MOHAMMAD BIN HAMAD ABDUL-KARIM AL-MOJIL v PROTIVITI MEMBER FIRM [2016] DIFC CFI 020 — Jurisdiction over DIFC-registered entities in cross-border tort claims (03 January 2016)

This order confirms the DIFC Courts' jurisdictional reach over entities registered within the Centre, rejecting attempts to stay proceedings on forum non conveniens grounds despite the underlying tortious acts occurring in Saudi Arabia.

What is the nature of the dispute between the Al-Mojil family and Protiviti Member Firm (Middle East) regarding the USD 3,438,177.35 claim?

The dispute arises from a consultancy engagement involving the Mohammad Al-Mojil Group (MMG), a construction firm specializing in the oil and gas sector. The Claimants, Saudi nationals and founding shareholders of MMG, initiated proceedings against the Defendant, Protiviti Member Firm (Middle East) Limited, a DIFC-registered entity. The core of the litigation concerns a report commissioned by the Saudi Capital Market Authority (CMA) in 2012 to investigate the financial reporting and operations of MMG.

The Claimants allege that the report produced by the Defendant led to severe sanctions against them in Saudi Arabia, including asset freezes and travel bans. Consequently, the Claimants filed a claim in the DIFC Courts seeking damages of USD 3,438,177.35, the delivery of the report, and associated costs. As noted in the factual background:

At the conclusion of the investigation, the Defendant was to produce a report (“the Report”) dealing in particular with whether any fraud or other misconduct had occurred.

The Defendant subsequently delivered this report to the CMA in Saudi Arabia, which the Claimants contend serves as the basis for their tortious claim.

Which judge presided over the jurisdictional challenge in CFI 020/2015 and when was the hearing held?

The jurisdictional challenge was heard by H.E. Justice Omar Al Muhairi of the DIFC Court of First Instance. The oral hearing took place on 17 and 18 November 2015, with the final order being issued on 3 January 2016.

What were the specific legal arguments advanced by the Claimants and the Defendant regarding the DIFC Court's jurisdiction?

The Claimants relied upon the Defendant’s status as a DIFC-registered entity to establish the Court's jurisdiction under the Judicial Authority Law. They argued that the Court had the requisite authority to hear the tort claim and that the DIFC was an appropriate forum for the adjudication of the matter, given the Defendant’s corporate presence within the jurisdiction.

Conversely, the Defendant, represented by Mr Tom Montagu-Smith, Mr Adrian Chadwick, and Ms Reema Ashraf, sought to contest jurisdiction under RDC Part 12.1.2. They argued that the Claimants failed to establish a "good arguable case" or a "case which can found a dispute," asserting that the Particulars of Claim lacked sufficient detail regarding recoverable losses. Furthermore, the Defendant contended that the DIFC Courts should decline jurisdiction on the grounds of forum non conveniens, arguing that the Kingdom of Saudi Arabia (KSA) was the natural forum for the dispute. The Defendant’s position on their own registration was acknowledged as follows:

The Defendant specifically sets out this position in their Skeleton Argument dated 12 November 2015 in paragraph 24 which states, “Protiviti is registered in the DIFC.

What was the precise doctrinal issue the Court had to resolve regarding the "good arguable case" test?

The Court was tasked with determining whether the Claimants had met the threshold of establishing a "good arguable case" to justify the exercise of the Court's jurisdiction. The doctrinal issue centered on whether the Particulars of Claim provided sufficient substance to constitute a justiciable dispute. The Defendant argued that without a clearly articulated case that could "found a dispute," the Court should either dismiss the claim or stay the proceedings. The Court had to balance this requirement against the statutory jurisdictional gateways provided by the Judicial Authority Law, ensuring that the claim was not merely speculative but possessed the necessary legal foundation to proceed within the DIFC judicial framework.

How did Justice Al Muhairi apply the jurisdictional test to the facts of the Al-Mojil claim?

Justice Al Muhairi rejected the Defendant’s application, finding that the jurisdictional requirements were clearly met by the Defendant’s registration within the DIFC. The Court emphasized that once a jurisdictional gateway is engaged, the Court must assess whether the claim has sufficient substance. The judge concluded that the Claimants had successfully met this burden. As stated in the judgment:

It is clear that the Claimants have laid out a case in their Particulars of Claim dated 28 June 2015 outlining their cause of action as well as losses and damages incurred sufficient enough to articulate an arguable claim.

