Claim No. SCT 060/2021
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai
IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
BEFORE H.E. JUSTICE MAHA ALMHEIRI
BETWEEN
LILIANI
Claimant
and
LUCID
Defendant
| Hearing : | 23 March 2021 |
|---|---|
| Further submissions : | 30 March 2021 |
| Judgment : | 19 April 2021 |
JUDGMENT OF H.E. JUSTICE MAHA AL MHEIRI
UPONthis Claim being filed on 1 March 2021
AND UPONa hearing having been listed before H.E. Justice Maha Al Mheiri on 23 March 2021 with the Claimant and the Defendant’s representative in attendance
AND UPONreading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Claimant’s claims are dismissed.
2. Each party shall bear their own costs.
Issued by:
Ayesha Bin Kalban
SCT Judge and Deputy Registrar
Date of issue: 19 April 2021
At: 2pm
THE REASONS
The Parties
1. The Claimant is Liliani (the “Claimant”), a company providing guest room technological solutions to the hospitality industry.
2. The Defendant is Lucid (the “Defendant”), a hotel located in Dubai.
Background and the Preceding History
3. On 2 October 2018, the Claimant and Defendant entered into a maintenance agreement (the “Agreement”) for the installation of a ‘Lista System’. The maintenance period agreed between the parties was set out to be 2 years with the ability to extend for a further year in accordance with the Agreement.
4. On 30 July 2019, the Defendant terminated the Agreement citing reasons for the Claimant’s alleged failure to meet the Defendant’s requirements. On 29 September 2019, further to a meeting with the Claimant’s technical team, it was agreed by the parties that the Agreement would be reinstated subject to the Claimant completing all pending tasks in the agreed time frame.
5. The parties were in dispute as to the quality of the work provided by the Claimant and as such the Defendant terminated the Agreement again, stating that the Claimant’s pending tasks were not completed. The termination therefore occurred on 24 March 2020, with a one-month notice to the Claimant.
6. The current dispute arises over outstanding amounts allegedly owed by the Defendant to the Claimant following the early termination of the Agreement, in the amount of AED 83,006.49. The Claimant therefore filed its claim seeking the abovementioned amount in the DIFC Courts’ Small Claims Tribunal (the “SCT”) on 1 March 2021.
7. The parties met for a Consultation with SCT Judge Delvin Sumo on 15 March 2021 but failed to reach a settlement with respect to the Claimant’s claims. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a Hearing held on 23 March 2021.
8. At the Hearing, the Claimant made oral submissions in regards to an additional claim for unpaid amounts owed to the Claimant with respect to the provision of equipment by the Claimant to the Defendant, which the Claimant submits, was never paid for by the Defendant. The Claimant was then requested to submit any pending invoices as evidence in support of its claim demonstrating that the Defendant has failed to pay up until the termination date and as well the provision of a quotation for the equipment installed in the project. The Claimant was given until 6 April 2021 to file said submissions, but made no such filing. It is duly important to note that this did not form part of the original Claim, and was only mentioned in the course of the Hearing.
The Claim
9. In the course of the Claim, the Claimant submits that the issues raised by the Defendant were not set out in the scope of the Agreement, and all the issues agreed upon in the Agreement were resolved. As such, the Claimant submits it should be entitled to the outstanding amounts owed to it in the sum of AED 83,006.49 for early termination of the Agreement.
The Defence
10. In responding to the Claimant’s claims, the Defendant submits that the issues raised were indeed agreed upon in the Agreement, and submits that the Claimant at no point raised this concern during previous discussions held between the parties. In addition, the Defendant states that it terminated the Agreement in accordance with Clause 15 and 16 of the Agreement, providing a one-month notice to the Claimant.
11. The Claimant also submits that all amounts were paid to the Claimant in regards to maintenance service until the last day of the notice period. Therefore, the Defendant submits that it does not owe any amounts to the Claimant.
Discussion
12. The Agreement was signed on 2 October 2018, a fact that is not disputed by the parties. The dispute is governed by the DIFC Law of Contract and the relevant case law and principles concerning a breach of contract. Pursuant to Clause 12 of the Second Agreement, as stated:
“22.8 This Agreement is governed by UAE law. In the event of a dispute in connection with the Agreement, the parties must submit to the exclusive jurisdiction of the DIFC Courts.”
13. In order to determine the Claimant’s claims for early termination amounts, the Court must first examine whether the Defendant has terminated the Agreement in accordance with the agreed clauses in order to reach a conclusion in relation to the Claimant’s outstanding payments.
14. I first turn to Clause 15 and 16 in the Agreement which deals with the termination of the Agreement. This reads as follows:
“15 Term and Termination
15.1 this Agreement shall commence on the Agreement Date and shall expire at the end of the Service Period.
15.2 On termination of the Agreement the Customer will immediately pay all the amounts due and accrued to Liliani up to the termination date.
16. Early termination
Either party may terminate the Agreement by giving 30 days notice in writing to the other with immediate effect. In the event of an early termination by the Hotel with no failure on part of Liliani in preforming in any of it’s obligations under the Agreement and not due to any Ludar, Hotel understands and agrees to pay the “Equipment” supplied free of charge by Liliani under the Agreement. If the other party fails to pay any sum due under this Agreement within 30 days of the due payment date commits a material breach of this Agreement (and in the event of a material breach which is capable of remedy, fails to remedy the breach within 30 Working Days of the written notice giving full particulars of the breach); or a court competent jurisdiction makes an order, or a resolution is passed, for the winding up, dissolution or administration of the other party …”
15. The Agreement has a limited and defined duration, with a commencement and end date. The Agreement clearly identifies that in a situation where the parties wish to terminate the terms of the Agreement, they shall do so by giving the other party 30 days-notice. It is the parties’ right under the Agreement to terminate the Agreement at any time as long as they abide by the termination clause stated above.
16. The Agreement does not stipulate any repercussion that may potentially befall a party should said party seek to terminate the Agreement ahead of time. The Agreement however does state that, in the event of early termination, the equipment supplied in the maintenance project for free shall be paid for. As set out above, the Court did seek submissions from the Claimant in support of its claim in the form of a quotation displaying equipment prices, which the Claimant failed to provide. Therefore, the Court shall dismiss the Claimant’s claim for payment in lieu of equipment supplied for free in the maintenance project, seeing as it was not formally claimed nor has the Claimant sought to provide any form of evidence to support this claim.
17. The Claimant did confirm at the Hearing that all amounts up to the date of the termination of the Agreement were paid by the Defendant. Therefore, I have determined that there are no pending amounts to be paid to the Claimant under the Agreement. As such, the Claimant’s claims shall be dismissed.
Conclusion
18. In light of the aforesaid, I find that the Claimant’s claims must be dismissed, as they are not entitled to any termination fees in respect of the early termination of the Agreement.