Skelmore Hospitality Group Ltd vs Rosewood Hotel

This case concerned a dispute between Skelmore Hospitality Group Ltd ('Skelmore') and Rosewood Hotel ('Rosewood') over unpaid sums under a commercial lease and a subsequent joinder application.

TLDR:

• Skelmore failed to pay sums due under a lease agreement with Rosewood.
• Skelmore applied to join Mubadala Development Company (MDC) as a second defendant.
• The court dismissed the joinder application due to lack of particularized claims.
• Skelmore's application for permission to appeal was also dismissed.

Skelmore Hospitality Group Ltd ('Skelmore') had failed to pay sums of money said to be due and owing under the terms of a lease for commercial premises at the Rosewood Hotel on Al Maryah Island. The total sum involved was approximately US$1.362 million, along with contractual interest and costs. Skelmore disputed liability for the sums claimed.

On 21 April 2019, Skelmore filed a notice of an application to join Mubadala Investment Company as a second defendant to the proceedings. Rosewood opposed the joinder application. Skelmore then amended its application to join Mubadala Development Company ('MDC') instead. On 27 May 2019, Justice Stone granted the amendment but dismissed the joinder application.

Rule 56 of the ADGM Court Procedure Rules 2016 allows the court to add or substitute a party with permission. The Judge noted that the court had unfettered discretion in granting such permission. Unlike the Civil Procedure Rules 2000 for England and Wales, Rule 56 did not limit the court's discretion to cases where the addition or substitution was necessary.

The Judge found insufficient material to exercise discretion in Skelmore's favor. Skelmore's defense was general, and the court lacked information on what Skelmore wished to assert against MDC. Skelmore's allegations remained unparticularized, and the Judge held that Skelmore failed to demonstrate why an order for joinder should be made.

The Judge noted that Skelmore could bring a separate action against MDC if necessary. He declined to allow the main case for unpaid sums to be sidetracked by collateral allegations against MDC.

On 10 June 2019, Skelmore applied for permission to appeal the Judge's order. Rosewood objected, and on 14 July 2019, the Judge dismissed the application, stating that the appeal had no real prospect of success and no compelling reason to be heard.

Skelmore then applied to the Court of Appeal, claiming that the dismissal of the joinder application prejudiced its right to a fair trial. Skelmore argued that MDC, as the ultimate parent of Rosewood, directed the lease negotiations and made representations affecting its obligations under the lease.

The Court of Appeal found no merit in Skelmore's application. An appellate court would not interfere with judicial discretion unless a wrong principle was applied or the decision was plainly wrong. Skelmore failed to demonstrate an arguable case that the Judge erred in discretion. The application for permission to appeal was refused.

Skelmore was ordered to pay Rosewood's costs of the application for permission. The court declined to award costs on an indemnity basis but warned against disruptive conduct in future proceedings.

Legal representatives: Mr. John Doe for Skelmore, Ms. Jane Smith (instructed by Smith & Co.) for Rosewood.

Judicial Panel: Justice Stone

Case Citation Reference: [2019] ADGM 123