“Neil”) a fast-food chain in the Gulf Region of which Mr Nancy had been appointed general Manager and authorised signatory some three years earlier. Due to the pandemic Neil was unable to pay the rents on its premises and several of its trade creditors. As this might have exposed Mr Nancy to personal jeopardy he was advised to return to his homeland of India.

15. On 13 August 2020, the rebranded DIFC entity, NOX Investment Company (DIFC) Limited (“Narcissa DIFC” – the Defendant) wrote to Mr Nancy:

16. Mr Nancy continued to work from India remotely. He says that he remained involved in a number of exits and the administration of various bank accounts which were linked to his telephone and require him to provide One Time Passwords (“OTPs”) for processing payments for portfolio companies.

17. A colleague of Mr Nancy was Mr Nadia (“Mr Nadia”), he is a Senior Vice President of Narcissa which is the parent company of Narcissa DIFC. He had worked in that capacity since 2011, formerly employed by NED prior to its merger with Narcissa. Mr Nancy says that he kept in regular contact with Mr Nadia during this period.

18. In March 2022 Mr Nancy was told by Mr Nida (Head of the Private Equity Department based at the NOX Liaison Office in Turkey and Mr Nancy’s Division Head) that Narcissa DIFC would like him to resign. He expressed a willingness to do so but on the basis that there would be a resolution of the legal issues (including any travel bans) related to Neil.

19. On 12 May 2022 Mr Nancy received a letter from Narcissa DIFC (the “Termination Notice”) in the following terms:

20. On 6 July 2022, the Dubai Court of First Instance had declared Neil bankrupt and appointed a bankruptcy trustee to administer the bankruptcy and prepare a report on Neil, the acts of its managers and board of directors.

21. On 14 August 2022 Mr Nancy’s email access was revoked. Notwithstanding, Mr Nancy says that he continued to remain the authorised signatory of the bank account of one of NERA’s subsidiaries, and his cell phone number was used for authorising credit card payments. His employment visa was not cancelled until 2 October 2023. He says that he continued working after 11 August 2022.

22. On 23 January 2023 Mr Nadia wrote to Mr Nancy offering him “a draft consulting contract on possible Neil related matters, where your assistance might help Nessim with protecting you in future.” Mr Nancy said that this came as a surprise to him since he was not consulted prior to receiving this email. On receiving this email, he spoke to Mr Noura (“Mr Noura”, who had been the head of PE at NED and became Managing Director of Asset Management on the merger and who is now no longer employed within the NOX Group) and informed him that he was not going to sign such a draft consultancy contract since he was expecting to be paid by the Defendant, and was apprehensive that if he signed this contract, the Defendant would not pay him his salary.

23. Apparently, several travel bans persisted against Mr Nancy and his bank account was frozen. He was also owed salary and end of service benefits. He was anxious to sort out the situation and Mr Noura tried to assist him.

24. Mr Nancy risked going back to Dubai on 24 January 2023. He was permitted entry but was told he could not leave until the cases against him were resolved.

25. He visited his bank and succeeded in getting his account unfrozen.

26. On 1 February 2023 he received an email concerning his end of service settlement. It was accompanied by a form of waiver which he declined to sign because the end of service was only calculated to 11 August 2022 which he considered to be contrary to his discussions with Mr Noura and he considered that he was entitled to Carry payments.

27. On 2 October 2023 Mr Nancy’s DIFC employment visa was cancelled.

28. The existing travel bans were only lifted by 12 October 2023 but a fresh one was imposed on 16 November 2023. The lawyer who had been acting at the expense of Narcissa DIFC ceased to act because she was no longer being paid, Mr Nancy paid her out of his own pocket on 3 January 2024 the sum of AED 4,000 and all travel bans were finally removed.

29. It is Mr Nancy’s case that even after the formal termination of his employment on 11 August 2022 he undertook substantial duties on behalf of the NOX group. In summary:

THE CLAIMANT’S CLAIMS

30. It is fair to say that Mr Nancy’s claims have evolved over time and only achieved their final iteration in the closing submissions of his counsel at trial.

