This judgment addresses the enforceability of a software supply agreement following the defendant's failure to appear at trial, clarifying the court's stance on uncorroborated witness statements and the validity of high-interest penalty clauses in commercial contracts.
What were the specific contractual claims brought by Aptiva Technologies FZE against Liberty Steel Group Holdings (EMEA) Ltd in CFI 076/2024?
The dispute centered on a three-year software supply agreement dated 13 February 2024. Aptiva Technologies FZE, a software supplier incorporated in the Ras Al Khaimah Economic Zone, sought to recover unpaid fees from Liberty Steel Group Holdings (EMEA) Ltd, a DIFC-incorporated entity. The claimant alleged that the defendant’s purported cancellation of the contract in early 2024 constituted a repudiatory breach, entitling the claimant to the full contract price.
The stakes involved a significant financial recovery for the claimant, comprising both the principal debt and contractual interest. As noted in the court's order:
4. There be judgment for the Claimant in the sum of USD 476,768.68 plus interest of USD 66,029.74.
The defendant initially contested the claim, arguing that no binding agreement existed, that the software was unfit for purpose, and that the claimant had failed to mitigate its losses. However, the defendant’s financial instability, linked to the collapse of Greensill Capital, ultimately led to its non-appearance at the trial, leaving the claimant’s evidence largely unchallenged.
Which judge presided over the trial of Aptiva Technologies FZE v Liberty Steel Group Holdings (EMEA) Ltd in the DIFC Court of First Instance?
The trial was presided over by H.E. Justice Roger Stewart in the DIFC Court of First Instance. The proceedings culminated in a judgment delivered on 2 February 2026, following a trial held on 27 January 2026. The procedural history leading to this judgment included a Case Management Order dated 16 October 2025 and a Pre-Trial Review held on 19 December 2025.
What legal arguments did Liberty Steel Group Holdings (EMEA) Ltd advance in its defence before failing to appear at the trial?
Prior to its withdrawal from the trial, the defendant raised several substantive legal arguments. Liberty Steel contended that the agreement was terminated on various dates between March and May 2024, asserting that it had never accessed the software. Furthermore, the defendant argued that the claimant had not incurred actual loss because it had not yet paid the underlying licence fees to its own supplier, Opentext.
Crucially, the defendant challenged the claimant’s entitlement to interest, specifically arguing that the 18% interest rate stipulated in the contract was an unenforceable penalty clause. Despite these arguments being set out in the defendant's skeleton argument, the decision not to attend trial meant that these points could not be tested through cross-examination or supported by oral testimony.
What was the primary jurisdictional and evidentiary question the Court had to resolve regarding the defendant's witness statements?
The court was required to determine the weight, if any, to be afforded to the defendant’s witness statements when the witnesses failed to attend the trial for cross-examination. Under the Rules of the DIFC Courts (RDC), the court had to decide whether it could rely on evidence that was not subject to the rigors of the adversarial process.
The doctrinal issue was whether a party can rely on written witness statements to prove a defence when that party has explicitly informed the court that its witnesses will not be available to give oral evidence. The court had to balance the interests of justice against the procedural requirement that evidence must be tested to be considered reliable in a contested commercial dispute.
How did Justice Roger Stewart apply the rules of evidence to the defendant's uncorroborated witness statements?
Justice Stewart adopted a strict approach, ruling that the defendant’s failure to produce witnesses for cross-examination rendered their statements inadmissible or, at the very least, unworthy of judicial weight. The court emphasized that the absence of the witnesses deprived the claimant of the opportunity to challenge the veracity of the defendant's claims regarding contract termination and software fitness.
The judge’s reasoning was clear: if a party serves witness statements but fails to attend trial to support them, the court is not obliged to consider that evidence. As Justice Stewart noted:
I consider that I should pay no attention at all to the two witness statements which have been served and, accordingly, I disregard them.
By disregarding these statements, the court effectively removed the evidentiary basis for the defendant’s arguments, leaving the claimant’s case as the only credible narrative before the court.
Which specific DIFC laws and RDC rules were applied by the Court in determining the liability of Liberty Steel Group Holdings (EMEA) Ltd?
The court relied on Article 118 of the DIFC Contract Law to determine the appropriate interest rate for the judgment debt. Regarding procedural compliance, the court invoked RDC 29.41, 29.48, and 29.122, which govern the service of witness statements and the consequences of failing to comply with trial directions. These rules collectively empower the court to manage the trial process and ensure that evidence is presented in a manner that allows for fair adjudication.
How did the Court distinguish the applicability of English precedents regarding penalty clauses in this commercial dispute?
The court referenced Cavendish Square v Talal El Makdessi [2015] UKSC 67 to address the defendant's argument that the 18% interest rate was a penalty. Justice Stewart determined that the rate was not extravagant or unconscionable, but rather a reflection of the commercial risks inherent in the software supply sector.
Additionally, the court cited Interoffice Telephones v Freeman [1958] 1 QB 190 to support the finding that the contract was formed on the date alleged by the claimant. By applying these principles, the court concluded that the interest rate was a legitimate commercial term rather than a penal one, noting:
The agreed interest rate reflects, in my view, the risks taken on by Aptiva in relation to late payment of the price or part of it.
What was the final disposition and the specific monetary relief awarded to Aptiva Technologies FZE?
The court entered judgment in favor of the claimant for the full amount claimed, plus interest and costs. The final order required the defendant to pay the principal sum and interest, as well as court fees and an interim payment for legal costs. The court’s order stated:
The Defendant shall make an interim payment in respect of the costs of the action set out in 2(c) above of USD 25,000.
The defendant was also ordered to make submissions regarding the total costs within seven days, providing a clear timeline for the finalization of the financial recovery.
What are the wider implications of this judgment for DIFC practitioners regarding trial attendance and witness evidence?
This case serves as a stark reminder that the DIFC Courts will not tolerate the "paper-only" defense of claims where the defendant fails to appear at trial. Practitioners must advise clients that serving witness statements is insufficient if those witnesses are not prepared to attend court for cross-examination. The judgment reinforces the court's commitment to the RDC and its willingness to award significant sums, including high contractual interest rates, when the defendant fails to mount a credible, evidence-backed defense.
Where can I read the full judgment in Aptiva Technologies FZE v Liberty Steel Group Holdings (EMEA) Ltd [2024] DIFC CFI 076?
The full judgment is available on the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/aptiva-technologies-fze-v-liberty-steel-group-holdings-emea-ltd-2024-difc-cfi-076
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Interoffice Telephones v Freeman | [1958] 1 QB 190 | To establish the date of contract formation. |
| Cavendish Square v Talal El Makdessi | [2015] UKSC 67 | To assess the validity of the interest rate as a penalty clause. |
Legislation referenced:
- DIFC Contract Law, Article 118
- Rules of the DIFC Courts (RDC), Rules 29.41, 29.48, 29.122