The Small Claims Tribunal (SCT) addresses a contractual dispute involving unpaid public relations retainer fees, emphasizing the enforceability of DIFC jurisdiction clauses in agreements between entities registered outside the DIFC.
What was the specific nature of the contractual dispute between Lisana Fz Lle and Lukna Advertising Llc regarding the AED 8,000 claim?
The dispute arose from a Public Relations Agreement entered into by the parties on 3 November 2019. The Claimant, Lisana Fz Lle, alleged that the Defendant, Lukna Advertising Llc, failed to settle invoices for services rendered during the period spanning the end of February and the beginning of March 2020. The Claimant maintained that the Agreement stipulated a monthly retainer fee of AED 8,000, payable in two installments of AED 4,000 at the beginning and end of each month.
The Claimant asserted that despite performing its contractual obligations—which included managing a three-day influencer event, dispatching press releases, and generating brand coverage—the Defendant withheld payment. Consequently, the Claimant sought the recovery of the outstanding retainer fee and additional damages. As noted in the court record:
The Claimant’s case is that the parties entered into an Agreement in November 2019 with a commencement date on 3 November 2019.
The Claimant further detailed the financial scope of its claim, stating:
Therefore, the Claimant claims the payment of the retainer fee in the amount of AED 8,000 for pending invoices, as well as the amount AED 2,000 for damages it has incurred as a result of the Defendant’s failure to make payment to the Claimant, in addition to the court fee applicable to the filing of this Claim.
The full judgment can be accessed at: https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/lisana-fz-lle-v-lukna-advertising-llc-2020-sct-317
Which judge presided over the SCT hearing for Lisana Fz Lle v Lukna Advertising Llc and when did the proceedings take place?
The matter was heard before SCT Judge Maha Al Mehairi. Following a failed consultation before SCT Judge Hayley Norton on 27 September 2020, the case was referred for determination. The hearing took place on 20 October 2020, with representatives from both the Claimant and the Defendant in attendance. The final judgment was subsequently issued on 8 November 2020.
What specific legal arguments did Lukna Advertising Llc advance to contest the breach of contract claim brought by Lisana Fz Lle?
The Defendant, Lukna Advertising Llc, denied liability by arguing that it had already satisfied its financial obligations under the Agreement. It contended that the total value of the contract was AED 25,200 and that it had, in fact, paid the Claimant a total of AED 28,840 for work performed between November 2019 and February 2020.
The Defendant argued that the surplus payment of AED 3,240 was intended to cover additional work performed by the Claimant outside the scope of the original retainer. As stated in the court documents:
The Defendant submits that it paid the Claimant the amount of AED 28,840 for the work that was done in November to February, and the total amount of the contract agreed is AED 25,200.
Furthermore, the Defendant clarified its position regarding the extra services:
The Defendant submits that the additional amount of AED 3,240 is for additional extra work that the Claimant had carried out on behalf of the Defendant.
What was the primary jurisdictional question the SCT had to resolve regarding the agreement between Lisana Fz Lle and Lukna Advertising Llc?
The court was required to determine whether it possessed the requisite jurisdiction to adjudicate a dispute between two entities—both registered outside the DIFC—that had explicitly opted into the DIFC Courts' jurisdiction via a contractual clause. The Agreement contained a specific provision stating that any dispute arising from the contract, including questions of validity or failure to pay, would be subject to the exclusive jurisdiction of the DIFC Courts. The court had to confirm that this "opt-in" clause was valid and sufficient to confer authority upon the SCT to hear the merits of the breach of contract claim.
How did Judge Maha Al Mehairi apply the evidence to determine the breach of the payment mechanism?
Judge Al Mehairi evaluated the conflicting submissions regarding the payment history and the performance of services. While the Defendant claimed that all obligations were met, the court scrutinized the evidence provided by the Claimant regarding the unpaid invoices for the specific period in question. The judge concluded that the Claimant had sufficiently demonstrated that the Defendant failed to adhere to the agreed payment mechanism.
The court’s reasoning focused on the failure of the Defendant to substantiate its defense against the specific invoices presented by the Claimant. The judge ultimately ruled in favor of the Claimant regarding the retainer fee, as reflected in the following finding:
In light of the aforementioned, I find that the Defendant shall pay the Claimant the total sum of AED 8,000.
The procedural context of the determination was summarized as follows:
In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a Hearing held on 20 October 2020 with the Claimant’s and the Defendant’s representatives in attendance.
Which specific DIFC rules and procedural authorities were cited in the determination of the Lisana Fz Lle v Lukna Advertising Llc matter?
The court relied upon the Rules of the DIFC Courts (RDC), specifically RDC 53.70, which governs the procedures of the Small Claims Tribunal. Additionally, the court referenced the jurisdictional authority granted by the parties' own Agreement, which explicitly designated the DIFC Courts as the forum for dispute resolution. The court also operated under the general procedural framework established for the SCT, which allows for the determination of claims based on the evidence submitted by the parties during the hearing process.
How did the SCT handle the Claimant’s request for additional damages and legal costs?
The Claimant sought AED 2,000 in damages for the time and effort expended in pursuing the claim, as well as legal costs. During the hearing, the Claimant argued that the litigation process had diverted resources from other projects. As noted in the record:
At the Hearing, the Claimant pled for its costs, arguing that the matter wasted the Claimant’s time and efforts when she could have worked on other projects instead of pursuing the claim.
However, the court declined to award these additional damages or legal costs. Judge Al Mehairi determined that each party should be responsible for their own legal expenses, stating:
Thus, I cannot grant the Claimant’s request for costs in the matter and the parties shall bear their own costs.
What was the final disposition and the specific monetary relief ordered by the SCT in this case?
The SCT allowed the claim in part. The court ordered the Defendant, Lukna Advertising Llc, to pay the Claimant, Lisana Fz Lle, the outstanding retainer fee of AED 8,000. Additionally, the Defendant was ordered to reimburse the Claimant for the court filing fee in the amount of AED 367.25. The claim for additional damages was dismissed.
What are the wider implications of this ruling for practitioners drafting service agreements with opt-in jurisdiction clauses?
This case reinforces the efficacy of "opt-in" jurisdiction clauses within the DIFC, even when both parties are registered outside the jurisdiction. Practitioners should note that the SCT will strictly enforce payment mechanisms defined in service agreements. The ruling serves as a reminder that while the DIFC Courts will uphold contractual jurisdiction, claimants must provide robust evidence to support claims for damages beyond the principal debt, as the court remains conservative in awarding costs and additional damages in small claims matters.
Where can I read the full judgment in Lisana Fz Lle v Lukna Advertising Llc [2020] DIFC SCT 317?
The full judgment is available on the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/lisana-fz-lle-v-lukna-advertising-llc-2020-sct-317
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No external precedents cited in the judgment text. |
Legislation referenced:
- Rules of the DIFC Courts (RDC), Rule 53.70