Furthermore, the Court addressed the forum non conveniens argument by noting that the Defendant’s presence in the DIFC provided a sufficient nexus, and the practical obstacles to litigation in the KSA—such as the travel bans imposed on the Claimants—weighed against staying the proceedings.

Which specific statutes and RDC rules did the Court apply to confirm its jurisdiction over Protiviti?

The Court relied on Article 5(A)(1)(a) of the Judicial Authority Law (Dubai Law No. 12 of 2004, as amended by Law No. 16 of 2011), which grants the DIFC Courts jurisdiction over civil and commercial claims where the defendant is a DIFC Establishment. Additionally, the Court referenced Article 8(2) of the DIFC Courts Law No. 3 of 2004 as the basis for the filing of the claim. The procedural challenge was governed by RDC Part 12.1.2, which allows a defendant to contest the Court's jurisdiction. The Court’s reasoning regarding the statutory gateway was explicit:

The Court therefore has jurisdiction over claims to which Protiviti is a party: Judicial Authority Law, Art 5(A)(1)(a).” Indeed, the DIFC Courts has jurisdiction pursuant to Article 5 of the Judicial Authority Law, Dubai Law No. 12 of 2004 as amended by Law No. 16 of 2011.

Which earlier cases did the Court rely on to define the threshold for a "good arguable case"?

The Court referenced several key precedents to guide its decision. It cited Hardt v Damac [CFI-036-2009] to address the Defendant's argument that a claimant must advance a case that can "found a dispute." The Court also utilized Bank Sarasin v Al Khorafi [CA-003-2011] to clarify that the test for jurisdiction requires the claimant to establish a "good arguable case" with "sufficient substance." Regarding the forum non conveniens argument, the Court cited Corinth Pipeworks SA v Barclays Bank PLC [CA-002-2001] to acknowledge its discretionary power to decline jurisdiction, though it ultimately found no reason to exercise that discretion in this instance. The Court also noted the Defendant's reliance on Hardt v Damac:

The Defendant argues, however, that a party must advance “a case which can found a dispute” citing Hardt v Damac [CFI-036-2009] (4 April 2010) at [60].

What was the final disposition of the jurisdictional application and the order regarding costs?

The Court dismissed the Defendant’s application to contest jurisdiction in its entirety. Consequently, the proceedings were permitted to continue within the DIFC Court of First Instance. Regarding the costs of the application, the Court ordered that the Defendant, as the unsuccessful party, bear the costs, subject to assessment by the Registrar if the parties could not reach an agreement. The Court’s order on costs was definitive:

I am satisfied that the Defendant, as the unsuccessful party in this case, should pay the costs, and be subject to a detailed assessment if not agreed.

How does this ruling impact the practice of litigating against DIFC-registered entities for foreign torts?

This decision reinforces the principle that registration within the DIFC serves as a robust jurisdictional anchor. Practitioners must anticipate that the DIFC Courts will be reluctant to stay proceedings on forum non conveniens grounds when a defendant is a DIFC-registered entity, even if the underlying tortious conduct occurred entirely outside the DIFC and involves foreign law. The ruling clarifies that as long as the Particulars of Claim articulate a coherent cause of action and quantifiable damages, the Court will likely assert its jurisdiction. Litigants should be aware that the "good arguable case" threshold is primarily focused on the sufficiency of the pleadings rather than an exhaustive trial on the merits at the jurisdictional stage.

Where can I read the full judgment in Mohammad Bin Hamad Abdul-Karim Al-Mojil v Protiviti Member Firm [2016] DIFC CFI 020?

The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0202015-mohammad-bin-hamad-bin-abdul-karim-al-mojil-another-v-protiviti-member-firm-middle-east-limited or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-020-2015_20160103.txt

Cases referred to in this judgment:

Legislation referenced:

• DIFC Courts Law No. 3 of 2004, Article 8(2)
• Judicial Authority Law, Dubai Law No. 12 of 2004 (as amended by Law No. 16 of 2011), Article 5(A)(1)(a)
• RDC Part 12.1.2
• RDC 38.7