Abu Dhabi Court of Cassation Case no. 747/2012 PDF

Abu Dhabi Court of Cassation, 747/2012 (250) Abu Dhabi Court of Cassation 747/2012 (250) Abdul Aziz Mohamed; Mohamed Gafir; Abdul Moneim Awad; Al Mustafa Binsalmon: 17 July 2013 Subject: Plea "Di...

Abu Dhabi Court of Cassation, 747/2012 (250) Abu Dhabi Court of Cassation 747/2012 (250) Abdul Aziz Mohamed; Mohamed Gafir; Abdul Moneim Awad; Al Mustafa Binsalmon: 17 July 2013 Subject: Plea "Dismissal, Nullification, Capacity" Keywords: (1) Pleas "Plea of capacity"; Cassation "Grounds for appeal in cassation; What is not admissible thereof"; (2) Evidence "Official instruments"; "Photocopies"; "Denial'; Judgment "Substantiation thereof; Non-defective substantiation"; Cassation "Grounds for appeal in cassation; What is not admissible thereof"; Pleas "Plea of denial'; (3) Jurisdiction "Territorial jurisdiction"; "Jurisdiction of the state"; Public order; Voidness; Law "Applicable law"; Judgment "Substantiation thereof; Non-defective substantiation"; Cassation "Grounds for appeal in cassation; What is not admissible thereof"; (4) Suretyship; Law "Applicable law"; Judgment "Substantiation thereof; Non-defective substantiation"; Cassation "Grounds for appeal in cassation; What is not admissible thereof"; Legislation referred to: Article 11/2 of the Evidence law Abstract 1. It is established, as per the ruling of this court, that if the plea includes a new defence that contains a fact which has not been raised before the Subject Matter Court, it may not be raised for the first time before the Court of Cassation. Accordingly, the plea of the lack of capacity is a substantive plea. The papers of the case did not include evidence that proved that the appellant insisted on that plea before the Court of Appeal although the company is litigated in the appeal without being represented by the sequestrator so that the Subject Matter Court decides thereon. Hence, that plea is deemed a new defence which may not be raised for the first time before the Court of Cassation. 2. Article 11/2 of the Evidence law states that, "A party who has discussed the subject of the instrument may not deny that the handwriting or the signature or the stamp or the fingerprint belongs to him, or refuse to admit that the person from whom he received the right, had ever done any of such acts". It is also established as per the ruling of this court that if the litigant has discussed the subject of the instrument that has been attributed to him, he may not refute the photocopy thereof. Accordingly, it is established in the appellant's rejoinder that was submitted to comment on the expert's report before the Court of First Instance that it discussed the expert's report by saying that, "The debt is confirmed against the second respondent and it shall be solely responsible for the settlement thereof". It also discussed the requested attorney fees saying that they were related to the consultancy only, not the case. It is established in the appeal explanatory memorandum that it discussed the subject saying that, "The present case was not preceded by any notice that was served on it regarding the claimed debt which violates the articles of the claimed suretyship deed". The appellant refuted the photocopy of the suretyship without declaring the reason therefor, although it bears the stamp of the appellant company. The challenged judgment considered the photocopy of the suretyship based on tolerable reasons; hence, the contention is groundless. 3. Article 20 of the Civil Procedure Law states that, "Except the right in rem cases pertaining to a real estate abroad, the courts shall have jurisdiction to consider the cases that are filed against the citizen and those that are filed against the expatriate who has a domicile or a place of residence in the state". Article 3 of the Company Law States that, "Any agreement that violates the articles of the chapter herein shall be void". Furthermore, Article 33 of the Civil Procedure Law states that, "Concerning the cases relating to the existing companies or associations or those which are in the course of liquidation or the private institutions, the jurisdiction shall fall within the scope of the court within whose jurisdiction the head office thereof is situated". Accordingly, the challenged judgment decided that the case was filed against the appellant that holds the state nationality and whose place of residence lies within the jurisdiction of the court that adjudicated the dispute, and that any agreement relating to the jurisdiction of foreign courts would be void and null and that its nullity would be Copyright 2025: Thomson Reuters. All Rights Reserved. Page 2 related to the public order. The court responded to the contention that stated that the foreign law was not applied by saying that, "As for the application of a foreign law regarding the suretyship, the appellant did not prove its existence or non-existence thereof. Therefore, the United Arab Emirates law shall be applied in accordance with the provisions of Article 28 of the Civil Transactions Law". These are tolerable reasons that are sufficient to justify the decision of the challenged judgment; hence, the contention is groundless. 