May 11, 2023 court of first instance - Judgments
Claim No: CFI 087/2021
IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE:
AS WORLD GROUP HOLDING LIMITED
SAJID BARKAT AL BARKAT
|Trial :||31 October 2022 – 2 November 2022|
Ms Sophia Hurst instructed by Mahmood Hussain Advocates & Legal Consultancy for the Claimant
Mr Antonios Dimitrakopoulos instructed by BSA Ahmad Bin Hezeem & Associates LLP for the Defendant
|Judgment :||11 May 2023|
JUDGMENT OF H.E. DEPUTY CHIEF JUSTICE ALI AL MADHANI
UPON the Claimant’s Claim having been filed on 31 October 2021
AND UPON the Defendant's Defence without Counterclaim dated 6 January 2022
AND UPON the Claimant’s reply to the Defence dated 7 February 2022
AND UPON the Claimant’s amended Particulars of Claim dated 9 February 2022
AND UPON the Claimant’s skeleton argument dated 26 October 2022
AND UPON reviewing the parties’ submissions in the case file
AND UPON hearing counsel for the Claimant and counsel for the Defendant at the Trial listed before me on 31 October until 2 November 2022 (the “Trial”)
AND UPON reviewing the Claimant’s and the Defendant’s evidence in the Core Trial Bundle
AND UPON review of the Law of Obligations, DIFC Law No.5 of 2005 (the “Law of Obligations”)
AND UPON reading the documents contained in the Trial Bundle and in particular the witness statements of the following witnesses:
(a) Mr Abdoulaye Senghor
(b) Ms Ruby Seiton
(c) Mr Jelalutheen Dashil Mogamath
(d) Mr Sultan Mohammad Rashid Amin
(e) Mr Sajid Barkat.
And further documents referred to in the course of the Trial
IT IS HEREBY ORDERED THAT:
1. Judgment be entered for the Claimant in the amount of AED 4,104,278 plus simple interest accruing at the rate of EIBOR + 1 per cent.
2. The Defendant shall pay the Claimant’s costs of the proceedings on the standard basis, to be assessed by the Registrar, if not agreed.
3. The Defendant shall be awarded an order for their costs for defending its claims until the point of when the Claimant discontinued its initial five claims. The Claimant shall pay the costs of the Defendant, agreed between the parties or those costs shall be assessed by the Registrar, if not agreed between the parties.
Date of Issue: 11 May 2023
SCHEDULE OF REASONS
1. The Claimant seeks to recover damages from the Defendant as a result of alleged breaches of his fiduciary and contractual duties owed to the Claimant. It is alleged by the Claimant that the Defendant had paid amounts of money to and for his benefit in the sum of AED 4,139,278. It is the Defendant’s case that this was not an unjust enrichment instead he had acted within the knowledge and in the best interest of the Claimant and its sole shareholder, Mr Abdoulaye Senghor (“Mr Senghor”).
2. Mr Senghor is a French national, born in Senegal, came to the UAE in or around 2017 to set up corporate vehicles entities for tax efficiency purposes. Mr Senghor said that his wealth is generated predominately from his business dealings in Africa, not through his businesses or any of his dealings in the UAE. It was said on behalf of the Claimant that the Defendant was hired by Mr Senghor to run and manage day-to-day operations from UAE. It was also said that it must have been clear to the Defendant that Mr Senghor had no experience on the formalities of setting up a company in the UAE.
3. The Defendant is a Pakistani national, was a senior employee of AS World. The allegations against him relate to whether he acted with the knowledge and approval and in the best interest of AS World and its shareholder.
4. These proceedings are brought with the objective of recovering the losses incurred by the Claimant. The principal claims in the proceedings may be summarised as follows:
(a) that the Defendant did not act in good faith and was in breach of the Law of Obligations under which it was authorised to act in the best interest of the company and its shareholders, instead the Defendant abused his managerial position by operating and managing the Claimant’s banks account funds for his own personal benefit; and
(b) further, that the Defendant acted in breach of his employment contract making several payments for his own personal interest, those payments were not made in the best interest of the Claimant or pursuant to any binding agreement, therefore he was in breach of his duties of care and liable for negligence and as such those payments are recoverable from the Defendant as damages for breach of contract.
5. Those claims are rejected by the Defendant:
(a) It is said on behalf of the Defendant that he was a fiduciary of the company, however he had acted in compliance within its fiduciary duties conferred under the Law of Obligations and acted in the best interest of the company at all times; and
(b) that, he had conducted his managerial position within the authorisation and knowledge of Mr Senghor and the allegations advanced on behalf of the Claimant is only a response to the Defendant’s request for his gratuity payments.
6. The issues that arise out of this dispute which will be determined in turn include the following matters are:
(i) whether the Claimant or Mr Senghor approved the Defendant’s salary increase from AED 40,000 to AED 75,000.
(ii) whether the Noor Bank cheques issued by AS World for the finance of the Defendant’s Dubai Hill Villa had been approved by the Claimant or Mr Senghor, if there was an agreement that the advance payments made by Mr Senghor are to be repaid back by the Defendant, whether the payments of AED 15,000 from the Defendant’s bank account to Mr Senghor amounted to a “loan” or repayments of the two advance payments made by Mr Senghor.
(iii) whether there was a loan of AED 100,000 that was borrowed by Mr Senghor at the start of his business relationship with the Defendant? If there was a loan agreement between the parties, had there been an authorisation to repay that loan from AS World’s funds.
(iv) whether the registration of AS World’s vehicle under the Defendant’s name was approved and authorised by Mr Senghor.
(v) If the bank transfer of AED 2 million from the Claimant’s bank account to the Defendant’s bank account was approved and authorised by Mr Senghor and if any of the supporting evidence are to be categorised as business expenditure.
(vi) If the cash handover of AED 2 million was provided on behalf of the Claimant to the Defendant on 11 March 2021.
7. In these proceedings, the Claimant relies on the significance and the legal overview of the fiduciary duties outlined in Article 158 of the Law of Obligations which expressly states that a “person is a fiduciary of another if he has undertaken (whether or not under the contract) to act for and on behalf of another in a matter in circumstances which give rise to a relationship of trust and confidence”. Therefore, it is the Claimant’s case that it could be assumed, unless demonstrated, that an employee will owe fiduciary duties to his employer. The Claimant submits that the Defendant accepts he was a fiduciary of AS World which would be the case in any event based on the wide-ranging powers that have been delegated to him and in particular the power to “dispose of the company’s property”, which is the essence of a fiduciary duty, to manage the company’s property in its best interest.
8. Further, the Claimant puts forward that acting as a fiduciary it involves acting “under the obligation of loyalty to [the Defendant’s] principal”, and a fiduciary’s obligations of loyalty comprises such of the duties set out in schedule 3 of the Defendant’s employment contract, which are appropriate in all circumstances of the relationship between the fiduciary and his principal.
9. It is the Claimants case that the fiduciary duties that have been listed above are ought to be applied to the Defendant particularly when the Defendant has been entrusted with property on behalf of the other individual and it is tasked with the management of that property and company’s money.
10. The Claimant explains that the obligation of loyalty is four-fold. First is to act in good faith in what he (the Defendant) considers to be the best interest of the principal without regard to his own interest. Second, a fiduciary must not place himself in a position where his own interest conflict with that of his principal. Third, the fiduciary must not use the principal’s property, information or opportunities for his own or anyone else’s benefit unless his principal has consent or the use has been fully disclosed to the principal and the principal has not objected to it. Fourthly, a fiduciary owes the principal a duty to exercise the care, skill and diligence which would be exercised in the same circumstance by a reasonable person having both: (a) the knowledge and experience that may reasonably be expected of a person in the same position as the fiduciary; and (b) the knowledge and experience which the fiduciary has.
11. It is the Claimant’s case that those obligations were owed specifically when the Defendant was holding money for the Claimant and was tasked with paying it out and dealing with it and transacting business on day-to-day basis for the Claimant. Since these payments had been made solely for the personal benefit of the Defendant, the Claimant argue that it is “self-evident” that the Defendant has been in breach of those duties of loyalty, conflict of interest, and secret of profits.
12. As part of the Claimant’s oral submissions, they contend that the Defendant cannot make payments out of the Claimant’s funds unless consent had been obtained by Mr Senghor or full and proper disclosure was given to Mr Senghor and there was no objection, without that authorisation, the Defendant had gratuitously made those payments to enrich himself and that is clearly not in the Claimant’s best interest and should amount to a breach of his duties.
13. My reasons for granting the Claimant’s application in seeking the monetary damages against the Defendant are set out below. I should make it clear that in addition to the oral submissions made during the Trial, I have read carefully through the evidence filed by both parties. In the event I may omit some arguments or legal authorities relied on by either the Claimant or the Defendant, this does not mean that I have overlooked it.
