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You are here: BAILII >> Databases >> The Dubai International Financial Centre >> Anastasiia Denisova v (1) Aleksei Galtcev (2) Realiste Holding Ltd [2025] DIFC CFI 041 (15 May 2025) URL: https://www.bailii.org/ae/cases/DIFC/2025/DCFI_041.html Cite as: [2025] DIFC CFI 41, [2025] DIFC CFI 041 |
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CFI 041/2024 Anastasiia Denisova v (1) Aleksei Galtcev (2) Realiste Holding Ltd
May 15, 2025 court of first instance - Orders
Claim No. CFI 041/2024
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
ANASTASIIA DENISOVA
Claimant
and
(1) ALEKSEI GALTCEV
(2) REALISTE HOLDING LTDDefendants
ORDER WITH REASONS OF H.E. JUSTICE SAPNA JHANGIANI
UPON the Part 8 Claim Form dated 10 June 2025 (the “Claim”)
AND UPON the Order of H.E. Justice Sapna Jhangiani dated 31 December 2024 determining that the Claim would proceed as a Part 7 claim
AND UPON reading the agreed Trial Bundle and parties’ skeleton arguments for the trial of the preliminary issue
AND UPON hearing from counsel for the Claimant and counsel for the Defendants and witnesses for the parties at the trial of the preliminary issue before H.E. Justice Sapna Jhangiani on 7 May 2025 (the “Hearing”)
AND UPON reading the documents recorded on the Court file and the transcript of the trial of the preliminary issue
IT IS HEREBY ORDERED, DECLARED AND DIRECTED THAT:
1. The Court finds in favour of the Claimant on the preliminary issue and declares that the Claimant paid the First Defendant USD 1,000 for the 10,000 class A shares which she claims in the Second Defendant in these proceedings.
2. The Claimant is entitled to her costs in relation to the preliminary issue, to be immediately assessed on the standard basis. The parties may file short submissions of no more than 3 pages on the costs to be awarded to the Claimant based on her schedule of costs for the preliminary issue on or before4pm on Thursday, 22 May 2025.
3. The parties shall consider settling this litigation by any means of alternative dispute resolution. The parties shall each file a letter with the Court on or before4pm on Thursday, 26 June 2025explaining the steps the parties have taken to resolve the litigation by alternative means (the “Letters”). Such Letters are not required to state any matters protected by without prejudice privilege.
4. The Registry shall issue further directions upon receipt of the Letters if so required.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 15 May 2025
Time: 9amSCHEDULE OF REASONS
A. Introduction
1. This case arises from a dispute over shares in the Second Defendant, an AI-technology platform that facilitates real estate investments. The First Defendant is the majority shareholder and CEO of the Second Defendant.
2. The Claimant is a former employee of the Second Defendant. She also worked for a related company of the Second Defendant. The precise nature of her role at the Second Defendant is disputed.
3. The crux of the Claimant’s case is that she had 10,000 shares in the Second Defendant (the “Claimed Shares”), which she paid for, was entitled to have registered in her name, and was entitled to sell. The Defendants claim that the Claimed Shares were not paid for by the Claimant, and that she was not entitled to have the Claimed Shares registered in her name due to her failure to pay for them.
4. By way of the Case Management Order dated 29 January 2025, I ordered that the case would proceed by way of a preliminary issue to be tried first. The preliminary issue to be tried is whether the Claimant paid for the Claimed Shares in the Second Defendant. This judgment comprises the Court’s decision on the preliminary factual issue of whether the Claimant paid the USD 1,000 which she was due to pay for the Claimed Shares.
5. The Claimant filed Application N. CFI-041-2024/3 dated 4 April 2025 to exclude the Defendants’ witness evidence because it was not filed by the appropriate deadline (the “First Application”). That First Application was dismissed by the Court’s Order with reasons dated 25 April 2025.