4. It is established as per the ruling of this court that although the general rule for the suretyship states that it is a civil work that is based on the donation of the surety, it relates to the original relationship between the surety and the principal obligor considering that the purpose thereof is the settlement of the debt which is the subject of such relationship; therefore, it shall acquire the commercial capacity if the guaranteed debt is commercial. Accordingly, the commercially guaranteed debt relates to the purchase of aviation fuel, and the appellant and the two respondents are commercial companies. The challenged judgment respected that regard and did not apply Article 1092 of the Civil Transactions Law; hence, the contention is groundless. Principles (1) - The plea of the inadmissibility of the case because it was filed without capacity may not be raised for the first time before the Court of Cassation. Reason therefor. (2) - The plea of denial of the handwriting or the signature or the stamp or the fingerprint may not be raised by he who discussed the subject of the instrument and he may not plead the ignorance thereof. - He also may not refute the photocopies. An example. (3) - Jurisdiction of the state's courts to consider the cases that are filed against the citizens of the United Arab Emirates before the court in whose jurisdiction they reside. - It is not permissible to agree to the contrary thereof. It is related to the public order. Grounds therefor. - The court overlooks the claim for applying the provisions of a foreign law because its existence is not confirmed or it does not exist. Valid. Grounds therefor (4) - Applying the provisions of the Commercial Transactions Law on the suretyship as it is considered a commercial suretyship because it relates to the original relationship between the surety and the principal obligor to settle a commercial debt. Valid. Grounds thereof. The Judgment The facts of the case, as revealed by the challenged judgment and other papers, may be summarized as follows; the first respondent filed the case No. 1600/2010 Commercial General Abu Dhabi against............................... seeking a judgment ordering him to pay to the plaintiff the sum of USD 742,071.29 which is equivalent to 2,734,532.70 Dirhams plus a conventional interest of 2% as of 17.11.2009, plus late payment interest of 12% as of 17.11.2009 till full settlement, together with the attorney fees in an amount of 194,769.12 Dirhams, on the grounds that the plaintiff is a foreign company that works in the field of aviation fuel supply. On 24.4.2008, it concluded an agreement with................................. Company for Air Charter to supply it with aviation fuel as ordered, provided that the fuel price would be made through an invoice that would be cashed within 10 days as of the date of the receipt thereof. On 22.10.2008,............................... agreed in accordance with a continuous irrevocable suretyship deed to guarantee the previous and future debts of................................. Company for Air Charter that were payable to.............................. Company. The value of the debts was USD 742,071.29 which is equivalent to 2,734,532.70 Dirhams, so the case was filed. The court appointed an expert who concluded, in his original and supplementary reports, that the second respondent was indebted in USD 968,800.92 equivalent to 3,560,343.40 Dirhams. The first respondent requested to join the appellant and the second respondent in the case and amended its claims by seeking a judgment ordering them to jointly and severally pay the sum of USD Copyright 2025: Thomson Reuters. All Rights Reserved. Page 3 968,800.92 equivalent to 3,560,343.40 Dirhams. On 23.10.2012, the court delivered its judgment ordering, first; the inadmissibility of the case against the defendant.................... as he lacks the capacity. Second, mandating the appellant and the second respondent to jointly pay to the first respondent the sum of USD 968,800.92 plus late payment interest of 4% as of the date on which the case was filed till full payment. The appellant appealed against that judgment by appeal No. 1435/2012. The first respondent also appealed against the same judgment by appeal No. 1444/2012. On 23.10.2012, the court affirmed the judgment. The appellant appealed against that judgment in cassation by the present appeal. Upon presentation of the appeal before this court, in the counselling chamber, a hearing session has been set. The first respondent pleaded the inadmissibility of the appeal in form as it was filed without capacity because the appellant appeared before the Court of First Instance represented by the sequestrator, mister..................................., although the notice of appeal in cassation did not include the name of its representative and whether he was still the sequestrator or not, despite the fact that the first instance judgment was delivered against the appellant represented by its legal representative. Furthermore, the papers of the appeal did not include what confirmed that the sequestration was cancelled. Hence, the judgment must be dismissed in form. This contention is overruled. It is established, as per the ruling of this court, that if the plea includes a new defence that contains a fact which has not been raised before the Subject Matter Court, it may not be raised for the first time before the Court of Cassation Accordingly, the plea of the lack of capacity is a substantive plea. The papers of the case did not include evidence that proved that the appellant insisted on that plea before the Court of Appeal although the company is litigated in the appeal without being represented by the sequestrator so that the Subject Matter Court decides thereon. Hence, that plea is deemed a new defence which may not be raised for the first time before the Court of Cassation. The appeal met its formal conditions. The appellant contends against the challenged judgment, in the first reason, that it is marred by violation of the law, defective reasoning and lacking in substantiation as it refuted all the documents that were enclosed with the statement of claim, especially the suretyship deed, because they were photocopies; moreover, it pleaded that before the court and did not discuss the subject of the case. However, the challenged judgment responded to that plea and that said that the second respondent acknowledged a part of the debt. The appellant had nothing to do with that acknowledgment as it was related to the relationship of the first and the second respondent and it did not apply to the appellant. The court also relied on Article 11/2 of the Law of Evidence in the Civil and Commercial Transactions which related to the binding