14. During the course of this Judgment, I will be referring to AS World Group Holding Limited as either the “Claimant”, the “Company” or “AS World” through the course of my findings.
The underlying facts
15. It is trite that Mr Senghor is the owner of three different entities in the UAE being, AS World Company FZE (established in Sharjah), AS World Company Conference Organiser (established in DIFC) and AS World Consultancy Limited (established in the DIFC), together the “AS World Group Companies”. It has been described that the Claimant’s primary business is to ultimately promote the “AS World” brand of the three AS World Group Companies, which generally means that the Claimant does not enter into contracts with clients.
16. On 8 January 2017, Mr Senghor registered a Power of Attorney (the “PoA”) in favour of the Defendant. The PoA included wide ranging powers over the Claimant’s bank accounts. It is understood that the Defendant had assisted Mr Senghor in setting up his business activities in the UAE.
17. On 1 May 2017, a contract of employment was entered into between the Claimant and the Defendant effectively appointing the Defendant as a Managing Director of AS World (the “Employment Contract”). It is said by the Claimant that the contractual duties of the Defendant are all contained in Schedule One of the Employment Contract. An integral part of those duties included the Defendant’s compliance with any contractual, statutory or fiduciary responsibilities owed to the Claimant, exercising his powers diligently and complying with all reasonable and lawful instructions directed to him by the Claimant. Although the Defendant was employed by the Claimant, he also had managerial oversight of all the other three AS World Group Companies.
18. It should be noted that the Defendant’s job responsibilities owed to the Claimant is a disputed issue, when it was put to the Defendant at the Trial whether the list of responsibilities contained in document A89 is part of his contractual duties, the Defendant claimed that document A89 had been forged by Mr Senghor because the address listed thereon was “the new office address” of the Company. Albeit the document had been signed by the Defendant and Mr Senghor.
19. On 3 July 2019, a power of attorney was granted to the Defendant by way of passing a board resolution appointing the Defendant the sole signatory of the Claimant’s bank accounts, effectively allowing the Defendant full control and access of the Claimant’s funds.
20. On 12 April 2021, the Defendant’s employment was terminated. The reason for termination is a disputed issue between the parties. The Defendant alleges that he was effectively terminated by Mr Senghor after he had expressed concerns about not intending to be responsible for signing cheques on behalf of the Claimant. However, the Claimant argues that the Defendant resigned voluntarily, as he provided his resignation letter during a casual lunch with Mr Senghor at which the Defendant had asked Mr Senghor to sign it.
21. In early May 2021, Mr Senghor became aware of the Defendant’s alleged unlawful use of the Claimant’s funds, making various unauthorised instalment payments towards his personal villa. In light of that information, on 7 May 2021, Mr Senghor cancelled the Defendant’s signatory powers granted to him by the Claimant.
22. On 27 July 2021, the Defendant brought proceedings in the SCT for amounts allegedly owed to him by the Claimant as a result of the termination of his employment. The Claimant issued a counterclaim in those proceedings in the amount of AED 5,576,845. On 29 September 2021, H.E Justice Maha Al Mheiri transferred the matter to the Court of First Instance because the counterclaim exceeded the monetary jurisdiction of the SCT.
23. On 31 October 2021, proceedings were initiated in the DIFC Courts of First Instance.
24. Before dealing with the agreed list of issues, I will consider the procedural matters raised in the Defendant’s skeleton argument involving the discontinued claims. The Defendant argues that, but for, the Claimant’s objection to its disclosure request, it would have been able to demonstrate that approvals have in fact been granted or can be deemed to have been granted to the transactions in question.
25. It is contended by the Defendant that the discontinued claims are a precursor to the “callousness of the Claimant’s conduct in compiling its spurious allegations” against the Defendant. The Defendant says that the initial five claims pursued against the Defendant were recklessly made, no reasonable investigation had been undertaken by the Claimant to ascertain if those allegations have any merit. The Defendant further contends that the Claimant failed to provide any reasons for their discontinuance, and in spite of that, there has been no cost order made against the Claimant by virtue of RDC 34.15.
26. The Claimant challenges these allegations on two grounds, first they rely on the premise that it was the Defendant’s responsibility to have kept a record of all transactions that he had entered into on behalf of the Claimant, and to provide and return those agreements and transactions on the termination of his employment. However, the Defendant failed to do so, preventing the Claimant from verifying if those payments were in fact business expenditure. The Claimant assumed that those payments were not made in the interest of the Claimant and sought recoverable damages. However, it is the Claimant’s case that those claims were subsequently withdrawn when the Defendant provided evidence in its statement of defence demonstrating that those payments were in fact business expenditure.
27. Second, the Claimant argues that the current claims against the Defendant are not vindictive, they have been pursued based on the Defendant’s inability in providing evidence confirming that the transactions in question were made in the best interest of AS World. Therefore, in the absence of any evidence produced by the Defendant to support his version of events, it could be determined that the Defendant had breached his contractual obligation. Since the Defendant cannot account for the vast majority of the payments, the Claimant argues that the Court should draw an inference that those transactions were not made in good faith and the Claimant’s funds were used for the Defendant’s personal benefit.
28. My understanding of RDC 34.2 and RDC 34.2 is that a notice of discontinuance is a unilateral right afforded to a claimant and the appropriate procedure for filing a notice of discontinuance does not require the claimant to specify reasons for their discontinued claims or remedies which were initially sought or pursued in the case. However, the general rule is that a discontinuing claimant is usually liable for the defendant’s costs which were incurred on or before the date on which the notice of discontinuances was served on the defendant. Based on the above, the Defendant shall be awarded an order for their costs. The Claimant shall pay the costs of the Defendant, those costs shall be assessed by the Registrar, if not agreed between the parties.
29. With reference to the Claimant’s refusal to the Defendant’s request to access documents on its database. The Defendant says that documentary record on the company’s database would have supported his case by demonstrating that approvals have in fact been granted or can be deemed to have been granted. I place no reliance on this argument (on two grounds). It was part of the Defendant’s duty to keep good and proper records of the transactions and dealings that he was entering into on behalf of the Claimant. Largely, he was appointed by Mr Senghor to run and manage AS World day-to-day operations and to keep track of dealings that had been entered on behalf of the Claimant. On review of the Defendant’s requested documents, are all in fact documents which would have been in the possession, custody and control of the Defendant. Therefore, if the Claimant did not have access to those documents, it is an indicator that those documents never existed and granting access to the Claimant’s database would not have revealed much or even “supported” the Defendant’s version of events.
30. Further, I agree with the Claimant, the Defendant had the opportunity to file an application under RDC 28.36 compelling the Claimant to produce those documents, allegedly withheld from him. As far as the evidence is concerned, the Defendant has not applied to the Court for a Document Production Order, on the grounds that the Claimant’s objection to produce is unreasonable. Therefore, in the absence of such application, it is not justified for the Defendant to complain or suggest that the Claimant is withholding documents, without fully exhausting all avenues afforded to the Defendant. It is a weak argument to rely on, a Managing Director employed for a small sized company, one would assume that those requested documents would be readily available for access and production, if needed.
31. Finally, the Defendant says that the claim is a vindictive claim launched against him because he simply demanded Mr Senghor to pay his end of year service and gratuity payments. This allegedly had disappointed Mr Senghor (rejected by Mr Senghor). The Defendant’s allegation that the Claimant’s case against him is vindictive is based on two-fold. First, the Claimant’s objection in disclosing crucial documents from the Defendant that would have supported his version of events. Second, the discontinued claims are an indicator that the remaining claim is meritless.
32. When dealing with this issue, a question comes to mind, if in fact, Mr Senghor was generous with the Defendant over the course of his employment with AS World, why would Mr Senghor suddenly withhold this generosity when the Defendant demands his end of service, it was the Defendant’s submissions that he was a valuable member of AS World. The foundation of the Defendant’s case is based on the premise that the payments in question have all been authorised by Mr Senghor, Mr Senghor knew of the salary increase, promised the purchase of the Dubai Hill Villa, authorised the Defendant to register the Company’s vehicle under his name and pay the remainder of the new vehicle using the Company’s funds and other cash transactions, all of which totalling circa. AED 4 million. Why would Mr Senghor refuse to pay AED 998,118.99 which is insignificant in value in comparison to the extraordinary gifts the Defendant had received from the Claimant and its shareholder. The Defendant has not provided this Court with a plausible explanation related on this issue.