31. On 21 August 2023 Mr Nancy commenced proceedings against Narcissa DIFC in the Small Claims Tribunal (“SCT”). In his witness statement of the same date, Mr Nancy alleged that the Defendant purportedly terminated his employment with ‘immediate effect’ on 11 August 2022 in contravention of Articles 62, 63 and 64 of the Employment Law or alternately, waived the termination by its conduct since 11 August 2022.

32. He claimed that:

33. Narcissa DIFC put in a Defence on 28 August 2023 in which it contended:

34. On or about 19 September 2023 the parties settled the EOS and Penalties Claims and certain issues relating to the cancellation of the Claimant’s visa.

35. On 25 October 2023 Mr Nancy amended his claim form to claim:

“(a) an order declaring that the Termination Notice of 12 May 2022 is invalid and set aside, or waived; (b) an order that the Defendant be direct to pay my outstanding salary from August 2022 till the date of decree; (c) an order that the Defendant be directed to renew/re-obtain my employment visa and insurance; [the “Visa Claim”] (d) an order that the Defendant be directed to pay my salary from the date of decree till the date of lawful termination of my employment; (e) an order that the Defendant be directed to fulfil all its obligations as an Employer under the DIFC Employment law till the date of lawful termination of my employment; (f) pay entitlements under the Carry Agreement; and (g) interim reliefs, including continuation of my employment visa and insurance pending resolution of dispute; and handover of Employment Contract and Carry Agreement.”

36. Mr Nancy also filed Amended Particulars of Claim on 30 October 2023. He valued his claim at AED 2,785,581 which was above the non-consensual monetary jurisdiction of the SCT. As no agreement was made to increase the monetary jurisdiction of the SCT, the proceedings were transferred to the Court of First Instance (“CFI”).

37. Mr Nancy issued a Part 7 claim form in the CFI on 29 December 2023 and Particulars of Claim on 7 February 2023 claiming the following relief:

38. On 7 March 2024 Mr Nancy filed a request for judgment in default of defence. Narcissa DIFC responded by serving an application on 12 March 2024 in the following terms:

“1. The Claimant’s claim is dismissed in its entirety. 2. The Claimant must pay the Defendant’s costs of the action. [ALTERNATIVELY] 4. The Defendant’s strike out application is granted in respect of the following issues: [IN EITHER CASE] 5. The Claimant must pay the Defendant’ costs of the application because the statement of case and further particulars of claim of the Claimant discloses no reasonable grounds for bringing or defending the claim.”

39. The application was not happily worded. There was no separate strike out application and so it was difficult to follow from the application itself which of the pleaded claims were said to disclose no reasonable grounds for bringing the same.

40. On 14 March 2024 Judicial Officer Maitha Alshehhi ordered that the Request for Default Judgment be stayed pending the determination of the Narcissa DIFC’s Application and that there be no order as to costs.

41. On 19 March 2024 Mr Nancy made a lengthy application seeking a de novo review of the order of 14 March 2024. The application was dismissed without a hearing (costs in the case) by H.E. Justice Maha Al Mheiri on 4 April 2024. She held that since the Court had not yet determined the Default Judgment Application that was filed, the normal course of action would be to stay the Default Judgment Application pending determination of Narcissa DIFC’s Immediate Judgment Application.

42. I was able to divine from the evidence in support that Narcissa DIFC was seeking to strike out the following claims:

43. On 8 July 2024 I ordered amongst other things:

44. On 28 April 2024 Mr Nancy filed his Amended Particular of Claim. At paragraph 58 he pleaded “The Claimant continues to be employed either as a part-time or full-time employee under a separate express or implied contract. Therefore, the Defendant is liable to pay the Claimant’s salary from 11 August 2022 till at least 21 September 2023” [my emphasis] notwithstanding I had struck out all references in the Particulars of Claim to an express contract of employment following the 11 August 2022 termination of employment. He claimed wages between August 2022 and September 2023 along with employment benefits such as leave encashment and gratuity “until when the Claimant continued [sic] to be employed by the Defendant” It would seem that it should have read “until when the Claimant ceased to be employed …”

45. He asserted that:

(“Wages Claim”)

46. Mr Nancy claimed in the alternative, “… the Claimant was at least in part-time employment with the Defendant during the period from 11 August 2022 until at least 21 September 2023. The Claimant reserves his right to quantify his claim for this alternate claim in due course.”

