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You are here: BAILII >> Databases >> The Dubai International Financial Centre >> Najjar v Nazira [2024] DIFC SCT 256 (08 November 2024) URL: http://www.bailii.org/ae/cases/DIFC/2024/DSCT_256.html Cite as: [2024] DIFC SCT 256

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Najjar v Nazira [2024] DIFC SCT 256

November 08, 2024 SCT - JUDGMENTS AND ORDERS

Claim No: SCT 256/2024

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai

IN THE SMALL CLAIMS TRIBUNAL
BEFORE SCT JUDGE MAITHA ALSHEHHI

BETWEEN

NAJJAR

Claimant

and

NAZIRA

Defendant

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Hearing :	4 November 2024
Judgment :	8 November 2024

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ORDER WITH REASONS OF SCT JUDGE MAITHA ALSHEHHI

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UPON the claim having been filed on 25 June 2024 (the “Claim”)

AND UPON the Defendant’s amended Acknowledgment of Service (“AOS”) setting out its intention to contest the jurisdiction of the DIFC Courts dated 11 October 2024 (the “Defendant’s Jurisdictional Challenge”)

AND UPON the Claimant’s further submissions on 17 and 31 October 2024

AND UPON a hearing having been listed before H.E Justice Nassir Al Nasser on 9 October 2024 with the Claimant in attendance and the Defendant failing to attend (the “First Hearing”)

AND UPON a second hearing having been listed before SCT Judge Maitha AlShehhi on 4 November 2024 with the Claimant in attendance and the Defendant failing to attend (the “Second Hearing”)

AND UPON reviewing the documents and evidence filed and recorded on the Court file

AND PURSUANTto Rule 53.61 of the Rules of the DIFC Courts (the “RDC”)

IT IS HEREBY ORDERED THAT:

1. The Defendant’s Jurisdictional Challenge shall be dismissed.

2. The DIFC Courts have jurisdiction to hear and determine the Claim.

3. Each party shall bear its own costs in respect of the Defendant’s Jurisdictional Challenge.

Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue:8 November 2024
At: 3pm

SCHEDULE OF REASONS

Parties

1. The Claimant is Najjar (the “Claimant”), an individual who used the Defendant’s financial services.

2. The Defendant is Nazira (the “Defendant”), a company providing financial services registered with the DIFC, Dubai, the UAE.

Background and Preceding History

3. The Claimant’s case is that it engaged the Defendant’s digital payment services while assuming it was a licensed establishment in the DIFC and regulated and authorized firm by the DFSA. The Claimant is requesting the Court to issue an order to cease the Defendant’s operations and actions that may constitute offering or providing financial services, and to discontinue offering or providing any such financial services until the Defendant sufficiently proves that it has met all the regulatory requirements to provide financial services in the UAE, in accordance with Article 92(2)(a)(b)(c) Regulatory Law - DIFC Law No.1 of 2004 and other relevant laws in the United Arab Emirates.

4. The Claimant is further claiming that the Defendant is liable to pay damages and compensation, although did not quantify the amount sought.

5. The Defendant submits that the DIFC Courts does not have jurisdiction to hear the Claim on the basis that the Claimant was not a customer of the DIFC entity.

6. The Defendant’s amended AOS states the following:

“Nazira Ltd respectfully contests the jurisdiction on the grounds that the claimant was not a customer of the entity operating under the Dubai international Financial Centre (DIFC). Furthermore, the claimant has never held an account with the entity under DIFC.”

7. The Defendant contends that it withdrew its license from the DFSA and is now licensed by the Central Bank of the UAE. Therefore, the Defendant submits that the Claimant was onboarded to the onshore entity regulated by the Central Bank and the Claimant signed the terms and conditions with the onshore entity and not the DIFC.

8. The Claimant takes the view that the DIFC Courts have jurisdiction to determine the Claim on the basis that the Defendant is licensed and registered with the DIFC as exhibited on the Dubai Financial Services Authority (DFSA) website. The Claimant further submits that the Defendant’s trading name always remained as “Nazira ” whether in the DIFC or onshore.

9. The Claimant asserts that the DFSA website sets out the Defendant’s status to be “active” with no mention of withdrawing its license or intent to withdraw.

10. The Claimant states that the parties have not entered into any other agreement opting out from the jurisdiction of the DIFC Courts, and as the Defendant is registered in the DIFC, the DIFC Courts have jurisdiction to hear the Claim.

11. Furthermore, the Claimant relies on the definition of Nazira in the terms and conditions which supports its argument that it is a DIFC establishment as per the below:

“Nazira”, “we”, “our” and “us” means Nazira Ltd”

12. The Claimant asserts that it downloaded and registered with the Defendant’s mobile application on 11 February 2024 after being assured by them that they have the necessary license and regulatory approval to offer and provide financial services.

13. On 6 March 2024, the Claimant submits that the following statement was available on the Defendant’s website which was not communicated to him nor made clear to him prior to registering with the Defendant’s application:

“Nazira Ltd is withdrawing its license from the DFSA on 1st February 2024.”

14. The Claimant further submits that the above statement was later changed to:

“Nazira Ltd is withdrawing its license from the DFSA on March 2024.”

