Laredo v (1) Luca (2) Lydia (3) Liliana [2021] DIFC SCT 159 (12 September 2021)

Laredo v (1) Luca (2) Lydia (3) Liliana [2021] DIFC SCT 159 (12 September 2021) [ Home ] [ Databases ] [ World Law ] [ Multidatabase Search ] [ Help ] [ Feedback ] [ DONATE ] The Dubai International Financial Centre You are here: BAILII >> Databases >> The Dubai International Financial Centre >> Laredo v (1) Luca (2) Lydia (3) Liliana [2021] DIFC SCT 159 (12 September 2021) URL: https://www.bailii.org/ae/cases/DIFC/2021/sct_159.html Cite as: [2021] DIFC SCT 159 [ New search ] [ Help ] Laredo v (1) Luca (2) Lydia (3) Liliana [2021] DIFC SCT 159 September 12, 2021 SCT - JUDGMENTS AND ORDERS Claim No: SCT 159/2021 THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS IN THE SMALL CLAIMS TRIBUNAL BETWEEN LAREDO Claimant and (1) LUCA (2) LYDIA (3) LILIANA Defendants ORDER WITH REASONS OF SCT JUDGE HAYLEY NORTON UPON this claim having been called for a Consultation before SCT Judge Hayley Norton on 22 August 2021 AND UPON reviewing the case file and submissions contained therein AND UPON reviewing Rule 53.32 of the Rules of the DIFC Courts (the “RDC”) IT IS HEREBY ORDERED THAT: 1. The Claimant’s Claims against the Second and Third Defendants be dismissed due to lack of jurisdiction. 2. The First Defendant shall pay the Claimant the amount of USD 41,758.05 . 3. The First Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of AED 7,667.81 . 4. The Claimant shall serve this Order upon the Defendants. Issued by: Hayley Norton SCT Judge Date of Issue: 12 September 2021 At: 3pm THE REASONS The Parties 1. The Claimant is Laredo, a law firm registered in Dubai, the UAE (the “Claimant”) 2. The First Defendant is Luca, a limited liability company based in Dubai, the UAE (the “First Defendant”) 3. The Second Defendant is Lydia, a UAE resident, and the General Manager of the First Defendant (the “Second Defendant”) 4. The Third Defendant is Liliana, an individual who held himself out as the advisor to the board of an affiliate company of the First Defendant (the “Third Defendant”) Background 5. On 25 May 2021, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking sums allegedly owed in relation to legal services provided by the Claimant to the Defendants pursuant to an engagement letter dated 16 September 2020 (the “Engagement Letter”). 6. On 11 August 2021, the Claimant filed a Certificate of Service to attest that it had served notice of this claim upon the Defendants by way of newspaper publication. 7. Thereafter, the Defendants failed to file their response to the Claim as required by RDC 53.14, and in accordance with RDC 53.21, a Consultation was listed before me on 22 August 2021 at which the Claimant’s representative attended, however, the Defendants failed to appear. 8. Pursuant to RDC 53.32, where a party fails to appear at a Consultation, the SCT Judge may decide the small claim against that party or adjourn the Consultation. 9. As noted above, the Defendants failed to file a response to this claim, nor did they make an attempt to notify the Court that they would be unable to attend the consultation on the date fixed, therefore, I see little argument in adjourning the Consultation for another day, and pursuant to RDC 53.32, I am content to decide this claim against the Defendants insofar as the Court has the jurisdiction to do so, based upon the Claimant’s submissions before me. Discussion Jurisdiction 10. RDC 53.2 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… (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.” 11. Upon review of the case file and submissions contained therein, I find that neither the Claimant nor any of the Defendants are, or were, DIFC registered or licensed entities and there is no evidence to suggest that the transactions were partly or wholly performed within the DIFC or related to DIFC activities. In the absence of a sufficient nexus between the Claim and the DIFC, 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, pursuant to Article 5(A)(2) of the JAL. 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. 12. Upon review of the Engagement Letter, I find that it contains an ‘opt-in’ clause, by virtue of which the DIFC Courts may exercise its jurisdiction over the Claim. The relevant clause is set out below and states as follows: “GOVERNING LAW AND JURISDICTION The courts of the Dubai International Financial Centre (DIFC), as applicable, shall have non-exclusive jurisdiction over any dispute arising out of or in connection with our services or these terms. The parties agree to refer any dispute to the Small Claims Tribunal (“SCT”), with the above address being your nominated address for service. If the value of the dispute exceeds the SCT’s jurisdiction (the parties hereby agreeing to the maximum allowable at any time) and the SCT refuses to hear the matter, either party may opt at any time thereafter to have the dispute heard by arbitration before a single arbitrator, with the arbitration to be held in the DIFC-LCIA under its rules.” The Second and Third Defendants 13. The Engagement Letter sets out a definition of the ‘clients’ and states as follows: “…Luca and Lucinda (the “Clients”)…” 14. I see no ambiguity with the wording above and I am satisfied that “Luca” and “Lucinda” are defined to be the Clients of the firm for the purposes of the Engagement Letter. I further note that the definition fails to include mention of the Second and Third Defendants. 