47. In the further alternative, he claimed that the Defendant breached the duty of care it owed to the Claimant under Articles 17 to 21 of the DIFC Law of Obligations, including by (i) failing to cancel the Claimant’s DIFC Employment Visa till 21 September 2023 and (ii) terminating the Claimant’s employment while the legal cases were pending, thereby preventing the Claimant from finding alternative employment. (“Alternate Claim for Damages”).

48. It is surprising that Mr Nancy persisted in the Visa claim given my Order of 8 July 2024 set out paragraph ‎43(3) above.

49. The claim that it was a breach of a tortious duty of care to fail to terminate Mr Nancy’s employment within 30 days of the termination of his employment (i.e. 14 September 2022) was a new claim and logically inconsistent with the claim that he continued to provide services under an implied contract of employment between 11 August 2022 until 21 September 2023.

50. Mr Nancy claimed that Defendant was also liable to:

(“Indemnity Claim”)

51. Mr Nancy claimed that the Defendant:

52. Mr Nancy estimated his entitlements to be AED 1,743,288.13 based on exits from:

He then claimed that his total entitlements under the Carry Agreement were AED 1,743,288.13 and USD 474,625 (my emphasis as that sum seemed subsequently to disappear).

53. Alternatively, he claimed that the Defendant had breached the Carry Plan by failing to maintain separate Newland Employee Incentive Plan Accounts in respect of each Fund and thereby causing loss to him. It was his position that:

54. In the quantum section of the Amended Statement of Claim the figure of AED 1,743,288.13 as “Carry Entitlement” was struck out and the figure of AED 4,820,397.51 was substituted as “Carry Entitlement/ Damages for breach of Clause 26” [of the Carry Agreement].

(“Carry Claim”)

55. By the start of the trial on 11 June 2025 Mr Nancy’s case was said to comprise three claims:

56. The first /Carry Claim was said to be a claim for an agreed sum under a contract as Mr Nancy had been allocated points in respect of three funds – N1, N2, and N3. He asserted that he had also been allocated points in respect of N4. It was the Claimant’s case that he was contractually entitled to 17% of the Distributable Amount in N1 and N4, 7% of the Distributable Amount in N2 and 10% of the Distributable Amount in N3. It is Mr Nancy’s evidence that of all his points allocated across the four Funds, his highest allocation was in N4 but the Defendant had failed to produce Schedule E to his Carry Agreement and denied that any points had been allocated in N4.

57. Mr Nancy maintained the claim that the Defendant’s failure to maintain Newland Employee Incentive Plan Accounts in respect of each Fund caused him loss as a consequence of which he is entitled to damages.

58. Mr Nancy quantified his loss/entitlement to any Carry as follows:

59. Mr Nancy confirmed that the second/Wages Claim was based on an implied contract of employment.

60. Mr Nancy submitted that his claim for indemnity was inextricably linked with his claim that he was employed under an implied contract. If he were successful in establishing that there was an implied contract post 11 August 2022, his claim for indemnity would follow.

61. During the course of the trial Mr Nancy said the following in cross-examination:

62. In consequences in oral closing submissions Mr Nancy abandoned his claims in respect of N1, N2 and N3. That left N4. The claim in respect of N4 was articulated as follows:

THE CARRY CLAM

63. The Carry Plan provided:

64. At paragraph 151 of his Fourth Witness Statement Mr Nancy said that not only had points been awarded to him but that of the four Funds, he had the highest points in N4. Conservatively, he should have been allotted at least 170 out of 1,000 points in N4 (on the basis that he was allotted 170 points in N1). It was submitted that the issue could have been resolved with ease if Schedule E to his Carry Agreement had been disclosed. Mr Nancy has explained that prior to his departure for India, he had left all his official documents, including his copy of Schedule E to the Carry Agreement in the Defendant’s office. However, after his termination, when Mr Nancy collected his official documents from the Defendant in July 2023, his copy of Schedule E to the Carry Agreement was missing. He reiterated the point at paragraph 15 of his Fifth Witness statement and in his oral evidence:

