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December 2016 – January 2017
In Abu Dhabi Court of Cassation Omission Application Decision 1 of 2016 (issued on 17 November 2016), the court held that the essence of Article 139 is that the court must have, through its own mistake or inadvertence, completely omitted to determine a request for substantive relief, leaving the request to remain undecided (by an explicit or implicit ruling) and pending before the court. An omission application is not subject to any of the statutory time limits for appeal and can be availed at any time. In addition, the Applicant’s acceptance of the partial judgment by proceeding to enforce the ruling made in its favour does not in itself indicate its acquiescence to the ruling and waiver of the requests for relief on which the Court made no ruling. Al Tamimi represented the Claimant in the appellate courts.
By a standard contract for works between the Defendant and a consortium comprising the Claimant and a Turkish company, the consortium was commissioned to build and construct a mall. Errors between the Defendant and Consultant delayed the execution of the project until the Defendant arbitrarily terminated the contract without good cause and liquidated two performance bonds.
The Claimant brought Commercial Action No. 278-2011 against the Defendant seeking judgment against him for AED 300m. This amount represented the cost of works undertaken by the Claimant, additional expenses incurred, compensation for damage suffered as a result of termination of contract, unlawful deductions made from the Claimant’s payments, payments the Claimant made to the Consultant and Subcontractors, interest, and compensation for loss and damage.
The Defendant filed a counterclaim to reserve his right to claim compensation for damages suffered.
Court of First Instance
The Court of First Instance appointed an expert committee for a specific mandate. After receiving the expert report, the Court of First Instance dismissed the main action on the basis of it being premature and dismissed the counterclaim.
Court of Appeal
The Claimant appealed in Appeal No. 867-2012, as did the Defendant in Appeal No. 891-2012. The Court of Appeal appointed a tripartite expert committee for a specific mandate.
After receiving the expert committee’s report, the Court of Appeal upheld the Court of First Instance decision. The Court of Cassation overturned the Court of Appeal’s ruling and sent the matter back for consideration by a differently constituted panel. The Court of Appeal (on remand) then quashed the Court of First Instance Decision with respect to the decision made on the main action (to dismiss the case as being premature) with remand to the Court of First Instance for further consideration.
Court of Cassation
The Claimant appealed in Commercial Appeal No. 424-2015, as did the Defendant in Commercial Appeal No. 483-2015 and, after joining the two appeals, the Court of Cassation, on 24 November 2015, dismissed the Defendant’s appeal. With respect to the Claimant’s appeal, the Court of Cassation overturned the Court of Appeal’s ruling and quashed the Court of First Instance decision and ordered the Defendant to pay the Claimant a sum of AED 72m.
The Claimant filed an application stating that the Court of Cassation omitted to award the Applicant certain substantive relief in Cassation Appeal No. 424-2015, namely 12% interest on the sum awarded (AED 72m) from the date of withdrawal of the project and liquidation of the bonds until satisfaction had been made. The application further stated that the Court of Cassation omitted to award costs, bank interest and penalties arising from the liquidation of the bonds from the date of liquidation until satisfaction had been made, which, at the date of filing the Cassation Appeal stood at AED 15m. The application further noted that the Court of Cassation omitted to award AED 5.5m as moral damages in connection with the liquidation of the bonds.
The Defendant argued that the Claimant had forfeited its right to file the omission application by proceeding to enforce the ruling.
Court of Cassation’s Decision
The Court of Cassation held that:
As a result of the Omission Application, the Defendant was ordered to pay the Claimant approximately AED 18m in addition to the amount of the previous ruling.
This judgment highlights that in the event of an omission, it is always the claimant’s right to make an omission application and it is never too late for the Court of Cassation to look into the merits of a case if a request was overlooked (provided the Court of First Instance had previously reviewed the case). The case also highlights the importance of properly pleading a case – although the Court acknowledged that the Claimant was entitled to claim interest, it only awarded interest from 31 December 2010 because the Claimant had neglected to claim for interest that had accrued prior to this date when filing its claim.
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