6. At the outset of the Hearing on 7 May 2025, the Court dismissed the Claimant’s second Application No. CFI-041-2024/4 dated 24 April 2025 for the Defendants’ witness evidence to be excluded (the “Second Application”). The Claimant’s Second Application also included an application to exclude the Defendants’ document entitled “Reply to the Claimant’s Witness Statement” dated 15 April 2025 (which was not in the form of a reply witness statement) for failure to satisfy the requirements of Rule 29.18 of the Rules of the DIFC Courts (the “RDC”).
7. I dismissed the Claimant’s Second Application for the same reasons and on the same basis that the Claimant’s First Application had been dismissed by Order dated 25 April 2025. In relation to the Claimant’s argument that the “Reply to the Claimant’s Witness Statement” be excluded, I found that the document comprised submissions by the Defendants, which would not be excluded from the record and would be considered alongside the parties’ submissions in relation to the preliminary issue.
8. The Court heard oral evidence from the following witnesses at the Hearing:
(a) the Claimant, on her own behalf; and
(b) on behalf of the Defendants, (i) the First Defendant; and (ii) Mr Dmitri Grigorev, who testified that he was a shareholder and the Company Secretary of the Second Defendant.
9. Mr Maksim Kuchin was due to give evidence at the Hearing on behalf of the Defendants, but just before he was to be sworn in as a witness, the Defendants’ Counsel informed the Court that Mr Kuchin did not speak English and that no interpreter had been arranged. Upon the Court’s indication that Mr Kuchin’s evidence in any event had little direct relevance to the preliminary issue, Mr Kuchin’s evidence was struck from the case record with the Defendants’ agreement.
B. Relevant Background Facts
10. I set out below the relevant factual background to the preliminary issue, highlighting any facts which are disputed between the parties, and the relevant evidence. Any references to messages exchanged between the Claimant and the First Defendant are to translations of messages which were originally exchanged in Russian. Neither party objected to the translations of the documents which were included in the Trial Bundle.
11. On 7 January 2024, the First Defendant passed a shareholder resolution to transfer 10,000 ordinary Class A shares to the Claimant (the “Shareholder Resolution”), making her a shareholder in the Second Defendant. At that stage, the First Defendant was the sole shareholder in the Second Defendant. The Shareholder Resolution approved the transfer of shares from the First Defendant to 5 individuals, including both the Claimant and “Dmitrii Grigorev” (i.e. Mr Grigorev who gave evidence in these proceedings, albeit that his first name was spelt slightly differently in the Shareholder Resolution from the spelling in his witness statement in these proceedings).
12. The Claimant’s evidence was that on 23 January 2024, after she and the First Defendant had attended a meeting outside of the office with the founder of Revolut bank, Nikolay Storonsky, they returned to the office of the Second Defendant in the DIFC to update the team, and on the same day she handed the First Defendant USD 1,000 in cash.
13. In the First Defendant’s evidence, he did not deny that he attended the 23 January 2024 meeting with Mr Storonsky with the Claimant, but denies that they returned to the office after the meeting, or that he received USD 1,000 in cash from the Claimant, whether on that day or otherwise.
14. The Claimant relies on a document entitled “Instrument of Transfer of Shares of Realiste Holding Ltd” dated 30 January 2024 (the “Instrument of Transfer”) as a receipt for her payment for the Claimed Shares. The Instrument of Transfer:
(a) indicates that the First Defendant as “Transferor” transfers 10,000 ordinary Class A shares in the Second Defendant to the Claimant, as “Transferee”, for“good and valuable consideration of 1000 (one thousand) USD provided to [the First Defendant] by [the Claimant]”;and
(b) is signed by the Claimant and the First Defendant, as well as Aijamal Karmyshakova as “Witness”, with the signature block indicating that the Claimant and First Defendant signed the document “in the presence of” Ms Karmyshakova. The Claimant’s evidence is that Ms Karmyshakova was the Company Secretary of the Second Defendant at the time.
15. The Claimant’s evidence is that a few days after 23 January 2024, she came into the office and found the “Instrument of Transfer” as a pre-populated and dated document on her desk. She signed the document and returned it to Ms Karmyshakova. The First Defendant’s evidence in relation to the Instrument of Transfer is“I think I signed it online because, at 30 January, I wasn’t in the office. I was not in the country”.The Defendants do not deny the authenticity of the Instrument of Transfer.
