What was the nature of the contractual dispute between Luwait and Liste regarding the AED 38,062.50 claim?
The dispute arose from a service agreement dated 21 February 2022, under which the Claimant, Luwait, provided public relations services to the Defendant, Liste. The Claimant alleged that the Defendant failed to settle outstanding invoices for services rendered between March and June 2022. The total amount sought encompassed partial payment for March, full payments for April and May, a pro-rated amount for June, and a fee in lieu of a 30-day notice period.
On 11 August 2022, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking payment of unpaid invoices in the amount of AED 38,062.50.
The Defendant initially acknowledged the debt but later contested the May and June invoices, citing alleged failures in service delivery, such as the non-publication of press releases and the absence of specific interview recordings. The Claimant maintained that no performance concerns were raised during the term of the contract and that the Defendant had even requested an extension for June 2022. The full judgment is available at https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/luwait-v-liste-2022-difc-305.
How did H.E. Justice Nassir Al Nasser exercise jurisdiction in Luwait v Liste [2022] DIFC SCT 305?
The matter was heard before H.E. Justice Nassir Al Nasser in the Small Claims Tribunal of the DIFC Courts. The proceedings culminated in a hearing held on 2 November 2022, with the final judgment issued on 14 November 2022. The court confirmed its authority to adjudicate the dispute based on the express jurisdiction clause contained within the parties' agreement.
What were the primary arguments advanced by Luwait and Liste regarding the alleged breach of contract?
The Claimant, Luwait, argued that the services were performed in accordance with the Agreement until the Defendant terminated the relationship on 16 June 2022. The Claimant emphasized that the Defendant had not raised formal objections to the invoices throughout the duration of the contract and had proactively requested an extension for June.
Conversely, the Defendant, Liste, contended that the Claimant failed to meet its contractual obligations, specifically regarding the frequency of press releases and the delivery of reports. The Defendant argued that these performance failures justified the non-payment of the May and June invoices. Furthermore, the Defendant asserted that a waiver of the June invoice had been agreed upon, though the Claimant maintained this was conditional upon the settlement of prior outstanding debts.
Did the DIFC Court have the requisite jurisdiction to hear a claim involving a company registered in the Media Free Zone, Al Fujairah?
The legal question centered on whether the DIFC Courts possessed subject-matter and personal jurisdiction over a dispute where the Defendant was registered in the Media Free Zone, Al Fujairah, rather than the DIFC. The court had to determine if the parties' contractual agreement to submit to the DIFC Courts’ jurisdiction was sufficient to satisfy the requirements of the Judicial Authority Law (JAL) and the Rules of the DIFC Courts (RDC).
Therefore, I am of the view that the DIFC Courts have the jurisdiction to hear and determine this claim in accordance with the above clause and Article 5(A)(2) of the JAL.
How did Justice Al Nasser apply the doctrine of conditional waiver to the disputed June invoice?
The court examined whether the Claimant’s alleged waiver of the June invoice was binding. Justice Al Nasser applied a strict contractual interpretation, finding that while the Claimant had offered to waive the invoice, this offer was contingent upon the Defendant settling the March, April, and May invoices. Because the Defendant failed to satisfy these conditions precedent, the waiver was deemed ineffective.
I agree that the Claimant waived the June Invoice but as per the email it appears that it was conditional to the Defendant settling the March Invoice, the April Invoice and the May Invoice before the
The court further reasoned that the Defendant’s failure to provide evidence of non-performance—despite its claims of poor service—meant that the contractual obligation to pay remained enforceable. The judge noted that the Defendant had continued to accept services and even requested an extension, which contradicted its later claims of material breach.
Which specific provisions of the Judicial Authority Law and the Rules of the DIFC Courts were central to the court's reasoning?
The court relied primarily on Article 5(A)(2) of the Judicial Authority Law (Dubai Law No. 12 of 2004), which provides the legal basis for the DIFC Courts to exercise jurisdiction where parties have expressly agreed to such jurisdiction in their contract. The court also operated under the procedural framework of the Rules of the DIFC Courts (RDC), which govern the conduct of Small Claims Tribunal proceedings, including the amendment of claim forms.
Thereafter, a hearing was held before me on 2 November 2022, at which the Claimant’s and the Defendant’s representatives attended (the “Hearing”).
How did the court utilize the procedural rules regarding the amendment of claims during the hearing?
The court exercised its discretion under the RDC to allow the Claimant to amend its claim form during the hearing. This procedural step was essential for the Claimant to accurately reflect the total amount owed, including the notice period fee.
Such permission was granted. and on 3 November 2022, the Claimant amended its claim form and paid the relevant uplifted Court filing fee on 7 November 2022.
What was the final disposition and the specific monetary relief awarded to Luwait?
The court ruled in favor of the Claimant, finding that the Defendant was liable for the unpaid invoices. The Defendant was ordered to pay the full amount of AED 38,062.50. Additionally, the court ordered the Defendant to cover the Claimant’s court filing fees in the amount of AED 1,903.12, reflecting the successful outcome of the claim.
What are the wider implications of this ruling for practitioners dealing with service agreements and conditional waivers?
This case serves as a reminder that the DIFC Courts will strictly enforce jurisdiction clauses even when parties are based outside the DIFC, provided there is a clear contractual agreement. Furthermore, it highlights the danger of relying on "waivers" that are not clearly documented as unconditional. Practitioners should advise clients that any waiver of payment must be explicitly drafted to avoid being interpreted as a conditional offer that can be revoked if the counterparty fails to fulfill their own obligations.
Where can I read the full judgment in Luwait v Liste [2022] DIFC SCT 305?
The full judgment can be accessed via the official DIFC Courts website at: https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/luwait-v-liste-2022-sct-305 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/small-claims-tribunal/DIFC_SCT-305-2022_20221114.txt.
Legislation referenced:
- Judicial Authority Law, Dubai Law No. 12 of 2004, Article 5(A)(2)
- Rules of the DIFC Courts (RDC)