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You are here: BAILII >> Databases >> The Dubai International Financial Centre >> Naazim v Novak [2024] DIFC SCT 200 (12 August 2024) URL: http://www.bailii.org/ae/cases/DIFC/2024/DSCT_200.html Cite as: [2024] DIFC SCT 200

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Naazim v Novak [2024] DIFC SCT 200

August 12, 2024 SCT - JUDGMENTS AND ORDERS

Claim No. SCT 200/2024

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

BETWEEN

NAAZIM

Claimant

and

NOVAK

Defendant

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Hearing :	7 August 2024
Judgment :	12 August 2024

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JUDGMENT OF H.E. JUSTICE MAHA AL MHEIRI

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UPON this Claim being filed on 20 May 2024 (the “Claim”)

AND UPON the Defendant’s Acknowledgement of Service dated 10 June 2024 as amended on 19 July 2024 setting out its intention to contest the jurisdiction (the “Jurisdiction Application”)

AND UPON a hearing held before H.E. Justice Maha Al Mheiri on 7 August 2024, with the Claimant’s and the Defendant’s representative attending (the “Hearing”)

AND UPON reading the submissions and evidence filed and recorded on the Court file

IT IS HEREBY ORDERED THAT:

1. The Jurisdiction Application is granted.

2. The DIFC Courts do not have jurisdiction to hear this Claim.

3. Each party shall bear their own costs as to the Jurisdiction Application.

Issued by:
Delvin Sumo
SCT Judge and Assistant Registrar
Date of Issue: 12 August 2024
At: 3pm

THE REASONS

Parties

1. The Claimant is Naazim, a Sudanese national that worked as Head of Legal Department for Nabil.

2. The Defendant is Novak (the “Defendant”), a company incorporated and registered in the Dubai International Financial Centre (DIFC), owned by Nabil.

Background

3. The underlying dispute arises out of an Employment Contract signed on 1 April 2021 (the “First Employment Contract”) between the Claimant and Nabil, a company registered in Sudan. Nabil owns different companies around the world, one being Novak, the Defendant.

4. The Claimant is based and works in Sudan under Nabil, and from time to time would visit the Defendant in Dubai. As the Claimant was one of Nabil executive employees, he was offered international benefits in order to visit Group-owned companies around the world.

5. The executive benefits included a DIFC Visa and international medical insurance. To facilitate these benefits, the Claimant signed an employment contract with the Defendant dated 31 March 2021 (the “Second Employment Contract”). This employment contract facilitated the issuance of the DIFC visa, opening of a bank account in Dubai and receiving international medical insurance. The Defendant, being owned by Nabil, facilitated this process.

6. On 2 April 2024, the Claimant was terminated by Nabil, and was also requested to cancel his visa under the Defendant.

7. On 20 May 2024, the Claimant filed a case against the Defendant in the DIFC Courts Small Claims Tribunal (“SCT”) requesting that the Court order that, as per the employment contract signed between the Claimant and Defendant, the Defendant be required to pay the amount of AED 239,000 for his employment entitlements.

8. On 10 June 2024, the Defendant acknowledged service intending to defend the Claim.

9. The parties met for a Consultation with SCT Judge Maitha Al Shehhi on 17 July 2024 but were unable to reach a settlement.

10. On 19 July 2024, the Defendant filed an application seeking to contest the jurisdiction of the DIFC Courts to hear this Claim (the “Jurisdiction Application”). In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a hearing held on 7 August 2024 (the “Hearing”).

The Jurisdictional Challenge

11. The Defendant contested the DIFC Courts’ jurisdiction arguing that the Claimant is not an employee of the Defendant. The Claimant signed an undertaking letter dated 31 October 2022 (the Undertaking Letter) expressly confirming that he is an employee of Nabil. He has further confirmed in writing that the Second Employment Contract was signed for visa purposes only and has undertaken not to claim any end of service benefits or other payments from the Defendant.

“I, Naazim, am currently employed by Nabil, Sudan, and part of the Executive Group of Nabil. Nabil is managing all my employment benefits and my role requires regular business trips to Dubai, U.A.E. as approved from the CEO.

I hereby confirm the Employment Agreement signed between Novak (owned by Nabil) and myself is for U.A.E visa purposes only.