16. The Claimant contends that the DIFC Public Register was updated on 30 January 2024 to reflect the Claimant as a shareholder, and the Defence admits that the Claimant was issued the Claimed Shares on 30 January 2024, without specifying a date that the DIFC Public Register was updated. As part of document production, the Defendants disclosed a document from the “DIFC Client Portal” indicating that the First Defendant uploaded the Shareholder Resolution to the portal and requested that Class A shares of the Second Defendant be transferred to the transferees mentioned in the Shareholder Resolution (including the Claimant), and that the list of shareholders of the Second Defendant be updated accordingly.
17. Sometime in April or May 2024, the relationship between the Claimant and the First Defendant began to sour. The First Defendant’s evidence was that he verbally “fired” the Claimant in May 2024, but allowed her to stay at the company for a few months longer. The Claimant’s evidence is that the termination was mutual, and she had decided to leave the company in May 2024. According to the Claimant’s evidence, a notice of mutual termination which had been signed by the Claimant and the First Defendant was sent to her on 3 June 2024 by the Defendants, but this is not directly relevant to the preliminary issue.
18. On 17 April 2024, the Claimant sent a message to Ms Karmyshakova as follows:“Tell me, do you have a file where I’m supposed to have 10 thousand shares in DIFC? We signed it. I need it”.In response, Ms Karmyshakova sent the Claimant a copy of the Instrument of Transfer and the Shareholder Resolution.
19. The Claimant’s evidence is that she was treated as a shareholder of the Second Defendant until the Claimed Shares were revoked, and there was no suggestion that she had not paid for them.
20. On 27 May 2024, the Claimant entered into a share sale agreement for the sale of 4,000 shares of her Claimed Shares in the Second Defendant with a seller, Mr Nikola Kosutic (the “SPA”).
21. On 1 June 2024, the First Defendant became aware of the SPA and sent a number of messages to the Claimant, including the following:
- “It is not polite to sell the shares.”
- “It is very rude to sell the shares.”
- “I told Nikola that I fired you.”
- “You should have asked our opinion.”
- “There is investor misinformation.”
- “I will recommend that Nikola reverse the deal.”
- “When you sell shares, you must bring the investor up to date on the affairs of the company.”
- “I am meeting with Nikola on Tuesday to discuss this.”
- “If I were you, I would not spend the money yet.”
22. On 3 June 2024, the Claimant wrote to representatives of the Second Defendant, with Mr Nikola Kosutic in copy, attaching the SPA and requesting that the Second Defendant transfer 4,000 of the Claimant’s shares to Mr Kosutic.
23. On 3 June 20241, the First Defendant messaged the Claimant as follows:
"So far, you have been denied share registration of shares due to the fact that you have not paid for your shares. You will receive the corresponding letter today by email. Come to the office and provide the payment made before 3 June for the shares. So far, the holding has refused to register the transaction and the holding has initiated the return of all your shares due to your non-payment for these shares…"
24. The Claimant’s response to the above message was to say that she did not understand the First Defendant, as his position was changing, and he had previously alleged she had manipulated information (to Mr Kosutic), which she had explained did not happen. She asserted that she had the right to sell the shares, and asked if he was going to prevent that.
25. When asked in cross-examination why she did not deny the First Defendant’s allegation that she had not paid for the Claimed Shares, the Claimant indicated it was because she was “shocked” that the Claimed Shares were“revoked”, and it was a“disaster”because her“closest partner and friend just took the shares”.The Claimant said she understood that she needed to hire legal counsel, and she filed this case on 10 June.
26. Also on 3 June 2024, the First Defendant passed a resolution as sole director of the Second Defendant (the “Director Resolution”). The Director Resolution referred in the recitals to a letter from the First Defendant, as shareholder, to the Second Defendant,“requesting to cancel share transfer to [the Claimant] Dated 30th January 2024 on the grounds that the payment for these shares has not been made by the Transferee as stipulated”.The Director Resolution transferred 10,000 Class A shares of the Second Defendant back from the Claimant to the First Defendant.
