PROTIVITI MEMBER FIRM v AL-MOJIL [2016] DIFC CA 003 — Confirmation of the Spiliada doctrine for forum non conveniens (23 August 2016)

Did the DIFC Court of Appeal confirm that the Spiliada doctrine of forum non conveniens applies to defendants domiciled in the DIFC?

The dispute centers on a claim brought by Mohammad Bin Hamad Abdul-Karim Al-Mojil and Adel Bil Mohammad Bin Hamad Al-Mojil against Protiviti Member Firm (Middle East) Limited. The claimants, Saudi nationals and shareholders of the Mohammed Al-Mojil Group, alleged that the defendant—a DIFC-incorporated consultancy firm—produced a negligent, inaccurate, and defamatory report for the Saudi Capital Market Authority. The defendant sought a stay of the proceedings, arguing that the Kingdom of Saudi Arabia (KSA) was the natural and more appropriate forum for the litigation.

The core of the dispute involved the defendant’s attempt to invoke the doctrine of forum non conveniens (FNC) to shift the litigation away from the DIFC. The claimants resisted this, arguing that because the defendant was domiciled in the DIFC, no FNC doctrine should apply, or alternatively, that the court should adopt a more restrictive test than the English Spiliada standard. The Court of Appeal addressed this by confirming the applicability of the Spiliada test, noting:

The Court of Appeal also confirmed that Spiliada FNC principles will be potentially applicable where there is available another forum outside the UAE that is distinctly more appropriate than the DIFC Courts even where the jurisdiction of the DIFC Courts is not “exorbitant”, whether because the defendant is domiciled in the DIFC or otherwise.

The judgment is available at: https://www.difccourts.ae/rules-decisions/judgments-orders/court-appeal/protiviti-member-firm-middle-east-limited-v-1-mohammad-bin-hamad-abdul-karim-al-mojil-2-adel-bil-mohammad-bin-hamad-al-mojil-201

Which judges presided over the Court of Appeal hearing in Protiviti Member Firm v Al-Mojil [2016] DIFC CA 003?

The appeal was heard by a panel consisting of Chief Justice Michael Hwang, Justice Sir Richard Field, and H.E. Justice Ali Al Madhani. The judgment was handed down on 23 August 2016, following a hearing held on 26 May 2016.

What were the specific legal arguments advanced by Jonathan Adkin QC and Tom Montagu-Smith in the Protiviti appeal?

Tom Montagu-Smith, representing the appellant (Protiviti), argued that the Court of First Instance erred in its evaluation of the forum non conveniens factors. He contended that the Kingdom of Saudi Arabia was the natural forum for the dispute, given the location of the underlying events and the parties involved. The appellant’s position was that the DIFC Court should exercise its discretion to stay the proceedings in favor of the KSA courts.

Jonathan Adkin QC, for the respondents (the Al-Mojils), argued that the forum non conveniens doctrine was inapplicable because the defendant was a DIFC-domiciled entity. He further submitted that if the court were to apply an FNC test, it should adopt a more restrictive approach, such as the Australian Voth test, rather than the English Spiliada test. The respondents maintained that the DIFC was the appropriate forum, particularly highlighting the practical difficulties, such as a travel ban affecting the respondents, which would impede their ability to litigate effectively in KSA.

What was the precise doctrinal question regarding the classification of forum non conveniens that the Court of Appeal had to resolve?

The court had to determine whether the law relating to forum non conveniens is a matter of substantive law or procedural law. This distinction was critical because it determined whether the DIFC Courts were bound by the "waterfall" provisions of Article 8 of DIFC Law No. 3 of 2004, which dictates the applicable law in civil and commercial matters. If FNC were substantive, the court might have been forced to look to foreign jurisdictions; if procedural, the DIFC Court retained the autonomy to define its own FNC test.

How did the Court of Appeal apply the Spiliada test to the Protiviti dispute?

