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In Commercial Bank of Dubai v Al Sari [2025] EWHC 400 (Comm) Foxton J discusses at length the identification of the lex causae in a claim that certain of the defendants maliciously prosecuted two sets of DIFC Proceedings.
The losses claimed are legal fees in respect of various proceedings as well as losses alleged to have been suffered from a delay in recovering certain assets.
Claimants contend that the effect of A4(1) Rome II is that the claims for malicious prosecution of relevant DIFC Proceedings are governed by UAE law, or alternatively involve a series of claims, governed, inter alia, by UAE and English law, and that the claims for malicious prosecution of another set of DIFC Proceedings are likewise governed by English law and/or UAE law. In the alternative, by way of a new argument, they contend that UAE law applies as between some parties by virtue of A4(2) Rome II.
It is common ground that the law of the DIFC does not recognise a tort of malicious prosecution of civil claims.
[14] the judge refers to the need consistently to apply concepts in Rome I/II with the same concepts in Lugano Convention, Brussels Ia although he also, and much justifiably (as I have repeatedly stated) urges caution in doing so for “the cases disclose consideration in the former context of issues which do not seem to be directly germane to the latter.”
[15] Claimants refers to many authorities
“in which the claimant contended it had made what proved to be a worthless, or at least insufficiently valuable, investment in reliance on negligent advice or inaccurate statements. The obvious tension in these cases is whether the place of damage is where the “defective” transaction is irreversibly entered into, the place from which funds are advanced to make it, or where the flaws in the investment subsequently manifest themselves or crystallise (for example through on-sale of the investment at a reduced value).”
The authorities referred to are Kwok Ho Wan v UBS AG [2022] EWHC 245 (Comm), which in turn cited CJEU Kronhofer, CJEU Kolassa, CJEU Universal Music, CJEU Löber v Barclays Bank Plc, CJEU Vereniging van Effectenbezitters v BP. Cockerill J in Kwok suggested that the overall thrust of the CJEU jurisprudence favoured the place of the manifestation of damage, rather than the place of the transaction which led to the damage, as the relevant place for jurisdiction purposes – this was confirmed upon appeal [2023] EWCA Civ 222 where at [33], Sir Geoffrey Vos MR emphasised that the CJEU authorities which the Judge had said were “not entirely clear” reflected their particular facts, and should not be construed as a statute ([33]). The Court of Appeal doubted that there was “a rule that is universally applicable to financial loss cases”.
Clearly therefore the ‘fact pattern’ [21] needs to be taken into account and specific consideration is made of “two cases which were not defective investment cases, but cases in which a legal wrong had caused the defendant to incur various heads of costs. Those might be said to be closer to the fact pattern here.”: MX1 Limited v Farahzad, and W Nagel v Pluczenik.
[31] ff the judge concludes, with reference (like Kockerill J in Kwok) to prof Dickinson, both his Rome II contribution in Dicey (with the use of ‘reversability’), and [35] his chapter in the Gedächtnisschrift for Professor Jonathan Fitchen :
“The central submission of this chapter is that the concept of ‘damage’ within EU private international law is an active one which fixes upon the way in which the relevant event brings about its (claimed) effects upon the victim by adversely affecting a legally protected interest of that person to which the claim relates. This opens up the possibility of classifying different kinds of legally protected interests with a view to developing autonomous approaches for locating interference with them”.
[36] the judge then also links this to a ‘rights based’ approach to applicable law for torts, and for torts generally:
The assistance to be derived from the nature of the legally protected right as a relevant factor when identifying what constitutes direct and immediate damage and where it is suffered, coheres with wider right-based tort scholarship (e.g. Robert Stevens, Torts and Rights (2007)).
[37] “Approached from this perspective, the tort of malicious prosecution addresses the very specific interest of not being harassed by bad faith litigation before the sovereign court of a particular state.”
The judge continues (and readers might want to read those passages in full) with further underpinning of the argument that the legal costs etc suffered, all are indirect, consequential damage, and concludes [40] “Applying Article 4(1) to this singular tort, I am satisfied that the place of the invasion of the protected legal interest (and, in this case, of the primary or direct loss) is the DIFC.”
[41] ff Discussion of the fall-back A4(2) option leads to an interesting discussion of on-shore UAE law as a territorial unit per A25 Rome II and a conclusion [48] that A4(2) is engaged so far as the parties habitually resident in Sharjah and Dubai are concerned. [51] ff recourse to A4(3) is discussed ia with recourse to Owen v Galgay and I think (but have to say the judgment by this stage is not entirely clear) that the judge holds that A4(3) operates to displace the A4(2) presumption viz those parties where it was engaged (reference to Marshall v MIB), [60] ultimately making DIFC law the applicable law for all claims.
I wonder whether the ‘rights based’ approach to purely economic loss will get much traction. Prof Dickinson’s ‘reversability’ approach seems by now to be firmly anchored in English law.
Geert.
EU Private International Law, 4th ed. 2024, Chapters 2 and 4.
https://www.linkedin.com/posts/geert-van-calster-60abab9_lengthy-discussion-of-jurisdictional-issues-activity-7281969805660680193-xIOO?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAHHS6oB7DOA8jUedLLahLDL6cEwepyHYwA
https://x.com/GAVClaw/status/1899023760415506565
