Claim No: ARB 004-2016
THE DUBAI INTERNATIONAL FINANCIAL CENTRE
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum,
Hearing: 6 September 2016 Counsel: XXX Judgment: 20 September 2016
JUDGMENT OF THE DEPUTY CHIEF JUSTICE SIR DAVID STEEL
ORDERUPONhearing Counsel for the Claimant and Counsel for the Defendant on 6 September 2016AND UPONreading the submissions and evidence filed and recorded on the Court
Date of Issue: 20 September 2016
At: 12 pm
SCHEDULE OF REASONS1.The Court is faced with an application which raises various issues as to the impact of Decree 19 of 2016 concerning the establishment of the Judicial Tribunal
1)Articles 2 and 43 of the DIFC Arbitration Law do not apply to the Award, being an award from an arbitration seated in Dubai outside the DIFC.
2) The Defendant intends to bring proceedings in the Dubai Courts for the annulment of the Award
3) No valid arbitration agreement existed between the parties within the meaning of Article 44 (1) (a)(i) of the DIFC Arbitration Law
4) The Claimant failed to make full and frank disclosure of material facts in seeking and obtaining the Order.
7. That application is yet to be determined by the Court. Nonetheless it is legitimate for present purposes, to comment as follows. Firstly, the suggestion that Articles 42 and 43 do not apply is in direct conflict with a number of decisions of this Court, including in particular the decision of the Court of Appeal in Banyan. 8. As regards Item 2 so be it. Why that has any effect on the validity of the order remains wholly obscure. 9. Item 3 again so be it. It is clearly open to the Defendants to make an application to the court of the seat as they were threatening so to do in order to challenge the validity of the arbitration contract. However the basis for that application namely that it was signed on their behalf by someone who had no authority to do so, despite the fact that the very same person had authority to sign the SPA does not look promising. But it matters not. The Arbitration Law makes express provision for the situation in which the validity of an award is being challenged in the seat. It must be open to the court in due course either to enforce the award or refuse to enforce the award or adjourn the application generally or with the provision of security by the Defendant. It seems likely that the last course would be the most likely. 10. Fourthly non-disclosure is a point which was a regular feature of applications to challenge the enforcement of the award. But since the rules require that the Defendant or Respondent to it should be afforded an opportunity to set aside the award, it is probably not a situation which calls for full and frank disclosure. And even if it was there is no basis for asserting that there had been a failure to identify that there was a challenge to the enforceability of the award by reason of lack of authority in signing the arbitration agreement. Such was unknown. 11. Shortly after the issuance of that application notice challenging jurisdiction, the Defendant filed an application in the Dubai Courts for the annulment of the award as they had stated they would on the basis that the arbitration agreement was not valid. There have been a series of hearings. The most significant was on 4 August 2016 where there was a hearing at which the Defendant filed a memorandum addressed to the Judicial Tribunal requesting the stay of proceedings in accordance with the Decree. 12. The next hearing in the Dubai Courts is listed for 27 October 2016 where despite the application for a stay it appears that the Gilam LLC will file documentation in support of its application for the annulment of the award. 13. In the meantime, on 13 June 2016 the Claimant filed an application with this Court that the application dated 31 May 2016 be set aside as having been made out of time. On 13 July, Justice Sir Jeremy Cooke dismissed that application and awarded the Defendant its costs. 14. On 14 July 2016 the Claimant filed an application with this Court for urgent relief. It is a very lengthy application covering a wide range of orders. I quote some of them: an application that it be treated as an expedited application, that it be treated as an application for immediate judgment, that there be a declaration that the DIFC Courts have exclusive jurisdiction in this matter having been the Court first seized that the defendants has acted in abuse of process that the defendants should pay $25,000 by way of damages and so on. 15. Suffice it to say for present purposes, these applications seem to be based on a complete misconception of the nature of the relevant jurisdiction of the DIFC Courts on the one hand and the Dubai Courts on the other. The Dubai Courts are the court of the seat and thus the Dubai Courts clearly have jurisdiction to determine an application to annul the award. The DIFC Courts have exclusive jurisdiction in respect of the enforcement of awards within the DIFC: no question of their jurisdiction can arise. 16. It is not arguable that the DIFC Courts have (other than in respect of enforcement within the DIFC) exclusive jurisdiction in this matter B reason of the order recognising the award dated 10 May 2016 nor can it be argued that the Defendant is engaged in some form of abuse of process by taking parallel proceedings in the Dubai Court in order to seek the annulment of the award. It follows that the Court has no jurisdiction to make an award by way of damages nor at the moment is open for this Court to make an order for posting the security up to the value of the award in circumstances where no reliance is placed on the relevant article in the Arbitration law. So for the present purposes we can leave aside the entirety of the Claimant’s application filed on 14 July 2016. 17. We now come to the rather more important issues. On 20 July 2016, the Defendant purportedly filed an application with the Judicial Committee under Decree 19. I say filed an application: that is a gloss which I will have to deal with in a moment. The document is before me but before I cite from it I ought to identify the relevant provisions of the Decree. The Decree establishing the Tribunal records in Article 1 the formation of that tribunal, not in terms of names but in terms of identity, including the Head of the Dubai Court of Cassation as chairman and the Head of the DIFC Courts as a member. There is then provision for five other members. I indicated during the course of argument that I had been nominated by the Head of the DIFC Courts as one of the judges of the DIFC Courts of First Instance and/or Court of Appeal to sit on this committee. Iit is important to note that the committee has yet to meet. Indeed at the moment it cannot readily be said that the Judicial Tribunal has been established. 18. When it is established, the jurisdiction of the tribunal is recorded in Article 2 and in particular having the authority and power to “determine the competent court to consider any claim or applications as to which conflict of jurisdiction may arise between the Dubai Courts and the Center’s Courts”. There are various other provisions in relation to jurisdiction which are not material for the present purposes. 19. Article 3 deals meetings of the Committee. Most notable under paragraph b of Article 3 “the judicial tribunal must consider the applications submitted to it and hand down its final decision within no more than 30 working days from the date of the application submission” and “provide reasoning for its decisions which shall be notified to the applicant within no more than 7 working days from the date of the decision”. 20. There is then a crucial article which defines the jurisdiction of the Tribunal: “In the event of a dispute over jurisdiction arises between the Dubai Courts and the DIFC Courts that none of the two courts rejected the claim or both courts refused to hear the claim or where contradicting judgments are issued by the two courts” an application can be submitted by one of the parties which is what the defendants purports to have done. 21. Article 5 identifies the consequence of a referral of such a dispute namely “a stay of the claims or applications” until a decision is handed down by the tribunal determining that the Court has the jurisdiction. 22. As I identified, on 20 July 2016 the Defendant purported to tender a document to the Judicial Body of the Dubai Courts which is headed ‘Before the Judicial Body of the Dubai Courts and Dubai International Financial Center Court Petition No ….. 2016 (requesting determination of the competent Court). The introductory paragraph refers to the arbitration award asserting that it was null and identifying the application that had been made under Article 213 and 216 of the Civil Procedures Code requesting the Dubai Courts to nullify the award. It refers in paragraph 2 to the application for recognition and enforcement in the DIFC and the Court had issued a decision in the absence of the plaintiff and that the Plaintiff had challenged the decision on the basis that the DIFC had no jurisdiction to recognise or enforce the arbitral award