The Court of Appeal concluded that the law of appropriate forum is procedural. Consequently, the court was free to adopt the Spiliada doctrine as the standard for the DIFC. The court emphasized that the test requires the defendant to show that there is another available forum that is "clearly or distinctly more appropriate." The court noted that the First Instance judge, H.E. Justice Omar Al Muhairi, had effectively applied this standard, even if he did not recite the Spiliada test verbatim.

The correct test under Spiliada in deciding if a stay of proceedings brought in a court of competent jurisdiction should be granted is whether the defendant has shown that there is another available forum which is clearly or distinctly more appropriate for the trial of the action.

The Court of Appeal found that the First Instance judge’s evaluative judgment was sound and that he had not erred in his assessment of the factors, including the defendant's DIFC registration and the practical constraints faced by the claimants.

Which specific DIFC statutes and international legal principles were cited in the Protiviti judgment?

The court relied heavily on the jurisdictional framework provided by Law No. 12 of 2004, specifically Article 5(A)(1), which governs the jurisdiction of the DIFC Courts. The court also addressed the "waterfall" provisions of Article 8 of DIFC Law No. 3 of 2004, clarifying that these do not apply to procedural matters like forum non conveniens. Additionally, the court referenced Law No. 16 of 2011, which further defines the jurisdictional reach of the DIFC Courts. Regarding the European Judgments Regulation, the court noted:

Even if the law of appropriate forum were substantive and not procedural, the European Judgments Regulation would in my opinion be of no application to the DIFC Courts under Article 8(2) (e).

Which precedents did the Court of Appeal rely on to establish the Spiliada doctrine in the DIFC?

The court relied on Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 as the foundational authority for the FNC test. To contrast the Spiliada test with more restrictive approaches, the court cited the Australian case Voth v Manildra Flour Mills Pty Ltd, noting that the Voth test requires a showing that the forum is "clearly inappropriate," which is a higher threshold than the "clearly more appropriate" test under Spiliada. The court also referenced Owusu v Jackson [2005] ECR I-1383 and VTB Capital plc v Nutritek International Corpn [2013] UKSC 5 to discuss the application of jurisdictional rules and the limits of forum challenges.

What was the final disposition of the Protiviti appeal and the order regarding costs?

The Court of Appeal dismissed the appeal, upholding the decision of the Court of First Instance. The court confirmed that the DIFC Courts have the jurisdiction to hear the claim and that the defendant failed to demonstrate that the KSA courts were a clearly more appropriate forum. Costs were awarded to the respondents on the standard basis, reflecting the court's decision to maintain the proceedings within the DIFC.

How does this judgment change the practice of forum non conveniens challenges in the DIFC?

This judgment provides definitive clarity for practitioners, establishing Spiliada as the governing standard for forum non conveniens in the DIFC. Litigants must now anticipate that the DIFC Courts will apply this test even when the defendant is domiciled within the DIFC. The ruling confirms that the DIFC Courts retain the discretion to stay proceedings, but the burden remains firmly on the defendant to prove that a foreign forum is "clearly or distinctly more appropriate." Practitioners should note that the court will not easily interfere with the evaluative judgment of a First Instance judge unless there is a manifest error in the application of the Spiliada test.

Where can I read the full judgment in Protiviti Member Firm (Middle East) Limited v (1) Mohammad Bin Hamad Abdul-Karim Al-Mojil (2) Adel Bil Mohammad Bin Hamad Al-Mojil [2016] DIFC CA 003?

The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-appeal/protiviti-member-firm-middle-east-limited-v-1-mohammad-bin-hamad-abdul-karim-al-mojil-2-adel-bil-mohammad-bin-hamad-al-mojil-201

Cases referred to in this judgment:

Legislation referenced:

• DIFC Law No. 3 of 2004, Article 8
• Law No. 12 of 2004, Article 5(A)(1)
• Law No. 16 of 2011