15. The Claimant asked the Defendant by way of email sent tosupport@nazira.comto clarify the following question as per the below:

“Hello,

I'm a Nazira customer and I have 3 questions based on the following statement on your website:

Nazira Ltd is withdrawing its license from the DFSA on 1st February 2024.

Question 1:If this is the case, under what license are you operating and what entity in the UAE is regulating your handling on my money?

Question 2:Can I be guided as to where I have been informed about your license type? Assuming that your DFSA license is still valid as it says on the DFSA public register, it states that your license is an "Innovation Testing License". And as such, Nazira has to make clear that it is operating under a testing license and it's clients have limited rights. Nowhere is that mentioned in Nazira's written promotional statements or even the Terms and Conditions, which constitutes the agreement between us.

Question 3:Shouldn't there be an update within 30 days after withdrawing the license? It has been more than 30 days.

Finally,in an interaction with one of your customer service reps through in-app chat, I asked them "Who am I speaking with?" and their response was "I'm a Nazira customer service rep!"

Even if I disregard the insinuation that I didn't know that I was chatting with a Nazira customer rep, that should absolutely never happen in any industry and especially not the industry Nazira is operating in.

If the individuals responsible for building Nazira believe that this response is acceptable and wouldn't affect their ability to build trust with their customers, then I'm informing them that they are terribly mistaken and either have a poor understanding of, or minimal regard for, their customers and their customers' relationship with money.”

16. On 7 March 2024, the Defendant replied with the following:

“Our company is transitioning between regulatory authorities, so we are finalizing the licensing details and the regulatory entity overseeing our operations in the UAE. We will update our website with all the necessary information as soon as this process is complete. Our regulator is aware of this and is involved in the updating process. We understand how important this information is to you and want to assure you that we are dedicated to providing you with comprehensive details as soon as they are available. Our top priority is to comply with all regulatory standards and ensure the safety and security of your funds.”

17. The Claimant asserts that the above response did not address all the questions he had in relation to regulatory authority, terms and conditions and their updated status and submits that it is clear that he is a customer of the Defendant as the Defendant did not refer to the existence of another entity other than Nazira Ltd, which is a DIFC Establishment.

18. The Claimant submits that he later asked the Defendant to share the terms and conditions agreed upon entering the contract by downloading and registering with the application and contends that the version shared by the Defendant was dated August 2023.

19. However, the Claimant submits that the Defendant forged this document, said it is not the original one entered into with the Claimant. The reason submitted for doing so is because the Claimant was pressuring them into sending it.

20. Following this email, the Claimant states that the Defendant made the terms and conditions inaccessible on their website as he was unable to view it from 13 March to 26 March 2024. Two versions of the terms and conditions are now available on the website.

Discussion

21. I do not propose on making a final determination on the Claim as the purpose of the jurisdiction hearing is to determine whether the DIFC Courts have jurisdiction to hear the Claim, meaning whether it falls within the jurisdictional gateways of the DIFC.

22. Therefore, I will not be looking at the merits of the case or delivering a final judgment on this case.

23. As expressed above, the Defendant failed to attend the First Hearing and Second Hearing, but pursuant to RDC 53.61 the SCT may proceed to determine the case based on the Claimant’s evidence.

24. The Defendant also failed to provide evidence that the Claimant was not a customer of the DIFC entity or any other evidence to suggest that the Claimant never held an account with the DIFC entity.

Can the DIFC Courts hear and determine this Claim?

25. RDC 53.2 requires that the Small Claims Tribunal (“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:

“(1) The Court of First Instance shall have exclusive jurisdiction to hear and determine:

(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) The Court of First Instance may hear and determine any 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.”

26. For cases to be heard in the SCT, first, they must first fall within the DIFC Courts’ jurisdiction by engaging any of the jurisdictional gateways set out in the abovementioned Article.

27. The Claimant provided sufficient evidence that the Defendant is indeed a DIFC Establishment and was still regulated by the DFSA up until March 2024 while the Claimant entered into an agreement with the Defendant on 11 February 2024.

28. I have taken the liberty to view the Dubai International Financial Centre Authority (DIFCA) website which sets out the Defendant’s details as follows:

“Entity Overview

Activities: Technology Research & Development

Entity Details

Current name: Nazira Ltd

Trading name: Nazira

Type of License: Non Regulated

Legal Structure: Private Company

Current director: Nangial

Namina

Name of shareholders: Nazira Inc

DNFBP(Designated Non-Financial Businesses and Professions):Not Applicable

Financial year end:31st December

Former Properties

Activities: Providing Money Services

Director: Nakhat

Nakhat

Shareholders: Nangial

Company Secretary: Najwa "

29. Further to the above and given that the Defendant failed to submit any evidence to suggest otherwise, I find that the Defendant is a DIFC Establishment which renders this Court as the default jurisdiction.

30. It follows that the Defendant’s Jurisdictional Challenge be denied and the DIFC Courts have jurisdiction to hear and determine the Claim pursuant to Article (1)(a) of the JAL.

Findings

31. The Defendant’s Jurisdictional Challenge shall be dismissed.

32. The DIFC Courts have jurisdiction to hear and determine the Claim.

33. Each party shall bear its own costs in respect of the Defendant’s Jurisdictional Challenge.

34. The Claim shall be listed for a consultation.