27. On 4 June, the Claimant received an email from the Second Defendant in the following terms, attaching a copy of the First Defendant’s Director Resolution of 3 June 2024 (the “4 June Email”):
“We refer share transfer executed in the form of the Instrument of Transfer between Aleksei Galtsev (as Transferor) and Anastasiia Denisova (as Transferee) on 30th January 2024, transferring 10000 (Ten thousand) ordinary Class A shares of the Company to Anastasiia Denisova.
Subject to Article 12 of the Articles of Association of the Company, the Directors may refuse to register the transfer of a Share if the Share is not fully paid or the instrument of transfer, the share certificate and any other evidence that the Directors may reasonably require, are not duly filed at the registered office or the office of the agent that maintains the Register of Shareholders.
Subject to Article 12 of the Articles of Association of the Company, if the Directors refuse to register a transfer of a Share, they shall within fourteen (14) days' notify the transferee and transferor accordingly.
We hereby inform you that the sole director of Realiste Holding Ltd has made a relevant resolution, the copy of which is attached hereto for your reference.”
28. By 11 July 2024, when the Claimant checked the DIFC Public Register, she was listed as a former shareholder who was deregistered as a shareholder. She has adduced an extract from the DIFC Public Register of 11 July 2024 in these proceedings. The extract indicates that the date of the Claimant’s deregistration as a shareholder of the Second Defendant was 3 June 2024, which is not disputed by the Defendants.
C. The Parties’ Cases
29. The Claimant’s position is that she paid for the Claimed Shares. She relies on the following:
(a) The Claimed Shares were recorded on the DIFC Public Register as having been paid for and allocated. There was no document to say the Claimed Shares were not paid for, and no demand for payment from the First Defendant. The First Defendant proceeded to register the share transfer to the Claimant on the DIFC Public Register without any objection.
(b) The Claimed Shares were revoked on 3 June 2024 without any notice to the Claimant. Had the non-payment by the Claimant been a lawful reason to deprive the Claimant of the Claimed Shares, then the Defendants would have demanded payment from her within 14 days, pursuant to Article 11A of the Articles of Association of the Second Defendant. They did not do this.
(c) Instead, the Claimant was deprived of the opportunity to rectify her alleged nonpayment, and was forcibly deregistered as a shareholder of the Second Defendant on 3 June 2024. The Claimant contends that if she had been required to pay USD 1,000 twice for the Claimed Shares, she would have done so, as the price of the share sale under the SPA was USD 200,000 and she would still earn a profit of USD 198,000.
(d) The Claimant contends that the real reason the First Defendant claimed she had not paid for the Claimed Shares was because she had entered into the SPA to sell the Claimed Shares. The allegation that she had not paid for the Claimed Shares was only raised after the First Defendant became aware of the SPA. His first reaction on 1 June 2024 was to inform the Claimant that she should have consulted him before selling a portion of the Claimed Shares, thereafter suggesting that he would ask Mr. Kosutic to reverse the deal, adding“If I were you I wouldn’t spend the money”.
(e) The first time the issue of non-payment was alleged against the Claimant was on 3 June 2024, and the Claimant contends that, because payment for the Claimed Shares was made by the Claimant in cash, the First Defendant manufactured a lawful reason to object to the share transfer, so as to sabotage the sale under the SPA and“deprive the Claimant of her property as a personal vendetta”. The Claimant further argued at the Hearing that:
“Critically, the defendants never marked the shares as unpaid in the Company Registers, never recorded any lien over the shares, never raised the issue of non-payment until after learning of the share sale agreement, never raised the issue of non-payment when he fired the claimant in May, as per his oral evidence”.
