Claim No. SCT 309/2023
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE SMALL CLAIMS TRIBUNAL
BETWEEN
MUSOB
Claimant
and
(1) MAKANI
(2) MIKIN
Defendants
ORDER WITH REASONS OF SCT JUDGE DELVIN SUMO
UPON the claim having been filed on 21 August 2023 (the “Claim”)
AND UPON this Claim having been called for a consultation before SCT Judge Delvin Sumo on 8 November 2023 with the Claimant in attendance and the Defendants failing to appear although served notice of the Claim (the “Consultation”)
AND UPON reviewing the case file and submissions contained therein
IT IS HEREBY ORDERED THAT:
1. This Claim be dismissed due to lack of jurisdiction.
2. Each party shall bear its own costs.
Issued by:
Delvin Sumo
SCT Judge and Assistant Registrar
Date of Issue: 21 November 2023
At: 11am
THE REASONS
The Parties
1. The Claimant is Musob, an individual based in Dubai, UAE (the “Claimant”).
2. The First Defendant is Makani, an individual based in Dubai, the UAE (the “First Defendant”).
3. The Second Defendant is Mikin, a company based in Dubai, the UAE (the “Second Defendant”).
Procedural Background
4. On 21 August 2023, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking payment of sums allegedly owed by the Defendants to the Claimant in the amount of AED 500,000, other unpaid dues, accrued interest, court fees and expenses, and damages in the amount of AED 250,000 (the “Claim”) pursuant to an investment agreement entered into between the parties on 9 March 2022 (the “Agreement”).
5. The Defendants failed to file any acknowledgement of service.
6. On 8 November 2023, a consultation was listed before me at which the Claimant attended and the Defendants failing to appear, although served notice of Claim (the “Consultation”).
7. At the Consultation, I requested the Claimant to provide the Court with a new copy of the Agreement, as the Agreement already provided to the SCT was not clear. The Agreement was provided on 20 November 2023. On the same date, the Claimant amended the Claim Form to reflect the Claim in the Amount of AED 500,000 only.
Can the DIFC Courts hear and determine this Claim?
8. Rule 53.2 of the Rules of the DIFC Courts (the “RDC”) requires that the SCT hear only cases that fall “within the jurisdiction of the DIFC Courts”. The jurisdiction of the DIFC Courts is determined by Article 5(A) of the Judicial Authority Law, Dubai Law No. 12 of 2004, as amended (the “JAL”), which provides a number of limited gateways through which the DIFC Courts have jurisdiction over a claim, which are, as relevant:
“(a) Civil or commercial claims and actions to which the DIFC or any DIFC Body, DIFC Establishment or Licensed DIFC Establishment is a party;
(b) Civil or commercial claims and actions arising out of or relating to a contract or promised contract, whether partly or wholly concluded, finalised or performed within DIFC or will be performed or is supposed to be performed within DIFC pursuant to express or implied terms stipulated in the contract;
(c) Civil or commercial claims and actions arising out of or relating to any incident or transaction which has been wholly or partly performed within DIFC and is related to DIFC activities; …
(e) Any claim or action over which the Courts have jurisdiction in accordance with DIFC Laws and DIFC Regulations…
(2) …civil or commercial claims or actions where the parties agree in writing to file such claim or action with [the DIFC Courts] whether before or after the dispute arises, provided that such agreement is made pursuant to specific, clear and express provisions.”
9. For cases to be heard in the SCT, they must first fall within the DIFC Courts’ jurisdiction by engaging any of the jurisdictional gateways set out in the abovementioned Article.
10. Upon review of the case file and submissions contained therein, I find there is no evidence to suggest that the transaction was partly or wholly performed within the DIFC nor was it related to DIFC activities. In the absence of a sufficient nexus between the Claim and the DIFC, the DIFC Courts may still have jurisdiction over the Claim if it can be shown that the parties sought to ‘opt in’ to the jurisdiction of the DIFC Courts, pursuant to Article 5(A)(2) of the JAL. Such a provision would allow the parties to ‘opt-in’ to the DIFC Courts’ jurisdiction, provided that it clearly demonstrates the parties’ intention to do so.
11. Upon reviewing the Agreement, it appears that the Agreement does not contain an express clause by virtue of which the DIFC Courts would be able to exercise jurisdiction over the Claim in accordance with Article 5(A)(2) of the JAL. Instead, it appears that the Agreement contains a clause which sets out the parties’ intention to refer any disputes relating to the Agreement to the Dubai International Financial Centre LCIA. The relevant wording of Clauses 26 and 28 of the Agreement are set out below:
“26. DISPUTE RESOLUTION
i. If any Dispute, controversy or claim between the Parties hereto arises or in connection with the Agreement, including the breach, termination, or invalidity, thereof (‘Dispute’), the Parties shall use all reasonable endeavors to negotiate with a view to resolving the Dispute amicably if not, then the matter shall be referred to be finally settled by Dubai International Financial Centre LIAC
ii. If one Party gives the other Party notice that a Dispute has arised (a ‘Dispute Notice’) and the Parties are unable o solve the Dispute amicably within 6 months of service of the Dispute Notice (or such longer period as the Parties may mutually agree) then the parties can take legal action.
iii. Before going into Arbitration, the parties shall try to settle the dispute through Mediation.”
“28. JURISDICTION
Any dispute, difference, controversy, or claim (‘Dispute’) arising out of or in connection with this Agreement, including (but not limited to) any question regarding its existence, validity, interpretation, performance, discharge, and applicable remedies shall be referred to the exclusive jurisdiction of the Dubai International Financial Centre LCIA.”
12. Considering the above, I am of the view that the DIFC Courts cannot exercise its jurisdiction over this Claim. The DIFC Courts do not have default jurisdiction over this claim as the parties are based outside of the DIFC and the other gateways of the JAL do not apply.
13. Therefore, I dismiss the Claimant’s Claim for AED 500,000 on the grounds that the DIFC Courts lacks jurisdiction over this Claim.
Conclusion
14. Accordingly, for the reasons I have set out above, I find that the DIFC Courts do not have jurisdiction to hear and determine this Claim.
15. Each party shall bear their own costs.