33. I find it quite inconsistent with the Defendant’s account and his own case to suggest that the claim was launched primarily because Mr Senghor could not find it in himself to pay the employment claim. It is also contradictory for the Defendant to suggest that the Claimant was withholding various documents and evidence that would have demonstrated approvals and authorisation, in the meantime, it was the Defendant’s testimony that Mr Senghor instructions were executed based on a verbal approval from him, considering AS World was a small sized company, “[o]ur decision was based mostly orally. So Mr Senghor instruct me, instruct Ruby, for any kind of approval. All right? We should have in a company expense policy or some payment policy which we did not have it. We were mostly doing it orally”. (Transcript 3, Page 223-224).
Findings of facts on the disputed issues
34. I now turn to make findings of fact on certain disputed issues. In that context it is necessary to make observations as to the creditability and reliability of the witnesses of fact.
35. Mr Senghor gave evidence on behalf of the Claimant. His evidence was given through a video link. It was, quite properly, subject to searching cross-examination. It would be fair to say that Mr Senghor’s recollection of the events was in some respects detailed, I am satisfied that he was an honest witness who was doing his best to assist the Court. His recollection of events between him and the Defendant and what was said to the Defendant was corroborated by the evidence of one or more of the former employees of AS World. I am satisfied that I can accept his evidence.
36. Ms Seiton’s and Mr Mogamath’s evidence - both are longstanding and obviously loyal and conscientious individuals to Mr Senghor. They, too, gave evidence through a video link. They sometimes struggled to understand questions or give their answers in good English, but were clearly seeking to assist the Court. I am conscious that, in evaluating their evidence, it is necessary to have in mind that they might well have been motivated by a desire to assist and support their previous/current employer; but I am satisfied that any such desire did not lead them to give evidence which they did not believe to be true. In my view they were each honest and straightforward witnesses who were seeking to assist the Court.
37. The Defendant elected not to cross examine Mr Amin on his witness statement. Since the Defendant did not challenge in cross examination the witness statement of Mr Amin, it is therefore permissible to assume that the Defendant does not argue that the particular issue relevant to the cash handover of 11 March 2021 is not challenged. I agree with the Claimant that this is a long-established common-law principle, a party must challenge in cross examination the evidence in chief if that party intends to argue that the relevant evidence is not accepted.
38. Mr Barkat was the principal witness in support of his case, and he gave evidence by a video link. It is fair to say that he was the least satisfactory witnesses called on behalf of his own case: in that he was prone to verbose, argumentative and defensive in his answers to the questions put to him. For reasons which I shall explain in the course of making the findings of fact which I do, found it necessary to approach his evidence with great caution. His attempt to evade and prevaricate - together with his unwillingness to answer the questions put to him – led me to the conclusion that he had no interest in assisting the Court in its task of ascertaining the true facts in this case. I found his evidence to be self-serving, evasive, self-contradictory to his witness statements and unreliable. Mr Barkat did not call any other witness to support his own version of events.
39. The Claimant submitted Mr Kassem Younes’ report (“Mr Younes’s Report”). This Court had the benefit of Mr Youns’s testimony and his answer in cross examination. However, given the evidence that have been submitted by both the Claimant and the Defendant, Mr Younes’s Report did not add to my consideration of the factual issues one way or another. The Defendant submits in his third witness statement that he had been unable to instruct an independent expert to rebut Mr Younes’s Report, inferring that this may be detrimental to the outcome of the case. As set out, I have determined the factual issues based on all evidence submitted by the parties, factual witness statements and the assessment of the witnesses during cross examination.
40. It is the Claimant’s case that the Defendant had acted without the approval and the knowledge of Mr Senghor in the increase of his salary from AED 40,000 to AED 75,000 which took effect from September 2019 to March 2021. The Claimant argues that the Defendant had no authorisation for the increase of his remuneration, allegedly, this was a unilateral decision made by him. In support of their argument, the Claimant relies on clause 2.1 of the Employment Contract which sets out the contractual salary, split into categories of payments including a basic salary of AED 24,000 a month, a housing rent allowance of AED 12,000 a month and transportation allowance of AED 4,000 a month with a total monthly salary of AED 40,000. It is argued that the AED 40,000 is the start and finish of the Defendant’s monthly entitlement and since the Employment Contract had not been validly varied between the Claimant and the Defendant, the increase to AED 75,000 amounts to an unauthorised payment and the Defendant is therefore in breach of his contractual and fiduciary duties under the Law of Obligations.
41. Since this is a question of fact and a matter of evidence, in support of the Claimant’s argument, they rely on the witness evidence of Mr Senghor, Ms Ruby Seiton (“Ms Seiton”), the former administrative secretary of the Claimant and Mr Jelalutheen Dashil Mogamath (“Mr Mogamath”), the current operational manager of AS World. Both witnesses provided the Court with evidence in relation to the events relating to the Defendant’s salary increase, HR letters and the salary slips. Ms Seiton submits in her witness statement that she was surprised to learn that the Defendant had increased his salary, amidst the COVID-19 temporary 50% salary reduction of all AS World’s employees.
42. The Defendant refuted the Claimants allegations on three grounds. Firstly, he submits that the increase was justified on the premise that the Defendant had managed two separate entities, being AS World Sharjah and the AS World, thus he was entitled to two separate salaries from the Claimant. Second, the Defendant relies on the WhatsApp message sent on 17 April 2020 which he sent to Mr Senghor listing all the employees’ payroll which allegedly confirms that Mr Senghor ought to have known that the Defendant was receiving a salary of AED 75,000. Third, the Defendant relies on an alleged verbal agreement between him and Mr Senghor in April 2019 confirming that he would receive a monthly remuneration of AED 75,000.
43. Mr Senghor objected to the Defendant’s allegations that the WhatsApp message should be constituted as evidence of his knowledge. Mr Senghor confirmed that he did not know or take any note of the exact list or the salary that the Defendant was paying himself and he never agreed to an increased salary at any time during the Defendant’s employment (Transcript 1, Page 78).
44. It is common practice, when an employer agrees to increase an employee’s salary, an agreement to that effect is usually documented in writing and signed by both parties. As far as the evidence is concerned, there is no written agreement between the Defendant and the Claimant with respect to the salary increase. The Defendant insisted that there was evidence supporting the salary increase of AED 75,000, namely the Sharjah employment contract dated 28 March 2017 (D189) offering him a salary of AED 40,000 (the “Sharjah Contract”) and AS World DIFC Employment Contract dated 1 May 2019 offering him a salary of AED 40,000. The Defendant submits that the Sharjah Contract does not supersede the Employment Contract offered by AS World DIFC, suggesting that both contracts act and operate distinctly of each other, although the wording of the Defendant’s responsibilities, remuneration rate including his working hours are almost identical. There are many issues with this argument, for instance, the suggestion that the Defendant is expected to work and dedicate 48 hours a week to each company is absolutely absurd and unrealistic. I find it to be an attempt to conceal his misconduct whilst he was entrusted to operate and run AS World with utmost good faith and act in the best interest of the Company. During the Defendant’s cross examination, he accepted that whilst he was under an obligation to perform duties for other subsidiaries of AS World, by virtue of clause 10 of the Employment Contract, however the Sharjah entity was a separate company, in a different state in the UAE, and not a subsidiary, suggesting he was entitled to both salaries. Further, the Defendant indicated that Mr Senghor agreed to pay the Defendant €20,000 as Mr Senghor always dealt in euros (Transcript 3, Page 76) a contention which has not appeared in any of the Defendant’s three witness statements.
45. The Defendant also argues that he was entitled to that increase because of his promotion to the position of CEO and this justified the increase of his salary. On the other hand, the Defendant testified that “in a three-person company, do I really care about if I’m CEO or MD or whatever?” (Transcript 3, Page 87). It was the Defendant’s evidence that the breakdown earnings of AED 75,000 shown in his payslips (D105-D111) was not part of the April 2019 salary increase discussion with Mr Senghor. The Defendant indicated that Ms Seiton prepared this breakdown without his approval. It was Ms Seiton’s evidence that she felt obligated to prepare and sign the Defendant’s payslips at fear of losing her job.
46. I found the Defendant’s submissions in these proceedings to be contradictory and reasonably unconvincing. For instance, there are many discrepancies between the Defendant’s witness statement, his own defence and his oral evidence with respect to the salary increase. In the Defendant’s first witness statement, he mentions in paragraph 70 that the first increased salary of AED 75,000 was received in April 2019, in paragraph 63 of the Defence, he indicates that an agreement between him and Mr Senghor only took place around September 2019. During his cross examination, the Defendant conveniently said that this was a “typo” and the discussions he had with Mr Senghor was in April 2019.
