This order serves as a critical reminder that the DIFC Court’s procedural leniency regarding default judgments does not extend to the fundamental requirements of jurisdiction and service, particularly when dealing with defendants located outside the DIFC.
What specific evidentiary failures led H.E. Justice Nassir Al Nasser to deny the Default Judgment request in Berger Paints Emirates Ltd Co v Arabtec Construction?
The dispute centers on a request for Default Judgment filed by Berger Paints Emirates Ltd Co LLC against Arabtec Construction LLC. Despite the Defendant’s failure to acknowledge service or file a defense, the Court found the application procedurally deficient. The primary obstacle was the Claimant's failure to provide the necessary evidentiary foundation required by the Rules of the DIFC Courts (RDC) to establish the Court's authority over the matter.
The Court emphasized that the mere absence of a response from the Defendant does not automatically entitle a claimant to a judgment. The Claimant failed to satisfy the specific requirements set out in RDC 13.24, which governs applications for default judgment against parties served outside the jurisdiction. As noted in the order:
The Claimant has not submitted evidence, as required by RDC 13.24, that: (i) the claim is one that the DIFC Courts have power to hear and decide; (ii) no other court has exclusive jurisdiction to hear and decide the claim; and (iii) the claim has been properly served (RDC 13.22/13.23).
Consequently, the Court was unable to verify its own jurisdiction or the validity of the service, leading to the summary denial of the request.
Which judge presided over the CFI 021/2021 application for Default Judgment and when was the order issued?
The application for Default Judgment in CFI 021/2021 was heard by H.E. Justice Nassir Al Nasser, sitting in the DIFC Court of First Instance. The formal order denying the Claimant’s request was issued on 2 May 2021.
What were the respective positions of Berger Paints Emirates Ltd Co and Arabtec Construction regarding the default judgment request?
The Claimant, Berger Paints Emirates Ltd Co LLC, sought a Default Judgment on the basis that the Defendant, Arabtec Construction LLC, had failed to engage with the proceedings within the prescribed time limits. The Claimant argued that it had complied with the procedural requirements for service, having filed a Certificate of Service on 5 April 2021 in accordance with RDC 9.43. The Claimant maintained that the Defendant’s silence—specifically the failure to file an Acknowledgment of Service or a Defence—entitled it to a judgment for the specified sum and interest.
The Defendant, Arabtec Construction LLC, did not appear and did not file any submissions in response to the claim or the request for Default Judgment. Despite this total lack of opposition, the Court scrutinized the Claimant’s application under the RDC. The Court noted that the Defendant had not taken any steps to challenge the claim, stating:
The Defendant has failed to file an Acknowledgment of Service or a Defence to the claim (or any part of the claim) with the DIFC Courts and the relevant time for so doing has expired (RDC 13.4).
However, the Court’s independent review of the file revealed that the Claimant had failed to meet the threshold requirements for a judgment in default, effectively rendering the Defendant's silence irrelevant to the outcome of the application.
What was the precise jurisdictional question the Court had to answer regarding the service of Arabtec Construction?
The central legal question before the Court was whether the Claimant had satisfied the stringent evidentiary requirements of RDC 13.24 when seeking a default judgment against a defendant served outside the DIFC jurisdiction. The Court had to determine if the Claimant had sufficiently demonstrated that the DIFC Courts possessed the requisite power to hear the claim and that no other court held exclusive jurisdiction.
This inquiry was not merely a formality but a jurisdictional safeguard. Because the Defendant was served outside the jurisdiction, the Court was required to ensure that the conditions of RDC 13.22 and 13.23 were met. The Court had to decide if the Claimant had provided the necessary evidence to prove that the claim fell within the DIFC’s jurisdictional scope, a burden that the Claimant failed to discharge.
How did H.E. Justice Nassir Al Nasser apply the RDC 13.24 test to the Claimant's request?
Justice Al Nasser applied a rigorous, step-by-step assessment of the Claimant’s compliance with the RDC. While the Court acknowledged that the Claimant had followed the general procedure for obtaining a Default Judgment under RDC 13.7 and 13.8, it found that these general rules were superseded by the specific requirements for service outside the jurisdiction.
