Claim No. CFI 045/2022
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
DR CHRISTOPHER EMEKA ODUNEYE-BRAINIFF
Claimant
and
COMMERZBANK AG (DIFC BRANCH)
Defendant
ORDER WITH REASONS OF JUSTICE MICHAEL BLACK
UPON the Defendant’s Application Notice CFI-045-2022/1 dated 30 September 2022 seeking immediate Judgment against the Claimant (the “Defendant’s Application”)
AND UPON the Defendant’s First Witness Statement of Mr. Raymond Clement dated 16 September 2022 filed in support of the Defendant’s Application
AND UPON the Claimant’s Witness Statement dated 28 October 2022
AND UPON the Defendant’s Second Witness Statement of Mr. Raymond Clement dated 9 November 2022
AND UPON the Claimant’s and Defendant’s skeleton argument dated 30 January 2023
AND UPON the Claimant’s and Defendant’s costs submissions dated 2 February 2023
AND UPON reviewing all relevant documents and submissions on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant’s Application is dismissed.
2. The Defendant shall pay the Claimant's costs assessed at AED 170,000.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 8 February 2023
At: 2pm
SCHEDULE OF REASONS
Introduction
1. This is an application by the Defendant, Commerzbank AG (DIFC Branch), issued on 30 September 2022 for:
(1) Immediate judgment to be entered dismissing the Claims for race discrimination prior to 11 January 2021, false representation/misrepresentation, unlawful deduction of wages and penalties against the Claimant pursuant to Rule 24.1 of the Rules of the DIFC Courts (the “RDC”); or
(2) The parts of the Claimant's Particulars of Claim in respect of the claims for race discrimination prior to 11 January 2021, false representation/ misrepresentation, unlawful deduction of wages and penalties are struck out pursuant to RDC 4.16; and
(3) Costs.
2. The Claimant, Dr Christopher Emeka Oduneye-Braniff, is a senior banker of Nigerian origin. He holds degrees in mathematics from Imperial College London and the University of Cambridge.
3. The Defendant, Commerzbank AG, is the leading bank for the German Mittelstand, partnering around twenty-eight thousand corporate client groups, and with about eleven million private and small business customers in Germany. The Bank's head office is at the Kaiserplatz in Frankfurt. The Bank is also present internationally with nineteen operational foreign branches, thirty-five international representative offices and financial institution desks, and seven material subsidiaries worldwide, and with a presence in almost forty countries where the Bank's corporate clients do business. The Defendant carries on business via a branch with an office in the DIFC.
4. The Claimant held various positions with branches of the Bank from November 2006 to December 2022:
(1) November 2006 – February 2008: Financial Engineer – London Branch;
(2) February 2008 – February 2009: EM Structured Credit Trader – London Branch;
(3) February 2009 – August 2012: Head of EM Structured Credit Trading (corporate title of Director) – London Branch;
(4) August 2012 – April 2013: Head of EM Structured Credit Trading (corporate title of Director) – Singapore Branch;
(5) April 2013 – April 2016: Head of Structured Credit Trading and Regional Head of Fixed Income Currencies and Commodities Asia (corporate title of Managing Director) – Singapore Branch;
(6) April 2016 – July 2019: L2 Executive – (concurrently) Global Head of Credit Trading and Head of Fixed Income, Currencies and Commodities Asia – Singapore Branch;
(7) July 2019 – January 2021: Co-Head of Capital Markets Asia and Global Head of Credit Solutions – Singapore Branch; and
(8) January 2021 – December 2021: Co-Head of Capital Markets Asia and Global Head of Credit Solutions – DIFC Branch.
5. By his Particulars of Claim issued on 12 July 2022 the Claimant brings complaints of:
(1) Harassment related to race under Article 59(2)(c) of the DIFC Employment Law (“the Law”);
(2) Direct discrimination and dismissal on the grounds of race under Article 59(2)(a) of the Law;
(3) Indirect discrimination on the grounds of race under Article 59(2)(b) of the Law;
(4) Victimisation pursuant to the filing of a grievance and whistleblowing under Article 60 of the Law;
(5) Detriment owing to the Claimant's protected disclosures under Article 64 of the DIFC Operating Law No. 7 of 2018;
(6) False representation and/or misrepresentation to relocate to the DIFC Branch under false pretence under Article 12 of the Law and Article 57 of the DIFC Contract Law (DIFC Law No.6 of 2004);
(7) Breach of contract in respect of verbal (sic.meaning “oral”) promises/agreements made and not kept under Article 12(1) of the Law;
(8) Breach of contract in respect of a significant demotion under Article 14(3) of the Law; and
(9) Unlawful deduction of wages under Article 20(1) of the Law in respect of non-payment of End of Service Gratuity from the Commencement Date and the shortfall of mandatory statutory contributions to the DIFC Employee Workplace Savings Scheme (“DEWS”) from the Commencement Date of his employment due to him under Article 66(2) and Article 66(7) of the Law and daily penalties under Article 19(1) of the Law.