47. Furthermore, the Defendant seems to rely on an argument which supports his account to an extent, whilst simultaneously abandoning the same argument when it is not befitting to his defence. I note that the Defendant indicated that the job responsibilities document A89, is a fake document that in the event of any changes to his duties and responsibilities he should have signed that document, “this must be signed by me” (Transcript 3, Page 20). The Defendant also took an issue with AS World’s Board Resolution prepared by the Claimant with the objective of granting him wide ranging powers to operate and manage the Company, he indicated that this should have been signed by him in order for it to be valid, “I am a director in the company” (Transcript 3, Page 41). The Defendant questioned the validity and the authenticity of various documents relied on by the Claimant, implying that they may have been prepared by the Claimant after his departure or that it could not have been valid because he did not sign it. Whilst at the same time, the Defendant was not able to provide an accurate month on when the verbal agreement took place between him and Mr Senghor or provide any independent evidence demonstrating that the salary increase was authorised and approved by the Claimant and its shareholder.
48. The Defendant abandoned the notion of “invalid or forged document” argument with respect to the salary certificate letters and the payslips (D103 and D111) and did not suggest that those letters are forged or invalid because Mr Senghor did not sign those payslips and salary certificate letters. The Defendant says that although Mr Senghor has not signed these payslips, he provided his approval to Ruby verbally. Another example of this is evident in his first statement under paragraph 74 which states that he “preferred to simply rely on his [Mr Senghor’s] word and then implement our agreement through the payroll”.
49. I am satisfied to conclude that the Claimant’s account with respect to this issue to be more convincing and credible, the Sharjah Contract was simply entered into between the Claimant and the Defendant due to the delays that had been experienced in the incorporation of the DIFC Holding Company. Once that had been incorporated, the Sharjah Contract became effectively void because the Employment Contract offered by AS World had superseded the parties’ initial agreement. Aside from the fact that the argument is impractical, assuming the Defendant’s account is true, he would have been entitled to AED 80,000 instead of AED 75,000 there is an unjustified deduction of AED 5,000 which has not been accounted for by the Defendant. There should have been a formal written amendment to the Sharjah Contract particularly given the significant increase of AED 35,000 to the Defendant’s salary. However, there could not have been an amendment because there was no such agreement between the Defendant and Mr Senghor. Further, one would also have expected to see a board resolution to the effect of promoting the Defendant from the position of a Managing Director to a CEO, similar to the board resolution which Mr Senghor delegated powers and authority to the Defendant to operate and manage AS World.
50. As for the WhatsApp message which the Defendant relies on as evidence that Mr Senghor ought to have known about the salary increase, is a weak argument and not credible to support his account that the payments of AED 75,000 had been authorised. Irrespective of the Company’s policy, a director that owes statutory and contractual duties to the Company should have recorded any arrangement that was agreed between him and Mr Senghor particularly in respect of financial matters. This would have removed any uncertainty with regards to his entitlement and any narrative that he failed to uphold his fiduciary duties. The Defendant had ample opportunity to confirm his salary entitlement of AED 75,000 is approved by Mr Senghor. For instance, his requests of payslips from Ms Seiton for his salary transfer, not one of the letters or the payslips have been signed by Mr Senghor and if the Court relies on the Defendant’s argument that if there are any changes, “this must be signed by me” (Transcript 3, Page 20) then one ought to conclude that the payslips could not have been authorised and therefore are invalid. It is improper for the Defendant to simply rely on the fact that Ms Seiton may have received a verbal approval from Mr Senghor.
51. The Defendant’s counsel suggested that the salary increase was clearly authorised and approved by Mr Senghor relying on his testimony at the Trial in which he indicated that he authorised the Defendant to pay himself AED 75,000, “he take one time, AED 75,000 […] and I allowed him” (Transcript 1, Page 94). It is unacceptable for the Defendant to rely on this one-off authorisation as proof that Mr Senghor knew and authorised the Defendant’s salary increase. It was clear from Mr Senghor’s testimony that the Defendant requested to receive a higher salary of AED 75,000 for that month (May 2020) because he had worked hard (Transcript 1, Page 94), it was an isolated authorisation for that particular month, however it did not constitute an authorisation nor an approval to use the Claimant’s funds and continue to be paid AED 75,000.
52. With reference to the SCT Proceedings in which the Defendant continues to rely on, the SCT Order has been overturned in my order of 7 July 2022 (the “Appeal Order”). The Appeal Order clearly stated that the issue surrounding the Final Salary would indeed be determined pending these proceedings before me. Therefore, I place no reliance on the Defendant’s argument that “SCT proceedings confirmed that his salary was indeed AED 75,000”, the entitlement that was granted by H.E. Nassir Al Nasser in SCT-222-2021 on 20 October 2021 has been overturned in the Appeal Order pending my decision in these proceedings.
53. Based on my findings above, the salary payments commenced from September 2019 to March 2021 were unauthorised payments made by the Defendant without the knowledge and the approval of Mr Senghor or the Claimant. Aside from the payment that was made in May 2020 in which Mr Senghor clearly authorised the Defendant to pay AED 75,000 as a one-off payment.
Payments towards the Dubai Hills Villa
54. It is said on behalf of the Claimant that the cheques issued on:
(a) 28 July 2018 for AED 150,000 titled “Sajid Barkat Advance Payment”;
(b) 8 September 2019 for AED 309,389, cheque No. 100072;
(c) 28 November 2019 for AED 309,389, cheque No.100166; and
(d) 12 December 2020 for AED 450,000 out of the AS World’s bank account a transfer titled “Bonus Annual”.
were unauthorised payments made towards the Defendant’s personal villa (the “Dubai Hill Villa”). There is no evidence of any contractual entitlement or separate agreement between the Defendant and the Claimant to either suggest that the Claimant would finance the purchase of the Defendant’s villa or that the purchase would be a gratuity from Mr Senghor. During the cross examination of the Defendant, he accepted that those cheques had been presented to pay for his villa. It is an undisputed issue that there is no written agreement confirming that the Claimant or Mr Senghor would buy the villa for the Defendant as a gift, however standard practice dictates that such arrangement would be expressly written to avoid a dispute of what was agreed between the parties.
55. The Claimant relies on the sales agreement signed between the Defendant and Emaar (the “Emaar Agreement”) dated 24 April 2018, confirming that it was a bilateral agreement, where the Claimant was not a party to it, revealing that the purchase of the villa was for the Defendant’s residential use of AED 3,093,888. The Claimant further relies on the Defendant’s Employment Contract which entitles him, amongst other benefits, a housing rent allowance of AED 12,000 a month, suggesting that it would be commercially absurd for the Claimant or Mr Senghor to pay twice in this respect. In support of the Claimant’s account, it also relies on the HR salary certificate letter referring to the Defendant’s application for a home loan from Dubai Islamic Bank suggesting that the Defendant’s account is contradictory. The Claimant says, if the Defendant’s defence is based on the foundation that Mr Senghor had agreed to purchase the villa as a gift, why does the Defendant need to apply for a home loan.
56. The Defendant challenges this contention claiming that the lavish gifts were a courtesy of Mr Senghor which were described as “voluntary handouts” including the purchase of the Dubai Hill Villa. It is the Defendant’s case that the cheques issued on behalf of the Claimant were authorised payments and were made within Mr Senghor’s knowledge and approval because it was Mr Senghor’s intention to reward the Defendant.
57. The Defendant relies on four grounds to support his account that the cheques were authorised by Mr Senghor. Firstly, the Defendant asserts that in the early 2018 Mr Senghor made two payments of AED 154,694 and AED 126,756, total of AED 281,450 to Emaar for the acquisition of the Dubai Hill Villa (the “Emaar Advance Payment”). Purportedly, those payments had been made on the premise that Mr Senghor would cover the entire cost of the villa, and financing that acquisition would have either been settled through the use of Mr Senghor’s personal funds or the funds of the Claimant (rejected by the Claimant and Mr Senghor).
58. Second, the Defendant explains that the Emaar Agreement included AS World’s address which he provided instead of listing his own personal address, he says that this should be a reliable indicator that the Claimant impliedly consented to finance the costs of the Dubai Hilla Villa. As such, the cheques issued on behalf of the Claimant are not unauthorised payments.
59. Third, the Defendant asserts that the Claimant was facing severe financial difficulties relying on a dishonoured cheque No.000062 drawn from the bank account of AS World Sharjah towards the purchase of the Defendant’s villa, the payment of AED 464,084 was returned on 23 September 2020. In light of that event, Mr Senghor instructed the Defendant to pay that amount from his personal account and the Claimant would reimburse him at a later stage (rejected by the Claimant). The Defendant relies on this account to explain the transfer of AED 450,000 made on 12 December 2020 titled “Bonus Annual” to his personal account. Further, in view of the Claimant’s financial issues, the Defendant began loaning Mr Senghor money to assist with his credit card debt to enable him to pay for other liabilities. As such, the Defendant made five separate payments of AED 15,000 over the course of 5 months (totalling AED 75,000).
