Al Ayar vs Klinkhamer

This case involved a jurisdictional challenge in the ADGM Courts, where the court ultimately declared it had no jurisdiction to try the claim brought by Mr Faisal Hamad Mubarak Al Ayar against Mr Paul Klinkhamer.

TLDR:

• The ADGM Court declared it had no jurisdiction over the claim.
• The proceedings were dismissed.
• The Defendant was awarded costs.
• The dispute involved promissory notes totaling USD 500,000.
• The Defendant argued the funds were for investment, not a loan.

The case involved Mr Faisal Hamad Mubarak Al Ayar, a Kuwaiti national and prominent businessman, who sought to recover USD 500,000 plus interest from Mr Paul Klinkhamer, a Dutch national and corporate business consultant. The sum was allegedly given as a loan under three promissory notes.

The Defendant, Mr Klinkhamer, contested the claim, asserting that the funds were for investment purposes and not a loan. He also challenged the jurisdiction of the ADGM Courts to hear the case, citing his residence outside the UAE and the lack of connection to the ADGM.

The court examined the jurisdictional framework under the ADGM Courts Civil Evidence, Judgments, Enforcement and Judicial Appointments Regulations 2015 and Abu Dhabi Law No. (4) of 2013, as amended by Abu Dhabi Law No. (12) of 2020. The court found that the claim did not meet the statutory requirements for the ADGM Courts to exercise jurisdiction.

Dr Shaun Morgan, representing the Claimant, argued that the ADGM Courts were the only English law court in the Middle East capable of hearing the dispute. However, the court found no jurisdictional basis under the ADGM Courts Regulations or the Founding Law.

The Defendant's alternative argument of forum non conveniens was noted but not decided upon, as the primary finding on jurisdiction rendered it moot. The court also addressed the issue of service of proceedings, finding that service had not been legitimately effected under the CPR.

Ultimately, the court granted the Defendant's application, dismissed the proceedings, and awarded costs to the Defendant. The Claimant was given a short period to respond to the Defendant's statement of costs.

Legal representatives: Dr Shaun Morgan (LLM), Franklin Morgan Legal Advisory LLC for the Claimant; Yash Bheeroo of 3 Verulam Buildings, London (instructed by Pinsent Masons LLP) for the Defendant.

Judicial Panel: Justice William Stone SBS KC

Case Citation Reference: [2024] ADGMCFI 0002