What was the specific monetary dispute between Minni and Mithal regarding the unpaid service invoices?
The dispute centered on the performance of three service agreements under which the Claimant, Minni, provided destination management services for groups traveling from Israel to the UAE. The Claimant alleged that the Defendant, Mithal, failed to settle invoices for services rendered, leading to a shortfall in payments. The Claimant sought to recover the balance of these invoices, arguing that the fees were calculated based on confirmed rooming lists rather than the actual number of passengers who arrived.
The financial stakes were significant for the parties, with the Claimant initially seeking a total of USD 85,806.02. The Defendant contested this amount, asserting that it had already fulfilled its obligations through payments totaling USD 450,000. The disagreement necessitated a forensic review of the invoices, particularly regarding additional services provided for the "Misunn Group." As noted in the court record:
Therefore, the Claimant filed a claim in the SCT claiming the remainder payments of the invoices in the sum of USD 85,806.02.
The final determination of the debt required the court to reconcile these conflicting figures through an expert report, ultimately resulting in a partial award for the Claimant. Further details on the claim history can be found at the DIFC Courts website.
Which judge presided over the SCT 354/2021 proceedings and when were the hearings held?
The matter was heard before H.E. Justice Nassir Al Nasser in the Small Claims Tribunal (SCT) of the DIFC Courts. Following unsuccessful consultations with SCT Judge Ayman Saey earlier in 2022, the case was referred to Justice Al Nasser for formal determination. A hearing was conducted on 29 March 2022, followed by a second hearing on 6 June 2022, where representatives for both parties were in attendance. The final judgment was issued on 15 June 2022.
What were the primary legal arguments advanced by Minni and Mithal regarding their contractual performance?
The Claimant, Minni, argued that the agreements were binding and that payments were due based on the confirmed rooming lists provided by the Defendant, rather than the actual number of arrivals. Minni contended that the Defendant failed to provide the required written cancellation notifications stipulated in the agreements, thereby rendering the Defendant liable for the full invoiced amounts. Furthermore, the Claimant asserted that additional services provided for the Misunn Group were clearly invoiced and remained unpaid.
Conversely, the Defendant, Mithal, relied heavily on the force majeure provisions within the agreements. Mithal argued that the COVID-19 pandemic and subsequent government regulations made the performance of the contracts impossible, particularly following the cancellation of flights in December 2020. The Defendant maintained that it had acted in good faith throughout the relationship. As stated in the judgment:
The Defendant submits that it has fulfilled its contractual liabilities and obligations towards the Claimant by making continuous payments to the Claimant in good faith in the amount of USD 450,000.
Mithal also counterclaimed for damages, alleging poor service and inflated invoicing, though this was ultimately dismissed due to a lack of supporting evidence.
What was the core doctrinal issue the court had to resolve regarding the force majeure clause?
The court was tasked with determining whether the COVID-19 pandemic and the associated flight cancellations triggered the force majeure clause (Clause 13) of the agreements. The doctrinal issue was whether the circumstances rendered the performance of the contract "impossible" or merely commercially inconvenient. The court had to decide if the Claimant’s provision of services to the groups that did arrive—and the Defendant's acceptance of those services—precluded the Defendant from relying on the pandemic as a total excuse for non-payment of the remaining invoices.
How did Justice Nassir Al Nasser apply the test for contractual impossibility?
Justice Al Nasser applied a strict interpretation of the force majeure clause, focusing on whether the agreements were objectively impossible to perform. The court found that because the services were successfully provided to the groups that arrived, the threshold for impossibility had not been met. The judge emphasized that the existence of a pandemic does not automatically excuse performance if the contractual obligations can still be carried out.
The court’s reasoning was anchored in the factual reality that the services were delivered as agreed. The judge rejected the Defendant's attempt to use the pandemic as a blanket defense, noting that the agreements were not frustrated by the circumstances. As stated in the judgment:
This clause is clear in its interpretation, the Agreements were not impossible to perform, in fact, the Agreements were performed to all the groups.
Consequently, the court found the Defendant liable for the outstanding balance, adjusted for the verified costs of the services rendered.
Which specific statutes and rules were applied in the adjudication of SCT 354/2021?
The court relied on the principles of contractual interpretation under the DIFC Contract Law (DIFC Law No. 6 of 2004). Specifically, the court examined the express terms of the service agreements, including Clause 5 (Cancellation Terms) and Clause 13 (Force Majeure). The proceedings were governed by the Rules of the DIFC Courts (RDC), particularly those pertaining to the Small Claims Tribunal, which emphasize the resolution of disputes through evidence-based findings and expert reports.
How did the court utilize the expert report and pre-contractual evidence in its final calculation?
The court utilized an expert report to verify the debt, which allowed the Claimant to reconcile the rooming lists with the actual services provided. The court also looked at pre-contractual email correspondence to determine whether guided tours were included in the scope of the agreement. The Claimant successfully argued that these services were confirmed and should be included in the final invoice. As noted in the judgment:
In addition, the Claimant claims an extra sum of USD 8,216.43 which is the total amount for the tour guide room and dining and additionally confirmed service in relation to the Misunn Group.
By accepting these calculations, the court ensured that the final award reflected the actual services rendered rather than the inflated claims initially presented.
What was the final disposition and the specific relief granted by the SCT?
The court allowed the claim in part and dismissed the Defendant’s counterclaim for lack of evidence. The Defendant was ordered to pay the Claimant USD 45,771.41, representing the verified outstanding balance. Additionally, the court ordered the Defendant to pay interest at a rate of 9% per annum from the date of the judgment until full payment, as well as court fees. As recorded in the final order:
The Defendant shall pay the Claimant the sum of USD 45,771.41 plus interest accruing at the rate of 9% per annum from the date of this Judgment until the date of full payment.
What are the wider implications for DIFC practitioners regarding force majeure clauses?
This case serves as a reminder that DIFC Courts maintain a high threshold for invoking force majeure. Practitioners should anticipate that "impossibility" will be interpreted strictly; the mere occurrence of a global event like a pandemic is insufficient to excuse performance if the contract remains capable of execution. Litigants must provide concrete evidence of how specific government regulations or events physically prevented performance. Furthermore, the dismissal of the counterclaim underscores the necessity of robust evidentiary support for any allegations of poor service or inflated costs.
Where can I read the full judgment in Minni v Mithal [2021] DIFC SCT 354?
The full judgment is available on the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/minni-v-mithal-2021-sct-354.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- DIFC Contract Law (DIFC Law No. 6 of 2004)
- Rules of the DIFC Courts (RDC)