Claim No. SCT 223/2017
THE DUBAI INTERNATIONAL FINANCIAL CENTRE
In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum,
IN THE SMALL CLAIMS
IBSEN BANK (PJSC)
Hearings: 7 November 2017, 26 November 2017, 6 December 2017
Judgment: 19 March 2018
JUDGMENT OF SCT JUDGE NASSIR AL NASSER
UPONthe Claim Form being filed on 27 August 2017;
AND UPONthe Defendant being served and responding to the Claim on 19 October 2017;
AND UPONthe parties being called on 10 October 2017 and 18 October 2017 for a first and second Consultation with SCT Judge
AND UPONHearings having been held before SCT Judge Nassir Al Nasser on 7 November 2017, 26 November 2017, and 6 December 2017, with the Claimant’s representative,Ichabodand the Defendant in attendance;
AND UPONthe parties thereafter being unable to reach a settlement;
ANDUPONreviewing the documents and evidence submitted in the Court
IT IS HEREBY ORDERED THAT:
1.The Claimant’s claims are dismissed.
2. The parties shall bear their own costs.
3. The security cheque No. 000005 in the amount of AED 75,000 provided by the Defendant to the Claimant is invalid and may not be encashed at any time.
Date of issue: 19 March 2018
1. The Claimant is Ibsen Bank (PJSC), a bank providing financial services including credit cards and personal loans to customers (the “Claimant”).
2. The Defendant is Ikira, an individual and Indian National (the “Defendant”).
3. The parties’ entered into a written agreement on 3 August 2016, entitled ‘IBSEN Smart Loan, Credit Card Application Form’ (the “Original Agreement”). Under the terms of the Original Agreement, the Claimant was to receive a loan of AED 72,589 with a repayment schedule of 36 instalments of AED 2,343. However, upon further review of this Original Agreement, the Claimant adjusted the loan amount to AED 69,600. The Defendant confirmed via email that this revised amount was amenable to him for his “smart loan top up”.
4. Thus, the Defendant allegedly received a loan of AED 69,600 on 16 August 2016 (the “Loan”), however only AED 14,267.25 of that amount was actually transferred into his account. The loan terms required repayment via 36 monthly instalments of AED 2,246.
5. The Claimant also received a credit card (number 5193051571814457) to the value of AED 72,500 on 18 December 2008 (the “Credit Card”). This Credit Card seems to have been provided well in advance of the Original Agreement, however the relevant Credit Card number is included in the Original Agreement under the section entitled “Financial Details with IBSEN.”
6. The Defendant made regular repayments of the loan until June 2017, after which date he fell into arrears. According to the Claimant, the remaining amount currently outstanding on the loan is AED 55,440.16 while the outstanding owed on the Credit Card is AED 76,707.29. The Defendant has also failed to repay the credit card amount. According to the Claimant, the sum of the amounts owed by the Defendant to the Claimant in relation to the Loan and Credit Card is AED 132,147.
7. Following the Defendants’ failure to keep up with his repayments, the Claimant filed a claim with the DIFC Courts
8. The Defendant initially did not respond to the Claim, although having been served via email and via courier. However, the Defendant did attend the Consultations scheduled by the SCT. Having been unable to reach a settlement, the Defendant provided an email submission to the SCT on 19 October 2017 detailing his defence. The Defendant did not provide an Acknowledgement of Service
9. The parties then engaged in an extensive series of documentary exchanges and Hearings through 15 January 2018 with three Hearings held on 7 November 2017, 26 November 2017, and 6 December 2017. After the final Hearing, the parties received additional time to pursue a settlement, but they were unable to come to an agreement. Thus, this case was reserved for Judgment.
10. At the First Hearing, it was made clear that the Claimant had possession of a security cheque No. 000005 made out for AED 75,000 by the Defendant which the Defendant wished to be returned to him. I made an Interim Order on 7 November 2017 requiring the Claimant to return this cheque but the Claimant contended that it is unable to return the cheque as it was destroyed in a fire that occurred in 2014. The Defendant counters that the cheque was provided well after 2014 and thus could not have been destroyed in this fire. This disagreement was not resolved after three Hearings and the Interim Order was not complied with. In any event, it is clear that the security cheque No. 000005 provided by the Defendant to the Claimant in the amount of AED 75,000 is invalid and cannot be encashed by the Claimant at any time.
11. It is important to note that both parties have mentioned portions of confidential settlement discussions had at the previous consultations and settlement negotiations, against the rules of the SCT. Settlement discussions, including any admissions made during the Consultations, are confidential and not relevant in a Judge’s assessment of the Claim. These statements from the parties have not swayed my decision, which is based on the documentation provided by the parties.