30. The Defendants’ position is that the Claimant’s Claim that she paid for the Claimed Shares is not credible, and has not been proved for the following reasons:
(a) In her pleadings and also in the agreed Case Memorandum in these proceedings, the Claimant stated that she made payment in cash on 30 January 2024. It was only after the First Defendant provided irrefutable evidence that he was not physically present in Dubai on 30 January 2024 (in the form of immigration records) that she revised her account for the first time in her witness statement to say that the cash payment occurred on 23 January 2024.
(b) There is no acknowledgement of payment, no supporting communication, no bank transfer record, no accounting entry, and no record of a cash transaction having taken place on 23 January 2024. The Claimant did not even have any proof she was a shareholder until she obtained it from Ms Karmyshakova on 17 April 2024.
(c) In relation to the Instrument of Transfer, it does not constitute an independent verification of payment. It is a standard document which was used in relation to all share transfers in the Second Defendant, and its mere execution cannot prove payment. By analogy, when an employee’s visa is cancelled in the UAE, the employee must sign a declaration confirming receipt of all dues. However, that signed form is not treated as definitive, and the employer remains under a legal obligation to prove actual payment, failing which the Court will find in favour of the employee if a dispute arises.
(d) It would be illogical and legally imprudent for the Defendants to revoke the Claimed Shares if the First Defendant had paid for them, thereby exposing themselves to liability.
(e) The Claimant’s non-payment for the Claimed Shares only came to light after she sought to sell the shares through the SPA.
(f) When the First Defendant informed the Claimant that she did not pay for the Claimed Shares, she did not dispute it at the time.
(g) Under Article 10A of the Articles of Association, the Second Defendant has a lien over every share that is not paid for, and there is no requirement under this Article to provide notice of up to 14 days to exercise a lien. Article 10D provides that the company may sell the shares under the lien if the unpaid amount is not settled within 14 days of the notice demanding payment.
(h) In the Defence, the Defendants also relied upon Article 12 of the Second Defendant’s Articles of Association, and asserted that they complied with Article 11A.
(i) The Defendants’ Lead Counsel argued at the Hearing that the Claimed Shares:
“were actually not given because she is actually the shareholder. It had a different purpose. It was different. It was to promote her face as a marketing person, somebody important, to attract the crowd for the brand. So, it was under an understanding that those shares had to be sold, should be given back to the company or offered first to the current shareholder. But nothing like that was done. She was selling it to another party…”
(j) The Defendants’ Lead Counsel further argued that the First Defendant came to know that the Claimant had not paid for the Claimed Shares around 3 June 2024, after he found out the Claimant wished to sell them, and he sent her a notice about her failure to pay for the Claimed Shares:
“Then, when she did not pay for it or she did not dispute it at that time, that is when he cancelled the shares. And it is not something that you can hold the shares in trust also. So, he just wanted to ensure that it does not go out and it is secured until this thing is sorted out.”
31. The Defendants also argued:
(a) that the Claimant’s assertion that she was not afforded 14 days to cure her alleged non-payment was an admission of non-payment. This argument was rejected by me outright at the Hearing as not persuasive, based on the way in which the Claimant pleaded her case in the Particulars of Claim about not being offered an opportunity to rectify the alleged non-payment within 14 days.
(b) Article 37(1) of the DIFC Companies Law provides that shares in a private company must be allotted for cash consideration2unless Article 37(2) applies (which is not applicable in the circumstances). I accept the effect of Article 37 of the DIFC Companies Law, but in my view, this does not advance the Defendants’ case because they admit that the Claimed Shares were registered in the Claimant’s name and transferred to her.
(c) The Defendants contend that rather than being treated as a shareholder from 30 January 2024 until the Claimed Shares were revoked, the Claimant did not receive any dividends, notice for shareholders’ meetings or board communications from the Second Defendant (and this is not disputed by the Claimant). Again, it is not clear how this advances the Defendants’ case, since it is not disputed that the Claimant was a registered shareholder for the Second Defendant from around 30 January 2024 until 3 June 2024. Similarly, the fact that the Claimant had to ask Ms Karmyshakova on 17 April 2024 for the documents evidencing the share transfer to her does not prove that the Claimed Shares were not transferred to the Claimant – it is in fact admitted by the Defendants that they were, until the transfer was revoked on 3 June 2024.
