Barclays Bank PLC v (1) Afras Limited and (2) Radhakrishnan Nanda Kumar [2013] DIFC CFI 008 (11 August 2013)

Claim No. CFI 008/2013



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

of Dubai




Chief Justice







Hearing:11 July 2013
Council:Mr James Abbott, Mr Shane Jury and Ms Melissa McLaren (Clifford Chance) for the Claimant

Mr Puneet Arora (Pahwa & Co.) for the Defendants

Judgment:11 July 2013



Transcribed from the oral Judgment delivered on 11 July 2013 and revised and approved by the Judge


1. The application now before this Court
is made on behalf of the Defendants named in those proceedings, Afras Limited and Mr Radhakrishnan Nanda Kumar.
2. The claimant in these proceedings is Barclays Bank Plc ("the Bank"). In order to put the present application in context, it is necessary to refer to proceedings commenced against the Bank, under reference CFI 024/2010, by Corinth Pipeworks SA as long ago as 29 September 2010. The dispute which is the subject of those proceedings arose out of a contract for the sale of pipes for use in the oil and gas industry in the Emirate of Oman. The parties to that contract were Corinth Pipeworks SA, the manufacturer (as vendor), and Afras Limited, a company with headquarters in Jebel Ali, Dubai (as purchaser). At all material times that company was controlled by Mr Radhakrishnan Nanda Kumar. The total price payable under the contract was some US$34,668,000; of which Afras Limited has paid $9,642,000. In proceedings brought in the Dubai Civil Courts by Corinth Pipeworks SA, as claimant against Afras Limited and Mr Nanda Kumar, as Defendants it has been held that the balance of $24 million odd is due from Afras Limited, to Corinth Pipeworks SA, subject to a cross- claim for commission against Corinth Pipeworks.
3. The allegation in the proceedings CFI 0024/2010 is that the Bank wrongly parted with moneys which had been deposited with it by Afras Limited or Mr Kumar; and to which Corinth Pipeworks SA assert it was entitled to look for payment. In particular, it is said, that the Bank was persuaded to part with those monies by representations made by one of their employees, Mr Figueredo; and, it is said, that those representations were known by Mr Figueredo to be false.
4. In the proceedings CFI 0024/2010 the Bank took the point that the DIFC courts
DIFC Courts
had no jurisdiction; and that, accordingly, the proceedings should be dismissedin limine. It was said, correctly, that the relevant events had not taken place in the DIFC
; they had taken place at the Jebel Ali branch of the Bank. The challenge to jurisdiction was argued in the Court of First Instance and in the Court of Appeal. It was determined by the Court of Appeal in a judgment delivered on 22 January 2012. That Court, after examining Law No. 12 of 2004, came to the view that the Bank was a licensed DIFC establishment for the purposes of article 5(A)(1) of Law No. 12 of 2004. Article 5(A)(1) provides that the Court of First Instance shall have exclusive jurisdiction to hear and determine, "civil or commercial claims and actions to which the DIFC, any DIFC body, DIFC establishment or licensed DIFC establishment, is a party".
5. For the reasons set out in its judgment of 22 January 2012 the Court of Appeal came to the conclusion that the Bank, which was registered in the DIFC and licensed to conduct business there, was a licensed DIFC establishment; and so was subject to the jurisdiction of the DIFC Courts
DIFC Courts
. But, if the bank is subject to the jurisdiction of the DIFC Courts, it must follow that the bank can invoke that jurisdiction: the Law has effect not only in relation to a proposed defendant but also in relation to a proposed claimant. If Barclays Bank Plc is a licensed DIFC establishment, as the Court of Appeal has held, it can be both claimant or defendant to proceedings in this court. Further, given that the Law provides for the DIFC Courts to have exclusive jurisdiction in respect of matters within article 5(A)(1), cannot be a party to proceedings in the Dubai Civil Courts.
6. No doubt, having either appreciated or (in the light of the judgment of the Court of Appeal) accepted, that it was a licensed DIFC establishment — and, of course, faced with its position as defendant in the proceedings CFI 024/2010 — the Bank took the view that, if it wished to bring a claim against Afras Limited and Mr Nanda Kumar arising from the matters alleged in those proceedings, the DIFC courts was the appropriate, and indeed the only appropriate, court within the Emirate of Dubai in which that claim could be brought.
7. In those circumstances the Bank applied, on 2 June 2013, for permission to make an additional claim against Afras Limited and Mr Nanda Kumar, in connection with the representations on which the claim against the Bank is made by Corinth Pipeworks in the main proceedings, CFI 024/2010. At a case management conference held on 21 March 2013, Justice Sir David Steel acceded to that application. He made an order giving permission underRDC 21.18to make the additional claim set out in the draft particulars of claim exhibited to the third witness statement of Mr James Abbott, dated 13 March 2013; and he gave permission to the Bank to serve the additional claim on Mr Nanda Kumar at the offices of Afras Limited in the Jebel Ali Free Zone and by sending an electronic copy to his email address.
8. Service
of the claim pursuant to that order led to the application, under reference CFI/008/2013/3, which is now before the Court. By this application, which was issued on 2 June 2013, Afras Limited and Mr Nanda Kumar seek an order, pursuant toRDC 12, declaring that the Court does not have jurisdiction to entertain the claims against them — alternatively, declaring that the Court declines to exercise such jurisdiction as it might have — and for an order setting aside service of the claim from upon them.
9. The grounds set out in the application notice are these: (i) that the issues in the additional claim have been the subject of a final judgement rendered by the Dubai Civil Courts; (ii) that the Dubai Civil Courts having accepted jurisdiction over the subject matter of the additional claim, this Court cannot accept jurisdiction over the same issues; and (iii) that the appropriate forum for the resolution of the additional claim is the Court of First Instance in Dubai. The application which was made on behalf of the applicants Afras Limited and Mr Nanda Kumar, by Bin Shabib & Associates, contains no reference to Law No. 12 of 2004; and, in particular, no reference to article 5(A)(1) of that Law.