Parties’ Submissions and Procedural History
12. The Claimant’s Claim Form detailed the provisions of the Original Agreement and alleged that the Defendant owed the Claimant AED 132,147 in repayment for the Loan and Credit Card. The Claimant contended that the DIFC
13. The Defendant submitted a defence via email on 19 October 2017, stating that the Claimant had failed to prove that the DIFC Courts had jurisdiction over the total claim. The Defendant also rejected the claim value and contested the documentation provided by the Claimant as failing to reflect the true nature of the relationship between the parties. The Defendant contended that this claim should proceed in the Dubai Courts
14. At the first Hearing on 7 November 2017, the Defendant reiterated his claims contesting jurisdiction and also claimed that the Original Agreement was rejected and is therefore invalid. The Defendant challenged the Claimant to provide the full documentation relevant to his Loan and Credit Card. It became clear that the Claimant’s documentary evidence was insufficient to prove its claims. Thus, the Claimant was given time to supplement its evidence after the first Hearing. The issue of the AED 75,000 security cheque arose at the first Hearing and the Interim Order was issued on that same day.
15. The Claimant provided additional documentation on 12 November 2017 including an email showing that the Defendant accepted the adjusted loan amount of AED 69,600. However, the Claimant still failed to provide documentation of the Credit Card claims. The Claimant also failed to comply with the Interim Order, stating that the security cheque had been destroyed in a fire occurring in 2014. The Claimant provided documentation of that fire on 21 November 2017.
16. During the second Hearing on 26 November 2017, the parties disagreed about the AED 75,000 security cheque. The Defendant argued that his account upon which the cheque was written was only opened in 2015 and thus the cheque could not have been destroyed in the 2014 fire. However, as the cheque was not relevant to the Claims at stake in the case, this issue was not further discussed.
17. At the second Hearing, the Defendant acknowledged that he has a liability to the Claimant but refused to define the amount of that liability. The Defendant argues that the criminal case brought against him in the Dubai Courts cleared the monetary issue and that the Claimant should file claims in the Dubai Courts for any additional repayment. Furthermore, the Defendant again pointed out that the Claimant has failed to provide documentation of the Credit Card Claim and he argued that only approximately AED 14,500 was actually dispersed to him as regards the Loan Claim.
18. On 29 November 2017 the Claimant finally provided documentation of the Credit Card Claim, however there was no inclusion of a contractual agreement relevant to the Credit Card.
19. On 4 December 2017, the Defendant provided his bank account statements showing that he received only AED 14,267.25 in his account on 16 August 2016. He also provided proof that his account was opened in December 2015.
20. At the third and final Hearing on 6 December 2017, the Defendant reiterated his claims against jurisdiction. He specifically pointed out that there was no agreement relevant to the Credit Card and thus no jurisdiction over that claim. Furthermore, the Defendant continued to argue that the Original Agreement was rejected and thus invalid. The Claimant responded that the Original Agreement remained valid with an amendment to the amount of the Loan agreed via email.
21. The Defendant stated that he may or may not have received the full Loan amount, however only AED 14,267.25 shows in his account. The Claimant argued that this was a “top up” loan and thus the smaller amount deposited to the Defendant was due to the fact that the additional amount remained owing on a prior loan. However, the Claimant did not point to any evidentiary proof that this loan was a “top up” loan.
22. This Claim includes three main elements. First, it must be established that the DIFC Courts have jurisdiction over all of the parts of the Claim, including the Loan Claim and the Credit Card Claim. Second, the two Claims must be assessed based on the documentary evidence provided to adjudicate whether the Defendant is in arrears and how much remains owing to the Claimant.
23. As explained on numerous occasions to the Defendant during the Hearings, the Defendant failed to properly contest jurisdiction by filing an Acknowledgment of Service with the SCT. The Defendant has confirmed that he received the instructions and Claim documents but argued that he did not know the proper procedure and instead he brought up his jurisdiction argument at the Consultation instead of filing an Acknowledgment of Service.
24. However, due to the Defendant’s constant reiteration of his jurisdiction objection and due to the important fact that the SCT cannot give judgment on claims falling outside of its jurisdiction, I will address the SCT’s jurisdiction over each claim below.