60. Fourthly, the transfer of AED 150,000 titled ‘Sajid Barkat Advance Payment’ made on 28 July 2018 ostensibly pertains to two separate loans. The first loan that was lent to Mr Senghor in the sum of AED 100,000 which was advanced at the start of his business relationship with the Defendant. The second loan accounts for the five payments of AED 15,000 which the Defendant made to Mr Senghor (AED 75,000).
61. I will deal with Mr Senghor’s evidence in light of the Defendant’s grounds of defence.
62. Mr Senghor asserted that there had been no verbal agreement between him and the Defendant that he or the Claimant would finance the purchase of his villa and those allegations advanced by the Defendant are untrue. With reference to the Emaar Advance Payment, Mr Senghor admits that he made that payment of AED 281,450 using his personal American Express credit card based on the Defendant’s inability in settling the upfront deposit and the land registration fees. Mr Senghor objects to the Defendant’s allegation that the Emaar Advance Payment should be a precursor that that the cheques issued by AS World were authorised payments. Mr Senghor was only prompted to make such large payment because the Defendant was unable to do so, there was no agreement that should have alluded the Defendant that he would be exempt from repaying Mr Senghor. It appears that the Emaar Advance Payment was made under the condition and purportedly under a verbal agreement that the Defendant would make monthly repayments to Mr Senghor.
63. The Defendant objects to this argument and relies on the lack of any written agreement between him and Mr Senghor to confirm that the Emaar Advance Payment was in fact a loan and he was liable to recompense Mr Senghor.
64. I find the Defendant’s argument on “evidence of absence” to be entirely inconsistent with his case. Initially, the Defendant relies on that argument as proof that in the absence of any agreement between him and Mr Senghor, one should effectively imply that the Emaar Advance Payment were not loaned by Mr Senghor, otherwise there would have been written evidence recording that arrangement, The Defendant says in his first witness statement that, “I would have […] expected […] a written confirmation of what would have amounted to an alleged loan would. Yet, this argument is completely abandoned by the Defendant on the lack of any documentation relating to the purchase of the Dubai Hill Villa. The Defendant does not seem to suggest that the lack of a written agreement between him and Mr Senghor should be an indicator that the purchase amounts to a gift, because it would contradict their earlier argument.
65. In the absence of any written evidence to indicate that the Emaar Advance Payment was a gratuity payment, or that the Defendant should not be liable in repaying that amount. I find it satisfactory that it was paid to financially support the Defendant in purchasing his villa and on the condition the Defendant would reimburse Mr Senghor.
66. With reference to the payments of AED 15,000 purportedly loaned to Mr Senghor to support him with outstanding liabilities, those payments were made over the course of five months. I am not satisfied with the notion that these payments were a loan.
67. Firstly, they simply do not resemble the characteristics of a loan, standard practice would suggest that the borrower would receive the whole loan as a lump sum rather than sporadic monthly payment over the course of five months. Second, it is admitted by the Defendant that Mr Senghor had acquired other villas in or around 2018, I find it implausible and unlikely that such a relatively small loan to a man of Mr Senghor’s wealth would be needed. Third, those payments appear to have coincided with the Emaar Advance Payment which suggests that there was in fact a verbal agreement between the Defendant and Mr Senghor that such amount would be reimbursed. Fourthly, if in fact Mr Senghor was in financial difficulty, the Defendant should have purchased his own villa to relieve Mr Senghor from being financially restrained. It is implausible for the Defendant to suggest that the purchase of the villa was a gift from Mr Senghor whilst simultaneously argue that Mr Senghor was incapable of meeting his credit card debit. Finally, amongst the other reasons which I find the AED 15,000 to be a repayment of the Emaar Advance Payment is the transfer made on 2 April 2018 from the Defendant’s personal bank account to Mr Senghor’s titled “Dubai Hills”. This is a strong indicator and consistent with the notion that the AED 15,000 is a repayment of the Emaar Advance Payment, rather than a loan to Mr Senghor, as alleged by the Defendant.
68. It was put forward in the Defendant’s closing submissions that the Court should disregard the expert’s evidence as his opinion simply affirms the Claimant’s allegations against the Defendant. I place no reliance on this argument, in this instance the expert was not required to produce compelling reasons and arguments in support of his opinion to convince this Court that those payments could not amount to a loan.
69. The Defendant submits that if the AED 15,000 was in fact a repayment connected to the Emaar Advance Payment, this does not explain the reason the Defendant only made five repayments out of the 18 instalments. As such, the Defendant relies on Mr Senghor’s lack of chasing the Defendant for the overdue instalment, claiming that the AED 15,000 was not a repayment of the Emaar Advance Payment. During the cross examination of Mr Senghor, he was asked why he did not pursue the remaining 13 instalments, Mr Senghor said that this was in fact raised with the Defendant, and the Defendant promised him the “money would be coming in” (Transcript, Day 1, Page 130-131). I find the Defendant’s reliance on Mr Senghor’s alleged “non-performance” or his approach in pursuing the overdue repayments to be weak and unconvincing argument. It appears that Mr Senghor followed up with the Defendant on the overdue payments, but this was met with unreliable promises. Therefore, I find the Claimant’s account on this matter to be more convincing and plausible than that of the Defendant, as a result the burden of proof placed on the Claimant is successfully discharged.
70. Further, I am not persuaded by the Defendant’s argument that the acquisition of the Dubai Hill Villa should be treated as a gift from Mr Senghor, the suggestion that a company with an annual revenue of circa. AED 3 or 4 million (E35) would contemplate of purchasing a villa to one of its employees in the amount of AED 3 million is a controversial argument to rely on. I struggle to believe that Mr Senghor thought this would have been a sensible commercial decision to justify on behalf of the Claimant.
71. It is standard practice to have such an arrangement documented and recorded if in fact there was an agreement between Mr Senghor and the Defendant that this acquisition should be treated as a gift. Since it was for the benefit of the Defendant, he should have insisted to document their agreement to prevent the line of questioning such as this. In the absence of any written agreement, or a board resolution confirming that the Claimant will effectively purchase this asset for the Defendant, I find the Defendant’s version of events to be inherently implausible to even suggest that a company and its shareholder would agree to purchase something as expensive as AED 3 million and to promise to cover the cost of the entire acquisition.
72. Whilst I find the Defendant’s arguments and grounds of defence relating to the purchase of the Dubai Hill Villa implausible and weak. Nonetheless, I will deal and address the grounds of defence relied on by the Defendant against the Claimant’s allegations and setting out my reasons for its dismissal.
73. With reference to the payment of AED 450,000 which relates to the returned cheque issued by AS World Sharjah of AED 464,084 towards the Defendant’s villa. I find the Defendant’s account to be unsatisfactory and inherently unlikely based on three-fold. During Mr Senghor’s cross examination, he explained that he became aware of the returned cheque through the Defendant, to that effect, Mr Senghor contacted Emaar instructing them not to present the cheque for clearance because it was the Defendant’s responsibility to issue a cheque from his own bank account. Mr Senghor stated that he informed the Defendant to issue a personal cheque to pay that amount, as it was his responsibility to settle the instalment payment plan with Emaar. Mr Senghor rejected the Defendant’s account that he or AS World agreed to reimburse the Defendant at a later date. Second, if the Defendant’s account is in fact true, I struggle to understand the rationale of concealing the true purpose of the transfer, the Defendant identifies it as a “Bonus Annual”, instead of “reimbursement payment towards Dubai Hill Villa”. Third, the Defendant does not provide insight on why the transfer does not reflect the exact amount of the returned cheque. If in fact there was an agreement that Mr Senghor would repay the returned cheque, one would expect the exact amount to be reimbursed to the Defendant’s bank account, instead there is an unjustified deduction of AED 14,084.
74. Mr Senghor denied the allegation that he had approved or authorised the issuing of those cheques to repay the outstanding balance of the Dubai Hill Villa for the Defendant. The Defendant’s counsel questioned Mr Senghor if he had felt generous at the time, since AS World’s business was thriving, only to discover later that this was not a sensible decision. Mr Senghor rejected those allegations and denied that he would have purchased such a lavish gift to one of his employees.
75. With respect to the payment of AED 150,000, with the description of “Sajid Barkat Advance Payment” made by the Defendant to his personal account, this is somewhat a standalone payment, in that the dispute here between the Defendant and Mr Senghor, is whether or not it is a loan. The Defendant says the AED 150,000 is a repayment to himself, alleging that it was done with the knowledge and approval of Mr Senghor. The Defendant accepts that he paid an amount of AED 150,000 from AS World’s Emirates NBD bank account to his personal account through a cheque deposit.