D. Relevant Provisions of the Second Defendant’s Articles of Association
32. I set out below provisions of the Second Defendant’s Articles of Association which are relevant to the preliminary issue:
(a) Article 10 provides in relevant part as follows:
“10. LIEN OVER PARTLY PAID SHARES
The Company has a lien over every Share that is not fully paid for all amounts payable to the Company (whether presently payable or not) in respect of that Share.
…..The Company may sell any Share it has a lien over, if a sum is payable on the Share and is not paid within fourteen (14) days’ from the date on which notice was given to the Shareholder of the Share or to the person entitled to it by reason of the Shareholder’s death, bankruptcy or otherwise, demanding payment and stating that if the notice is not complied with the Shares may be sold.
…..F. The net proceeds of any such sale, shall be applied in payment of the amounts payable to the Company under the lien at the date of enforcement, and any remainder shall (subject to a like lien for any moneys not presently payable on the Shares before the sale) be paid to the Shareholder entitled to the Shares immediately prior to the sale.”
(b) Article 11A provides as follows:
“11. CALLS ON SHARES AND FORFEITURE
A. Subject to the terms of allotment, the Directors may make calls upon the Shareholders in respect of any moneys unpaid on their Shares and each Shareholder shall (subject to receiving at least fourteen (14) clear days’ notice specifying when and where payment is to be made) pay to the Company, as required by the notice, the amount called on the Shares. A call may be required to be paid by instalments.”
(c) Article 12 provides in relevant part as follows:
“12. TRANSFER OF SHARES
A. The instrument of transfer of a Share may be in any form which the Directors may approve and shall be executed by or on behalf of the transferor and, if the shares are partly paid, the transferee.
B. The Directors may refuse to register the transfer of a Share if the Share is not fully paid or the instrument of transfer, the share certificate and any other evidence that the Directors may reasonably require, are not duly filed at the registered office or the office of the agent that maintains the Register of Shareholders.
C. If the Directors refuse to register a transfer of a Share, they shall within fourteen (14) days’ notify the transferee and transferor accordingly.”
E. The Court’s Decision
33. Addressing firstly the standard of proof in these proceedings, I do not accept the Defendants’ argument that the Claimant must provide actual proof of payment, just as an employer must do when an employee’s visa is cancelled in the UAE. The standard of proof in this Court is on a balance of probabilities, and in order to succeed on the preliminary issue, the Claimant must prove that it is more likely than not that she paid USD 1,000 for the Claimed Shares.
34. An important point to note at the outset is that the payment for the Claimed Shares would have been made to the First Defendant and not the Second Defendant, since he was the seller and transferor of the Claimed Shares, not the Second Defendant. Mr Grigorov paid the First Defendant directly for his shares in the Second Defendant, and the Claimant would have done the same.
35. The Claimant’s and First Defendant’s oral evidence about whether or not the Claimant paid USD 1,000 in cash to the First Defendant for the Claimed Shares is in direct conflict. Neither witness came across as dishonest, and I am unable to resolve the issue of whether the Claimant paid for the Claimed Shares based on witness testimony alone.
36. I should mention, however, that one point that stood out in the First Defendant’s oral evidence is that he was vague about his understanding of whether the Claimant had paid him for the Claimed Shares when he signed the Instrument of Transfer. At first, he stated that when he signed the Instrument of Transfer“I supposed the money will come”i.e. he expected to be paid. He then stated that when he signed the Instrument of Transfer,“I really thought that she already paid to me, like on my bank account, but it never happened”and,“I thought that the transfer was made to my bank account, so I signed [the Instrument of Transfer]. But once I checked it, it wasn't”.His position in the Statement of Defence filed by the Defendants was that“On January 30, 2024, the claimant was issued shares with the understanding that the consideration would be paid as agreed”. These positions are not consistent.