B. The Loan Claim
25. The Claimant argues that the Original Agreement remains valid between the parties, including the email amendment adjusting the loan amount and repayment terms. Within the Original Agreement, Clause 18 reads:
“I acknowledge and agree that the civil courts of the individual Emirates, the Federal civil courts of the United Arab Emirates, and the courts of the Dubai International Financial Centre (including without limitation the Small Claims Tribunal of the DIFC), shall have non-exclusive jurisdiction over all matters arising under the Products’ terms and conditions save that the Bank shall have the right to file actions in any court with jurisdiction over me or my assets. In the event that a party opts to commence a claim in the Small Claims Tribunal of the Dubai International Financial Centre, the parties expressly agree that such claim may be made for any amount up to AED 1,000,000 or for such greater amount as may be within the jurisdiction of that Tribunal from time to time.”
26. The Defendant counters that he signed subsequent loan documentation reflecting the new loan amount of AED 69,600 and thus, the Original Agreement which was provided is invalid. The Claimant insists that no further documentation was signed with respect to the Defendant’s 2016 Smart Loan, rather the amount of the loan was adjusted via email, relying on the Original Agreement for terms and conditions.
27. For this issue, I find it more likely than not that the Original Agreement with email amendment received from the Defendant was the extent of the documentation provided. From this valid documentation, it is clear that the Defendant agreed to the opt-in jurisdiction of the SCT via Clause 18 and therefore the SCT has jurisdiction over the Loan Claim.
28. As for the Loan Claim itself, there is some significant disagreement between the parties as to the actual details of the loan. The Claimant, after much time and extensive confusion, was finally able to articulate its argument at the Third Hearing that this particular loan was a “top up” loan. According to the Claimant’s representative, a “top up” loan occurs when a client has already paid significant sums on a prior loan and seeks to borrow again against this repaid amount. As discussed at the Third Hearing, a simplified example would include a client having paid AED 40,000 of a AED 100,000 loan and then essentially re-starting his loan. In this case, he would receive the AED 40,000 he had already paid back and would begin his repayments on the AED 100,000 again. Thus, the resulting “top up” loan would result in the client receiving a lesser amount in his account although he would remain liable for the full amount.
29. The Claimant, although making no mention of this financial structure in its initial Claim Form or any of its oral or written submissions, claimed at the Third Hearing that the Defendant was receiving a “top up” on a prior loan, and for that reason the Defendant only received part of the total loan amount of AED 69,600. As reflected in the Defendant’s bank statements, the Defendant received AED 14,267.25.
30. The Defendant argues that his records only show that he received AED 14,267.25 of the total amount and that he is only responsible to repay that smaller amount, which he has already accomplished through his nine installment payments. The Defendant challenged the Claimant to provide proof that he received the full amount. When asked directly what his liability to the Claimant is, the Defendant was unable to give a straight answer. In fact, the Defendant stated during the Third Hearing that he may or may not have received the full amount. He reiterated that his back records only show him receiving AED 14,267.25 and that he is not liable for any additional amounts until the Claimant can show that he received those additional amounts.
31. The Claimant has been unable to show additional payments were made to the Defendant. Furthermore, the Claimant has not been able to show any further documentation proving its “top up” argument.
32. Seeing as the Claimant is a large bank, it is surprising that there are not more complete records of this alleged “top up” Loan or else proof that the Defendant received the full loan amount. The only reference I can find to this Loan being a “top up” is in the Defendant’s email agreeing to the new Loan amount, where he states that he emails in reference to his “smart loan top up.” In fact, the document entitled “View Basic Feature Details” listed “NA” under “Old Loan Account Number,” implying that this was a new loan. If there is any other indication that this was a “top up” loan in the paperwork, it was not pointed out by the Claimant and is not obvious upon a careful review of the documentation. Furthermore, even upon being made aware of this issue at the Third Hearing, the Claimant was unable to provide further documentation, documentation that should have been provided with the initial Claim Form.
33. However, both parties did acknowledge that the Defendant has obtained multiple loans from the Claimant, with the Claimant providing proof of at least one loan for AED 75,000 paid out in October 2013. Furthermore, it is curious that the Defendant would make nine payments on a loan for which he only received 20% of the agreed loan amount. The Defendant addressed this inconsistency by stating that he was happy to get anything and thus began repayment immediately. He has not provided any proof that he brought up the Claimant’s alleged failure to pay the full amount at any time.
34. Thus, there remains a gap in the documents provided and the stories of the parties. It is noted that the Defendant seems to be taking advantage of the Claimant’s poor documentation, however it is the Claimant who is responsible for the burden of proof. At this time, the Claimant has proven that the Defendant applied for a Loan in amount AED 69,600 but has been unable to show that the Defendant actually received this full amount. Instead, the Defendant has rebutted and proved that he only received AED 14,267.25 in the relevant account (the Igone bank account relevant to the Original Agreement and the repayments remains the same on all documentation).