6. From the foregoing it will be apparent that the large majority of the Claimant’s claims are bought under the Law. Further, the facts pleaded in support of the allegations of harassment related to race, direct race discrimination and detriment for whistleblowing that all took place within the period 2013 to 2020 with one exception and that related to what were said to be earlier assurances. Thus, the vast majority of the conduct relied upon to found the claims under the Law occurred before the Claimant was employed in the DIFC.
7. The Defendant contends that:
(1) the alleged acts prior to 11 January 2021 are outside the scope of the Law; and
(2) the Claimant had insufficient qualifying continuous employment with the Defendant to be entitled to end of service gratuity and, on that basis, there was no deduction and no entitlement to any associated penalties. Accordingly, these claims (or parts of a claim) have no real prospects of success and there is no compelling reason why they should be disposed of at trial.
The Applicable Legal Principles
8. The principles governing applications under RDC 24.1 and 4.16 are not in dispute.
9. RDC 24.1 provides:
The Court may give immediate judgment against a claimant … on the whole of a claim, part of a claim or on a particular issue if:
1. it considers that:
(a) that claimant has no real prospect of succeeding on the claim or issue;
… and
2. there is no other compelling reason why the case or issue should be disposed of at a trial.
10. RDC 4.16 provides:
The Court may strike out a statement of case if it appears to the Court:
1. that the statement of case discloses no reasonable grounds for bringing … the claim ….
11. The Defendant helpfully summarises some of the case in its skeleton argument:
(1) InGEH Capital Ltd v. Haigh [2014] DIFC CFI 020 (10 November 2016) at [9] it was stated:
The principles on which the Court acts are well established, and were recently restated by Simon J inJSC VTB Bank v Skurikhin [2014] EWHC 271 at [15] –
“The principles which apply have been set out in many cases, are summarised in the editorial comment in the White Book Part 1 at 24.2.3 and have been stated by Lewison J inEasyair Limited v. Opal Telecom Limited [2009] EWHC 339 (Ch) at [15], approved subsequently (among others) by Etherton LJ inA C Ward & Son v. Caitlin (Five) Limited [2009] EWCA Civ 1098 at [24]. For the purposes of the present application it is sufficient to enumerate 10 points.
(1) The Court must consider whether the defendant has a ‘realistic’ as opposed to a ‘fanciful’ prospect of success, seeSwain v. Hillman [2001] 2 All ER 91, 92. A claim is ‘fanciful’ if it is entirely without substance, see Lord Hope inThree Rivers District Council v Bank of England [2001] UKHL 16 at [95).
(2) A ‘realistic’ prospect of success is one that carries some degree of conviction and not one that is merely arguable, seeED & F Man Liquid Products v. Patel [2003] EWCA Civ 472.
(3) The court must avoid conducting a ‘mini-trial’ without disclosure and oral evidence:Swain v Hillman(above) at p.95. As Lord Hope observed in theThree Riverscase, the object of the rule is to deal with cases that are not fit for trial at all.
(4) This does not mean that the Court must take everything that a party says in his witness statement at face value and without analysis. In some cases it may be clear that there is no real substance in factual assertions which are made, particularly if they are contradicted by contemporaneous documents, seeED & F Man Liquid Products v. Patel(above) at [10]. Contemporary activity or lack of activity may similarly cast doubt on the substance of factual assertions.
(5) However, the Court should avoid being drawn into an attempt to resolve those conflicts of fact which are normally resolved by a trial process,see Doncaster Pharmaceuticals Group Ltd v. Bolton Pharmaceutical Co 100 Ltd [2006] EWCA Civ 661, Mummery LJ at [17].
