The Dubai International Financial Centre

Claim No: CFI 083/2020

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF APPEAL

BEFORE CHIEF JUSTICE ZAKI AZMI, H.E JUSTICE ALI AL MADHANI AND JUSTICE SIR JEREMY COOKE

BETWEEN

LAASYA

Claimant/Respondent

and

(1) LABUKI
(2) LUIS
(3) LAJWAT
(4) LAKSH

Defendants/Appellants

ORDER WITH REASONS OF THE COURT OF APPEAL

UPON the Order with Reasons of Justice Wayne Martin dated 7 September 2021 (the“Order”)

AND UPON reviewing the Defendants’ Appeal Notice filed on 27 September 2021 (the“Appeal Permission Application”)

AND UPON the Order with Reasons of Justice Wayne Martin dated 15 November 2021 refusing permission to appeal (the“Impugned Order”)

AND UPON reviewing the Defendants’ Second Appeal Notice filed on 7 December 2021 applying for permission to appeal against the Order (the“Second Permission Application”)

AND UPON reviewing the Defendants’ skeleton argument dated 29 December 2021

AND UPON reviewing the Claimant’s written submissions in opposition to the Second Permission Application dated 3 January 2022

AND PURSUANT TOPart 44 of the Rules of the DIFC Court (“RDC”)

IT IS HEREBY ORDERED THAT:

1. The Second Permission Application is refused.

2. The Defendants/Applicants shall pay the costs of the Claimant on the indemnity basis, with such costs to be the subject of assessment by the Registrar, if not agreed.

Issued by:
Nour Hineidi
Registrar
Date of issue: 22 March 2022
Time: 9.30am

SCHEDULE OF REASONS

CHIEF JUSTICE ZAKI AZMI, H.E JUSTICE ALI AL MADHANI AND JUSTICE SIR JEREMY COOKE IN AGREEMENT:

1. By an Appeal Notice dated 7 December 2021, the putative Appellants (the“Defendants”or the“Applicants”) seek “further permission to appeal before the Appellate Court” against various findings of Justice Wayne Martin. Those findings are said to be as follows:

2. In the draft order, the Applicants seek an order granting permission to appeal and setting aside the Impugned Order of 15 November 2021. The draft order also provides for a stay of the order made by Justice Wayne Martin that the Applicants should pay the costs of seeking such permission to appeal together with a stay of all further proceedings until termination of the Appeal.

3. Putting aside the technical deficiencies in the Second Permission Application, which ought to be a renewed application for permission to appeal following the refusal of Justice Wayne Martin, rather than an application seeking to set aside his own decision to refuse permission, we treat the application as one for permission to appeal on the grounds set out in the Appeal Permission Application dated 28 September 2021 and the Second Permission Application dated 7 December 2021.

4. This Court has come to the clear view that any appeal against the decision of Justice Wayne Martin, as recorded in the Impugned Order and Schedule of Reasons dated 15 November 202,1 has no realistic prospect of success and that there is no compelling reason why the matter should be heard by the Court of Appeal. The Applicants are not entitled to any of the relief which they seek.

5. The first ground set out in the Second Permission Application dated 7 December 2021 does not reflect the decision of the Court below. In his decision of 7 September 2021, Justice Wayne Martin decided that the Dubai Courts had never determined that they had jurisdiction to entertain the Defendants’ claims and that the objection raised to the onshore Court’s jurisdiction by the Claimant had never been determined. The onshore Court instead simply determined the merits of the Defendants’ claim (finding against the Defendants) without ever deciding the question of jurisdiction. Despite Defendants appealing against that decision, the fact remains that there has been no decision by the onshore Dubai Courts ruling that they do have jurisdiction. By contrast, this Court expressly decided in its decision of 21 April 2021 that the DIFC Courts did have jurisdiction in respect of the claim made by the Claimants under the guarantees signed by the Defendants. Consequently, the Judge at first instance, relying on the decision of the Court of Appeal inLakhan v Lamia [2021] DIFC CA 001, held that there was no dispute as to jurisdiction between the DIFC Courts and the onshore Dubai Courts since this was neither a situation where both Courts had either each claimed or disclaimed jurisdiction nor where the two courts had issued inconsistent decisions on jurisdiction. The Defendant’s application to the Judicial Committee therefore had no basis in fact. In such circumstances there are no grounds for a stay pending any decision by that Committee.

