Commercial Bank of Dubai PSC & Ors v Abdalla Juma Majid Al Sari & Ors

For a claim alleging malicious prosecution of civil proceedings, the direct invasion of the claimant’s legally protected interest occurs principally where the proceedings were instituted. Legal costs incurred in defending them and consequential losses elsewhere are ordinarily secondary consequences. Under Article 4(1) of Rome II, the applicable law is therefore generally the law of the place of the allegedly wrongful proceedings. Article 4(2) may apply where parties habitually resident in different territorial units share the same substantive law on non-contractual obligations. Article 4(3) remains an exceptional escape route, requiring a clear and manifestly closer connection. Applying those principles, the claims were governed by DIFC law.

The judgment determined an outstanding applicable-law issue following the court’s earlier judgment in the same proceedings. The claimants alleged that certain defendants had maliciously prosecuted civil proceedings in the DIFC, and that those acts also constituted unlawful means for conspiracy claims.

The alleged losses included legal fees paid from accounts in the UAE and losses said to result from delayed realisation of property in England and Wales. The parties disputed whether English law, UAE law, DIFC law, or different laws applied under Articles 4(1), 4(2) and 4(3) of Rome II. It was initially common ground that DIFC law did not recognise the relevant tort.

1. Applicable law under Article 4(1). The court held that, in the distinctive context of malicious prosecution of civil proceedings, the relevant direct damage is the invasion of the protected interest in not being wrongfully subjected to litigation before the sovereign court of a particular state. That invasion occurs where the proceedings are instituted. Legal fees, the place of payment, the place of retainer, the place where legal work is performed, and losses arising from delayed enjoyment of property are secondary or consequential matters and do not determine the applicable law.
2. The analysis is fact-sensitive generally, but the nature of this tort makes the place of the proceedings the appropriate connecting factor. The approach avoids claimant-controlled and potentially fragmented results in which one wrongful commencement of proceedings generates claims governed by several laws.
3. Article 4(2). Dubai and Sharjah were treated as territorial units sharing the same UAE legislation on tort law, despite having separate court systems. That was sufficient for Article 4(2) to operate between parties habitually resident in those Emirates. Its application could nevertheless produce different laws for different parties or periods, which may support resort to Article 4(3).
4. Article 4(3). The provision is exceptional and requires a clear, manifestly closer connection. The close relationship between wrongful invocation of a court’s process and the law of the place where that process is invoked supported DIFC law. The same conclusion was reached independently of any differential operation of Article 4(2).
5. The applicable law of the claims concerning both sets of DIFC proceedings was therefore DIFC law. On the assumed common ground that DIFC law did not recognise a tort of malicious prosecution of civil proceedings, the claims were not arguable and the alleged acts could not constitute unlawful means for the conspiracy claims. However, a DIFC legislative amendment enacted during the hearing created a possible issue concerning the content and temporal application of DIFC law. The applicable-law finding was binding, but the content of DIFC law was left for determination on a future occasion.

The judgment addressed an outstanding issue following the same court’s earlier judgment, reported as [2024] EWHC 3304 (Comm). It was a first-instance determination of the applicable law of the pleaded claims.