(6) In reaching its conclusion, the court must take into account not only the evidence actually placed before it on the application for summary judgment, but the evidence that can reasonably be expected to be available at trial :Royal Brompton Hospital NHS Trust v Hammond (No. 5) [2001] EWCA Civ 550, [19].
(7) Allegations of fraud may pose particular problems in summary disposal, since they often depend, not simply on facts, but inferences which can properly be drawn from the relevant facts, the surrounding circumstances and a view of the state of mind of the participants, see for exampleJD Wetherspoon v Harris [2013] EWHC 1088 , Sir Terence Etherton Ch at [14 ].
(8) …
(9) The overall burden of proof remains on the claimant, …to establish, if it can, the negative proposition that the defendant has no real prospect of success (in the sense mentioned above) and that there is no other reason for a trial, see Henderson J inApovodedo v Collins [2008] EWHC 775 (Ch), at [32].
(10) So far as Part 24.2(b) is concerned, there will be a compelling reason for trial where ‘there are circumstances that ought to be investigated’, seeMiles v Bull [1969] 1 QB 258 at 266A. In that case Megarry J was satisfied that there were reasons for scrutinising what appeared on its face to be a legitimate transaction; see alsoGlobal Marine Drillships Limited v Landmark Solicitors LLP [2011] EWHC 2685 (Ch), Henderson J at [55]-[56].
(2) The guidance was adopted and developed subsequently inThe Estate of Christos Papadopoulos v. Standard Chartered Bank [2018] DIFC CFI 004 (27 February 2018) at [16] where Sir David Steele DCJ cited Justice Roger Giles inGEH Capitaland added that an application for immediate judgment may be based on a point of law.
12. The “point of law” issue was addressed by Justice Roger Giles inNest Investments Holding Lebanon SAL & Ors v. Deloitte & Touche (ME) & Anor [2016] DIFC CFI 027 (12 February 2018) at [22] adopted fromEasy Air Ltd v. Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15]:
.... it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court has before it all the evidence necessary for the proper determination of the question and the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better.
(similar remarks were made by H.E. Justice Al Madhani inHexagon Holdings (Cayman) Limited v (1) Dubai International Financial Centre Authority and (2) Dubai International Financial Centre Investments LLC [2019] DIFC CFI 013 (25 March 2020).
13. It is however important to note that Lewison J (as he then was) inEasy Air Ltdwent on in the passage referenced by Justice Giles:
If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success.
14. Justice Giles went on to note at [20]:
There is a degree of overlap between these two provisions. RDC 4.16 is apt for an application on the basis that, even if the pleaded grounds are accepted, the claim must fail. That can also be the basis for an application under RDC 24.1, but that rule is apt for an application on the basis of evidence showing that the claim must fail, or of absence of evidence to support it. The overlap suggests, however, a common approach under either rule, subject to questions of fact in an evidence-based application and to RDC 24.1 (2)
and at [23] that"the test for the RDC 4.16 avenue has been regarded as materially the same"as that for immediate judgment, citingKryvenko v. Renault Sport Racing Team Ltd [2016] EWHC 2284 Comm at [54]. However, it is right to note that Justice Sir Jeremy Cooke stated inFix Sense Management Llc v (1) Sunset Hospitality Holding Limited (2) Sunset Hospitality Group Holding Limited [2020] DIFC CFI 059 (10 January 2021) [2]:
The test applicable on striking out is yet more stringent, because, effectively, the pleas alone fall to be investigated to ascertain, whether as a matter of law they are capable of amounting to a defence, without any factual enquiry into the evidence which is said to support or refute them.
The Undisputed Facts
15. The Claimant moved from the Bank’s Singapore Branch to its DIFC Branch with effect from January 2021.
16. By a letter dated 12 November 2020 on notepaper headed“Commerzbank DIFC Branch General Management”it was stated:
We are pleased to offer you employment with Commerzbank Aktiengesellschaft DIFC Branch subject to the terms and conditions stated herein.
The terms and conditions of your employment are as set out below and in Section 8 of the Bank's Employee Handbook. A copy of the Employee Handbook is enclosed with this letter. Where there is any conflict between this letter and the Employee Handbook, the terms and conditions set out in this letter will prevail… In this letter and in the Employee Handbook "the Bank" means Commerzbank AG together with all of its subsidiaries.
17. At the foot of the first page of the letter appear the names of the Chairman of the Supervisory Board and the Board of Managing Directors. Also appears is the name “Commerzbank AG DIFC Branch” and a DIFC Registration Number and Tax Registration Number.