76. If the Defendant’s account is true and there was a loan lent by him personally to Mr Senghor, and in the absence of any independent evidence to suggest that this was a business expenditure. It was improper for the Defendant to use the Claimant’s funds to repay a loan that was borrowed by Mr Senghor, particularly when the Claimant was not liable to the Defendant to repay the borrowed amount. I find it implausible that Mr Senghor would allow its Managing Director to use the Claimant’s funds to settle a personal loan obtained from the Defendant prior to the start of their business relationship. During the Defendant’s cross examination, he submitted that AS World and Mr Senghor are the same, effectively suggesting that this entitled him to use the Claimant’s funds to repay the borrowed loan “company is paying me back which is Mr Senghor is paying me back” (Transcript 3, Page 151).
77. I disagree with this argument, a company is a legal personality in its own right, separate from its own shareholders, the directors owe statutory duties to the company, namely, to act within their powers, in the best interest of the company, to exercise their powers and duties with care and skills, to promote the success of the company and to avoid conflict of interest. In my view, the Defendant did not consider the long-term consequences of his actions and how those decisions would have a financial impact on AS World, it is objectively clear that he failed to act within the powers that was conferred onto him in the PoA and failed to consider the interest of the Company. Based on the above, the Defendant had erred in assuming that AS World and Mr Senghor are the same person, and he exceeded his authority and powers by assuming that the Claimant’s funds are Mr Senghor’s funds. The Defendant’s counsel suggested that Mr Senghor was at fault in diminishing the line between his personal funds and AS World’s funds, in the way he operated by settling personal liabilities through the use of the Company’s funds, I reject this argument, Mr Senghor is not on trial.
78. Further, during the Defendant’s re-examination, he was invited to explain how Mr Senghor discovered the payment of AED 150,000 was related to a loan. His position was that Mr Senghor would have had access to the bank statements report which he sent to Mr Senghor’s email address. Assuming that the Defendant in fact sent the bank statements, the Defendant seems to rely on a course of action or a chain of events to have happened which he considered as “approval” for the repayment of the loan. Namely, Mr Senghor reviewing the bank account reports, reviewing transactions that were debited from the Claimant’s funds and concluding that the payment of AED 150,000 pertains to two separate loans which he had borrowed from the Defendant. The Defendant’s proposition is quite farfetched, he effectively insinuates that upon receipt of the bank statement to Mr Senghor’s email address that amounted to an implicit request, the fact that Mr Senghor did not raise any objections or question that particular transaction, it inevitably amounted to an approval. The “lack of any objection” argument is not a credible defence, the Defendant was required to make an official explicit request to Mr Senghor for the reimbursement of the loan, irrespective of the Company’s policy. I consider the Defendant’s conduct as an abuse of his powers, it was not within his powers to use the Company’s funds to repay himself, even if that had been approved or authorised by Mr Senghor (denied by Mr Senghor), one would have expected a record of this transaction, and reasons why Mr Senghor considered it to be a business expenditure that entitled the director to use the Company’s funds to settle a personal loan.
79. Based on my findings above, the Defendant is liable to indemnify the Claimant for the unauthorised cheques which are listed above in paragraph 54 and for any losses the Company has suffered as a result of the Defendant’s misconduct. The Defendant is also to account for any profits that he has made as a result of this breach.
80. The dispute is whether the registration of the Vogue 2020 had been approved by Mr Senghor.
81. It is the Claimant’s case that the Ranger Rover Velar 2018 (the “Velar 2018”) was AS World’s asset registered in its name, the Defendant was permitted to use it. Mr Senghor decided to update the Velar 2018, accordingly he gave verbal authorisation to the Defendant to trade in the Velar 2018 for Range Rover Vogue 2020 (the “Vogue 2020”) and for it to be registered in the name of AS World. The Claimant’s case is that the Vogue 2020 was designed to replace the Velar 2018 accordingly, when the Vogue 2020 came to be purchased as its replacement, it also ought to have been registered in the company’s name. However, when the Defendant traded in the Velar 2018 for the Vogue 2020, he wrongfully registered it in his personal name.
82. It is undisputed by the Defendant that he caused the Vogue 2020 to be registered in his personal name as its owner and on the termination of his employment, the Velar 2020 was not returned to AS World. In support of the Claimant’s case, it relies on the data set out in a statement of account from Al Qalam Motors which shows the Velar 2018 was sold to the dealership at a value of AED 220,000 and the following entry being the purchase of the Vogue 2020 in the amount of AED 440,000. Since it was a trade in, the sale of the Velar 2018 was accounted toward the purchase of the Vogue, with a total of AED 220,000 to be settled. The Claimant also relies on the list of May 2020 payables where a payment of AED 2 million cheque was made for the benefit of Al Qalam Motors. The Claimant submits that the Vogue 2020 was paid for by the Company’s funds and the Defendant had appropriated it wrongfully.
83. It is the Defendant’s case that the purchase of Vogue 2020 was a gift made by Mr Senghor for his hard work “He wants me to go and buy a car for me” (Transcript 3, Page 168). The Defendant explains that the initial arrangement between him and Mr Senghor was for the Defendant to use the Velar 2018 until he brought in sufficient and profitable work, following the Defendant’s fulfilment of that arrangement including his successful negotiation of the purchase of a Bugatti on behalf of Mr Senghor, the registration of the Vogue 2020 was a gesture of goodwill from Mr Senghor.
84. With respect to evidence adduced by the Defendant, the Defendant did not provide any independent evidence to indicate that the registration of Vogue 2020 was a gift from Mr Senghor, however his explanation on the statement of accounts from Al Qalam Motors varied to that of the Claimant. He submits that the statement of account was a personal account belonging to Mr Senghor with Al Qalam Motors, it is not an account of AS World. Further, the Defendant relied on the PoA granted by the Claimant allowing him, amongst other authorities, to transfer vehicle ownership from Mr Senghor’s name to his name. Meanwhile it was the Defendant’s testimony that he faced difficulties in exercising those powers when carrying out straightforward matters on behalf of Mr Senghor, rendering it ineffective.
“Power of attorney […] maybe use one or two time. We never […] check if there is a power of attorney. Maybe it's in the office locker. We never use it […] Power of attorney, I mean, it is nothing for me. We never use it because Mr Senghor is here”. (Transcript 3, Page 91). The Defendant also relies on the lack of any request from the Claimant or Mr Senghor to return the Vogue 2020, following his departure from AS world, as an implied indicator that the vehicle was a gift from Mr Senghor.
85. As mentioned above, there are no evidence which indicates that Mr Senghor or the Claimant approved the registration of the Vogue 2020 for the benefit of the Defendant.
86. Whilst there was an approval granted by the Claimant through the PoA including a verbal approval from Mr Senghor to trade in the Velar 2018 to a recent model, however, that approval did not extend to registering the Vogue 2020 in the Defendant’s name. In the absence of any evidence to indicate otherwise, I find it credible that the arrangement which the Defendant was expected to execute on behalf of the Claimant was similar to the Velar 2018 arrangement, trade in the Velar 2018 for the Vogue 2020, concluding the transaction by registering the Vogue 2020 under the name of the Claimant.
87. I find the Defendant’s argument on the lack of any objection as an implied consent that the registration of the Vogue 2020 had been approved by the Claimant or Mr Senghor to be weak. The Defendant’s proposition is farfetched to argue if the Vogue 2020 was not a gift, Mr Senghor would have requested the Defendant for its return.
88. The Defendant must account for its value as the rightful owner is AS World.
The reimbursement of business expenses
89. There is a dispute on various payments which allegedly had been made by the Defendant without the approval of the Claimant or Mr Senghor which include:
(a) a bank transfer of AED 2 million received on 10 March 2020
(b) cash payment of AED 2 million - four cheques made out by Mr Senghor for the benefit of Mr Mogamath (received by the Defendant to pay AS World’s business expenses)
(c) a cheque drawn from CBD for AED 200,000 cashed by the Defendant
(d) a bank transfer of AED 33,000 from the Claimant’s CBD bank account into the Defendant’s personal account
(e) a payment of AED 37,000 for the Francophonie summit.
90. It is the Claimant’s case that Mr Senghor had no knowledge of the AED 2 million payment from AS World’s CBD account to the Defendant’s personal account. On the contrary to the Defendant’s case in which he says that Mr Senghor instructed him to make the payment to his personal account so that the Defendant was able to make several payments on behalf of the Claimant, transfer amounts to the other AS World group companies, and to reimburse the Defendant for the expenses that he had already incurred in paying business expenses on behalf of the Claimant.
