The DIFC Court of First Instance imposes a USD 75,000 fine and mandates remedial share transfers following the respondent’s deliberate frustration of a prior judicial order.
What specific actions by Hana Habib Mansoor Habib Al Herz led to the contempt of court finding in CFI 024/2020?
The dispute centers on the failure of the Respondent, Hana Habib Mansoor Habib Al Herz, to comply with a previous order issued by Justice Giles on 27 May 2022. The Claimants, Sunset Hospitality Holdings Limited and Peatura FZ LLC, sought an order of committal after the Respondent failed to transfer her shares in two specific entities—Black Tap Restaurant and Coffee LLC and Brick Oven Restaurant LLC—to the respective Claimants.
Beyond mere non-compliance, the Court found that the Respondent actively sought to undermine the judicial process. She did not simply ignore the order; she took affirmative steps to frustrate its purpose by procuring the transfer of the Claimants' shares in these companies into her own name. This conduct prompted the Court to issue a formal penal notice. As stated in the order:
By reason of the Respondent’s contempt as set out in the recitals to this Order, the Respondent shall within 21 days pay a fine to the Court of USD 75,000.
Which judge presided over the contempt hearing in CFI 024/2020 and when was the order issued?
The contempt application was heard by H.E. Justice Maha Almheiri in the DIFC Court of First Instance. Following the hearing held on 4 October 2022, the Court issued its formal order on 13 October 2022.
What arguments did the Claimants and the Respondent advance regarding the alleged contempt of court?
The Claimants, represented by counsel, argued that the Respondent’s failure to transfer the shares as mandated by the 27 May 2022 order constituted a clear breach of the Court’s authority. They highlighted that the Respondent had not only failed to perform the required transfers but had actively engaged in conduct—specifically, transferring the shares to herself—that was designed to frustrate the Court’s prior directions.
The Respondent, represented by Afridi & Angell, appeared before the Court to address these allegations. While the specific nuances of her defense are not detailed in the final order, the Court’s finding of contempt indicates that the arguments presented on her behalf were insufficient to excuse the failure to comply with the earlier order or to justify the subsequent actions taken to consolidate control over the companies in question.
What was the precise legal question the Court had to answer regarding the Respondent's conduct?
The Court was tasked with determining whether the Respondent’s failure to comply with the 27 May 2022 order, coupled with her subsequent actions to transfer the shares to herself, met the threshold for contempt of court under the Rules of the DIFC Courts (RDC). The core issue was whether the Respondent had willfully disobeyed a court order and whether her actions constituted an attempt to frustrate the administration of justice, thereby warranting the imposition of a fine and a mandatory order for remedial action.
How did Justice Maha Almheiri apply the test for contempt of court in this matter?
Justice Almheiri’s reasoning focused on the evidence of the Respondent’s non-compliance and her subsequent efforts to obstruct the Court's previous mandate. The Court found that the Respondent had failed to transfer her shares as ordered by Justice Giles and had further exacerbated the situation by transferring the Claimants' shares to herself.
The Court’s approach was to balance the punitive nature of the contempt finding with a structured path for the Respondent to rectify her actions. By setting specific deadlines for share transfers and requiring an affidavit of management activities, the Court sought to restore the status quo. The order includes a mechanism for the Respondent to potentially purge her contempt:
If the Respondent complies fully with paragraphs 3 to 7 of this Order, and on time and without taking any action or omitting to take an action which has the effect of frustrating the purpose of this Order, the Respondent has liberty to apply to purge her contempt and to discharge the sanction set out at paragraph 1 of this Order.
Which RDC rules and statutory authorities were applied by the Court in CFI 024/2020?
The Court relied heavily on RDC Part 52, which governs committal proceedings for contempt of court. Additionally, the Court invoked RDC Part 29, specifically Section VI, which addresses the consequences of making false statements in affidavits. To facilitate the enforcement of the order, the Court utilized RDC 9.31, which allows for alternative service of the order upon the Respondent’s legal representatives, Afridi & Angell, given the nature of the proceedings.
How did the Court utilize the Order of Justice Giles dated 27 May 2022 in its current ruling?
The Order of Justice Giles dated 27 May 2022 served as the foundational authority for the contempt application. Justice Almheiri used this earlier order to establish the baseline of the Respondent's obligations. The breach of paragraphs 1 and 2 of that order—which required the transfer of shares in Black Tap Restaurant and Coffee LLC and Brick Oven Restaurant LLC—formed the primary basis for the finding of contempt. The current order effectively acts as a enforcement mechanism to ensure that the original requirements are finally met, while simultaneously penalizing the Respondent for her intervening conduct.
What was the final disposition and the specific relief granted by the Court?
The Court found the Respondent in contempt and imposed a fine of USD 75,000, payable to the DIFC Courts within 21 days. Furthermore, the Court ordered a strict timeline for the Respondent to reverse her actions:
- Within 2 days, the Applicants must provide trade licenses.
- Within 7 days of receiving those licenses, the Respondent must apply to the Dubai Economic and Tourism Department to transfer 100% of the shares in the two companies to the Claimants.
- Within 2 days of approval, the Respondent must attend the notary public to finalize the share transfers.
- The Respondent must swear an affidavit detailing her management actions since 25 July 2022.
The Court also imposed a restriction on her management activities:
Pending the transfer of shares in Black Tap Restaurant and Coffee LLC and Brick Oven Restaurant LLC in accordance with paragraph 5 of this Order and the removal of the Respondent as a manger of each of those companies, the Respondent shall not take any steps as manager of those companies or cause or permit those companies to do any act, other than those acts necessary to comply with paragraphs 3 to 5 of this Order.
What are the wider implications for practitioners regarding contempt and share transfers in the DIFC?
This case serves as a stern reminder that the DIFC Courts will not tolerate the frustration of their orders, particularly in corporate disputes involving share transfers. Practitioners should note that the Court is prepared to use its full powers under RDC Part 52 to impose significant financial penalties on parties who attempt to circumvent judicial mandates.
Furthermore, the Court’s emphasis on the accuracy of the required affidavit, supported by the warning regarding false statements, underscores the high standard of transparency expected during the purging of contempt. Parties must ensure that their clients understand that any attempt to "frustrate the purpose" of an order will likely lead to further, more severe sanctions.
The Respondent is hereby reminded that pursuant to Section VI of RDC Part 29, further proceedings for contempt of court may be brought against her if she makes a false statement in the affidavit to be served in accordance with paragraph 8.
Where can I read the full judgment in Sunset Hospitality Holdings Limited v Hana Habib Mansoor Habib Al Herz [CFI 024/2020]?
The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0242020-1-sunset-hospitality-holdings-limited-2-peatura-fz-llc-v-hana-habib-mansoor-habib-al-herz-1
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Order of Justice Giles | 27 May 2022 | Basis for contempt finding |
Legislation referenced:
- RDC Part 52 (Committal)
- RDC Part 29 (Affidavits)
- RDC 9.31 (Service)