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You are here: BAILII >> Databases >> The Dubai International Financial Centre >> Nilsa v Noori [2024] DIFC SCT 517 (25 March 2024) URL: http://www.bailii.org/ae/cases/DIFC/2024/DSCT_517.html Cite as: [2024] DIFC SCT 517

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Nilsa v Noori [2023] DIFC SCT 517

March 25, 2024 SCT - JUDGMENTS AND ORDERS

Claim No. SCT 517/2023

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum,
Ruler of Dubai

IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
BEFORE H.E JUSTICE MAHA AL MHEIRI

BETWEEN

NILSA

Claimant

and

NOORI

Defendant

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Hearing :	21 March 2024
Judgment :	25 March 2024

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ORDER WITH REASONS OF H.E JUSTICE MAHA AL MHEIRI

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UPON this Claim being filed on 28 December 2023

AND UPON a Jurisdiction Hearing having been held before H.E. Justice Maha Al Mheiri on 21 March 2024, with the Claimant and the Defendant in attendance (the “Jurisdiction Hearing”)

AND UPON reading the submissions and evidence filed and recorded on the Court file

IT IS HEREBY ORDERED THAT:

1. The DIFC Courts have jurisdiction to hear and determine this claim.

2. Each party shall bear their own costs of the Jurisdiction Hearing.

Issued by:
Hayley Norton
SCT Judge
Date of Issue: 25 March 2024
At: 2pm

THE REASONS

The Parties

1. The Claimant is Nilsa (the “Claimant”), an individual who purchased the Defendant’s Unit.

2. The Defendant is Noori (the “Defendant”), the owner of Unit located in (the “Unit”), Dubai International Financial Centre (“DIFC”)

Background and the Preceding History

3. On 20 October 2023, the Claimant and the Defendant entered into a Sales Agreement (the “Sales Agreement”) for the purchase of the Defendant’s Unit for the amount of AED 2,000,000. The Sales Agreement was finalised by 30 November 2023, and the Unit was transferred under the Claimant’s name.

4. The underlying dispute arises over the pro-rata rent of the Unit for the remainder of the lease period of the Unit to the Claimant by the Defendant. By way of email, the Claimant requested that the outstanding amount be transferred from the Defendant however he failed to make the transfer.

5. On 28 December 2023, the Claimant filed a claim in the DIFC Courts Small Claims Tribunal (the “SCT”) seeking payment of the pro-rata rent of the Unit for the period that the Unit was transferred under his name in the sum of AED 33,171.

6. On 21 March 2024, I heard the parties’ arguments at a Jurisdiction Hearing.

The Jurisdiction Application

7. The Defendant submits that the signed Sales Agreement makes reference to the ‘Abu Dhabi Arbitration Centre’ instead of the ‘DIFC Courts’, as set out below:

“6.4 This Agreement shall be governed by and interpreted in accordance with the laws as applicable in the DIFC. All disputes arising out of or in connection with this Agreement or related to its interpretation, breach (acknowledged or alleged), termination or nullity shall be exclusively and finally settled under the Rules of Arbitration of the Abu Dhabi Arbitration Centre by one or more arbitrators appointed in accordance with these Rules. The seat of the arbitration tribunal shall be Abu Dhabi, United Arab Emirates.”

8. The Defendant argues that it is clear from the contents of the Sales Agreement that the parties intended for the Abu Dhabi Arbitration Centre to resolve any dispute.

9. In reply, the Claimant submits that the entire Sales Agreement refers to the DIFC Courts and the relevant law except for Clause 6.4 which refers to the Abu Dhabi Arbitration Centre which is a typographical error made by the real estate agency that drafted the Sales Agreement. The Claimant also adds that the Unit is located in the DIFC and the transfer itself was executed by the DIFC Services, therefore, the Claimant strongly believes that the DIFC is the sole and relevant jurisdiction for all disputes arising out of the Sales Agreement.

Discussion

10. 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, namely:

“(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. There is evidence that these gateways apply to the circumstances before the Court as the location of the property in question is within the DIFC jurisdiction. The relevant Articles from the Real Property Law DIFC No. 4 of 2007, and amended thereafter, Amendment Law DIFC Law No. 10 of 2018 are applicable to the matter at hand.

12. Article 3 specifies that this Law applies to real property within the jurisdiction of the DIFC and Article 4 stipulates that on 17 March 2003, His Highness Sheikh Mohamed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, transferred to the DIFC certain real property on which the DIFC was to be situated in accordance with the Federal and Dubai laws to be later enacted to establish the DIFC as a financial free zone within Dubai.

13. Article 8,9 and 11 of the DIFC Real Property Law provides:

“8. Real Property governed by this Law

(1) From the date on which this Law comes into force, all real property from time to time within the jurisdiction of the DIFC is governed by this Law.

(2) Real property within the jurisdiction of the DIFC includes:

(a) the real property referred to in Article 4(1); and

(b) any real property later brought within the jurisdiction of the DIFC, by any method.

9. Non-applicability of certain other laws

(1) Dubai real property laws do not apply to real property governed by this Law.

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11. Interpretation

(1) For the purposes of this Law, “Real Property” includes land, buildings, and items placed in, on or under the land comprising a Lot with the intention that such buildings and fixtures should remain in position permanently or indefinitely.

(2) Unless the context indicates otherwise, a reference in this Law to Real Property is a reference to Real Property within the jurisdiction of the DIFC governed by this Law and which forms part of a Lot for which a Folio has been created under the provisions of this Law.

(3) Schedule 1 contains:

(a) interpretative provisions which apply to this Law; and

(b) a list of defined terms used in this Law. Terms that are capitalised in this Law have the meanings as so ascribed in Schedule 1 and if not defined in Schedule 1, have the meanings as so ascribed in the Regulations or the Strata Title Law, or both.”

14. Thus, it is clear, even though the parties have elected in writing to choose the Abu Dhabi Arbitration Centre to resolve their dispute, as the Unit of concern is located within the DIFC jurisdiction, it is considered to be within the physical jurisdiction of the DIFC.

15. Generally, the parties to a dispute may agree on the jurisdiction of a specific court pursuant to Article 31(5) of Federal Law No.11 of 1992 Concerning the of the UAE Civil Procedure Law (“CPL”) which states:

“5. In other than the cases stipulated in the Article (32) and the Articles from (34) to (39), it is possible to agree on the jurisdiction of a certain court to examine the litigation, and in such case the jurisdiction will be given to such court or the court in which circuit the prosecuted residence, domicile or workplace exists.”

16. Article 32 of the same law provides for the following exception to the above:

“(1) In the real estate actions and the possession actions, the jurisdiction should be given to the court in which circuit the real property, or one of its parts in case it exists in more than one court's circuit.

(2) In the personal real estate actions the jurisdiction should be given to the courts in which circuit the real property or the residence of the prosecuted exists.”

17. The Claimant’s claim concerns real property located in the jurisdiction of the DIFC. As the dispute relates to the Defendant’s alleged pro-rata rent, I determine this claim to be an‘action in personam’in respect of real property, and Article 32(2) would apply in the circumstances. Accordingly,‘jurisdiction is vested in the court in whose area the real property is located or the defendant has his domicile’,as such the effect of the law would include the DIFC Courts to have jurisdiction as the property is located within the DIFC.

18. For the above cited reasons, I find that the DIFC Courts have jurisdiction over the matter.

19. Each party shall bear their own costs as to the Jurisdiction Hearing.