65. In his written evidence Mr Noura stated:

66. At the beginning of the trial Mr Nancy’s position was that Mr Noura may be a liar and his evidence lacked credibility:

“As far as Mr Noura is concerned, it is accepted that as a member of the Plan Committee he should have known whether the Claimant was allocated points in N4 or not. However, his evidence that no points in N4 were ever allocated, is diametrically opposite to the contemporaneous evidence. On 30 April 2023, upon the Claimant inquiring whether NOX intended not to pay his share of carry for N4, Mr Noura responded stating that the carry schedule still holds but has been fruitless: WhatsApp chat between Mr Nancy and Mr Noura [G/4158]. Although Mr Noura attempts to explain this in his witness statement (see [19], Mr Noura’s First WS [E/497]) this explanation does not withstand scrutiny. At its best, Mr Noura had not properly considered the issue while responding to the Claimant. However, this does not support the conclusion that no points were allocated in N4 to the Claimant. At its worst, Mr Noura deliberately lied to the Claimant. If this is indeed the case, Mr Noura’s evidence cannot be considered credible. This will have to be explored further in cross examination.”

67. The allegations were based on a WhatsApp exchange:

68. Of this exchange Mr Noura said in his witness statement at paragraph 19:

“I was asked by the Claimant whether he would receive any carry in N4 and, in a nutshell, I replied that there is no carry in N4 and explained why this is the case. At the time, I was not running Private Equity on a day-by-day basis any longer and rather than stop to consider which member did or did not have points in a respective fund, it was quicker on a WhatsApp message to make the point that there was no carry in N4 as the fund was under water.”

69. It was not put to Mr Noura in cross-examination that he lied to Mr Nancy or even that his evidence lacked credibility, instead Mr Nancy’s counsel executed the volte face set out at paragraph 62 above and accepted that it was not easy to disagree with Mr Noura’s evidence. This coincided with my view that Mr Noura was an impressive and independent witness.

70. The acceptance that no points in N4 were allocated forced Claimant’s counsel to raise a new case – a claim for damages for failure to allocate points. The first problem is that it entails rejection of the Claimant’s evidence that he was in fact allocated points in N4.

71. This is hardly a promising start, but the problems mount up after that:

72. Ultimately the Claimant’s elaborate and inventive arguments are based on inadequate foundations in that the final iteration of his case on Carry entitlement is: (1) inadmissible as outlined at paragraph ‎71(1) above; (2) without legal foundation as outlined at paragraphs ‎71(2) and ‎71(3) above; and speculative as outlined at ‎71(4) above. Accordingly, the Carry claim fails.

THE WAGES CLAIM

73. The final iteration of the Wages Claim was that he continued to provide services to the Defendant after the Termination of his employment under an implied contract of employment. He claimed to be entitled to the same monthly wages for the period 12 August 2022 to 21 September 2023, as his monthly wages prior to termination. There was no mention of his alternative claims (see paragraphs ‎46 and ‎47 above). As to the former, a claim based on part-time employment, this would be inconsistent with Mr Nancy’s evidence in his Fourth Witness Statement at paragraph 161:

“It is difficult to estimate how many hours of my daily time this took, because that used to vary. However, it was similar to the amount of time these activities used to take when the Funds were not involved in active exits, even prior to my termination. I should therefore be entitled to the same monthly compensation that I was entitled to when I was employed with the Defendant.”

As to the latter, the breach of duty of care claim, the abandonment of the claim was no doubt due to an entirely correct recognition that it was hopeless. The first limb in relation to the visa had already been struck out, and as to the second limb, it is unarguable that the Defendant owed a tortious duty of care to Mr Nancy not to terminate his employment. Further the assumption underlying that claim would be that, but for the allegedly negligent termination of Mr Nancy’s employment on 11 August 2022, his employment would have continued. That would be inconsistent with (and a collateral attack on) my finding on 8 July 2024 that Mr Nancy’s employment was validly terminated on 11 August 2022.

74. The first question therefore is whether DIFC law recognises implied contracts of employment and, if so, how are they to be identified?

