LANDMARK JUDGMENT UNDER LABOR CASE
Continuing an employment relationship if the employee is suspended from work without justification is one of our success stories.
Under an absolute term labor contract, our Client (Employee) entered into an employment relationship with the Defendant Company; Defendant Company suspended the Employee from work without justification for more than a year and six months. Therefore the Employee filed a labor case against the Employer.
Plaintiff claimed total salaries, labor dues, and compensation for unfair dismissal from his suspension from work until the date of registering the labor complaint.
Before the Court of First Instance, the Defendant Company stated it terminated the Employee’s services after three months had passed from the date he was suspended and argued the case was time-barred as a period of one year lapsed.
What Happened After the Court Ruling?
Court of First Instance ruled the case was time-barred.
We firmly challenged judgment before the Court of Appeal and claimed that suspension from work by the Defendant Company was unjustified, and our Client was not notified. Hence employment relationship remained continuous until the date of submitting the labor complaint.
Accordingly, the Court of Appeal accepted our arguments, overturned the Court of First Instance judgment, and obliged the Defendant Company to pay total salaries from the date of suspension until the labor complaint was registered, leave allowance, gratuity, and compensation for unfair dismissal, air ticket and experience certificate.
It’s another win for us and added to our success stories.
SUCCESS STORY IN TAXATION CASE
Khairallah Advocates & Legal Consultants obtained landmark judgment against Federal Tax Authority (FTA), revoked the decision issued by the Committee of Resolution of Tax Disputes in the Emirate of Dubai imposing penalties imposed as per clauses (9) and (11) of Table (1) of the Cabinet Decision No. (40) of 2017.
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We firmly objected to the above because of misapplication of the law, being defective in reasoning, and lacking the proper substantiation; the decision has violated Article 25(i) of the Law of Tax Procedures because the penalty is applied in case of not paying the due tax within the prescribed time limit calculated after the expiry of the tax period plus the following time limit granted by the Law to the Taxable Person.
The defendant’s attorney challenged proceedings by relying on Article 32 and Article 33 of the Federal Law No. 7 of 2017 concerning the Tax Procedures.
In terms of subject matter:
It is established that the trial Court has the authority to understand the material facts of the case and estimate and weigh between the proofs submitted therein, provided that the Court ends with a reasonable judgment supported by the case documents.
It is established by the case documents that the FTA has not provided any evidence of notifying our Client, and the FTA’s non-acceptance of the requests for reconsideration is baseless; as Article 11 of the Law of Tax, Procedures has explained the methods of notification by sending the notice to the through the address stated in the correspondence between FTA and that Person, bearing in mind that the FTA is responsible for the notification and nothing in the case documents proves that the FTA has fulfilled such responsibility. The plea raised by the FTA that the penalty was imposed electronically on 07/10/2019 via FTA’s system does not meet the notification requirements.
The Essence of Our Success Stories
The FTA alleges the necessity for applying the penalty for the delay in paying the tax differences under the voluntary disclosure, which is considered an amendment of the tax return submitted by our Client. Still, the Legislator had made the imposition of this penalty under Article 11 of the said decision no, (40) conditional on the presumption that the mistake contained under the tax return or the tax assessment results in non-payment of the tax itself by the taxable person due to such error, but for which there would be no penalty and after the application of the penalty provisions imposed on administrative violations under the Cabinet Decision No. (4) of 2017 which apply to specific incidents separately, in which case the Legislator has prescribed a separate provision for each violation, on contrary to the interrelated incidents as is the case in the current incident.
ACCEPTANCE OF JURISDICTION OF COURT OVER JUDICIAL COMMITTEE ESTABLISHED TO HEAR MATTER RELATED TO FINANCE COMPANY
Khairallah Advocates & Legal Consultants successfully represented Client in real estate matter in defending jurisdiction of Court over Judicial Committee.
With the success stories, we tell you, you’ll be assured of what we can offer you.
What Did the Second Contestant Ask Before the Court?
The Contestant had filed plenary real estate against the First Contestee before the Honorable Dubai Court of First Instance, whereby he asked the Court to:
- invalidate the contract of sale under dispute, and – alternately – terminate the agreement, and in all cases, obligate the first Contestee to pay the Contestant the amounts previously paid by the Contestant plus interest at 12% as of the date of judicial claim till the date of full payment;
- obligate the First Contestee to pay the Contestant compensation.