91. It is the Defendant’s case that he had paid business expense totalling AED 2,337,141 on behalf of the Claimant, although the Defendant reimbursed himself an amount of AED 2,233.000. In the Defendant’s First Witness Statement, he submits that the transfer of AED 2.3 million to his personal bank account was as a result of the notice of closure of AS World’s CBD accounts and in order to maintain AS World’s contractual obligation related to the Angola delegation (the “Angola Delegation Project”), it was suggested by Mr Senghor that AED 2 million be transferred to the Defendant’s personal bank account to settle business expenditure.
92. Similar to the bounced cheque that was made for the benefit of Emaar, if the Defendant’s account is true and an approval from Mr Senghor was obtained to reimburse the Defendant for the business expenses paid on behalf of the Claimant, one would expect to see an exact figure to be transferred to the Defendant’s bank account. The amount paid by the Defendant as business expenditure was greater than the amount transferred to his account.
93. It is Mr Senghor evidence that he had issued four cheques of AED 500,000 each to Mr Mogamath. Mr Mogamath indicates that he had been instructed by the Defendant to encash those cheques to settle business expenditure on behalf of the Claimant. The factual issues that ought to be determined in relation to this dispute are two questions (i) whether the transfer of AED 2 million to the Defendant’s personal account had been solely paid for the purposes of settling business expenditure on behalf of the Claimant and (ii) whether the Defendant did in fact received AED 2 million in cash from Mr Mogamath.
The transfer of AED 2.3 million to the Defendant’s personal bank account
94. On 1 March 2021, the Defendant entered into a short-term rental agreement with Mario Sarnataro (the “Landlord”) for the lease of two villas on the Palm Jumeirah intended for the use of the Angola Delegation.
95. The Defendant submits that he made several payments totalling AED 1,442,259 which was in connection with the rental of the Palm Jumeirah villas, including other liabilities which had arisen out of the Angola Delegation Project in the amount of AED 894,882 thereby justifying the transfer of AED 2.3 million to his account.
96. Despite a number of risible explanations, there is no gainsaying the fact that the money belonging to the Claimant ended up in the bank account of the Defendant, who was a senior employee in what he admits was a fiduciary position. None of the funds have been returned and there is, despite attempts to justify the receipt of funds, no proper basis for the Defendant to have received them or the fact they have been retained by the Defendant.
97. Nonetheless, I will consider the evidence that have been produced by the Defendant in support of his account and his explanation justifying the transfer of AED 2.3 million to his personal bank account, setting out my reasons for rejecting the Defendant’s case.
98. The Defendant relies on a signed handwritten note allegedly from the Landlord in connection with a cash payment of AED 700,000. The handwritten states that the Landlord was in receipt of that payment from the Defendant. I find this evidence of payment to be inconsistent, the method of payment adopted by the Defendant is questionable particularly when three cheques were issued and signed by him to the Landlord in the amount of AED 1,385,000 in March 2021. The Defendant attempts to explain this ambiguity by suggesting that the additional cash payment was an advance payment of two rent instalments requested by the Landlord for the Palm Jumeirah villas. However, that does not explain why the Defendant did not issue a cheque payment to the Landlord in that amount when notably the Defendant is the authorised signatory of all accounts belonging to AS World. The lack of any evidence or reasonable explanation for the alleged cash payment when a cheque would have sufficed, suggests that this was not business expenditure which the Claimant was unjustifiably caused to pay. The Defendant believes that he provided “overwhelming” amount of evidence to discharge its burden of proof, on the contrary, the Defendant provided evidence which established that he did not use the Claimant’s monies for the purposes of settling business expenditure.
99. Turning to the invoices relevant to the payment of the “set-up costs” in the amount of AED 410,000 and 295,000 which was made to Luxury Explorer. The Defendant explains that he used Luxury Explorers to set up the Palm Jumeirah villas.
100. Those invoices were clearly issued personally to the Defendant as opposed to the Claimant. There are no documents to suggest that those two payments relate to a business expenditure or in fact related to the Angola Delegation. On 28 May 2018, Ms Seiton advised the Defendant that AS World would not be in the position to claim VAT against some invoices that had been issued personally in his name, and advised the Defendant that those invoices ought to be addressed to the Claimant for VAT refund purposes. The Defendant alleges that Luxury Explorer invoices were mistakenly addressed to him, and he was able to rectify this issue with Luxury Explorer and the corrected invoices are in the possession of the Claimant, which are being withheld from these proceedings (Transcript 3, Page 201). I reject the Defendant’s case and the evidence provided by him does not establish that the set-up costs payments were used to pay business expenses on behalf of the Claimant. As a whole I find the Defendant’s evidence to be inconsistent and in places implausible. I am not satisfied that he has provided an adequate explanation for these payments. I find the Claimant’s explanations for each payment to be more believable and consistent with the documents filed with this court and common practice in general. I therefore find in favour of the Claimant.
101. In any event, the set-up costs invoices should not have been addressed to him if in fact those services offered by Luxury Explorers were provided to AS World or its clients, there should not have been any confusion between him or the Company. In respect of the continuous complaints that AS World are withholding evidence that would have otherwise proven his innocence in these proceedings is outrageous, the Claimant clearly discontinued other claims against the Defendant when they learnt that some payment had been authorised by Mr Senghor or were business expenditure, I see no justifying reason why the Claimant would proceed with the remaining allegations, unless there are no evidence or reasonable explanations provided by the Defendant to suggest that he was acting in the best interest of the Company.
102. The invoices relating to the nine payments for miscellaneous costs totalling AED 37,259 were all issued to the Defendant personally, the payment was allegedly in connection with the purchase of flowers, interior furniture, kitchen items and security cameras for the Palm Jumeirah villas. There is no evidence that these items were purchased for the Angola Delegation on AS World’s behalf. It is the Claimant’s case that those items were not found in its offices. Therefore, in the absence of any evidence to suggest that these items were purchased in relation to company business, it could be concluded that the payments were not made in the best interest of AS World.
103 Finally, with respect to the payment of AED 394,441 made on 13 March to Hugues Chevalier Paris, is also alleged to be in respect of business expenses of the Claimant. It is the Defendant’s case that the payment was in connection with the purchase of furniture for the Palm Jumeirah villas. Although, it was the Defendant’s testimony that the Palm Jumeirah villas were “60 per cent or 70 per cent furniture[d]” (Transcript 3, Page 208). The Defendant indicated that the Angola Delegation requested a security room which would be dedicated for engineers and doctors (Transcript 3, Page 208), however, upon review of the purchased items listed in the invoice from Hugues Chevalier, there were not related to any items or equipment that you would expect in a security room. It was Mr Senghor’s testimony that he was the owner of Hugues Chevalier Paris, therefore, if the Defendant’s account is true and bearing in mind the short term stay of the Angola Delegation, the purchased furniture could have been loaned for the duration of their visit, rather than purchasing items worth AED 394,441.
104 It is the Claimant’s case that if the purchased furniture was a business expenditure, then undoubtedly it would remain with AS World, however the Claimant could not locate any of it following the departure of the Angola Delegation. As part of the Defendant’s cross examination, he was requested to clarify whether the purchased furniture is currently at his villa. The Defendant admitted that some of the items were sent to his villa at the request of Mr Senghor (Transcript 3, Page 206) and the reminder of those items were sent to Mr Senghor’s residence. As a whole, I find the Defendant’s version of events to be inconsistent and I am satisfied, bearing in mind the seriousness of the allegation, on the evidence that the Defendant has breached its fiduciary duties and caused to be paid monies into his own bank account belonging to the Claimant without the approval of Mr Senghor.
105. On 9 March 2021, the Defendant say that he had paid for food services expenses in the sum of AED 100,000. It is clear that there is no proof provided that this expense was incurred by him. It is the Defendant’s case that the AED 100,000 was related to AS World’s client, albeit there is no trace of an invoice being issued to that client. I see no justifying reason why the Claimant was caused to pay this expense when the Defendant has failed to convince this Court that the amount was a business expenditure or that it was in the best interest of the Claimant.
106. With respect to the expenses arising from the Francophonie summit totalling AED 37,500 alleged to be a business expenditure. The Defendant relies on an email from Ms Seiton sent to him attaching an excel spreadsheet, titled “Francophonie Expense Sheet", listing all expenses and liabilities incurred, however none of the recorded expenses list what AED 37,500 represents in the Francophonie summit. The Defendant was invited to clarify this position at the Trial and his testimony lacked any clarity, he was unable to explain to the Court or justify the transfer of AED 37,500 to his account. It is clear that the evidence provided by the Defendant does not support the monies transferred from AS World’s bank account totalling AED 37,000.
