The Court of Cassation

In the Name of God, the Most Gracious, the Most Merciful

In the Name of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai

The Court of Cassation, in its public session held on July 23, 2024, at the headquarters of the Court of Cassation in Dubai, issued the following ruling in Labor Appeal No. 106 of 2024:

Parties

Appellant: J. M. L. Sh.

Respondent: L. S. A.

The Appealed Judgment

Issued in Labor Appeal No. 2023/1567 on May 30, 2024

The Court's Ruling

After reviewing the documents, hearing the summary report read in the session by Judge Omar Younis Jarour, and after deliberation, the following is established:

Facts

The facts, as evident from the appealed judgment and all other documents, are as follows:

  1. The appellant filed Case No. 1188 of 2023 (Labor - Partial) against the respondent and another individual named Dominic Liam Noel Barnes, in his capacity as the respondent's manager.
  2. The appellant claimed they failed to pay her labor dues.
  3. She submitted her complaint to the competent authority, which was unable to settle the dispute amicably, and referred the complaint to the court.
  4. The appellant's statement of claim was electronically registered on January 19, 2023, and legally served.
  5. In her final requests, she sought an order obligating the respondent and the other individual to pay her 8,911,200 dirhams.

The appellant based her claim on the following assertions:

  • She worked for them under an offer of employment and an open-ended employment contract from May 8, 2021, with a total salary of 70,000 dirhams, of which 60,000 dirhams was the basic salary.
  • She was also entitled to a basic incentive for assuming the position of Executive Director, at a rate of 2% of the company's shares upon achieving revenues exceeding 15,000,000 US dollars for the company.
  • Her services were terminated without justification on August 21, 2022, with a three-month notice period, with the last working day being November 19, 2022.
  • The respondent and the other individual refused to pay her dues, which consisted of the following:
  • 90,000 dirhams as leave allowance for her service period
  • 210,000 dirhams as compensation for arbitrary dismissal
  • A profit bonus of 2% of the respondent's shares, equivalent to 8,611,200 dirhams, along with her profits and acquisition by registering them in the appellant's name, with the right to dispose of them and the rights arising therefrom

The respondent argued that:

  • The court lacked local and substantive jurisdiction
  • The case should not be accepted because it was not filed through the proper channels, as the appellant did not submit a labor complaint to the Dubai Multi Commodities Centre Authority before resorting to the court

The court appointed an expert, and after the expert submitted their report, the court ruled on September 21, 2023, that:

  • The appellant was entitled to possess all or part of the respondent's shares at a rate of 2% from January 1, 2022, and the rights arising therefrom
  • The court rejected her request to receive the value of these shares in cash and rejected all other requests

The respondent (the defendant, Dominic Liam Noel Barnes, in his capacity as the respondent's manager) appealed this judgment in Labor Appeal No. 1567 of 2023. On December 14, 2023, the court ruled to:

  • Accept the appeal in form and substance
  • Overturn the appealed judgment
  • Rule anew that it lacked jurisdiction to hear the case

The appellant challenged this judgment with Cassation Appeal No. 31 of 2023 (Labor). On January 30, 2024, the court:

  • Overturned the appealed judgment
  • Ruled on the merits that the Dubai courts had substantive jurisdiction to hear the case

The Court of Appeal heard the case after it was referred to it and ruled on May 30, 2024, on the merits of the appeal:

  • Amending the wording of the appealed judgment to state that the respondent was entitled to possess 2% of the appellant's shares as of January 1, 2022, with all rights arising from possession
  • Rejecting all other requests
  • Upholding the appealed judgment in all other respects

The appellant challenged this judgment with the present Cassation appeal through a statement of claim submitted to the Case Management Office on June 26, 2024, requesting its annulment. The respondent's lawyer submitted a defense memorandum within the specified timeframe, requesting the rejection of the appeal.

The appeal fulfilled its formal requirements.