18. The letter contained the following terms:
(1) Paragraph 1 –
Your normal place of work will be the Bank's premises in the Dubai International Financial Centre (DIFC) although you will be required to work at such place and undertake such travel overseas as may be required in order to perform your duties,
(2) Paragraph 4 –
Your employment shall commence on 01 January 2021, subject to the approval of your work visa being granted by the relevant authority and the fulfilment of all of the conditions set out in Clause 17 - Conditions of Employment of this letter.
This employment will continue indefinitely unless terminated in accordance with the terms of this letter or DIFC Law No. 2 of 2019, as amended (the DIFC Employment Law).
Your previous employment with Commerzbank AG, which commenced on 01 November 2006, shall be recognized as continuous service.
(3) Paragraph 20 –
Governing Laws: Your contract of employment shall be governed by the laws of the DIFC. You submit to the jurisdiction of the courts of the DIFC in the event of dispute and agree that any action against the Bank may only be brought in the DIFC
19. The Employee Handbook contained the following passages:
This Handbook is intended to provide you with information about Commerzbank AG (the "Bank") and serve as a reference to its practices, policies, procedures and benefits for Dubai based employees in the Dubai International Financial Centre only. However, notwithstanding the terms of this Handbook, employees who are issued with a DIFC Secondment Card will not be entitled to receive certain benefits and entitlements in accordance with the DIFC Employment Law.
…
Section B (Terms and Conditions of Employment) of the Handbook forms part of your contract of employment. Where there is a conflict or discrepancy between the terms and conditions in your contract of employment and the terms and conditions as set forth under Section B of this Handbook, your contract of employment shall prevail. The terms of contract as set forth under this Handbook may be changed at the Bank's discretion from time to time.
…
Section B – Terms & Conditions
Clause 1: You are employed by Commerzbank AG, Dubai Branch. In this Handbook "the Bank" means Commerzbank AG together with all of its subsidiaries.
…
Clause 23 - Your contract of employment is governed by DIFC law and both you and the Bank agree to submit to the exclusive jurisdiction of the DIFC courts in relation to any claim or matter concerning the contract.
20. On 28 September 2021 the Claimant received a letter in the following terms:
We write on behalf of Commerzbank AG (DIFC Branch) (“the Bank”).
It is with regret that, on behalf of the Bank, we inform you that the Bank is terminating your employment by reason of redundancy with a minimum of 3 months’ notice as provided for in clause 5 if your contract of employment dated 12 November 2020 (the “Employment Contract”).
21. Perhaps the only other relevant undisputed fact is that Article 66 of the Law provides for end of service gratuity for employees who have completed continuous employment of at least one year. Article 66(7) states that for the purposes of a scheme qualifying under the Article during the first five years of service 5.83% of the employee’s monthly basic wages shall be paid into the scheme by the employer. For each additional year of service the employer shall pay 8.33%. The Defendant paid 8.33% into a scheme on behalf of the Claimant.
The Defendant’s Case
22. The Defendant essentially makes three points:
(1) Commerzbank AG (DIFC) is a different employer from the Claimant’s previous employers in London and Singapore and (irrespective of his pleaded causes of action) he has no claim no claim against this employer;
(2) Even if Commerzbank AG (DIFC) is the same entity as the Claimant’s previous employers the Claimant cannot make claims under the Law in relation to periods before the inception of his employment contract on 11 January 2021 which is the date under which his relationship with Defendant first became subject to the Law; and
(3) The Claimant was made redundant within less than one year of the commencement of his employment in the DIFC and therefore did not qualify for an end of service gratuity under Article 66 of the Law.
23. In support of the first proposition Mr Edward Kemp, on behalf of the Defendant, drew my attention to a number of Articles of the Law:
(1) Article 4(1) –
Subject to Article 4(3), this Law applies to:
a) any person having a place of business in the DIFC (including a body, authority, registry or entity established by or pursuant to the DIFC Founding Law) who employs one (1) or more individuals; and
b) individual employed by way of an Employment Contract by a person referred to in Article 4(1)(a), who either:
I. is based within, or ordinarily works in or from, the DIFC; or
II. agreed in an Employment Contract to be subject to this Law; or
c) any individual working or employed in the DIFC pursuant to Article 4(2).