The Judge concluded that the Claimant had failed to provide the necessary evidence to satisfy the Court that it was appropriate to enter a judgment in default. The reasoning focused on the lack of proof regarding the Court’s power to hear the case and the absence of exclusive jurisdiction elsewhere. As the Judge stated:
I am not satisfied that the conditions of RDC 13.22 and RDC 13.23 [defendant served outside jurisdiction] have been met.
The Court’s reasoning highlights that the burden of proof rests entirely on the claimant to proactively demonstrate that the court is the correct forum, even when the defendant is entirely unresponsive.
Which specific RDC rules were cited by the Court in its assessment of the Default Judgment request?
The Court’s decision was heavily grounded in the Rules of the DIFC Courts (RDC). Specifically, the Court referenced RDC 13.3, 13.4, 13.6(1), 13.6(3), 13.7, 13.8, 13.9, 13.14, 13.22, 13.23, and 13.24. Additionally, the Court cited RDC 4.16 regarding the striking out of statements of case, RDC 9.43 regarding the Certificate of Service, and RDC Part 24 regarding immediate judgment.
The Court noted that the Defendant had not taken any of the steps that would typically preclude a default judgment, such as applying to strike out the claim or filing an admission:
The Defendant has not: (i) applied to the DIFC Courts to have the Claimant’s statement of case struck out under RDC 4.16; or for immediate judgment under RDC Part 24 (RDC 13.6(1)); (ii) satisfied the whole claim (including any claim for costs) on which the Claimant is seeking judgment; or (iii) filed or served on the Claimant an admission under RDC 15.14 or 15.24 together with a request for time to pay (RDC 13.6(3)).
How did the Court distinguish the procedural requirements for service under RDC 9.43 versus RDC 13.22/13.23?
The Court distinguished between the ministerial act of filing a Certificate of Service and the substantive requirement of proving jurisdiction. While the Claimant had filed a Certificate of Service in accordance with RDC 9.43 on 5 April 2021, this was insufficient to satisfy the Court that the service was valid for the purposes of a default judgment against a foreign-served defendant.
The Court clarified that RDC 9.43 establishes that service occurred, but RDC 13.22 and 13.23 impose a higher threshold for default judgments involving parties outside the jurisdiction. The Court held that the Claimant failed to provide the evidence required by RDC 13.24 to bridge this gap, specifically regarding the Court's power to hear the claim and the absence of exclusive jurisdiction in other forums.
What was the final disposition of the Court in CFI 021/2021 and what order was made regarding costs?
The Court denied the Claimant’s request for Default Judgment in its entirety. The order explicitly stated that the request was denied because the Claimant failed to satisfy the evidentiary requirements of RDC 13.24. Consequently, the Court ordered that the Claimant shall bear its own costs for the application.
What are the practical implications for practitioners seeking Default Judgment in the DIFC against parties served outside the jurisdiction?
This case serves as a stern warning to practitioners that the DIFC Court will not rubber-stamp default judgments, particularly where service has been effected outside the jurisdiction. Practitioners must ensure that every application for default judgment is accompanied by robust evidence addressing the Court’s jurisdiction and the validity of service under RDC 13.22 and 13.23.
Failure to provide the specific evidence required by RDC 13.24—namely, proof that the DIFC Court has the power to hear the claim and that no other court has exclusive jurisdiction—will result in the denial of the request, regardless of the defendant's failure to respond. Practitioners should treat the RDC 13.24 requirements as a mandatory checklist rather than a procedural formality.
Where can I read the full judgment in Berger Paints Emirates Ltd Co v Arabtec Construction [2021] DIFC CFI 021?
The full text of the order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-021-2021-berger-paints-emirates-ltd-co-llc-v-arabtec-construction-llc-2
A copy is also available on the CDN: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-021-2021_20210502.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No external precedents were cited in this order. |
Legislation referenced:
- Rules of the DIFC Courts (RDC):
- RDC 4.16
- RDC 9.43
- RDC 13.1(1) & (2)
- RDC 13.3(1) & (2)
- RDC 13.4
- RDC 13.6(1)
- RDC 13.6(3)
- RDC 13.7
- RDC 13.8
- RDC 13.9
- RDC 13.14
- RDC 13.22
- RDC 13.23
- RDC 13.24
- RDC 15.14
- RDC 15.24
- RDC Part 24