6. The Defendants have not sought to grapple with the terms of that decision and consequently, there is no prospect of success in relation to the stay sought on the grounds of an application made to the Judicial Committee. In light of the decision inLakhan, it is plainly not enough for the Court of First Instance of the onshore Dubai Courts to have dismissed the Defendants’ case on the basis that it had no merit, for it to be assumed that there is a conflict of jurisdiction between that Court and the DIFC Courts. Moreover, the fact that an appeal has been launched against that decision by both the Defendants and the Claimants does not create such dispute for the purposes of Article 4(1) of Decree 19, nor does this raise any novel point of law which could constitute a “compelling reason” for the matter to be heard by the Court of Appeal.

7. As to the other grounds raised in the earlier Appeal Permission Application of 27 September 2021, this Court also finds that there is no realistic prospect of success. It is, as Justice Wayne Martin said, not easy to discern the individual grounds of appeal from that Application but, in addition to the first ground which is the same as the two grounds which we have just dealt with, the second ground is based on the submission that statements in an affidavit or Witness Statement should have been struck out on the ground of non-compliance with RDC r.17.43 which provides that full and specific details of any allegation of fraud, dishonesty or illegality should be set out it in the statement of case, where a party wishes to rely upon them in support of that case. In addition to applying for the strikeout of various parts of the Witness Statement, an application was made to strikeout the Particulars of Claim on the ground that they were an abuse of the Court’s process because there had been a failure to comply with RDC r.4.16. Those Particulars of Claim make no allegation of fraud, dishonesty or illegality and relied simply on the cause of action under the guarantees which had been signed by the Defendants in respect of a debt to the Claimant which had not been repaid by the principal debtor. Justice Wayne Martin was correct in referring to the definition of a “statement of case” in Part 2 of the RDC and holding that an affidavit or witness statement did not fall into that category, being, by its very nature, evidence to which RDC r.17.43 did not apply. Since the Claimant made it clear that it did not rely on the evidence of fraud in relation to the cause of action which it was pursuing against the Defendants but relied on it solely in relation to continuation of the worldwide freezing order, there was no need for any of such allegations to appear in the Particulars of Claim. The case made against the Defendants did not proceed on the basis of fraud or dishonesty, because this was completely unnecessary to the cause of action founded on the guarantees themselves. In such circumstances, there was no basis for striking out any part of the witness evidence or the Particulars of Claim. The prospects of success of an appeal on this point are simply not realistic. Furthermore, no point of law which would provide a compelling reason for the matter to be heard by this Court was raised.

8. A further complaint appears in the earlier Notice of Appeal, where it is stated that “the Learned Judge wrongly entered Immediate Judgement by splitting the cause of action”. This appeared to be a complaint based on the reliance of the Judge on the evidence of fraud in making a post judgement freezing order when he was not relying upon it in the context of giving immediate judgement on the guarantees. The Judge, in fact, adopted an entirely principled approach, having been told by the Claimant, contrary to what appeared in the deponents’ statements, that the evidence was only to be relied upon for the limited purpose of the worldwide freezing order. He therefore decided the immediate judgement application on the basis that the cause of action was advanced without reference to any issues of fraud or dishonesty. There are allegations of prejudice to the Defendants on the basis that the Judge gave “tacit judicial recognition to unverified allegations of fraud” without the Defendants ever having an opportunity substantively to respond to them. The reality is, however, that the Defendants had every opportunity to adduce evidence to the court to show that they were not liable under the Guarantees but never put forward any substantive defence of any kind, eschewing the opportunity to produce any evidence at all.

9. Therefore, none of the grounds put forward by the Defendants has any realistic prospect of success and none raises issues of public importance or issues of law which could provide some compelling reason for the Court of Appeal to hear the case. No other argument is put forward in favour of finding that there is such a compelling reason.

10. It is abundantly clear that the Defendants do not have any defence to liability under the guarantees and virtually every step taken by them in this action has been deployed as a delay tactic. The arguments advanced by them have been unsustainable and the application to the Judicial Committee has been one final attempt at delaying the inevitable outcome of this case. This is even clearer in light of the fact that the Defendants have disobeyed Court orders for disclosure, disregarded and ignored Court orders for costs and have taken every opportunity available to pursue procedural points of no merit in order to avoid their obligations in the full knowledge that there is no defence to the claim.

11. The Second Permission Application is therefore refused and as it is, in this Court’s view, an application “beyond the norm” which has been found to have no realistic prospect of success, the Defendants must pay the costs of the Claimant on the indemnity basis, with such costs to be the subject of assessment by the Registrar if not agreed.