107. I find it difficult to accept the Defendant’s version of events with reference to the transfer of AED 2.3 million to his bank account, the inconsistency in his case is staggeringly obvious. Mr Barkat testified at the Trial that he would not pay for any business expenditure using his own personal bank account (Transcript 3, Page 183), which is a common and a fair practice to adopt by the Managing Director of any company. Notwithstanding, that testimony is later contradicted by the astounding number of payments that have been made using his personal bank account, purportedly to pay for Company’s expenses. I understand it is the Defendant’s case that the Claimant’s bank accounts were closing, and it was Mr Senghor’s decision to transfer funds to the Defendant’s account to enable him to pay for business expenditure (rejected by Mr Senghor). Assumingly that was true, the money that was transferred to the Defendant’s bank account to pay for AS World’s outgoing was a Dubai Islamic Bank account, however the alleged business expenditure made on behalf of the Claimant were debited from his CBD account, one would expect to see those payments being deducted from the account that benefitted from the transfer of AED 2.3, however there is no plausible explanation or rationale as to why the Defendant used his other bank account.
The cash payment of AED 2 million
108. Turning to the second factual issue related to the AED 2 million cash handover and whether the Defendant received that money from Mr Mogamath.
109. In support of the Claimant’s case, it relied on photographic evidence of the two cheques issued from Mr Senghor’s personal bank account for the benefit of Mr Mogamath (D81). Each issued cheque was for AED 500,000 totalling AED 1 million. There are no evidence of the remaining two cheques to verify that four cheques were issued by Mr Senghor, however the AED 2 million cash handover (on 11 March 2021) was confirmed by two separate witnesses being, Mr Sultan Amin (“Mr Amin") in his witness statements of 29 July 2022 and Mr Mogamath’s witness statement of 28 July 2022 including his testimony at the Trial. Mr Senghor’s second witness statement of 26 August 2022 confirmed that the Defendant was paid AED 2 million cash.
110. It is Mr Mogamath’s evidence that the Defendant was present when Mr Senghor issued the four cheques on 9 March 2021, two days later on 11 March 2021, under the instructions of the Defendant, Mr Mogamath cashed the four cheques and converted some of the AED 2 million into foreign currency (D82). Mr Mogamath asserts that once he converted some of those funds, he was requested to meet with the Defendant to provide him with the cash. Mr Mogamath indicated that although he did not question the Defendant, he vaguely remembers that the Defendant required the cash urgently for expenses related to the Angola Delegation.
111. The Claimant also relies on the receipts from the currency conversion and the business details of the financial manager who the Defendant recommended to Mr Mogamath to use for the conversion. In addition to the testimony of Mr Mogamath, Mr Amin provided a witness statement which reaffirmed Mr Mogamath’s version of events with respect to the cash hand over on 11 March 2021. The Defendant elected not to cross examine Mr Amin, by that the Defendant is taken not to have contested the evidence of Mr Amin. The Defendant’s counsel explains the rationale of that decision was based on the premise that Mr Amin would have simply repeated the same narrative as Mr Mogamath.
112. It is the Defendant’s case that this claim is fabricated against him by Mr Senghor, Mr Amin and Mr Mogamath and he strongly denied making a request of the cash payment because he already had settled all AS World’s outgoings related to the Angola Delegation.
113. The testimony of the three witnesses clearly establishes that the Defendant was provided with the AED 2 million cash by Mr Mogamath in the presence of Mr Amin. There is clear evidence that the cheques existed and evidence that Mr Mogamath converted some of the AED 2 million into foreign currency. The Defendant’s version of events is unevidenced and wholly implausible. Therefore, in the absence of any supporting evidence and in the circumstances where he has been responsible in transferring funds from the Claimant’s account to his personal bank account without any approval or prior authorisation of Mr Senghor, I find the Defendant’s assertion lacks any credibility.
Power of Attorney and Bank Account Management
114. The Defendant’s counsel puts forward in his oral opening submissions that the Claimant and Mr Senghor could not have been oblivious to the Defendant’s conduct or his involvement of retaining full control of AS World’s bank accounts. The Defendant’s counsel continued to say that the reason why Mr Senghor could not have been “blind” to it all “because bank statements are perfectly available to shareholders of any company, let alone its only shareholder” (Transcript 1, Page 38).
115. Whilst I accept that it is a common practice for the shareholder to have access of its company’s financials and bank statements, however this was not an ordinary situation, the Defendant admitted that he became a signatory of AS World’s bank accounts as a result of Mr Senghor’s difficulty in communicating directly with bank officials based on the language barrier “Mr Senghor […] [found] it difficult. He is a very nice person but he has a communication with the English problem here, right? He is moving in places from Senegal, French speaking, and banks are here every five minutes calling him. "Sajid, can you help me, please?" (Transcript 3, Page 85).
116. Further, the Defendant was not only elected to become the signatory of AS World’s bank account due to Mr Senghor’s barrier in communication with the bank, but he was entrusted to be the person on the ground responsible to run AS World’s business while Mr Senghor was not in the UAE. This was even admitted in the Defendant’s testimony as he found it burdensome to ask for Mr Senghor’s authority to sign cheques (Transcript 3, Page 45).
117. The Defendant was aware that he had been entrusted to manage AS World’s bank accounts, he was also aware of the reasons why he had been entrusted with that responsibility by Mr Senghor. Pursuant to that authority granted to him as the Managing Director of the Company, it was the Defendant’s responsibility and his fiduciary duty to manage and operate the Company in good faith. It is not a cogent defence to rely on the notion that Mr Senghor could not have been “blind” to it all, because he could/should have picked up earlier on the Defendant’s wrongdoings. It is not a credible defence to rely on to mitigate the Defendant’s wrongdoing.
118. I find that the Defendant had sole control and charge of the Company’s accounts. As a result of that control, the Defendant made various decisions and payments that ultimately benefitted him personally at the detriment of AS World.
119. In Ms Seiton’s first witness statement, she explained that the Defendant was the only person in AS World with access to AS World’s bank account and she would only be permitted to review bank account statements when the Defendant requested her to assist with bank reconciliation [paragraph 24]. I find her testimony credible, by that the Defendant took advantage of his position and the sole authority conferred on him by the Claimant to operate and manage AS World’s funds for his own benefit.
120. Mr Senghor testified that he was not privy to AS World’s bank account statements, and this is evident in the notice which the Claimant received from its CBD account relating to KYC issues which the Claimant was required to confirm to maintain the operation of its account with CBD. It was Mr Senghor’s testimony that the Defendant failed to provide any documentation to the bank to avoid the closure of the account. Mr Senghor explained that he only became aware of this matter following the departure of the Defendant.
121. The lack of record keeping was a primary defence deployed by the Defendant in support of his defence against the Claimant’s allegations. It was suggested that the fluidity of AS World’s management and operation on a day-to-day basis meant that some of these transactions and decisions were all approved orally. The Defendant said that in a three-sized company, AS World did not have a proper company’s record, or a policy that required its employees to record and maintain up-to-date records. “So at AS World, we are a small company where owner of the company -- sole owner and the CEO of the company, Mr Senghor, sits in the company, myself and Ruby. So our decision was based mostly orally.” (Transcript 3, Page 223). Assumingly that there was no proper procedure, it was part of the MD’s duty to ensure that there was a policy in place that required the employees including himself to maintain records, particularly of financial records, invoices, receipts, orders for the payment of money, cheques, working papers and other documents needed to explain financial statements, contracts with third parties to keep track of all business expenditure of the Company. It was for the Defendant to adopt and follow this practice to ensure all AS World records are documented, stored and recorded in a central location and in a manner that would accessible and produced, if required. Therefore, I do not accept this as a cogent defence.
122. Finally, the number of payments which the Defendant claim to be gifts, gratuities or rewards for his efforts and his hard work for the Claimant is quite significant, the Defendant’s argument seems to suggest that Mr Senghor intended to remunerate the Defendant above and beyond the payment of his salary at a time when all employees were receiving a reduction of 50% and when the Claimant was in financial difficulty, it was struggling to pay its staff. It is implausible for the Defendant to suggest that those were approved transactions when the Claimant was not in a financial position to be granting bonuses, agreeing to pay for the Defendant’s villa and registering a luxurious vehicle in the Defendant’s name without the expectation of being recompensated.
123. Based on the above, the Claimant is entitled to AED 4,104,278 plus simple interest accruing at the rate of EIBOR + 1 per cent.
124. The Defendant shall pay the Claimant’s costs of the proceedings on the standard basis, to be assessed by the Registrar, if not agreed.
125. The Defendant shall be awarded an order for their costs for defending its claims until the point of when the Claimant discontinued its initial five claims. The Claimant shall pay the costs of the Defendant, agreed between the parties or those costs shall be assessed by the Registrar, if not agreed between the parties.