15. When turning to the signatures found within the Engagement Letter, although I note that Lydia’s signature is present at page 2, I find that he has signed “for and on behalf of the Client” (i.e. the First Defendant), and thus cannot be deemed to have signed the Engagement Letter in his personal capacity, as, he, himself, fails to fall within the definition of a ‘Client’. I also note that the Third Defendant’s signature fails to appear within the Engagement Letter. 16. My observations set out above were shared with the Claimant’s representative at the Consultation, and I requested that the Claimant provide submissions to address these points. The Claimant responded on 24 August 2021 by filing a number of submissions, which included a Power of Attorney from the Second and Third Defendants authorising the Claimant to act on their behalf for ongoing criminal proceedings. The Claimant also provided the court with an email dated 21 October 2020 wherein the Third Defendant appears to be seeking the legal assistance of the Claimant. The Claimant also provided a narrative of the work allegedly performed by the Claimant for the Third Defendant throughout October 2020. In addition to the above, the Claimant also sought to draw the Court’s attention to a contractual term set out at page 5 of the Engagement Letter (the “Term”), which states the following: “RESPONSIBILITY Rights and obligations in respect of our engagement shall be between the Firm and the Client. … All entities and persons associated with the services provided by the Firm shall be held jointly and severally liable for the Firms rights”. 17. The Claimant contends that the Second and Third Defendants have been recipients of the Claimant’s services, and therefore the above Term is sufficient to hold them jointly and severally liable for the reliefs requested in this matter. 18. I do not find it prudent to make a determination on the merits of this Claim at this juncture but to merely decide on whether the DIFC Courts have jurisdiction over this claim. Although it is clear to me that the Engagement Letter contains the Term pursuant to which the Claimant may seek to hold persons associated with its services jointly and severally liable for its rights, I am of the view that such a term must be read in conjunction with Article 5(A)(2) of the JAL which requires that the “ parties agree in writing to file [a] claim… with [the DIFC Courts]” and “that such agreement is made pursuant to specific, clear and express provisions ” (emphasis added). I find this Article to be unequivocally clear insofar as there exists a requirement that all of the parties (i.e. the First, Second and Third Defendants) must ‘agree’ in writing that their dispute be determined by this Court; I do not think that one party can enter such an agreement on behalf of another, even if the agreement is entered into for the benefit of that other, unless the contracting party has authority to do so and does in fact do so. 19. Upon reviewing the Claimant’s submissions filed on 24 August 2021, although persuasive to demonstrate that the Claimant may have provided its services for the Second and Third Defendants, they fail to show that the Second and Third Defendants “agreed in writing” to have any disputes adjudicated by the DIFC Courts. 20. I am mindful that the Claimant also seeks to rely upon the Term as holding the Second and Third Defendants jointly and severally liable in this matter. However, I find that the Claimant has presented no evidence to suggest that the First Defendant had the relevant authority to sign the Engagement Letter for and on behalf of the Second and Third Defendants in this regard. Conclusion 21. Accordingly, in the absence of such evidence and for my reasons set out above, I find that the DIFC Courts do not have jurisdiction to hear and determine this Claim insofar as it is against the Second and Third Defendants, and the Claimant’s Claims against the Second and Third Defendants must be dismissed for lack of jurisdiction. 22. Pursuant to RDC 53.32, I shall decide this claim against the First Defendant alone and therefore find that the First Defendant shall pay the Claimant the amount of USD 41,758.05 . 23. The First Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of AED 7,667.81 . 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