(2) Article 4(2) –
Subject to Article 4(3) an Employee may be employed in the DIFC pursuant to an employment contract subject to an applicable law other than this Law, in instances where:
a) the Employee is working in or from the DIFC on the basis of a Secondment;
(3) Article 11(2)(a) (referred by the Claimant but it is convenient to set it out here) –
Nothing in this Law precludes an Employer from providing in any Employment Contract terms and conditions that are more favourable to an Employee than those required by this Law
(4) Part 9, Article 59 –
Discrimination
1. An Employer must not discriminate against an Employee regarding employment or any term or condition of employment on the grounds of the Employee's … race
(5) Article 61 (referred by the Claimant but it is convenient to set it out here) –
1. In any proceedings before the Court under this Part 9:
a) the burden of proof shall be on the complainant; and
b) the respondent shall be treated as a party and is accordingly entitled to appear and be heard.
2. A Court shall not consider a claim under this Part 9 unless it is brought to the Court before the end of
a) the period of six (6) months beginning with the later of the date on which this Law comes into force and the date of the act, or failure to do something, to which the complaint relates; or
b) where a complainant satisfies the Court that there are circumstances which justify disapplying Article 61(2)(a), such other period as the Court considers reasonable.
3. For the purposes of Article 61(2)(a): conduct extending over a period is to be treated as done at the end of the period.
(6) Article 66(1) –
An Employee who is not registered with the GPSSA under Article 65(1), and who completes continuous employment of at least one (1) year or more with their Employer, before or after the Qualifying Scheme Commencement Date, is entitled to a Gratuity Payment for any period of service prior to the Qualifying Scheme Commencement Date on the termination of their employment.
(7) Paragraph 1(1)(b) of Schedule 1 –
In this Law, a reference to … a person includes any natural person, body corporate or body unincorporate, including a company, partnership, unincorporated association, authority, government or state;
(8) Paragraph 3 of Schedule 1, Defined Terms –
Employee - an individual referred to in Article 4(1)(b) or (e)
Employer - an establishment or entity referred to in Article 4(1)(a).
24. In relation to the first point the Defendant submits that Commerzbank AG (DIFC Branch) is a person having a place of business in the DIFC who employs one (1) or more individuals within the meaning of Article 4(1)(a) of the Law. While it may not have separate corporate personality it is a “body unincorporate” within the meaning of paragraph 1(1)(b) of Schedule 1 and so is “a person” for all purposes of the Law. It therefore falls within the definition of “Employer”.
25. Equally it is said the Claimant falls within the definition of “Employee” given that he was an individual employed by way of an Employment Contract by a person referred to in Article 4(1)(a), and was based within, or ordinarily worked in or from, the DIFC; and agreed in an Employment Contract to be subject to the Law.
26. The second point proceeds on the basis that once it is understood that “Employer” refers only to the DIFC Branch of the Bank, any claim under Part 9 can only relate to the relationship between the DIFC Branch and the Claimant and since none of the allegations sought to be struck out relate to that relationship they should not be entertained and immediate judgment be given dismissing the claims based on those allegations. Mr Kemp emphasized that it is important to differentiate between jurisdiction and the application of the Law. The Law cannot apply retrospectively and for there to be a statutory remedy the Claimant must have been an employee within the meaning of the Law in order to avail himself of a statutory cause of action.
27. In support of the latter submission Mr Kemp drew my attention the English case ofSecretary of State for Employment v Globe Elastic Thread Co Ltd [1979] ICR 706 (House of Lords). In that case an employee agreed to the transfer to another company on the basis of an assurance that he would not lose any of his accrued service benefits and that his service would be treated as continuous. The industrial tribunal found that even though his employment did not fall within the statutory definition of continuous the employers were estopped from denying the continuity of service. The House of Lords found that the tribunal was in error (Lord Wilberforce at page 711):
(1) If "continuity " means continuity with one employer, a tribunal, applying section 1 of the Act, could not properly have regard to continuity with two successive employers. The Act does not permit this. To take such latter continuity into account is to do something which the Act does not allow. It involves, not merely an error within the jurisdiction entrusted to the tribunal, but acting outside the jurisdiction altogether.
