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SUCCESS STORY – ACCEPTANCE OF JURISDICTION OF COURT OVER JUDICIAL COMMITTEE ESTABLISHED TO HEAR MATTER RELATED TO FINANCE COMPANY

Last updated on November 13th, 2020 at 04:37 pm

Khairallah Advocates & Legal Consultants successfully represented Client in real estate matter in defending jurisdiction of Court over Judicial Committee.

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 disputed, and – alternately – to terminate the contract, and in all cases, to obligate the first Contestee to pay the Contestant the amounts previously paid by the Contestant plus an 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 provides for referring any dispute that may arise between the two parties to arbitration so as to be settled in accordance with 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 plenary real estate case for the purpose of approving the arbitral award. As a result, the Court has approved the arbitral award, which was upheld. However, this judgment was canceled by the judgment rendered on challenge given the invalidity of the said arbitral award.

Although 10 years had passed over, 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 new case.

During the hearing of 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 of 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 consider the case.

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 appointed 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 case and to refer the case to the Judicial Committee formed by Decree No. 61 of 2009. The Contestant had filed 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 requested 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 judgment had violated and misapplied the law, had been based on wrong inference and violated 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 so as to hear the judgment to be rendered in the case without holding it responsible for any requests, i.e. the Third Contestee is not a real litigant in the case so that the jurisdiction is given to the said Committee, which means that the Court shall remain having the basic jurisdiction to consider the case; a matter which renders the contested judgment worthy being dismissed because of its defectiveness.

This objection is validly based because it is established by this Court that the Plaintiff is free to specify the scope of the case in terms of litigants unless the Law provides for litigating certain persons in the case. 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 interested party, if the litigant is joined in the case to hear the judgment or have the judgment rendered towards it, then this litigant shall neither be considered as a real litigant nor the judgment has any force against it. And the Contestant has joined the Third Contestee so as 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 requests 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 considered as a dispute with the Contestant’s requests nor renders the Third Contestee a real party in the case.

However, the contested judgment has, out 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, and as a result, such misapplication of the law made the Court not to consider the subject of the appeal, a matter which 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.

Khairallah Advocates

Khairallah Advocates & Legal Consultants, a law firm based in Dubai, is one of the leading Law firms in UAE. We have some of the best lawyers in Dubai and provide excellent legal assistance in various areas. Please check out our law practice areas page for more details. Should you require any legal assistance, feel free to contact us.

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