37. Mr Grigorev’s evidence was that he is the Company Secretary of the Second Defendant3, although a lawyer assists him generally with his tasks as Company Secretary, and the lawyer would have assisted with the task of registering the Claimant’s shares on the DIFC portal. Mr Grigorev gave evidence that he did not find any evidence of payment by the Claimant for the Claimed Shares in the Second Defendant’s company documents. Given that any payment for the Claimed Shares would be made to the First Defendant personally, and not the Second Defendant – just as Mr Grigorev had paid the First Defendant for his own shares in the Second Defendant – his evidence does not contradict the Claimant’s case that she paid for the Claimed Shares. Mr Grigorev stated that he only found out that the Claimant did not pay for the Claimed Shares when the First Defendant informed him of this.
38. In my view, the most useful evidence in relation to whether or not the Claimant paid the USD 1,000 for the Claimed Shares is the Instrument of Transfer.
39. I reject the Defendants’ argument that this document is simply a “standard” document for a share transfer and does not constitute a receipt or acknowledgment of payment. It clearly states that the First Defendant is transferring 10,000 Class A shares in the Second Defendant“For good and valuable consideration of 1000 (one thousand) USD provided to me by [the Claimant]”.Taking that statement at face value, the Instrument of Transfer constitutes strong evidence that the Claimant paid for the Claimed Shares.
40. The Instrument of Transfer is important, as it is a formal document recording that cash consideration has been made for the Claimed Shares which, as relied upon by the Defendants, is a requirement under Article 37 of DIFC Companies Law. Given that the Claimant’s position is that she paid for the Claimed Shares in cash, I do not consider her position is undermined by the Defendants’ argument that there is no receipt, no bank record, no exchange slip, nor email or written confirmation for the payment. Based on the terms of the Instrument of Transfer, and the fact that the Claimed Shares were transferred to the Claimant, the Instrument of Transfer may serve as proof of payment without any of these additional documents being necessary.
41. The Claimant had relied upon a receipt for a cash transaction of AED 10,500 from the First Defendant to “Demian”, an employee of the Second Defendant (who the Defendants point out is also the Claimant’s husband), in order to illustrate that it was normal for the Defendants to deal in cash transactions. In response, the Defendants rely upon the fact that the Claimant does not have a receipt from the First Defendant for the USD 1,000 in cash. For the reasons set out above, I do not consider that this undermines the Claimant’s position that she paid in cash for the Claimed Shares.
42. I am also not persuaded by the Defendants’ argument that there would be a deposit slip for the First Defendant’s deposit of USD 1,000 cash into his bank account if the Claimant had handed this cash to him. The First Defendant may have used the USD 1,000 cash, rather than depositing it.
43. Addressing the Parties’ arguments which do not relate to the Instrument of Transfer:
(a) I do not accept that the Second Defendant exercised a lawful lien over the Claimed Shares under Article 10A of the Second Defendant’s Articles of Association on account of alleged non-payment by the Claimant. Article 10D clearly provides that, before the shares over which the lien is exercised are sold, the shareholder must be provided with a notice demanding payment and stating that the shares may be sold if the notice is not complied with within 14 days. The Second Defendant did not comply with Article 10D. Indeed, the Second Defendant did not in fact sell the Claimed Shares after purporting to exercise a lien over them – if it had done so, it would have been necessary to apply the proceeds of that sale in accordance with Article 10F. Rather, pursuant to the Director Resolution and 4 June Email, the Second Defendant purported to “cancel” the transfer of the Claimed Shares to the Claimant, and transferred the shares back to the First Defendant. There was no sale of the Claimed Shares.
(b) The Claimant has asserted that the Second Defendant breached Article 11A of the Articles of Association, but it is not clear that Article 11A is relevant in the current circumstances as it relates to a “call” for payment to a shareholder, which appears to apply to circumstances where the shareholder was not previously due to pay the sums called for. In any event, given the Defendants’ purported reliance on Article 10A of the Second Defendants’ Articles of Association, it would follow that the Second Defendant was required to provide a notice demanding payment within 14 days for the Claimed Shares to the Claimant under Article 10D, and this was not done. (Whilst the Defendants had asserted in the Defence that the Claimant was given 14 days’ notice to pay for the Claimed Shares, this is not borne out by the evidence).