Grounds of the Appeal

The appeal is based on five grounds:

  1. First Four Grounds: The appellant argues that the appealed judgment:
  • Violated the law
  • Erred in its application
  • Was based on flawed reasoning
  • Contradicted the established facts in the documents

The judgment granted the respondent the right to 2% of the appellant's shares based on the job offer dated May 8, 2021, submitted to her by the appellant, despite this offer being superseded by the employment contract signed between the respondent and LOA Global Exports DMCC before the Dubai Multi Commodities Centre on June 16, 2021. This renders the job offer null and void according to Clause 7 of this contract, which states:

"This contract and any other contractual documents related to the employee's work with the employer, signed by both parties and submitted to the Dubai Multi Commodities Centre, represent the complete and final agreement between the parties regarding the terms of employment and supersede any other oral or written statements or agreements unless those statements or agreements are approved and certified by the Dubai Multi Commodities Centre."

The appellant argues that the superseded job offer was not signed by her, which renders the judgment flawed and necessitates its annulment.

  1. Fifth Ground: The appellant argues that the appealed judgment:
  • Violated the law
  • Erred in its application
  • Was based on flawed reasoning
  • Lacked sufficient reasoning
  • Contradicted the established facts in the documents

It rejected the plea of inadmissibility of the lawsuit due to it being filed more than fourteen days after the complaint was referred to the court. The judgment reasoned that this period is organizational, even though the law mandates filing the lawsuit within 14 days from the date of referral, which was January 9, 2023. The lawsuit was filed on January 26, 2023, without claiming the 2% share entitlement, which renders the appealed judgment flawed and necessitates its annulment.

Court's Analysis

Regarding the First Four Grounds

This argument is rejected.

It is established in the jurisprudence of this court that:

  1. Article 96 of the Civil Procedures Law No. 42 of 2022 indicates that the claimant has the right, in any state of the case, to introduce into the existing proceedings before the court anyone who could have been properly sued in the case when it was filed, requesting that they be obligated to fulfill the rights claimed against them, which are related to the same subject matter of the case directed against the original defendant.

  2. If the claimant submits such a request to the court and the court instructs them to notify the party requested to be joined, and that party is indeed notified in the manner prescribed by law to be ruled upon regarding the requests directed against them by the claimant, then the procedures for joining them as a party to the case are considered valid.

  3. In this case, the claimant is not obligated to follow the usual procedures for filing a lawsuit as stipulated in Article 44 of the same law, which is to submit the statement of claim to the court clerk before notifying the party of the requests therein. This is because the legislator did not require the claimant to do so, according to the wording of the first part of the aforementioned Article 96.

  4. The judge of the merits has the authority to understand the facts of the case, examine the evidence, and interpret agreements and other documents in a manner that they deem most faithful to the intent of the contracting parties or the relevant parties, guided by the facts and circumstances of the case.

  5. In doing so, the judge is not obligated to respond to every document presented by the parties, nor to address every unlawful argument they make, nor to follow them in their various statements, arguments, and requests, and respond independently to each one, as long as the establishment of the truth that the judge is convinced of and has provided evidence for implicitly refutes those statements, arguments, and requests.

  6. A subsequent contract supersedes a previous contract if it reorganizes all the terms that were organized in the previous contract. However, if the subsequent contract is silent on one or more conditions present in the previous contract by not mentioning them, then the previous contract remains valid with respect to that condition or those conditions not covered by the subsequent contract.

  7. The court of merits has full authority to assess the expert's work as one of the elements of evidence in the case. It is subject to the court's absolute discretion to adopt it if the court is satisfied with it and finds it convincing and consistent with what it deems to be the truth in the case.

