This Small Claims Tribunal judgment addresses the improper use of immigration-related absconding complaints as a surrogate for civil litigation to enforce post-termination restrictions and fiduciary duties.
What was the specific nature of the dispute between Lihart and Lufant regarding the absconding complaint and the alleged breach of contract?
The dispute arose following the resignation of the Claimant, Lihart, from his position as a Senior Strategy Planning Executive at Lufant. Upon the conclusion of his notice period, Lihart discovered that his former employer had initiated an absconding complaint against him, resulting in a travel ban. The Defendant, Lufant, justified this action by alleging that Lihart had failed to return company property—including laptops, furniture, and sensitive business data—and had prematurely commenced employment with a direct competitor, Lactr Technologies, while still under the Defendant's sponsorship.
The core of the conflict centered on the Defendant’s attempt to leverage immigration procedures to address commercial grievances. As noted in the record:
The Defendant is Lufant, a company registered and located in the Dubai International Financial Centre (the “DIFC”) (the “Defendant”).
The Claimant sought immediate judicial intervention to lift the travel ban and cancel his visa, arguing that the absconding process was being weaponized to bypass standard civil litigation channels. The full details of the application can be found at the DIFC Courts website.
Which judge presided over the Lihart v Lufant SCT hearing and when did the court issue its final order?
The matter was heard before H.E. Justice Nassir Al Nasser within the Small Claims Tribunal (SCT) of the DIFC Courts. The hearing took place on 7 November 2022, and the formal written reasons for the order were issued on 8 December 2022.
What legal arguments did Lufant advance to justify the absconding complaint against Lihart?
The Defendant, Lufant, argued that the Claimant’s conduct constituted a severe breach of both contractual and fiduciary obligations. Specifically, the Defendant contended that Lihart had failed to return company assets and had solicited existing employees to join a competitor, Lactr Technologies, which he had incorporated while still employed by Lufant.
The Defendant’s position was articulated as follows:
The Defendant submits that the Claimant’s actions are in complete breach of UAE federal immigration law, DIFC employment law, and the Claimant’s contractual obligations, namely his post-termination restrictions, as detailed at Clause 8 of the Employment Contract.
Furthermore, the Defendant asserted that Lihart had breached his fiduciary duties as a former director, citing the Law of Obligations DIFC Law No. 5 of 2005. The Defendant maintained that these breaches, combined with the failure to return sensitive documents, necessitated the use of the absconding complaint as a protective measure to prevent further damage to its business interests.
What was the precise legal question the SCT had to resolve regarding the use of absconding complaints?
The Court was tasked with determining whether an employer is permitted to utilize the administrative "absconding complaint" process—a mechanism intended for immigration control—as a tool to enforce post-termination restrictions, recover company property, or address alleged breaches of fiduciary duty. The doctrinal issue was whether the Defendant’s actions constituted an "abuse of the system" when legitimate civil remedies, such as applications for injunctive relief, were available to the employer through the DIFC Courts.
How did Justice Nassir Al Nasser apply the doctrine of abuse of process to the Defendant’s conduct?
Justice Al Nasser determined that the Defendant’s reliance on the absconding process was procedurally improper. The Court reasoned that the absconding complaint is reserved for genuine immigration violations, not as a shortcut for resolving commercial disputes or enforcing non-competition clauses. The judge emphasized that the Defendant had failed to pursue the appropriate legal avenues, such as seeking an injunction, which would have allowed for a balanced judicial review of the merits of the breach of contract claims.
The reasoning is summarized in the following finding:
I, however, find that the Defendant should have filed a claim before the courts seeking alternative relief instead of filing an absconding complaint to impose a travel ban upon the Claimant which, in my view, is an abuse of the system.
The Court concluded that if the Defendant believed it had a valid claim for damages or a breach of fiduciary duty, it was required to initiate formal proceedings rather than unilaterally imposing a travel ban through immigration authorities.
Which specific DIFC statutes and legal provisions were cited in the judgment?
The primary legislation referenced in the judgment was the Law of Obligations DIFC Law No. 5 of 2005, which the Defendant relied upon to argue that the Claimant had breached his fiduciary duties as a director. Additionally, the Court referenced the Employment Agreement dated 1 February 2022, specifically Clause 8, which contained the post-termination restrictions and non-solicitation clauses that the Defendant alleged were violated.
How did the SCT distinguish between the proper use of injunctive relief and the misuse of immigration complaints?
The Court clarified that the DIFC Courts provide specific mechanisms for employers to protect their interests when an employee is suspected of breaching confidentiality or non-competition agreements. Justice Al Nasser explicitly stated:
If the Defendant had sought to file an injunction in the DIFC Courts, then it was at liberty to do so.
By distinguishing between the "proper process" (seeking an injunction) and the "abuse of the system" (filing an absconding complaint), the Court established that the availability of civil remedies precludes the use of immigration-based travel bans for purely commercial disputes.
What was the final disposition and the specific relief granted to Lihart?
The SCT granted the Claimant’s application in its entirety. The Court ordered the Defendant to immediately lift the absconding order and cancel the Claimant’s employment visa. Furthermore, the Court ordered that the Defendant bear the costs of the application, effectively penalizing the employer for the improper use of the absconding process.
What are the wider implications for DIFC employers regarding the enforcement of post-termination restrictions?
This judgment serves as a stern warning to employers operating within the DIFC that the absconding complaint process is not a substitute for civil litigation. Practitioners must advise clients that attempting to use immigration-related travel bans to pressure employees into compliance with non-compete or non-solicitation clauses will likely be viewed by the SCT as an abuse of process. Employers seeking to protect intellectual property or prevent breaches of fiduciary duty must instead rely on the DIFC Courts' injunctive relief procedures, which ensure that such restrictions are enforced through a transparent and lawful judicial process.
Where can I read the full judgment in Lihart v Lufant [2022] DIFC SCT 384?
The full judgment is available on the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/lihart-v-lufant-2022-sct-384.
The document can also be accessed via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/small-claims-tribunal/DIFC_SCT-384-2022_20221208.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- Law of Obligations DIFC Law No. 5 of 2005
- UAE Federal Immigration Law (referenced generally)
- DIFC Employment Law (referenced generally)