(2) I am unable in any event to agree that any question of estoppel arises. There was a contract with the employee that he would retain the benefit of his previous employment. To convert this into an estoppel is to turn the doctrine of promissory estoppel (the validity or scope of which I do not now examine) upside down. Even if an estoppel may give rise to a contractual obligation, it does not follow, and it would be a strange doctrine, that a contract gives rise to an estoppel. I derive support, in this argument, from the reasoning of Lord Hailsham of St. Marylebone L.C. inWoodhouse A.C. Israel Cocoa Ltd. S.A. v. Nigerian Produce Marketing Co. Ltd. [1972] A.C. 741, 757-758.
(3) Even if anything in the nature of an estoppel arose, that could not confer upon the tribunal a jurisdiction beyond that given by the Act. Whatever force it might have as between employer and employee, it could not make the redundancy payment agreed upon a payment which the employer was "liable under Part I of this Act to pay" (section 30 (1) (a)) and so could not create a right of rebate, Putting this in another way, a personal estoppel as between employer and employee, which is the most that this could be, could not bind the Secretary of State.
28. Mr Kemp relied upon the passage in general terms in support of his contention that when one is dealing with statutory rights they override the terms of any contract between the parties. The parties cannot agree that the Law takes effect retrospectively to include a time when they were not respectively employer and employee within the meaning of Article 4 of the Law.
29. The argument on the third point follows the same line of reasoning but with more particularity: while the Claimant’s contract does expressly state that“Your previous employment with Commerzbank AG, which commenced on 01 November 2006, shall be recognized as continuous service”the parties cannot alter the wording of Article 66 of the Law which requires a minimum of one year’s service for an employee (as defined) to be entitled to a gratuity payment.
Discussion
30. The first point is ripe for disposal by way of immediate judgment. I consider that Commerzbank AG is the employer within the meaning the Law.
31. It is true that paragraph 1(1)(b) of Schedule 1 to the Law includes within the meaning of “person” an unincorporated body but it does not expressly address the status of a branch or division of a corporate body which is not usually be regarded as a separate unincorporated entity. That is clear from the decision of the Court of Appeal inCorinth Pipeworks SA v Barclays Bank Plc [2011] DIFC CA 002 to which the Claimant refers:
(62) The legal status of "Barclays Capital" and "Barclays Wealth" in the DIFC is that the Respondent has created two business units in the DIFC with distinctive names, but those businesses would still (under English law as well as DIFC law) be regarded as part of the Respondent, which is the owner of these two business units. To be precise, the correct legal description of those businesses would be "Barclays Bank plc trading under the name and style of Barclays Capital and "Barclays Bank plc trading under the name and style of Barclays Wealth". If the assets respectively of "Barclays Capital" or "Barclays Wealth" located in the DIFC were insufficient to meet obligations incurred in the DIFC (or indeed elsewhere), the assets of the Respondent, wherever located, would be available to be seized in settlement of the liabilities of either of those business units.
(63) That is the natural and legal consequence of operating a branch or division of a bank, viz that there is no separation of entity between an unincorporated branch of a foreign bank and the foreign bank itself. It is a fundamental principle of company law that the only way for a company to create another entity under its control (and yet legally separate from it) is to incorporate a subsidiary. In the present context, no other form of legal existence is known to the law.
32. It is not merely a matter jurisdiction but “a fundamental principle of company law” that an unincorporated branch does not have separate legal personality from the whole. The contracting party in the present case was therefore Commerzbank AG and not a separate entity, Commerzbank AG (Dubai Branch).
33. An employee is“any individual employed by way of an Employment Contract by [an employer]”. An Employment Contract is defined at paragraph 3 of Schedule 1 to the Law as“contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing and any permitted amendment or replacement thereof as agreed between the Employer and Employee.”That contract could only have been made by or on behalf of Commerzbank AG.
34. I do not consider that the definition of “person” at paragraph 1(1)(b) of Schedule 1 was intended to alter either contract or company law. What it was clearly intended to do, as a matter of statutory draughtsmanship, was to cast the net of regulation as wide as possible in order to assist the stated purposes of the Law in Article 3 to provide minimum employment standards, to promote fair treatment of employees and to foster employment practices that will contribute to the prosperity of the DIFC. What the definition in paragraph 1(1)(b) cannot do is alter the fundamental juridical status of parties.