This was on the pretext that the Contestant had, on 01/06/2008, purchased from the first Contestee an off-plan real estate unit. The sale contract refers to any dispute between the two parties to arbitration to be settled by DIAC Rules.
After a dispute had arisen between the parties concerning the implementation of the sale contract, the Contestant Case before Dubai International Arbitration Centre (DIAC), on which a judgment was rendered on 31/07/2013, but the first Contestee has not executed the arbitral award; a matter which forced the Contestant to file entire real estate case to approve the arbitral award. As a result, the Court has approved the arbitral award, which was upheld.
However, this judgment was canceled by the decision rendered on the challenge, given the arbitral award’s invalidity.
Although ten years had passed, the first Contestee had neither completed the project nor handed over the disputed unit yet; a matter entitles the Contestant to request terminating the sale contract and receive compensation for retaining the unit price by the first Contestee. Therefore, the Contestant had filed a new case.
During the hearing on 26/12/2017, the first Contestee submitted the non-acceptance of the case given the existence of the arbitration condition and requested joining the Second Contestee in its capacity as the new developer of the project where the unit subject of the case locates.
During the hearing on 21/02/2018, the attorney of the Second Contestee requested not to accept the case given the existence of the arbitration condition and not to accept the case given the lack of capacity; and joined the Third Contestee so that the judgment is rendered against it. However, the Third Contestee submitted the non-jurisdiction of the Court to consider the case because only the Judicial Committee formed by Decree No. 61 of 2009 has the jurisdiction to view the possibility.
What Did the Court Order?
On 13/11/2018, the Court ordered: 1) not to accept the submission made by the Second Contestee regarding the non-jurisdiction of the Court to consider the case and 2) not to accept the case against the Second Contestee due to lack of capacity.
The Contestant had appealed this judgment by appeal, in which the Court ordered to appoint an expert in the case. After the set expert had lodged a report in the case, the Court ordered, on 13/11/2019, to cancel the appealed judgment and ordered that Dubai Courts have no jurisdiction to consider the issue and refer the matter to the Judicial Committee formed by Decree No. 61 of 2009.
The Contestant had filed a challenge by cassation subject to a statement that was lodged before the Case Management Office on 09/01/2020, whereby he requested overruling this judgment, and the attorney for the Third Contestee submitted, within the legal period, a defense memo whereby he asked for the dismissal of the challenge.
The challenge fulfills the legal formalities.
The Contestant’s objection to the contested judgment is based on the pretext that the decision had violated and misapplied the law, had been based on wrong inference, and broke the material facts established by the case documents because it had ordered that Dubai Courts have no jurisdiction to consider the case and to refer the same to the Judicial Committee formed by Decree No. 61 of 2009, which is competent to consider disputes relating to Finance Companies, bearing in mind that the Third Contestee was joined into the case to hear the judgment to be rendered in the case without holding it responsible for any requests, i.e., the Third Contestee is not an actual litigant in the subject so that the jurisdiction is given to the said Committee, which means that the Court shall remain to have the primary authority to consider the case; a matter which renders the contested judgment worthy being dismissed because of its defectiveness.
How True is this Objection?
This objection is validly based because this Court establishes that the Plaintiff is free to specify the scope of the case in terms of litigants unless the Law provides for litigating certain persons.
Besides, it is also established that the core point in determining the litigants is the requests raised under the case. If a litigant was joined before the Court of First Instance to hear the judgment to be rendered therein because of being considered as an interested party, if the litigant is bound in the case to listen to the review or have the judgment rendered towards it, then this litigant shall neither be considered as an actual litigant nor the decision has any force against it.
And the Contestant has joined the Third Contestee to hear the judgment to be rendered in the case without holding the Third Contestee in charge of any requests, not to mention that neither the Third Contestee has objected to the demands raised by the Contestant nor the Contestant has a judgment rendered in his favor concerning these requests against the Third Contestee.
Therefore, neither can the Third Contestee be considered as a real party in the case, nor the rendered judgment has any force against it regardless of the submission raised by the Third Contestee concerning the lack of jurisdiction of the Court to consider the case because this submission neither can be regarded as a dispute with the Contestant’s requests nor renders the Third Contestee a real party in the case.
