This judgment clarifies the enforceability of commercial contracts within the DIFC Small Claims Tribunal when parties have not formally executed a written agreement but have engaged in clear conduct confirming the contractual relationship.
What was the specific monetary dispute and the nature of the claim in Mirtha v Mikhi [2023] DIFC SCT 075?
The dispute centered on a commercial disagreement regarding unpaid invoices for equipment rental services provided by the Claimant, Mirtha, to the Defendant, Mikhi. The Claimant alleged that it had supplied equipment for the Defendant’s project, but the Defendant failed to remit payment despite the services being rendered. The total amount in controversy was AED 62,810.20.
As noted in the court record:
On 14 February 2023, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) for payment of AED 62,810.20.
The Claimant asserted that the debt arose from a series of purchase orders and a corresponding hire agreement. The Defendant, however, refused to settle the outstanding balance, leading the Claimant to initiate proceedings in the SCT to recover the full amount of the unpaid invoices.
Which judge presided over the hearing in Mirtha v Mikhi and in what capacity did the SCT exercise its authority?
The matter was presided over by SCT Judge Nassir Al Nasser. The hearing took place on 24 April 2023, following a failed consultation process that had been scheduled earlier in April before SCT Judge Maitha Al Shehhi. The proceedings were conducted within the Small Claims Tribunal, which serves as the specialized forum for lower-value commercial disputes within the DIFC Courts system.
What were the specific legal arguments advanced by the Defendant regarding the validity of the hire agreement and DIFC jurisdiction?
The Defendant, Mikhi, did not file formal written submissions but appeared at the hearing to challenge the court's authority. The Defendant’s primary argument was that the hire agreements provided by the Claimant were legally void because they lacked a signature from the Defendant. Consequently, the Defendant contended that the jurisdiction clause contained within those unsigned documents was ineffective, thereby depriving the DIFC Courts of the power to adjudicate the dispute.
As documented in the judgment:
The Defendant failed to provide any written submissions, however, at the Hearing the Defendant sought to contest the jurisdiction of the DIFC Courts by arguing that the hire agreements provided by the Claimant (containing a clause opting into the jurisdiction of the DIFC Courts) were not signed by the Defendant.
By focusing on the absence of a signature, the Defendant sought to characterize the relationship as non-contractual, thereby attempting to avoid both the payment obligation and the forum selection clause.
What was the precise doctrinal question the court had to resolve regarding the formation of a contract through conduct?
The court was tasked with determining whether a contract can be deemed validly formed and binding—and whether a jurisdiction clause within that contract can be enforced—when the underlying document remains unsigned by one of the parties. Specifically, the court had to decide if the Defendant’s actions, including the issuance of purchase orders and the subsequent acceptance of equipment, constituted an "acceptance by performance" sufficient to override the lack of a formal signature.
How did Judge Nassir Al Nasser apply the doctrine of acceptance by performance to the unsigned hire agreement?
Judge Al Nasser rejected the Defendant’s argument that the lack of a signature rendered the agreement void. The court examined the evidentiary trail, which included purchase orders issued by the Defendant and an email chain confirming the off-hire of the equipment. The judge concluded that the Defendant’s conduct—specifically the request for equipment and the physical receipt of the goods—demonstrated a clear intention to be bound by the terms of the hire agreement.
The court’s reasoning was explicit:
I find that the actions of the Defendant by receiving the hire agreement and accepting the delivery of the equipment, are to be treated as acceptance and by performance, even if the hire agreement was
By treating the contract as perfected through conduct, the court affirmed that the jurisdiction clause contained in the agreement was equally binding, thereby validating the DIFC Courts' authority to hear the claim.
Which specific provisions of the Judicial Authority Law were applied to establish DIFC jurisdiction?
The court relied upon Article 5(A) of the Judicial Authority Law (Dubai Law No. 12 of 2004, as amended). Specifically, the court looked to the "opt-in" provision under Article 5(A)(2), which allows parties to submit to the jurisdiction of the DIFC Courts through a written agreement. The court held that because the hire agreement contained a clear and express clause referring disputes to the exclusive jurisdiction of the DIFC Courts, and because the contract was deemed validly formed through performance, the jurisdictional requirements were satisfied.
How did the court utilize the evidentiary record to support its finding of a binding contract?
The court relied on specific documentary evidence to bridge the gap between the unsigned agreement and the parties' actual conduct. The Claimant submitted purchase orders dated 16 June 2022, 20 July 2022, and 5 October 2022, which served as the foundation for the contractual relationship.
As noted in the judgment:
The Claimant provided the purchase orders sent by the Defendant dated 16 June 2022, 20 July 2022 and 5 October 2022 (the “Purchase Orders”).
Furthermore, the court highlighted the Defendant's own email correspondence as a critical piece of evidence. The court noted:
The Claimant also provided an email sent by the Defendant dated 27 October 2022 to off-hire all the rented equipment.
These documents collectively proved that the Defendant had actively engaged with the terms of the hire agreement, rendering the "lack of signature" defense untenable.
What was the final disposition of the claim and the specific relief granted to the Claimant?
The court ruled in favor of the Claimant, finding the Defendant liable for the full amount of the unpaid invoices. The Defendant was ordered to pay the principal sum of AED 62,810.20. Additionally, the court ordered the Defendant to cover the Claimant's court fees, amounting to AED 3,140.51.
The final order stated:
Therefore, for my reasons set out above, I find that the Defendant is liable to pay the Claimant the sum of AED 62,810.20 as per the hire agreement and the invoices provided.
The court concluded the judgment by reiterating the payment obligation:
In light of the aforementioned, I find that the Defendant shall pay the Claimant the total sum of AED 62,810.20 being the payments for the invoices.
What are the practical implications for practitioners regarding the enforcement of unsigned commercial contracts in the DIFC?
This judgment serves as a reminder that the DIFC Courts prioritize the substance of commercial dealings over formalistic requirements like signatures. Practitioners should advise clients that if they proceed with performance under a proposed contract, they may be held to the terms of that contract, including any jurisdiction clauses, regardless of whether the document was formally signed. Litigants must anticipate that the court will look to the "entirety of the conduct," including purchase orders, email chains, and the physical acceptance of goods, to determine the existence of a binding agreement.
Where can I read the full judgment in Mirtha v Mikhi [2023] DIFC SCT 075?
The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/mirtha-v-mikhi-2023-difc-sct-075
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No external precedents cited in the text of the judgment. |
Legislation referenced:
- Judicial Authority Law, Dubai Law No. 12 of 2004, Article 5(A)