Commercial judge refuses to enforce Dubai payment order after finding breach of natural justice occurred

About this case:

• Citation:
  [2025] CSOH 41
• Judgment:
  External link
• Court:
  Court of Session Outer House
• Judge:
  Lord Braid

Papel Payment Services Provider LLC sought to enforce an order it obtained ex parte in the Dubai Commercial Court of First Instance against Monitox Ltd, a company registered in Scotland which solely operated in London. The defender argued it had no effective opportunity to challenge the payment order which led to that judgment.

The case was heard by Lord Braid in the Outer House of the Court of Session. Frain-Bell KC and K Young, advocate, appeared for the pursuer and Tosh, advocate, appeared for the defender.

Fast-track procedure

In or about 2021 or 2022, the owner and director of the pursuer, Ferit Samuray, sought to acquired the shareholding in the defender of its sole shareholder, Maksim Asanov. During a period when Mr Samuray was also a director of Monitox, the pursuer and defender entered into a Supply of Services Contract governed by the law of the UAE, with the courts of Dubai having exclusive jurisdiction to settle all disputes arising from the contract.

The relationship between Mr Samuray and Mr Asanov soured, leading to separate litigation before the Court of Session about the share purchase deal. This also led to the termination of the contract and the pursuer submitting two invoices to the defender, which were not paid. On 30 September 2023, a judge in the Dubai Commercial Court of First Instance made payment orders against the defender, with no appeal lodged in the 30-day time limit.

An expert witness for the pursuer, Mr Al Zarooni, explained that the payment order legislation was introduced to provide a “fast-track” mechanism for creditors to recover undisputed debts following the service of a legal notice (in Arabic) to the debtor requiring payment within 5 days. Counsel for the pursuer submitted that this process was analogous to the Scottish procedures of summary diligence proceeding upon deeds registered for execution in the Books of Council and Session where the debt was readily ascertainable.

The cornerstone of the defender’s submissions was that it was a fundamental requirement of natural justice that sufficient notice of proceedings must be given before judgment is pronounced, and that simply had not happened in the present case. Even if the court did not accept that the entire procedure for obtaining a payment order was contrary to natural justice, the peculiarities of the present case resulted in such a breach.

No realistic prospect

In his decision, Lord Braid began by noting: “Senior counsel for the pursuer suggested that since the procedure was, so to speak, played by the book, I would have to find either that the system as a whole was contrary to our principles of natural justice, or that it was not, and that no middle ground was available. However, there are specialities which arise in this case out of the particular manner in which the defender was notified of the judgment; and anyway I do not accept that, after the point at which the order was obtained, the procedure was necessarily played by the book, for reasons I will come on to discuss.”

He continued: “It is factually not the case that the defender had several opportunities to deny the debt and request a full hearing. The notice of 7 July 2023, as previously pointed out, did not commence the legal process, and did not afford the defender any opportunity to present its case to the court. Further, while it may be true that the defender had more than one opportunity to deny the debt (to the pursuer), its failure to do so prior to the payment order procedure has no bearing on whether the subsequent procedure contravened natural justice or not.”

Considering the case law on deeming a foreign judgment to be unenforceable in Scotland, Lord Braid said: “It has been said that whether sufficient notice has been given is a question of function rather than form. All relevant circumstances must be taken into account, including the means employed for effecting service and the nature of the steps which required to be taken in order to prevent judgment from being pronounced. The debtor’s state of knowledge and whether any document served on the debtor had been translated into an appropriate language before service are relevant factors.”

He added: “The European Court of Human Rights has also made plain that the right of access to a court includes a right to be informed of the procedures to be followed in order to appeal against a judgment, including any relevant formalities and time limits, particularly in a case where a person has been convicted, or judgment has been granted, in absentia. Drawing all of this together, I conclude that natural justice will be breached where a debtor has not been given sufficient notice of foreign proceedings in such a way as to have an opportunity to present his case to the court at some stage in the process.”

Lord Braid concluded: “Of the three post-judgment notices relied on by the pursuer, the first, being the notice of 5 October 2023, was wholly in Arabic and recognised even by the court to be insufficient to bring the notice to the attention of a Scottish company with no known Arabic speakers. The second, a newspaper advertisement, was wholly in Arabic and published in a newspaper which had no realistic prospect of coming to the attention of the defender. The third, the notice of 13 October 2023 was only partly in English and while it drew the defender’s attention to the fact that a judgment of some sort had been passed, the amount stated was wrong, the parties were not identified and, crucially, there was no translation of the intimation of the right to appeal, or how, or by when, that must be exercised.”

Consequently, it was held that the defender was given no real opportunity to present its case, and decree of absolvitor was granted.