force of the official instruments, although the appellant refuted the photocopies of the suretyship deed which had no binding force concerning the evidence. Hence, the judgment is defective and necessitates cassation. This contention is inappropriate. Article 11/2 of the Evidence law states that, "A party who has discussed the subject of the instrument may not deny that the handwriting or the signature or the stamp or the fingerprint belongs to him, or refuse to admit that the person from whom he received the right, had ever done any of such acts". It is also established as per the ruling of this court that if the litigant has discussed the subject of the instrument that has been attributed to him, he may not refute the photocopy thereof. Accordingly, it is established in the appellant's rejoinder that was submitted to comment on the expert's report before the Court of First Instance that it discussed the expert's report by saying that, "The debt is confirmed against the second respondent and it shall be solely responsible for the settlement thereof". It also discussed the requested attorney fees saying that they were related to the consultancy only, not the case. It is established in the appeal explanatory memorandum that it discussed the subject saying that, "The present case was not preceded by any notice that was served on it regarding the claimed debt which violates the articles of the claimed suretyship deed". The appellant refuted the photocopy of the suretyship without declaring the reason therefor, although it bears the stamp of the appellant company. The challenged judgment considered the photocopy of the suretyship based on tolerable reasons; hence, the contention is groundless. The appellant contends against the challenged judgment, in the second reason, that it misapplied the law as it considered that the courts of the United Arab Emirates had jurisdiction to consider the case and apply the United Arab Emirates law on the dispute, although the courts of the state had no jurisdiction. Furthermore, the applicable law concerning the claimed suretyship is the law of the state of Texas in the Unites States of America, in accordance with Article 9 of the services agreement that was concluded between the first and the second respondents which states that, "This agreement shall be governed by the laws of the state of Texas, Unites States of America, and the judicial authority along with the litigation place concerning any lawsuit that arises from that agreement shall fall within the ambit of the courts of the state or the federal courts in Harris county, Texas, Unites States of America". Hence, the judgment is defective and necessitates cassation. Copyright 2025: Thomson Reuters. All Rights Reserved. Page 4 This contention is inappropriate. Article 20 of the Civil Procedure Law states that, "Except the right in rem cases pertaining to a real estate abroad, the courts shall have jurisdiction to consider the cases that are filed against the citizen and those that are filed against the expatriate who has a domicile or a place of residence in the state". Article 3 of the Company Law States that, "Any agreement that violates the articles of the chapter herein shall be void". Furthermore, Article 33 of the Civil Procedure Law states that, "Concerning the cases relating to the existing companies or associations or those which are in the course of liquidation or the private institutions, the jurisdiction shall fall within the scope of the court within whose jurisdiction the head office thereof is situated". Accordingly, the challenged judgment decided that the case was filed against the appellant that holds the state nationality and whose place of residence lies within the jurisdiction of the court that adjudicated the dispute, and that any agreement relating to the jurisdiction of foreign courts would be void and null and that its nullity would be related to the public order. The court responded to the contention that stated that the foreign law was not applied by saying that, "As for the application of a foreign law regarding the suretyship, the appellant did not prove its existence or non-existence thereof. Therefore, the United Arab Emirates law shall be applied in accordance with the provisions of Article 28 of the Civil Transactions Law". These are tolerable reasons that are sufficient to justify the decision of the challenged judgment; hence, the contention is groundless. The appellant contends against the challenged judgment, in the third reason, that it misapplied the law because it is a surety of the debt and the claim for the debt was not made within the six months' period that is stipulated in Article 1092 of the Civil Transactions Law; thus it would be deemed discharged thereof. Furthermore, the court stated that that applied to the civil debts, as for the commercial debts, they were subject to the prescription by time limit that was stipulated in Article 95 of the Commercial Transactions Law, although the provisions of the suretyship apply to the debt, whether it is civil or commercial. Hence, the judgment is defective and necessitates cassation. This contention is not appropriate. It is established as per the ruling of this court that although the general rule for the suretyship states that it is a civil work that is based on the donation of the surety, it relates to the original relationship between the surety and the principal obligor considering that the purpose thereof is the settlement of the debt which is the subject of such relationship; therefore, it shall acquire the commercial capacity if the guaranteed debt is commercial. Accordingly, the commercially guaranteed debt relates to the purchase of aviation fuel, and the appellant and the two respondents are commercial companies. The challenged judgment respected that regard and did not apply Article 1092 of the Civil Transactions Law; hence, the contention is groundless. Copyright 2025: Thomson Reuters. All Rights Reserved. Page 5