What was the core contractual dispute between Olave and Oleesa regarding the liability for credit card charge-backs?
The dispute arose from a service agreement between Olave, a DIFC-based payment collection and consolidation provider, and Oleesa, a Dubai-based business. The relationship was governed by an email agreement that facilitated electronic payments and corporate card management. The conflict centered on the allocation of financial loss when credit card customers initiated charge-backs, which the Defendant, Oleesa, claimed were the result of fraudulent activity by its own customers.
The parties entered into a contract by email dated 25 June 2024 which set out the terms upon which the Claimant provided its services to the Defendant.
The Claimant, Olave, sought to recover funds associated with these charge-backs after the relevant credit card companies refused to overturn them. Oleesa argued that Olave should have absorbed these losses, alleging breach of contract and gross misconduct. The underlying mechanism of the dispute involved the standard industry process for handling contested transactions:
The Claimant’s customer may then dispute such charge-back within a short period whereupon the dispute will be adjudicated by the relevant credit card company.
The Court ultimately determined that Olave’s role was strictly that of a facilitator, not an insurer of the Defendant’s business transactions. The full details of the claim can be reviewed at the DIFC Courts website.
Which judge presided over the application for permission to appeal in Olave v Oleesa [2025] DIFC SCT 542?
The application for permission to appeal the judgment of H.E. Justice Nassir Al Nasser was heard by H.E. Justice Roger Stewart. The order, issued on 23 March 2026, was delivered within the Court of First Instance, exercising its appellate jurisdiction over a matter originating from the Small Claims Tribunal (SCT).
What were the primary legal arguments advanced by Oleesa in its application for permission to appeal against Olave?
Oleesa sought to challenge the original SCT judgment on several grounds, primarily alleging that the trial judge failed to consider material evidence—specifically a recorded call from 25 April 2025—and failed to properly weigh the evidence regarding fraudulent activity by its customers. Furthermore, the Defendant attempted to introduce a new legal argument regarding estoppel, which had not been raised during the initial SCT proceedings.
Olave contested the application, arguing that the Defendant’s grounds were procedurally flawed and lacked merit. The Claimant’s response highlighted the following:
The Claimant provided a detailed response to the application in which it contended:
(a) That the application should be dismissed for procedural and factual irregularities namely:
i.
The Claimant maintained that the Defendant was attempting to re-litigate factual findings that had already been adjudicated, and that the introduction of an estoppel argument at the appellate stage was impermissible.
What is the jurisdictional threshold for appealing a judgment from the DIFC Small Claims Tribunal under Article 21 of the DIFC Courts Law No. 2 of 2025?
The legal question before the Court was whether the Defendant’s proposed grounds of appeal met the strict statutory criteria for challenging an SCT decision. Under Article 21 of the DIFC Courts Law No. 2 of 2025, an appeal from the SCT is not an automatic right. It is restricted to specific categories: questions of law, allegations of a miscarriage of justice, issues of procedural fairness, or matters specifically provided for under DIFC Laws. The Court had to determine if the Defendant’s grievances regarding the weight of evidence and the interpretation of the service contract fell within these narrow parameters.
How did H.E. Justice Roger Stewart apply the doctrine of finality to the factual findings made by the SCT?
Justice Stewart emphasized that the SCT is designed to be an informal forum where the strict rules of evidence do not apply, as per RDC 53.53. Consequently, the Court held that findings of fact made by the SCT judge are generally not subject to appeal. The judge scrutinized the Defendant's attempt to re-argue the evidence and concluded that the trial judge had correctly applied the contract terms.
In the present case, I do not consider that any of the procedural matters relied on by the Respondent were substantial or have caused the Respondent prejudice.
The Court reasoned that because the Claimant acted merely as a facilitator, it was not responsible for the underlying commercial risks of the Defendant’s business. The judge noted that the Defendant was attempting to shift the burden of its own customer fraud onto the service provider, a position unsupported by the contractual framework.
Which specific RDC rules and DIFC statutes were cited in the determination of the appeal application?
The Court relied heavily on Article 21 of the DIFC Courts Law No. 2 of 2025, which serves as the primary legislative gatekeeper for SCT appeals. Regarding the procedural conduct of the SCT, the Court referenced RDC 53.51 (the informal nature of SCT hearings) and RDC 53.53 (the exclusion of strict rules of evidence). Additionally, the Court utilized RDC 53.106 and RDC 53.109 to govern the assessment of costs and the procedural requirements for the Permission to Appeal Application.
How did the Court address the Defendant’s attempt to introduce the doctrine of estoppel on appeal?
The Court dismissed the Defendant’s reliance on estoppel as a ground for appeal, noting that it had not been pleaded or argued during the original trial. Justice Stewart held that a party cannot introduce new legal doctrines at the appellate stage that were not presented to the judge of first instance.
That there was no pleading or reliance on alleged estoppel before the Judge with the consequence that the Defendant was not entitled to raise the same in relation to a prospective appeal;
iii.
This holding reinforces the principle that the appellate court will not entertain new legal theories that could have been, but were not, raised in the lower tribunal.
What was the final disposition of the application for permission to appeal and the associated costs order?
The Court refused the application for permission to appeal, finding that the Defendant had no real prospect of success. Consequently, the original judgment in favor of Olave remained undisturbed. Regarding costs, the Court ordered the Defendant to pay the Claimant’s costs of responding to the application, to be assessed on the papers.
The Defendant shall pay the Claimant’s costs of responding to the Permission to Appeal Application to be assessed as follows:
(a) The Claimant is to file and serve a Statement of Costs and any short submissions in support of the costs claimed within 21 days of the date of this order.
The Court further outlined the timeline for the assessment:
(b) The Defendant shall provide any submissions in response to the costs claimed within 14 days of the service of the Statement of Costs.
(c) The Claimant is to provide any submissions in reply to the Defendant’s response within 7 days of service of that response.
What are the wider implications for DIFC practitioners regarding the allocation of risk in payment facilitation contracts?
This case serves as a critical reminder that the DIFC Courts will strictly enforce the contractual allocation of risk in payment services agreements. Practitioners should note that payment facilitators are generally not liable for the fraudulent acts of a client's customers unless the contract explicitly states otherwise. Furthermore, the decision underscores the extreme difficulty of appealing SCT judgments, particularly when the grounds for appeal are rooted in factual disputes or involve legal arguments not raised at the initial hearing. Litigants must ensure that all potential defenses, including estoppel, are fully pleaded at the SCT level, as the appellate court will not permit "trial by ambush" or the introduction of new arguments after the fact.
Where can I read the full judgment in Olave v Oleesa [2025] DIFC SCT 542?
The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/olave-v-oleesa-2025-difc-sct-542. The text is also available via the CDN link.
Legislation referenced:
- DIFC Courts Law No. 2 of 2025, Article 21
- Rules of the DIFC Courts (RDC), Part 4
- Rules of the DIFC Courts (RDC), Part 53 (specifically 53.51, 53.53, 53.106, 53.109)