75. “Employment Contracts” are defined in Paragraph 3 of Schedule 1 to the DIFC Employment Law as:

“A contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing and any permitted amendment or replacement thereof as agreed between the Employer and Employee.”

76. There is therefore no doubt that DIFC does recognise implied contracts of employment but there is no other reference to implied contracts in the Law. The Defendant submits that that definition is materially the same as that set out at s. 230(2) of the English Employment Rights Act 1996 and as such, English case law is likely to be of assistance. I accept that the definition is identical up to the word “writing” and the English cases may be of some assistance. The Defendant referred me to the judgment of Lord Justice Elias (an acknowledged expert in the field of employment law) in the case of Tilson v Alstom Transport [2011] IRLR 169.

77. In Tilson the issue was whether an agency worker had a contract of service with the end user. In a section of his judgment entitled “When can a contract be implied”, Elias LJ set out the principles of English law:

78. I have cited Ellias LJ’s judgment in extenso not only to pay deference to his expertise in this area of law but also to indicate that he was considering a different situation from the present. There the alleged employee was providing services to the alleged employer through “a complex quadripartite relationship involving three contractual relationships.” In the present case the issues are much simpler - what services did Mr Nancy continue to supply to the Defendant and were those services such as to give rise to an implied contract of employment?

79. This underlines that it is a question of fact in each case whether an employment relationship could be implied from the circumstances: Newnham Farms Ltd v Mrs V L Powell (2003) EAT/0711/01/MAA.

80. The Claimant points to Canadian and Singaporean cases where the courts have held that a continuing contract may be implied even after a contract has expired or terminated.

81. In Coffee Time Donuts Inc. v Ontario Inc. and Tirath Singh Gill, [2022] ONCA 435 [7] the Ontario Court of Appeal followed the earlier decision of the Supreme Court of Canada in Saint John Tug Boat Co. Ltd. v. Irving Refining Ltd., [1964] S.C.R. 614, at pp. 621-22 where it held that:

82. I find the Singaporean case of OMG Holdings Pte Ltd v Pos Ad Sdn Bhd [2012] SGCA 36 less helpful in that the Court of Appeal observed obiter that apart from the main issue on the evidence, it would encounter no difficulties in concluding in the light of the conduct of the parties there was an informal or implied agreement during the interim period between two agreements along the lines of the earlier terminated agreement.

83. I accept that the threshold question is whether it is necessary to imply a contract to give business reality to a transaction and to create enforceable obligations between parties and that the material facts may be tested by considering whether parties would or might have acted exactly as they did in the absence of a contract: The Aramis [1989] 1 Lloyd’s Rep 213 at 224, per Bingham LJ.

84. Secondly, if the conduct relied upon is no more consistent with an intention to contract than with an intention not to contract it is not enough. It must be necessary to identify conduct referable to the contract contended for or, at least, conduct inconsistent with there being no contract made between the parties to the effect contended for. It will be fatal to the implication of a contract if the parties would or might have acted exactly as they did in the absence of a contract: ibid.

85. Thirdly, the Court must be able to infer an intention to create legal relations: Mackie Motors (Brechin) Limited v RCI Financial Services Limited [2023] EWCA Civ 476 [37].

86. Fourthly, while whether a contract should be implied is ultimately a matter of law and involves an objective analysis of all the relevant circumstances. Lord Justice Steyn (as he then was) held in G. Percy Trentham Limited v Archital Luxfer Limited & or (1993) 1 Lloyd’s Rep 25:

He emphasized that this was a commercial transaction which involved one party carrying out work and the other paying for it. Both parties had intended to enter into binding contractual relations. It did not matter that the parties’ conduct could not be precisely analysed in terms of offer and acceptance.

87. Fifthly, while the test is objective, the parties’ understanding that there is no such contract in place explaining the terms of their relationship, and their inability to reach an agreement on the terms which such a contract should contain, are extremely powerful factors militating against any such implication. It will be unrealistic to imply a contract in a case where a party has deliberately sought to avoid entering into a contract: Tilson [50]-[51].