I undertake that at the end of this contract signed with Novak, I will not claim any End of Service benefits nor hold Novak responsible for any payments."

12. The Defendant also confirms that they have never paid the Claimant his monthly employment benefits, and submits that it processed the Claimant's salary payments on behalf of Nabil, and not on behalf of itself.

13. The Defendant had been in contact with the Claimant regarding the cancellation of his visa. The Claimant's employment with Nabil was terminated by way of letter dated 2 April 2024. On that basis that the Claimant only held a DIFC visa for the purposes of his employment with Nabil, the Defendant requested to cancel the Claimant's visa which the Claimant is resisting.

14. The Claimant is not entitled to any end of service benefits from the Defendant, as the Claimant was not an employee of the Defendant. The Claimant has confirmed in the Undertaking Letter that he is not entitled to any payments from the Defendant. As such, any claim the Claimant wants to raise in respect of his employment should be filed against Nabil, and not the Defendant.

The Claimant’s reply to the Jurisdiction Application

15. The Claimant advances that the Jurisdiction Application has no legal grounds; the Defendant is only trying to abandon their legal obligation toward the Claimant.

16. The Claimant also submits that the Second Employment Contract is formal and the Defendant’s argument that the contract is fictious is an attempt to suggest that there no work relationship and it was made only made for the purpose of obtaining the visa. This argument is void and without any legal significance. The Defendant cannot prove that the Second Employment Contract is forged which indicates that the Second Employment Contract is binding and enforceable against the Defendant.

17. The Claimant also submits the following:

(a) The Defendant is a registered DIFC company and still carrying on business at the DIFC premises

(b) The Claimant’s visa and residency are issued by the Defendant from the DIFC and under its regulations

(c) The Claimant continues to be a resident in Dubai under that residency certificate and ID.

(d) The Claimant’s salary certificate and work experience letter was issued signed and stamped by the Defendant office located in DIFC.

(e) The Claimant’s Bank statement proves that the salary transfer was from the Defendant

Discussion

18. Having considered the written submissions and the arguments put forward at the Hearing, I find that this dispute falls outside the jurisdiction of the DIFC Courts.

19. Rule 53.2 of the Rules of the DIFC Courts (“RDC”) requires that the SCT only hear 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, 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. . .

(2) . . . 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.”

20. There is no evidence of any of these gateways having the potential to apply in this case. The Claimant is an employee of Nabil and is based in Sudan. The Undertaking Letter signed by the Claimant confirms that the visa and the salary transfer from the Defendant is for international business travel purposes only. There is no agreement in place in which the Claimant was employed by the Defendant to engage in professional duties in Dubai as its employee. Any professional duties undertaken by the Claimant in Dubai were carried out in the Claimant's capacity as an employee of Nabil.

21. The Claimant’s employer, Nabil, is neither a DIFC Body or Establishment. The Claimant’s Employment Contract with Nabil is not partly or wholly concluded or performed within the DIFC. In fact, there is no alleged connection to the DIFC. There is no other relevant DIFC Law or Regulation granting jurisdiction in this matter. Finally, the Defendant nor Nabil have not agreed in writing to file such claim or action within the DIFC Courts. The Claimant has not presented any written contract or agreement including such a jurisdictional clause.

22. The Court acknowledged that the employment contract between the Claimant and Defendant must be read in conjunction with the Undertaking Letter signed by the Claimant, which confirms that the Claimant is employed by Nabil and the employment contract is for UAE visa purposes only. The Defendant has no contractual obligations towards the Claimant.

23. Pursuant to Article 5(A)(2) of the Judicial Authority Law, it is possible for the parties to agree in writing to the jurisdiction of the DIFC Courts after this dispute arose, however, the parties failed to do this. The Defendant contested jurisdiction over the matter as the Claimant is not an employee of the Defendant, this is considered a rejection to accept the Claim and to opt-in of the DIFC Courts’ jurisdiction.

24. There is no contractual or other legal nexus between the Claimant and the Defendant. There are no documents submitted by the Claimant that indicate that the Defendant has any obligation towards the Claimant.

25. The Court is satisfied that the Defendant’s arguments are correct as none of the relevant jurisdictional gateways of the Judicial Authority Law apply to this case, I must conclude that this case falls outside of the jurisdiction of the DIFC Courts.

26. Each party shall bear their own costs.