Claim No. SCT 238/2023
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai
IN THE SMALL CLAIMS TRIBUNAL
BEFORE SCT JUDGE DELVIN SUMO
|Hearing :||29 August 2023|
|JFurther Submissions :||8 September 2023|
|Judgment :||13 September 2023|
JUDGMENT OF SCT JUDGE DELVIN SUMO
UPON reviewing the Claim Form dated 22 June 2023 (the “Claim”)
AND UPON a hearing having been held before me, SCT Judge Delvin Sumo on 29 August 2023, with the Claimant’s and the Defendant’s representative in attendance (the “Hearing”)
AND UPON reading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant the sum ofAED 250,000(the “Amount”).
2. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the sum ofAED 12,500.
3. In the event the Defendant fails to comply with Paragraph 1 above within 21 days from the date of this Order, interest at the rate of 9% per annum, pursuant to Practice Direction No, 4 of 2017 (Interest on Judgments) will accrue on the Amount from the date of filing this Claim until the date of full payment.
SCT Judge and Assistant Registrar
Date of Issue: 13 September 2023
1. The Claimant is Mipul, a company based in Dubai, the UAE (herein the “Claimant”).
2. The Defendant is Meron Restaurant LLC, a company based in Dubai, the UAE (herein the “Defendant”).
3. On 22 June 2023, the Claimant filed its claim (the “Claim”) with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking payment from the Defendant in the sum of AED 250,000 (the “Outstanding Sum”). The Claimant makes this Claim seeking payment of the Outstanding Sum pursuant to an Asset Purchase Agreement entered into between the parties dated 25 April 2022 (the “Agreement”). In addition, the Claimant is seeking payment of the DIFC Courts’ filing fee in the amount of AED 12,500 and interest at the rate of 9% per annum from the date the Outstanding Sum became due until the date of full payment.
4. On 10 July 2023, the Defendant filed an acknowledgment of service intending to defend all of the Claim.
5. On 5 September 2023, upon my directions at the Hearing, the Defendant filed written submissions to the Claim and on 8 September 2023, the Claimant filed its response to the Defendant’s submissions.
6. The Defendant, in short, submits that the conditions required for the payment of AED 250,000 were never fulfilled, which led to the Defendant’s‘greater economic loss of AED 1 million, already paid to the Claimant’.
Background and the Preceding History
7. On 25 July 2023, this matter was listed for a Consultation before SCT Judge Hayley Norton (the “Consultation”). However, the parties failed to reach a settlement at the Consultation. Therefore, this matter was listed for a hearing to be held before me on 29 August 2023 (the “Hearing”).
8. The parties entered into the Agreement, by virtue of which the Claimant sold to the Defendant assets (as defined in the Agreement) for Unit 1, Block SS, Dubai (the “Unit”). The landlord of the Unit is MishanProperties (the “Landlord”).
9. In return, the Defendant was to comply with the conditions as set out in Article 3.1 of the Agreement which state the following (the “Conditions”):
3.1.1 the payment of AED 1,000,000.00 in cash of the Signing Date and
3.1.2 the payment of AED 250,000.00 in cash within 6 to 12 months from the signing date (the Remaining Consideration) provided that the following conditions are satisfied in full at the mutual discretion of the buyer:
(a) the seller has formally surrendered the Mipul Restaurant LLC Lease and Meron restaurant LLC has entered into a new lease in relation to the Unit; and
(b) MIshan has approved the concepts of the buyer,
(together, the Conditions).”
10. The Claim at hand pertains to the payment of AED 250,000 by the Defendant to the Claimant pursuant to Article 3.1.2 of the Agreement. There is no dispute between the parties in relation to the Condition set out in Article 3.1.2 (a) (“Condition A”), as confirmed at the Hearing and as submitted in their written submissions. Therefore, the only issue to be considered is the Condition set out in 3.1.2 (b) (“Condition B”), which is in essence the disagreement between the parties.
11. In my view, the Conditions are clear in so far that both conditions set out in Article 3.1.2 should be fulfilled for the amount of AED 250,000 to become payable. The Defendant assumed the lease, as supported by evidence in the parties’ submissions, and appeared to have commenced its business, which in my opinion, the Defendant could have only been able to if the concept of business was approved by the Landlord.
12. Otherwise, the Defendant had the privilege to rely on Article 3.3 and Article 3.4 of the Agreement, which read as follows:
“3.3 If a Party becomes aware of any fact or matter that prejudices the satisfaction of a Condition, then such Party shall within 3 Business Days notify the other Party.
3.4 Unless otherwise mutually extended or agreed in writing by the Parties before or on 1st of May 2022, if any Conditions are not satisfied by the close of business on 1st of May 2022:”
13. In its submissions, the Defendant failed to address Article 3.3 and Article 3.4 of the Agreement, and failed to provide any proof or evidence to demonstrate that the alleged non-fulfilment of Condition B has been brought to the attention of the Claimant. Therefore, I am of the view that Condition B has been met.
14. In light of the above, I find that the Claimant has submitted a convincing case that the Defendant owes it the sum of AED 250,000, which has been substantiated by the Agreement and the parties’ submissions. It follows that the Claim succeeds in its entirety and that the Defendant shall pay the Claimant the sum of AED 250,000.
15. As the Claimant has been successful in its Claim, I find that the Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of AED 12,500.
16. The Defendant shall pay the Claimant the sum of AED 250,000 (the “Amount”).
17. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the sum of AED 12,500.
18. In the event the Defendant fails to comply with Paragraph 24 within 21 days from the date of this Order, interest at the rate of 9% per annum, pursuant to Practice Direction No 4 of 2017 (Interest on Judgments) will accrue on the Amount from the date of filing this Claim until the date of full payment.