The Final Result
However, the contested judgment has, taking into account this issue, ordered that Dubai Courts have no jurisdiction to consider the case and referred the case as-is to the Competent Judicial Committee in pursuance of Decree No. 61 of 2009, so the contested judgment has misapplied the law. As a result, such misapplication of the law made the Court not consider the subject of the appeal. This matter renders this judgment defective regardless of the other aspects of the challenge, so the Court shall overrule this judgment and refer the case to the competent Court.
What did you learn from our narration of this case, knowing it’s only one of our success stories?
REAL ESTATE DISPUTE
The dispute arises from an agreement concerning selling a property unit in Dubai in 2008.
The estimated completion date for the property was December 2009, which may be extended for a period not exceeding twelve (12) months.
The property was not completed by the original Completion Date. Beyond this, the facts were heavily contested.
The Developer raised jurisdictional objections and claimed that the person who signed the SPA on behalf of the Developer had no authority to agree to arbitration; hence case must be rejected. The Developer referred to articles from the UAE Companies Law stating that an arbitration agreement must be “expressly granted” by the company’s Articles of Association or objectives. In the case of a Limited Liability Company, there are only three ways in which an individual can validly bind the company to arbitration: (i) it is expressly permitted in the Articles of Association, (ii) or the company’s objectives; and (iii) the General Manager either enters into the arbitration agreement himself or expressly authorizes another individual to do so.
As none of these scenarios came to pass, the Developer asserted that the person who signed had no authority to agree to arbitration and submitted a witness statement to support their claim.
We firmly challenged the above to prove that person who signed the SPA had authority and capacity to agree to all the terms therein, including the arbitration clause and relied on principles of good faith, implied and apparent authority, and argued that the signatory’s administration could be ratified at a later time.
The Tribunal accepted our arguments and rejected jurisdictional objections raised by the Developer confirming jurisdiction to hear and adjudicate this case.
On merits of the case, the Developer stated that the Purchaser defaulted in December 2008 when the third installment of the property was due and relied on Article 247 of the UAE Civil Code to highlight there position to suspend performance of its obligations to carry out the construction of the property and deliver the property by the Completion Date for as long as the Purchaser remained in breach and also challenged that the Purchaser had no right to serve Termination Notice as he was in payment default and property was completed.
The Developer claimed that they served three notices to the Purchaser on 25 May 2009 to extend the completion date to June 2010, a notice in July 2011 to extend the completion date to March 2012, and Property Completion Notice in June 2014.
We challenged the authenticity of documents submitted by the Developer and based our claim on per UAE Civil Code, particularly Article 272, which states that:
– In bilateral contracts, if one of the parties does not perform his contractual obligations, the other party may demand the performance of the contract or its rescission after serving a formal notification to the debtor.
– The judge may order the immediate debt or performance of the contract or grant him specified additional time, as he may order rescission with damages, in any case, if deemed justified.
We supported our arguments with principles from the Dubai Court of Cassation. It’s a good point and one of our success stories that chart the path.
Considering our arguments, the Tribunal ordered the termination of the SPA.
For real estate disputes, contact us, especially after knowing our success stories in this context.
ENFORCEMENT OF ARBITRATION AWARDS
Khairallah Advocates & Legal Consultants successfully enforced numerous arbitration awards through courts in the UAE.
Application for the enforcement of an arbitration award can now be brought directly before the UAE Court of Appeal.
The Chief Justice of the Court or whoever he delegates from among its judges shall order the arbitral award confirmed and enforced within sixty days of submission of the request for its confirmation and enforcement, unless it finds one or more of the grounds for setting aside the award under section 1 of Article 53 of Arbitration Law.
Law set a 30-day time limit for a party to challenge the validity of a final award before the relevant UAE Court of Appeal. A challenge to the validity of the final award may also be made in defense to an enforcement application filed by an award creditor outside the 30-day time-limit.
An action to set aside an arbitral award does not stay its enforcement. Nevertheless, the Court seized of the action to set aside the award may order a stay of enforcement if so requested by a Party showing good cause.
The Court shall decide the request for a stay of enforcement within fifteen days after the date of the first scheduled hearing.
If a stay is ordered, it may require the party seeking the stay to provide a given security or monetary guarantee. The Court then has sixty days from the date of the stay order to decide the action to set aside.
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