Claim No: SCT 338/2021
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE SMALL CLAIMS TRIBUNAL
ORDER WITH REASONS OF SCT JUDGE DELVIN SUMO
UPONreviewing the Claim Form submitted by the Claimant dated 23 November 2021 (the “Claim”)
AND UPONthis Claim having been called for a Jurisdiction Hearing before SCT Judge Delvin Sumo on 31 January 2022.
AND UPONthe Claimant and the Second Defendant attending the Jurisdiction Hearing
AND UPONreviewing the case file and submissions contained therein
IT IS HEREBY ORDERED THAT:
1. The Claim shall be dismissed due to lack of jurisdiction.
2. Each party shall bear their own costs.
Nassir Al Nasser
Date of Issue: 1 February 2022
SCHEDULE OF REASONS
1. The Claimant is Maya, a company registered in Sharjah, UAE (the “Claimant”).
2. The First Defendant is Micah, a company registered in Dubai, UAE (the “First Defendant”).
3. The Second Defendant is Malachi, a company registered in Dubai, UAE (the “Second Defendant”).
4. Rule 53.2 of the Rules of the DIFC Courts (the “RDC”) requires that the Small Claims Tribunal (the “SCT”) only hear cases that fall within the jurisdiction of the DIFC Courts. The relevant wording is set out below:
“The SCT will hear and determine claims within the jurisdiction of the DIFC Courts:
(1) where the amount of the claim or the value of the subject matter of the claim does not exceed AED 500,000 or;
(2) where the claim relates to the employment or former employment of a party; and
all parties elect in writing that it be heard by the SCT (there is no value limit for the SCT’s elective jurisdiction in the context of employment claims); or
(3) which do not fall within the provisions of sub-paragraph (1) or (2) above, but in respect of which:
a. the amount of the claim or the value of the subject matter of the claim does not exceed AED 1,000,000; and
b. all parties to the claim elect in writing that it be heard by the SCT, and such election is made in the underlying contract (if any) or subsequent to execution of that contract.”
5. 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 may exercise jurisdiction over a claim, which are, as relevant:
“1. The Court of First Instance will have exclusive jurisdiction to hear and determine:
a. Thecivil, commercial and labourclaims and actions to which the DIFC or any DIFC body, DIFC establishment or licensed DIFC establishment is a party.
b. Thecivil, commercial and labourclaims and actions arising out of or relating to a contract or promised contract, whether partly or wholly concluded, finalized 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. The Court of First Instance shall have exclusive jurisdiction to hear and determine thecivil, commercial and labourclaims 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;
d. Appeals against decisions or procedures made by DIFC bodies where DIFC Laws and DIFC Regulations permit such appeals and claim;
e. 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 it whether before or after the dispute arises, provided that such agreement is made pursuant to specific, clear and express provisions.
3. The Court of First Instance may hear and determine any civil, commercial and labour claims or actions falling within its jurisdiction if the parties agree in writing to submit to the jurisdiction of another court over the claim or action but such court dismisses such claim or action for lack of jurisdiction. The Court of First Instance may not hear or determine any civil, commercial and labour claim or action in respect of which a final judgment is rendered by another court.”
6. Pursuant to Article 5(A)(2) of the JAL, the DIFC Courts can exercise its jurisdiction over a matter that is unrelated to the DIFC, where the parties have agreed in writing that any dispute arising between them would be referred to the DIFC Courts for adjudication. 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.
7. The Claimant filed its Claim with the SCT seeking the payment of sums allegedly owed to the Claimant by the First and Second Defendants in relation to a purchase order dated 31 December 2020 (the “Agreement”).
8. Upon review of the Agreement, it appears to be signed between the Claimant and the First Defendant, however, at the Jurisdiction Hearing, the Claimant submitted that all purchase orders were in fact issued and stamped by the Second Defendant. In addition, the Claimant submits that all email communication originated from the Second Defendant. Therefore, the Claimant submits that the Second Defendant is part of this Claim, and that the Claimant is entitled to bring this action against both the First and Second Defendants.
9. At the Jurisdiction Hearing, the Second Defendant submitted that the First and Second Defendants share the same manager, however, the Defendants are two different companies with different shareholders. The Second Defendant further submitted that there is no contractual relationship between the Claimant and the Second Defendant. Moreover, the Claimant failed to submit any existing agreement between the Claimant and the Second Defendant.
10. Upon reviewing the Agreement, it appears that the terms and conditions set out in the Agreement and the purchase orders do not contain an express clause by virtue of which the DIFC Courts would be able to exercise jurisdiction over this Claim in accordance with Article 5(A)(2) of the JAL. Instead, it appears that the Agreement contains an arbitration clause which sets out the parties’ intention to refer any disputes relating to the Agreement for arbitration. The relevant wording of the clause is set out below:
“Any dispute arising out of or in connection with this Material Purchase Order, including any questions regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Arbitration rules of the DIFC-LCIA Arbitration Centre, which Rules are deemed to be incorporated by reference into this clause”.
11. In light of the aforementioned, I am of the view that, in absence of a clear written opt-in clause to the DIFC Courts’ jurisdiction between the parties, the DIFC Courts cannot adjudicate this Claim. Moreover, the DIFC Courts do not have default jurisdiction over this claim as all parties are based outside of the DIFC and the other gateways of the JAL do not apply.
12. Therefore, I dismiss the Claimant’s Claim for AED 239,454 on the grounds that the DIFC Courts lacks jurisdiction over this Claim.
13. The Claimant’s Claim is dismissed due to the Courts’ lack of jurisdiction.
14. Each party shall bear their own costs.