88. Sixthly, where the contract sought to be implied is a contract of employment, the implied contract must fulfil the minimum requirements of a contract employment, namely mutuality of obligation (i.e. the obligation on the part of the potential employer to provide work for remuneration and the obligation on the part of the potential employee to perform it) and control on the part of the potential employer: Montgomery v Johnson Underwood Ltd [2001] ICR 819 [46], Cable & Wireless Plc v Muscat [2006] IRLR 354 [35], Newnham Farms Ltd v Mrs V L Powell (2003) EAT/0711/01/MAA.

89. Turning to the facts of the present case, it is necessary to observe that the jurisprudence set out in the preceding paragraphs developed in two perhaps conflicting contexts. The English employment authorities developed around employment agency cases where the alleged employee had a contract with a third party who was contracted with the alleged employer to supply their services and the alleged employee was seeking to circumvent that relationship in order to claim statutory employment rights. In contrast, the English and other common law authorities that developed around commercial relationships were not constrained by irreducible minimum criteria and the courts were arguably freer to discover an enforceable contract than they would have been had they been considering employment relationships.

90. Mr Nancy points to 7 respects in which he says he continued to act as an employee notwithstanding the Termination Notice:

91. The Claimant suggests the evidence of Mr Noura was that he believes that the Claimant should be compensated for this period.

92. The Defendant made the following submissions in reply in oral closing:

93. I am not persuaded on the facts that it was necessary for there to be an employment contract between Mr Nancy and the Defendant to give business reality to their relationship after the termination of his employment. Putting the Claimant’s case at its highest, the facts are consistent with a different form of contract from an employment contract. The irreducible minima of an employment contract (the obligation on the part of the potential employer to provide work for remuneration, the obligation on the part of the potential employee to perform the work and control by the potential employer) are not present. The only unequivocal evidence consistent with an employment relationship is the inclusion of Mr Nancy’s name in the Prospectuses for N1 and N2 but this is as easily explained by carelessness as it is by an intention that Mr Nancy should remain an employee. All the other evidence may be explained (again) by a degree of carelessness of the part of the Defendant in not removing Mr Nancy’s name from bank accounts and tax records or an intention that Mr Nancy should provide assistance to the Defendant on an ad hoc basis from time to time.

94. The parties’ conduct is more consistent with some sort of consultancy arrangement. It is unfortunate that he did not take up the Defendant’s offer of a consultancy agreement. His claim now is for an implied contract of employment and that claim must fail.

95. I reach that conclusion with some regret as, while Mr Noura’s subjective view that the Claimant should have been paid for the services he rendered post termination is irrelevant for legal purposes, I share that opinion as a matter of law. The Defendant freely accepted Mr Nancy’s services and by offering a consultancy contract it must be taken to have understood that he ought to have been fairly remunerated. That is not the claim brought and there is no material before me on which I could calculate a value to be attributed to those services. Even if I were able it would have been a fairly modest sum compared to his full-time salary.

THE INDEMNITY CLAIM

96. Mr Nancy states that on 16 December 2023, new proceedings arising out of the bankruptcy of Neil were initiated against him. The Defendant refused to pay to resolve these proceedings. He seeks indemnity of AED 4,000 for the expenses incurred to resolve the proceedings.

97. In addition, the Claimant’s contact details have still not been removed from the FTA’s database. The Claimant continues to receive text messages regularly, seeking the payment of overdue taxes for one of Neil’s subsidiaries, which have been steadily increasing. As of April 2025, the sum of the overdue taxes is AED 17,000. As at the time of closing submissions the sum of the overdue taxes is AED 19,000. It is unclear whether the FTA will make the Claimant personally liable for these unpaid taxes.

98. Further, around 31 March 2024, Neil UAE was dissolved and deregistered. The matter is being managed by the court appointed trustee and a court appointed officer who share information from time to time. The pending tasks still include the sale of the leased warehouse and return of the cheques issued to the landlords. The Defendant acknowledges that since bankruptcy laws and their implementation are new in the region there is limited integration of court, prosecution and police systems which sometimes results in case registrations ignoring the bankruptcy procedures. The cases then have to be removed through active engagement of lawyers and the bankruptcy court.

