Claim No: SCT 224/2023
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
BETWEEN
MILO LLC
Claimant
and
MAYUR LIMITED
Defendant
ORDER WITH REASONS OF H.E. JUSTICE NASSIR AL NASSER
UPON the Defendant’s Acknowledgment of Service dated 13 July 2023 setting out its intention to contest the jurisdiction of the DIFC Courts
AND UPON this Claim having been called for a Jurisdiction Hearing before H.E. Justice Nassir Al Nasser on 31 July 2023, with the Claimant’s and the Defendant’s representatives in attendance
IT IS HEREBY ORDERED THAT:
1. The Defendant’s challenge to contest to the jurisdiction of the DIFC Courts is granted.
2. The DIFC Courts have no jurisdiction to hear and determine this claim.
3. Each party shall bear its own costs.
Issued by:
Hayley Norton
SCT Judge
Date: 1 August 2023
At: 3pm
SCHEDULE OF REASONS
1. The Claimant is Milo LLC (the “Claimant”), a free zone establishment incorporated in Ajman Media Free Zone, Ajman, UAE.
2. The Defendant is Mayur Limited (the “Defendant”), a company registered and located in the DIFC, Dubai, UAE.
3. On 13 June 2023, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) in his personal capacity against a representative of the Defendant in his personal capacity seeking the settlement of unpaid invoices.
4. On 5 July 2023, the Claimant amended the claim to correctly identify the parties to the claim.
5. On 13 July 2023, the Defendant filed its Acknowledgment of Service contesting the jurisdiction of the DIFC Courts.
6. A jurisdiction hearing was duly listed before me on 31 July 2023 at which the Claimant’s and the Defendant’s representatives appeared.
7. The Defendant submits that the letter of engagement dated 24 August 2022 (the “LOE”) is between the Claimant and Maverick Limited (“ML”), a company based in India. The Defendant adds that ML is a subsidiary of the Defendant and it is not denied that some payments were made by the Defendant to the Claimant on behalf of ML for administrative and accounting reasons.
8. The Defendant adds that it has not guaranteed obligations of ML under the LOE nor has the Defendant entered into any agreement with the Claimant. The Defendant further submits that the invoices raised by the Claimant are addressed for the attention of ML, and both companies (ML and the Defendant) are incorporated outside the DIFC. The Defendant adds that it is clear from the provisions of the LOE that the parties have not opted into the jurisdiction of the DIFC Courts, nor were the services under the LOE performed within the DIFC.
9. Therefore, the Defendant requests the Court to dismiss the claim for lack of jurisdiction.
10. In response, the Claimant submits that the Defendant has a majority stake in ML, thus making it its subsidiary. The Claimant provides that financial and management control over ML is exercised by the Defendant. The Claimant adds that it had engaged with ML based on direct approval of the Defendant, although the services rendered were to the exclusive benefit of ML, the engagement was approved by the Defendant and all invoices made to the subsidiary were paid in full by the Defendant.
11. Rule 53.2 of the Rules of the DIFC Courts (“RDC”) requires that the 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:
“(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. . .
. . . 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.”
12. 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.
13. Upon review of the case file and the submissions contained therein, I find that the there is no contractual relationship between the Claimant and the Defendant. The only contractual relationship that appears to exist is between the Claimant and ML which is a separate legal entity, although a subsidiary of the Defendant. Therefore, it does not satisfy the jurisdictional gateway requirements of Article 5(A)(a) of the JAL.
14. In light of the above, it must follow that the Defendant’s jurisdictional challenge is granted.
15. The DIFC Courts have no jurisdiction to hear and determine this claim.