35. InCorinththe DIFC Courts asserted jurisdiction over a claim relating to matters that occurred at a branch outside the DIFC because Barclays Bank was a Centre Establishment:
(66) I respectfully disagree with this line of reasoning. Once it is established that an unincorporated DIFC branch of a foreign bank cannot be regarded as an independent entity for purposes of qualifying as a "Centre Establishment", it follows that this term can only be interpreted to mean the Respondent and its various branches, wherever located. Accordingly, the DIFC Courts do have jurisdiction over the conduct of the Respondent's Dubai branch, as it would have over any other branch of the Respondent, wherever located.
Barclays Bank was a Centre Establishment because it was that entity that was a “Recognised Company”. Mr Raymond Clement, Head of Legal, Asia of Commerzbank AG (Singapore Branch) asserts in his First Witness statement dated 16 September 2022 that“The Defendant is a recognised company in the Dubai International Finance Centre (DIFC) and so is a branch of the Bank, based in the DIFC,”. If this is a suggestion that the branch is the Recognised Company I regret to say that it appears to me to be a misstatement as I do not understand that a branch can be a separate Recognised Company. However I did not hear argument on that point (although Ms Moyo on behalf of the Claimant exhibits DIFC Company Information showing Commerzbank AG as a Recognised Company to her witness statement of 28 October 2022), but it does seem to me that there is at the very least a realistic prospect that the Claimant will establish that the DIFC Courts have jurisdiction over Commerzbank AG and all of its branches wherever located subject to any arguments concerning the appropriate forum (seeCorinth [68(c)]).
36. The point is reinforced by something thatwascanvassed in argument, namely that by Clause 20 of the Employment Contract it was agreed that any action against the Bank may only be brought in the DIFC. “The Bank” was defined as Commerzbank AG together all of its subsidiaries. It is correct that the jurisdiction clause in the Employee Handbook is more limited -“you and the Bank agree to submit to the exclusive jurisdiction of the DIFC courts in relation to any claim or matter concerning the contract”but the Employment Contract takes precedence over the Handbook.
37. Mr Kemp’s second point has much more force. Even if Commerzbank AG is the proper Defendant and even if the parties have submitted to the exclusive jurisdiction of the DIFC Courts over any claim against the Bank whether concerning the contract or not, it is not possible retrospectively to apply the provisions of the Law to events occurring before the parties agreed they were subject to DIFC law. The Claimant might have or might have had claims under English or Singaporean law that may now be subject to the exclusive jurisdiction the DIFC Courts but that is not how the claim is pleaded.
38. Ms Sarah Malik for the Claimant disclaims any attempt to contend that the Law applies retrospectively. She submits that the allegations made by the Claimant are a continuing course of conduct culminating in his redundancy which he claims was engineered by false representation and/or misrepresentation in that he was persuaded to relocate to the DIFC Branch at a time when it must have been known to the Bank that it was planning to close the DIFC Branch. He pleads:
(4) On 26 November 2020 in an email (Exhibit 8), Mr Schumacher reassured the Claimant and advised him that the move to Dubai would be a better location and that he should "close your eyes and run". Further, it was at all times expressly agreed that in the event of any potential redundancy, the Bank would guarantee the Claimant a minimum redundancy payment equivalent to 12 months' pay, which amounts to USD 877,851. This reassurance from Mr Schumacher and assertion within the same email that Dubai is likely to be a better location and that the rumours of the DIFC Branch closing were only rumours, was a determinative factor in the Claimant's relocation to Dubai.
(5) Notwithstanding this on 19 May 2021, in a U-turn, Markus Brall, COO of the DIFC Branch ("Mr Brall") and Bernd Laber General Manager of DIFC Branch ("Mr Laber"), introduced a one-page redundancy policy for employees working in the DIFC Branch ("DIFC Branch Redundancy Policy") (Exhibit 9).
(6) The Claimant asserts that the introduction of the DIFC Branch Redundancy Policy amounts to direct discrimination on the grounds of race as it was specifically targeted at him. The policy was drafted in a manner that was less favourable to the Claimant taking account of the redundancy severance package that the Claimant would receive (given his longevity of more than 15 years' of service) when compared to the other branches of the Bank, which were overseen by Mr Schumacher.
39. These facts if proved give could give rise to causes of action (including under the Law) that accrued both before and after the Claimant commenced employment in the DIFC and relate back his other complaints.
40. Further Ms Malik draws my attention to Article 61(3) of the Law that provides for the purposes of Article 61(2)(a) conduct extending over a period is to be treated as done at the end of the period. Thus, she submits, the Claimant’s cause of action is deemed to have accrued while he was employed in the DIFC. Mr Kemp says that the article is only concerned with limitation, but I am not sure that is a full answer as limitation is concerned with when a cause of action accrued or is deemed to have accrued.