In light of the foregoing, the initial judgment, upheld by the appealed judgment, relied on the expert's report and the employment contract, which considered the job offer as part of the contract. It ruled to obligate the appellant to grant the respondent the right to possess 2% of the appellant's shares as of January 1, 2022, with all rights arising from possession. The court stated the following:

"It is evident from the case documents and the employment contract presented therein that the relationship was between the appellant and the respondent, and that the claimed right exists against the appellant as the concerned party and the one responsible for it, upon proving the respondent's right. Therefore, the appellant has standing in the case, and the court rejects the plea of lack of standing... The basis of the respondent's claim in the lawsuit is her entitlement to a percentage of the company's shares. This entitlement was agreed upon in the job offer, which was later adopted and considered an integral part of the employment contract. The employment contract signed by both parties stipulated the following: that the preamble, the previously signed job offer and its annex, are an integral part of this contract and its annex. The job offer, signed by Noel Barnes (the founder of the respondent company, The Giving Movement), LOA Global Exports DMCC, and the appellant (accepting the offer), included a clause on equity payments stating: (It is agreed that after the completion of the 3-month probationary period and upon achieving revenues of $15 million, you will be granted 2% of the company's value, and you will be granted a separate bonus of 1% of the company's value once revenues exceed $100 million during your tenure as CEO. A separate document for the rights to the company's value will be created once the revenues are reached). This entitlement was regulated by the Employee Stock Ownership Plan (ESOP) agreement. The respondent acknowledged this agreement in her letter to the appellant's manager and adhered to its terms. The Employee Stock Option Plan in The Giving Movement, dated August 17, 2022, bears the respondent's signature. The respondent sent an email on Friday, June 10, 2022, to the appellant regarding the Employee Stock Ownership Plan file. In her reply to the termination letter, she also referred to her achievements and adhered to the provisions of The Giving Movement's Stock Option Plan signed on August 17, 2022, and the Employee Stock Purchase Plan signed on August 19, 2022, which is referred to as the Option Plan. The appellant's manager acknowledged her entitlement to the claimed amount in his email on February 10, 2022. The expert's report submitted in the case confirmed that the condition for the respondent's entitlement to 2% of the company's shares had been fulfilled, which was the respondent achieving revenues for the company of $15 million in 2021, which the respondent exceeded.

Therefore, since the appealed judgment correctly applied the law, the court upholds it regarding the respondent's entitlement, with an amendment to its wording, and rules... to amend the wording of the appealed judgment to read: The court ruled in the presence of the parties: The plaintiff is entitled to possess 2% of the defendant's shares as of January 1, 2022, with all rights arising from possession. All other requests are rejected, and the appealed judgment is upheld in all other respects."

Regarding the Fifth Ground

This argument is also rejected.

It is established in the jurisprudence of this court that:

  1. The period mentioned in the Ministry of Human Resources and Emiratization's letter regarding the respondent's commitment to file the complaint within fifteen days is an organizational deadline that has no impact on the statute of limitations.

  2. This latter deadline specified in the complaint referral letter does not result in any nullity if the complainant files their lawsuit after more than two weeks from receiving the referral letter from the Ministry of Human Resources and Emiratization, as long as they file the lawsuit within one year from the date of termination of the employment relationship.

  3. The period mentioned in the complaint referral letter to the court, which is two weeks from the date of issuance of the letter, is an organizational deadline that does not affect the date of filing the lawsuit after the specified period in the referral letter, as long as the lawsuit is filed within one year from the date of entitlement, in accordance with the provisions of Article 54/7 of the Labor Relations Regulation Law No. 33 of 2021.

It is established that:

  • The respondent's last working day was on November 19, 2022.
  • The complaint was filed on January 3, 2023.
  • The complaint was referred from the Ministry of Human Resources and Emiratization office on January 9, 2023.
  • The lawsuit was filed on January 26, 2023.

Therefore, the lawsuit was filed within the deadline.

Since the appealed judgment reached this conclusion, it has correctly applied the law, and the appeal against it based on the aforementioned grounds is unfounded.

Conclusion

In light of the foregoing, the appeal is rejected.

Final Ruling

For these reasons, the Court rules to reject the appeal. The appellant shall bear the fees and expenses.

Issued on: July 23, 2024

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