This ruling resolves a critical preliminary dispute regarding the validity of a share transfer in an AI-technology real estate platform, confirming the Claimant's status as a shareholder following a contested cash payment.
Did Anastasiia Denisova successfully prove she paid USD 1,000 for 10,000 class A shares in Realiste Holding?
The core of this litigation concerns the ownership of 10,000 class A shares in the Second Defendant, Realiste Holding Ltd. The Claimant, Anastasiia Denisova, asserted that she had fulfilled her financial obligation to acquire these shares, while the Respondents, Aleksei Galtcev and Realiste Holding Ltd, contended that the shares were never paid for, justifying their subsequent revocation. The dispute centered on whether a cash payment of USD 1,000 had been transferred from the Claimant to the First Defendant.
Following a trial of the preliminary issue, H.E. Justice Sapna Jhangiani determined that the Claimant had met her burden of proof. The Court’s formal declaration was unequivocal:
The Court finds in favour of the Claimant on the preliminary issue and declares that the Claimant paid the First Defendant USD 1,000 for the 10,000 class A shares which she claims in the Second Defendant in these proceedings.
The resolution of this issue is pivotal, as it effectively invalidates the Defendants' unilateral revocation of the shares, which had been predicated on the alleged non-payment. The full judgment is available at DIFC Courts.
Which judge presided over the preliminary issue trial in CFI 041/2024?
The preliminary issue was heard before H.E. Justice Sapna Jhangiani in the DIFC Court of First Instance. The hearing took place on 7 May 2025, with the final Order with Reasons issued on 15 May 2025.
What were the conflicting arguments regarding the cash payment in Denisova v Galtcev?
The parties presented diametrically opposed accounts of the transaction. The Claimant maintained that she had paid the USD 1,000 in cash to the First Defendant, Aleksei Galtcev, to secure the 10,000 class A shares. Conversely, the Defendants argued that no such payment was ever received, and consequently, the Claimant was not entitled to have the shares registered in her name.
The Court noted the difficulty in resolving this dispute due to the lack of documentary evidence regarding the physical transfer of cash. As the Court observed:
The Claimant’s and First Defendant’s oral evidence about whether or not the Claimant paid USD 1,000 in cash to the First Defendant for the Claimed Shares is in direct conflict.
The Defendants further argued that the absence of a bank deposit slip for the USD 1,000 in the First Defendant’s personal account served as evidence that the payment never occurred. However, the Court rejected this, finding that the lack of a deposit slip did not definitively disprove the Claimant’s assertion that the cash was handed over.
What was the specific legal question the Court had to answer regarding the share ownership?
The Court was tasked with determining a narrow, fact-specific preliminary issue to streamline the broader corporate dispute. The primary question was whether the Claimant had satisfied the consideration requirement for the transfer of the 10,000 class A shares.
This judgment comprises the Court’s decision on the preliminary factual issue of whether the Claimant paid the USD 1,000 which she was due to pay for the Claimed Shares.
By isolating this issue, the Court sought to determine if the Defendants had a valid legal basis under the company’s Articles of Association to revoke the shares. If the payment were proven, the revocation would be deemed non-compliant with the company's internal governance rules.
How did Justice Jhangiani apply the balance of probabilities to the Instrument of Transfer?
In evaluating the conflicting oral testimonies, Justice Jhangiani relied heavily on the documentary evidence, specifically the Instrument of Transfer. The Court identified this document as the most reliable indicator of the parties' intentions and the state of the transaction at the time of execution.
In my view, the most useful evidence in relation to whether or not the Claimant paid the USD 1,000 for the Claimed Shares is the Instrument of Transfer.
The Court reasoned that the Instrument of Transfer explicitly acknowledged receipt of the USD 1,000. By weighing this written acknowledgment against the First Defendant's denial, the Court concluded that the Claimant's version of events was more credible. Furthermore, the Court dismissed the Defendants' reliance on the absence of a bank deposit slip, noting that such a document would not necessarily be generated even if the cash had been received. Consequently, the Court found:
I therefore find, on a balance of probabilities, that it is more likely than not that the Claimant paid USD 1,000 to the First Defendant for the Claimed Shares.
Which RDC rules and DIFC statutes were cited in the preliminary proceedings?
The proceedings involved procedural challenges under the Rules of the DIFC Courts (RDC) and substantive considerations under the DIFC Companies Law. Specifically, the Court addressed the admissibility of evidence under RDC Rule 29.18.
The Claimant had sought to exclude a document titled "Reply to the Claimant’s Witness Statement" on the grounds that it failed to comply with the procedural requirements for witness evidence. The Court noted:
The Claimant’s Second Application also included an application to exclude the Defendants’ document entitled “Reply to the Claimant’s Witness Statement” dated 15 April 2025 (which was not in the form of a reply witness statement) for failure to satisfy the requirements of Rule 29.18 of the Rules of the DIFC Courts (the “RDC”).
While the Court ultimately allowed the document to remain on the record as a set of submissions rather than witness evidence, the citation of Article 37 of the DIFC Companies Law provided the statutory backdrop for the share transfer dispute, governing the rights and obligations of shareholders and the company.
How did the Court handle the procedural applications regarding witness evidence?
The Court dealt with two separate applications by the Claimant to exclude the Defendants' witness evidence. Both were dismissed, with the Court maintaining a consistent approach to the admissibility of submissions.
At the outset of the Hearing on 7 May 2025, the Court dismissed the Claimant’s second Application No. CFI-041-2024/4 dated 24 April 2025 for the Defendants’ witness evidence to be excluded (the “Second Application”).
The Court reasoned that the "Reply to the Claimant’s Witness Statement" was essentially a collection of legal arguments rather than evidence, and therefore, it did not require exclusion under RDC 29.18. By treating the document as submissions, the Court ensured that the parties' arguments were fully considered without violating procedural fairness.
What was the final disposition and order regarding costs in CFI 041/2024?
The Court ruled in favor of the Claimant, declaring that the payment of USD 1,000 had been made. Consequently, the Claimant was awarded her costs in relation to the preliminary issue. The Court ordered that these costs be assessed on the standard basis. The parties were directed to file short submissions (not exceeding 3 pages) regarding the specific costs to be awarded by 22 May 2025. Additionally, the Court mandated that the parties engage in alternative dispute resolution and file letters with the Court by 26 June 2025 detailing their efforts to settle the remaining litigation.
What are the implications of this ruling for DIFC corporate litigation?
This case serves as a reminder of the evidentiary weight accorded to formal instruments, such as an Instrument of Transfer, in the absence of clear banking records. For practitioners, the ruling highlights that the DIFC Courts will prioritize the terms set out in signed transfer documents when oral evidence is in direct conflict. Furthermore, the decision underscores the Court's pragmatic approach to procedural applications; by reclassifying non-compliant witness statements as "submissions," the Court avoids unnecessary exclusion while maintaining the integrity of the trial record. Litigants should anticipate that the Court will continue to favor the "balance of probabilities" test when resolving factual disputes over share consideration.
Where can I read the full judgment in Anastasiia Denisova v Aleksei Galtcev [2025] DIFC CFI 041?
The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0412024-anastasiia-denisova-v-1-aleksei-galtcev-2-realiste-holding-ltd
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No external precedents cited in the provided order |
Legislation referenced:
- DIFC Companies Law, Article 37
- Rules of the DIFC Courts (RDC), Rule 29.18