35. Therefore, I cannot grant the Claimant’s first claim as regards the Loan. The Claimant has been unable to prove that this Load was paid out in full. It remains the Claimant’s responsibility to keep complete records of transactions made and its inability to properly prove the Loan Claim, as a sophisticated financial institution, cannot be overlooked. The Claimant was given numerous additional opportunities to supplement its inadequate initial Claim Form and attachments and although supplements were provided, they did not create a full picture of the circumstances enough to prove the Loan Claim. The nine payments made by the Defendant fully repay a loan amount of AED 14,267.25 and thus I cannot find any additional liability for the Loan Claim on the Defendant’s part based on the evidence provided.
C. The Credit Card Claim
36. The initial Claim Form included a claim for AED 76,707.29 in respect of the Credit Card Claim. Surprisingly, the Claimant included no proof of this claim in its initial filing and only provided the credit card statements on 29 November 2017. Additionally, the Claimant’s representative claimed in oral submissions that the Credit Card was covered by the Original Agreement as the Credit Card number was included on page 3 of the application under “Financial Details with IBSEN.”
37. There was some confusion at the Hearing as to when this particular Credit Card was issued to the Defendant. The Defendant claimed he has had this Credit Card account since 2008 and demanded the documentation relevant to the Credit Card to be submitted in the case. The Claimant’s representative was unclear as to the exact issuance of the Credit Card but claimed that the Credit Card was subject to the terms of the Original Agreement due to it being listed on page 3. While the Claimant’s representative did not mention this, it was listed in the initial Claim Form that the Defendant received this Credit Card in December 2008.
38. The Claimant has not submitted any further documentation showing terms and conditions of the Credit Card agreement that must have been made between the Claimant and Defendant in 2008 or some point after that. Instead, the Claimant has only provided the Original Agreement and the Credit Card statements (which begin in November 2014).
39. The Original Agreement contains a section entitled “Credit Card” where an applicant can presumable apply for a new Credit Card in addition to a loan. However, this section remains blank in the Original Agreement. Therefore, the Claimant’s contention that there is jurisdiction over the Credit Card Claim relies upon the inclusion of the Credit Card number on page 3 of the Original Agreement. According to the Claimant, this would imply that the jurisdiction terms of Clause 18 would also apply to the Credit Card.
40. Neither of the parties is a DIFC entity and thus the SCT’s jurisdiction over the Claim relies upon the parties having validly opted-in to the SCT’s jurisdiction. While this is a valid argument for the Loan Claim, as per Clause 18 of the Original Agreement, this argument does not work for the Credit Card Claim.
41. It is not reasonable to assume that the inclusion of the Credit Card number on page 3 of the Original Agreement would result in amendment to the terms and conditions relevant to the Credit Card. The Defendant was not on notice that this would be the case through any clear wording. Parties can only validly opt-in to the jurisdiction of the DIFC Courts and the SCT with clear and unambiguous wording reflecting that the parties were aware of their choice to opt-in. The Defendant could not have appreciated his choice to opt-in to the jurisdiction of the DIFC Courts and the SCT as regards his Credit Card (which he has had for nearly 10 years) by simply including that Credit Card number on a loan application. Any change to the terms and conditions of the Defendant’s Credit Card would need to be clearly labeled and presented to him for approval.
42. I cannot comment on the actual terms and conditions relevant to this Credit Card, as they have not been submitted into the Court File. As the Credit Card was obtained in 2008, and the DIFC Courts’ opt-in jurisdiction was created in 2011, it is not possible that the original Credit Card Terms opted-in to the jurisdiction of the DIFC Courts and SCT. I cannot speculate on any updates to the Terms and Conditions that have been provided since 2008 as there is no documentation provided in the Court File.
43. Thus, I cannot find that the SCT has jurisdiction over the Credit Card Claim without further documentation and proof from the Claimant showing that the Defendant knowingly opted-in to the jurisdiction of the SCT as regards his Credit Card. The Claimant had ample opportunity to fully prove its claims with numerous occasions for additional submissions to be provided. Thus, the Credit Card Claim is dismissed.
44. The Claimant’s claims regarding the Loan and Credit Card liabilities owed by the Defendant to the Claimant are dismissed in full.
45. Each party shall bear its own costs.
46. Finally, the security cheque No. 000005 provided by the Defendant to the Claimant in the amount of AED 75,000 is invalid and cannot be encashed by the Claimant at any time.
Date of issue: 19 March 2018