41. Once one accepts, as I hold one is bound to, that it was not just the DIFC Branch of the Bank that was the employer under the employment contract, the situation becomes a good deal more complex and fact-sensitive. The Claimant’s present rights under the Law may be intertwined with events that occurred January 2021.
42. The situation is more complicated than the Defendant would submit and in my judgment I cannot say that the Claimant’s race discrimination, false representation/ misrepresentation, unlawful deduction of wages and penalties claims only enjoy a ‘fanciful’ prospect of success.
43. The third point is more of a construction argument and turns upon the meaning of the phrase“Your previous employment with Commerzbank AG, which commenced on 01 November 2006, shall be recognized as continuous service”and the Bank’s payment of contributions to the scheme for end of service gratuity on basis of more than 5 years’ service.
44. In answer to Mr Kemp’s reliance onGlobal ElasticMr Malik refers to Article 11(2)(a) of the Law permitting terms and conditions that are more favourable to an Employee than those required by this Law. Thus, she submits while Article 66 does provide for a 12-month qualifying period for end of service gratuity, the parties have agreed that the relevant service dates back to 2006; this is not analogous toGlobal Elastic,it is not a matter that is prohibited by the statute but expressly condoned by it.
45. Mr Kemp denies that the wording was intended to have that that effect, he relies on the evidence of Mr Clement in his Second Witness Statement of 9 November 2022 at paragraph 17 as to intention behind the clause:
In response to paragraph 7.5 of CWS, continuity of service was never agreed by the Defendant to entitle the Claimant to pursue claims against other branches of Commerzbank AG that pre-dated the Claimant's employment with the Defendant. The Claimant is seeking to rely on the reference holistically In relation to the jurisdiction of the Employment law and this cannot be correct, particularly given the separate contracts that the Claimant had with different branches of Commerzbank AG, with different governing laws, reflecting which branch the Claimant was employed by at any given time. The Claimant's statement that he specifically negotiated for the provision relating to continuity of service in the Contract is not true. This provision was included in the first draft contract sent to the Claimant, without negotiation, as it is standard practice for different branches to preserve continuity of service from other branches, as can be seen at Exhibit "RC5". Continuity is recognised by standard practice as it is intended to apply where a branch has a specific policy in respect of which continuity of service will be a factor, such as a redundancy policy.
46. Whether or not direct evidence of intention is admissible as an aid to construction is a question for another day, but it seems to me that there is a conflict of evidence that may be material to the decision on the effect of the words.
47. It follows, in my judgment, that the argument that the parties in this case expressly waived the 12-month qualifying period for end of service gratuity and deemed the relevant service to have commenced on November 2006 cannot be summarily dismissed and that it carries some degree of conviction beyond the merely arguable given that the Defendant appears to acted consistently with that position.
Conclusion
48. In the light of the foregoing, the Defendant’s Application is dismissed.
Costs
49. Both parties served statements of costs and I heard costs submissions contingent on my possible findings. Mr Kemp realistically argued that whatever way the decision goes costs should follow the event.
50. While the Claimant’s costs were relatively modest compared with those of the Defendant even allowing that the Defendant had the carriage of the Application, Mr Kemp argued that I should exclude some of the costs claimed on the basis of duplication as the Claimant is using two law firms, Ms Malik’s firm and Gately UK LLP (DMCC Branch). Ms Malik replied that their relationship was akin to English barrister and solicitor and so there was no duplication.
51. I consider that Mr Kemp has a point, in particular since the witness statement of Ms Moyo of Gately largely contains legal argument which I would have expected in counsel’s skeleton argument. Gately’s costs appear broadly to be in the region of AED 35,000. I will therefore assess the Claimant’s costs at AED 170,000.
Postscript
52. RDC 27.3 provides that the Judges will, in appropriate cases, invite the parties to consider whether their dispute, or particular issues in it, could be resolved through alternative dispute resolution.
53. While of course I have no knowledge of any discussions that may have gone on between the parties, on the limited familiarity with the issues I have now gained, this does appear to be a suitable case for resolution through mediation.
54. I hope that this judgment may have clarified some of the issues and the Court stands ready to assist the parties in the speedy and economical resolution of their differences.