10. The grounds of the application, as set out in the application notice are without substance. The issues in the additional claim have not been a subject of the final judgment in the Dubai Civil Courts of Dubai: those issues were not before the Dubai Court of First Instance. The issues in the additional claim are whether or not Afras Limited and Mr Nanda Kumar conspired with Mr Figueredo in deceiving the Bank so as to lead the Bank to release funds which, it is said, were (in effect, although perhaps not in law) earmarked for payment of the debt owed by Afras Limited to Corinth Pipeworks SA. There is nothing to suggest that the Dubai Court of First Instance has accepted jurisdiction over the subject matter of the additional claim. And, as I have said, article 5(A)(1) of the Law confers on the DIFC Courts exclusive jurisdiction in relation to claims by or against the Bank as a licensed DIFC Establishment; so — for that reason — it would be impossible for the Dubai Court of First Instance to accept jurisdiction in relation to the additional claim and it cannot be said that that court is the appropriate forum for resolution of that claim. There are no other grounds on which that application is put forward.
11. I should say something about the procedural history of the present application. It can only be described as unsatisfactory. On 5 June 2013, Clifford Chance, on behalf of the Bank, wrote to the Registry
(in an e-mail) pointing out that proceedings in the main action, CFI 024/2010, could not sensibly proceed to a case management conference in August and to a trial fixed for five days in October 2013, until it was known whether or not the challenge to jurisdiction in respect of the additional claim was to be successful. It was said, correctly, that no effective case management conference could take place in August 2013, unless it were known whether the trial was going to involve the additional claim against Afras and Mr Nanda Kumar. In response to that email the Registry directed that the jurisdiction challenge made by the application of 2 June 2013 should be heard today. It was directed to be heard today because today was the only available date on which the application could be heard in time for the case management conference to take place at the end of August,. And it was made clear in the Registry's direction that the date fixed — that is today — was not negotiable.
12. Notwithstanding that direction, rather than take steps to pursue the application made in the notice of 2 June 2013, Afras Limited and Mr Nanda Kumar dismissed their attorneys, Bin Shabib Associates. It is not for this court to investigate why they took that step: it is enough, in the present context, that — for whatever reason — the applicants no longer wished Bin Shabib Associates to represent them.
13. The Registry, having been informed of that position, indicated that, if there were to be an application to adjourn today's hearing, it should be made formally and with expedition; and that it would be heard yesterday.
14. On 9 July 2013 notice of change of legal representative
Legal Representative
was filed, indicating that KBH Kaanuun, would come on the record. KBH Kaanuun appeared on behalf of the applicants before Justice Omar Al Muhairi yesterday, on an application filed on 9 July, seeking an order that today's hearing be adjourned. That application was heard and dismissed. The judge ordered that the jurisdiction hearing, listed for this morning, should remain as listed. He also ordered that the applicants should file skeleton arguments in advance of that hearing.
15. For whatever reason KBH Kaanuun do not appear this morning. I was told that Mr Anand Kumar had decided not to instruct them to do so. But Mr Puneet Arora, an advocate qualified in India and a member of the firm Parwa & Co, does appear on behalf of Afras Limited and Mr Nanda Kumar with an application that I should hear the Bank in response to his clients' application challenging jurisdiction; and, when I had done so, adjourn the application so that the applicants could have the opportunity to be heard later. He was not able to tell me what representations his clients would wish to make other than those which are set out in the application notice of 2 June 2013. And he made it clear — and at his request I record — that he was neither making submissions to me on the merits nor was his appearance to be taken as in any way a submission by his clients to the jurisdiction.
16. To seek to have his clients' application heard only on the representations of the respondents, with an opportunity for his clients to be heard later, seems to me to be entirely inconsistent with the order which Justice Omar Al Muhairi made yesterday. The order of Justice Omar Al Muhairi was that the hearing should remain as listed and that his clients should file skeleton arguments by 4.00pm yesterday afternoon. If the present application were to be made at all, it should have been made on the hearing before Justice Omar Al Muhairi . There is no basis upon which I could accede to it while the order of Justice Omar Al Muhairi stands; and no material which persuades me that it would be appropriate to vary that order.
17. Accordingly I have heard application CFI 008/2013/3 on the basis that it is made in the absence of the applicants. They have, as it seems to me, made a deliberate and informed choice not to appear or to be represented. I have considered the reasons advanced in support of the challenge to jurisdiction which are set out in the application notice of 2 June 2013. There is no substance in those reasons. The jurisdiction of the DIFC Courts to entertain the additional claim is, plainly, founded on article 5(A)(1) of Law No. 12 of 2004, as interpreted by the Court of Appeal. I am satisfied that the challenge to jurisdiction has no merit and should be dismissed.
18. Accordingly, I dismiss the application. The proceedings continue on the basis that the additional claim is to be heard with the main action. I direct that these proceedings (CFI 008/2013) be consolidated with the earlier proceedings (CFI 024/2010); with the earlier proceedings to be the lead action.

Issued by:

Maha AlMehairi

Judicial Officer

Date of Issue: 11 August 2013

At: 10am