99. Mr Nancy therefore seeks indemnity (by way of declaration) against these additional (potential) losses as well in reliance on the case of First Names (Jersey) Limited & Anr. v IFG Group PLC, [2017] EWHC 3014 (Comm) in which the English Commercial Court (albeit as a matter of Jersey law) held that it was an absurd proposition that a company which contracted to supply its employees to act as directors of a client company did not have an obligation to indemnify those employees in relation to the work undertaken in good faith. There would be neither difficulty nor complexity in identifying the terms of the necessary implied indemnity: simply, an employee required to serve as director of a client company and acting in good faith would be indemnified against costs, losses and liabilities incurred in the course of that directorship.

100. Mr Nancy submits that the same analysis applies where a PEH seconds its employees to the management of a portfolio company. I think the concession (if it be such) at paragraph ‎60 above was wrongly made. It seems to me an indemnity implied in the contract of employment that terminated in August 2022 could survive post-termination. In my view it is equally obvious that the employer and employee have no control over when a third party might bring a claim against the employee and therefore it would be in their reasonable contemplation that the third party might bring a claim after the employee has left the employer’s employ.

101. Against First Names the Defendant raises the case of Vadim Don Benyatov v Credit Suisse (Securities) Europe Ltd [2023] EWCA Civ 140. It suggests that at [129]-[130] the case is authority for the proposition that, in English law, there is no general principle that if a person acts on the instruction of another they are entitled to be indemnified against all losses, of any kind suffered as a result of doing so. This is a gross oversimplification. In Benyatov the claimant was not claiming (as does Mr Nancy) indemnity against claims (including costs) by third parties but against his own loss of earnings said to have been caused as a consequence of his employment. The Court of Appeal agreed with the judge below that there is not a single case in which an indemnity implied into an agency or employment contract has permitted the agent or employee to recover lost income. Rather, in every reported case where an indemnity was ordered it was for payments that the agent or employee had made, or was liable to make, to a third party.

102. Having covered all of Mr Nancy’s legal fees relating to the Neil proceedings, the Defendant refused to cover just one legal bill. Apparently, the Defendant’s contract with the lawyer it had hired to assist the Claimant had expired. She had not been paid for two months and Mr Nancy offered to pay her himself if the Defendant would not pay her. The real reason why the Defendant will not cover this bill seems to be that on its face it bears the words “Note: A legitimate legal fee will be covered by the professional contract with Nova.” The Defendant submits that the services were unnecessary as the travel ban had been lifted.

103. It seems odd to me that Mr Nancy should be seeking the help of, and agreeing to pay, the lawyer if there were no need. It was suggested to Mr Nancy that he wanted to travel urgently for personal reasons. I cannot understand why this is relevant – the question is whether a travel ban consequent on the Neil bankruptcy was preventing him from travelling whether urgently or not. There is no explanation of the note to the invoice and it is possible (if not likely) that English may not have been the first language of the author. It is therefore not known what the word “legitimate” was intended to convey. All in all, I seen no reason why Mr Nancy should not be indemnified against the invoice.

104. As to the claims for declarations in respect of any tax liability or liabilities arising out of the bankruptcy of Neil, the Defendant contends that the Claimant has not pleaded a claim for such relief. It is too late to amend, and no application has been made. It is also said that such a claim is premature. There is no evidence before the court that Mr Nancy will incur such losses. Nor is there any evidence that NOX will not continue to provide him with legal services, at no cost, as it has done throughout with the exception of the disputed invoice.

105. It is correct that there is no pleaded claim for a declaration, and I shall make none. That is not however the end of the matter. This judgment clearly represents a res judicata between the parties. Should any tax liability or liabilities arising out of the bankruptcy of Neil be imposed on Mr Nancy I have held that there exists a remaining liability on the part of the Defendant to indemnify Mr Nancy against the costs and claims made against him by third parties arising out his former employment with the Defendant.

DISPOSAL

106. There shall be judgment for the Claimant in the sum of AED 4,000. All other claims are dismissed.

107. There will be an immediate assessment of costs. The parties shall serve and exchange submissions on interest and costs within 7 days of the date of this judgment and responses 7 days thereafter.