What was the specific nature of the dispute between Nakia and Nihal regarding the AED 26,000 refund claim?
The dispute arose from a professional services agreement entered into on 21 September 2022, under which the Claimant, Nakia, engaged the Defendant, Nihal, to facilitate an application for a United Kingdom Innovator visa. The Claimant sought a refund of AED 26,000, representing a portion of the fees paid, alleging that the Defendant failed to procure the necessary endorsement letter required for the visa application. The Claimant contended that the lack of progress justified a return of the funds.
Conversely, the Defendant maintained that it had fulfilled its obligations under the agreement, asserting that the delay in the application process was attributable to the Claimant’s failure to provide necessary documentation and meet investment fund requirements. As noted in the court records:
On 15 April 2024, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) claiming a refund of the amount AED 26,000 for fees paid to the Defendant.
The core of the disagreement centered on whether the Defendant had breached the terms of the agreement or if the Claimant’s own inaction prevented the completion of the visa submission process. The contractual relationship was initially established as follows:
On 21 September 2022, the Claimant appointed the Defendant for immigration services to apply for Innovator visa (the “Visa”) to enter the United Kingdom (the “Agreement”). in return for payment of AED 43,785 excluding any third-party fees (the “Agreement”).
Which judge presided over the SCT proceedings in Nakia v Nihal [2024] DIFC SCT 147?
The matter was heard before H.E. Justice Maha Al Mheiri in the DIFC Courts’ Small Claims Tribunal. The hearing took place on 30 May 2024, and the final judgment was issued on 24 July 2024.
What were the specific legal arguments advanced by Nakia and Nihal regarding the alleged breach of contract?
The Claimant argued that the Defendant failed to deliver the agreed-upon immigration services, specifically the procurement of an endorsement letter, and therefore was entitled to a refund of the fees paid. The Claimant’s position was predicated on the assumption that the Defendant’s failure to finalize the application constituted a breach of the service agreement.
The Defendant, however, argued that it had diligently performed its duties, including providing checklists and drafting business plans, but was hindered by the Claimant’s lack of cooperation. Furthermore, the Defendant filed a counterclaim for the remaining balance of the contract, asserting that the Claimant’s conduct constituted a breach. As stated in the judgment:
The Defendant is of the view that the Claimant breached the contract and therefore it should be compensated for the remainder amount of the Agreement in the amount of AED 17,516.
The Defendant’s counterclaim was formally lodged as follows:
On 26 April 2024, the Defendant filed a counterclaim (the “Counterclaim”) seeking the amount of AED 17,516 for breach of the Agreement.
What was the primary legal question the Small Claims Tribunal had to determine regarding the performance of the immigration services agreement?
The Court was tasked with determining whether the Defendant had breached its contractual obligations under the agreement, thereby triggering a refund entitlement for the Claimant, or whether the Claimant’s failure to provide necessary documentation and investment evidence precluded the Defendant from completing the visa application. The doctrinal issue involved interpreting the scope of the service provider’s duties and whether the "non-performance" alleged by the Claimant was in fact caused by the Claimant’s own failure to satisfy the prerequisites for the visa application process.
How did H.E. Justice Maha Al Mheiri apply the principles of contractual performance to the facts of the case?
Justice Al Mheiri reviewed the chronological history of the engagement, noting that the Defendant had consistently provided the Claimant with the necessary checklists and updated business plans required for the visa application. The Court found that the Defendant had taken proactive steps to facilitate the process, including assisting with the transition from the Innovator visa to the "Innovator Founder" visa.
The Court emphasized that the Defendant’s obligations were contingent upon the Claimant’s cooperation, which was found to be lacking. Regarding the Defendant’s performance, the Court concluded:
I find that the Defendant has performed all of its duties in accordance with the terms of the Agreement. Consequently, I find that the Claimant is not entitled to a refund and the Claim must be reject
The Court further noted the specific milestones achieved by the Defendant, such as the provision of documentation checklists and the drafting of business plans, which demonstrated active performance of the contract.
Which specific procedural steps and communications were cited by the Court to establish the Defendant's performance?
The Court relied on a series of documented communications to establish that the Defendant had fulfilled its duties. These included the provision of a documentation checklist on 17 November 2022, the submission of an updated business plan on 29 December 2022, and the commencement of the submission process for an endorsing body on 24 January 2023. The court noted:
On 17 November 2022, the Claimant received a “checklist” which set out all the documentation he needed to provide to facilitate the visa process.
On 29 December 2022, the Defendant emailed the Claimant the updated business plan for the company, requesting that the Claimant review and provide any comments.
On 24 January 2023, the Claimant approved the business plan, and the Defendant started the submission process to find an endorsing body.
How did the Court address the Defendant's counterclaim for AED 17,516 in damages?
The Court dismissed the Defendant’s counterclaim on the basis that the Defendant failed to provide sufficient evidence to substantiate the damages claimed. While the Court acknowledged that the Claimant had not fully cooperated, it found no contractual or evidentiary basis to award the specific amount of AED 17,516 as damages for breach of contract. The Court noted:
Moreover, there is no reference in the Agreement in respect of damages being awarded to the Defendant in case of breach of contract, which is not the case.
The Court concluded that the Defendant had not demonstrated the actual loss suffered as a result of the Claimant’s actions, nor did the agreement provide a clear mechanism for such a claim.
What was the final disposition of the claims and the order regarding costs in Nakia v Nihal?
The Small Claims Tribunal dismissed both the Claimant’s claim for a refund and the Defendant’s counterclaim for damages. Regarding costs, the Court ordered that each party shall bear its own costs, reflecting the failure of both parties to successfully prove their respective claims for monetary relief.
What are the wider implications of this ruling for immigration service providers and their clients in the DIFC?
This case reinforces the principle that service providers are not liable for the failure of a visa application process if the contract does not explicitly guarantee a specific outcome and if the client fails to fulfill their own obligations, such as providing necessary documentation or investment evidence. For practitioners, the ruling highlights the necessity of clearly defining "performance" in service agreements and ensuring that any claim for damages for breach of contract is supported by specific evidence of loss and a clear contractual basis for such recovery. Litigants must anticipate that the SCT will strictly scrutinize the evidentiary basis for both refund claims and counterclaims for damages.
Where can I read the full judgment in Nakia v Nihal [2024] DIFC SCT 147?
The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/nakia-v-nihal-2024-difc-sct-147
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- DIFC Contract Law
- Rules of the DIFC Courts (RDC)