(c) I do not consider that Article 12B of the Second Defendant’s Articles of Association, relied on by the Defendants in their 4 June Email, the Director Resolution and the Defence, is relevant. It provides that the Second Defendant’s Directors may refuse to register the transfer of a Share if it is not fully paid. In the case of the Claimed Shares, they were already registered as transferred to the Claimant, and the First Defendant as sole Director revoked that registration, rather than refusing to register the transfer.
44. Weighing against all the matters referred to above, the Defendants rightly point out that the Claimant’s original position appeared to be that she paid the USD 1,000 in cash to the First Defendant on 30 January 2024, as set out below:
(a) The Claimant’s Particulars of Claim may be construed as suggesting that the Claimant’s payment was made on 30 January 2024:“[O]n 30th January 2024, the First Defendant finalized the transfer of 10,000 shares to the Claimant for $1,000 USD, which the Claimant paid in cash. The payment was confirmed by a receipt signed by the Claimant, the First Defendant, and a witness named Aijamal Karmyshakova”.
(b) The Defendants pleaded in the Defence that the physical handover of the cash could not have taken place on 30 January 2024, because the First Defendant was not in the UAE on that date.
(c) Paragraph 3 of the Claimant’s Reply to Defence responds to this plea as follows:
“3. The Defendants allege that the Claimant failed to pay $1,000 for the 10,000 shares transferred to her on 30 January 2024. This allegation is wholly false and contradicted by evidence:
3.1 The payment was made in cash, as confirmed by a signed and witnessed receipt [ie. the Instrument of Transfer]
3.2 The First Defendant's evidence of travel of his alleged absence, is unsubstantiated and irrelevant. The payment was witnessed and documented.”
(d) The Claimant’s position in the agreed Case Management Memorandum was that on 30 January 2024, the Claimant paid USD 1,000 for the Claimed Shares, and the transfer was duly registered on the DIFC Company Register.
45. I must assess the extent to which the Claimant’s change in position undermines her credibility, and whether I consider it more likely that:
(a) the Claimant paid for the Claimed Shares, but was initially mistaken about the date on which payment was made, and realised that the correct date was 23 January 2024 after the Defendants produced immigration records proving that the First Defendant was not in the UAE on 30 January 2024; or that
(b) the Claimant did not pay for the Claimed Shares, and fabricated her story about having paid the First Defendant in cash, thereafter changing her story about the date of payment in response to the immigration records adduced by the Defendants proving that she could not have paid the First Defendant in cash on 30 January 2024.
46. In deciding this issue, I take into account all of the matters I have set out above, including the following:
(a) The Defendants had no issue registering the Claimed Shares in the Claimant’s name following the execution of the Instrument of Transfer dated 30 January 2024 by both the Claimant and the First Defendant, which clearly stated that the Claimant had paid USD 1,000 for the Claimed Shares;
(b) The First Defendant was very vague in his evidence about his understanding of whether the Claimant had paid him for the Claimed Shares when he signed the Instrument of Transfer;
(c) The Defendants did not raise with the Claimant any issue of non-payment for the Claimed Shares, or any potential breach of DIFC Companies Law, until 3 June 2024, shortly after discovering that the Claimant had entered into the SPA to sell a portion of the Claimed Shares; and that
(d) Once the Defendants asserted that the Claimant had not paid for the Claimed Shares, the Claimant was not given an opportunity to pay any outstanding amounts for the Claimed Shares before her registration as a shareholder was revoked, and the Claimed Shares were transferred back to the First Defendant on 3 June 2024.
47. On account of the matters set out above and referred to in this judgment, I find that the Defendants’ case, and the First Defendant’s evidence, are less credible than that of the Claimant on the preliminary issue. I therefore find, on a balance of probabilities, that it is more likely than not that the Claimant paid USD 1,000 to the First Defendant for the Claimed Shares.