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Lexis^® Middle East

DIFC 006/2014 on 11/12/2014

TVM Capital Healthcare Partners Ltd v Hashemi on 11/12/2014

Type

Case

Court

Dubai International Financial Centre - JUDICIAL AUTHORITY OF THE DUBAI INTERNATIONAL FINANCE CENTRE, COURT OF APPEAL

Jurisdiction

Dubai International Financial Centre

Taxonomy

General Civil Procedure & Administration of Justice

Copyright

LexisNexis

Decision date

11 Dec 2014

Hearing/Judgment date

16 December 2014

Panel

Sir John Chadwick, Sir David Steel and H.E. Justice Al Muhairi

Catchwords

Practice – Res judicata – Issue estoppel – Parties having entered into confidentiality agreement – Claimant provided business and financial information regarding company (PV) that defendant having expressed interest in purchasing on behalf of third party – PV issuing criminal proceedings against defendant in Abu Dhabi – Defendant being acquitted – Claimant issuing proceedings in DIFC for breach of confidentiality agreement – Claimant’s application being allowed - Claimant being awarded damages and costs – Defendant appealing – Whether judge erring in not finding claim being barred by res judicata or abuse of process – Whether claim being barred by issue estoppel – Whether judge erring in assessment of award of damages in absence of relevant evidence as to quantum – Whether judge erring in approach to and quantification of costs order

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Background facts

Referenced documents

Federal Law No. 35 of 1992
Federal Law No. 3/1987

Table of Contents

Background facts
The defendant (H), purportedly on behalf of a wealthy family, had approached a consultant (K) who had been appointed by the claimant company (TVM) to enquire about purchasing TVM’s interest in a company (PV). In furtherance of negotiations, TVM and H entered into a confidentiality agreement. Accordingly, H was furnished with a document that covered the business and financial affairs of PV. Subsequently, TVM alleged breaches of the confidentiality agreement. PV initiated criminal proceedings in Abu Dhabi against H, K and two former employees. K and the former employees were charged with disclosure of trade secrets contrary to art 379 of the Federal Penal Code. H was charged with instigating and assisting in the disclosure of secrets by the other three defendants. The Bani Yas Court of First Instance found that no charge had been established against the first three defendants. H was acquitted because he could not be held to have instigated the commission of a crime by the other defendants in circumstances where those defendants had been acquitted of that crime. TVM issued proceedings against H in the Dubai International Financial Centre Court of First Instance seeking damages for breach of the confidentiality agreement. H raised defences of res judicata and abuse of process. The judge rejected both defences. In respect of res judicata, he found that there had been no other civil proceedings between TVM and H in relation to misuse of confidential information or at all. Further, abuse of process had not been established. The judge found that H had breached the confidentiality agreement. TVM’s primary claim to damages was advanced on the basis adopted in Wrotham Park Estate Company v Parkside Homes Ltd [1974] 2 All ER 321, the overriding principle of which was that the damages were compensatory. The primary basis for the assessment of Wrotham Park damages was to consider what sum would have been arrived at in negotiations between the parties, had each been making reasonable use of their respective bargaining positions, bearing in mind the information available to the parties and their commercial context at the time that that notional negotiation would have taken place. The judge concluded that the negotiating damages represented the price for which TVM might have released or relaxed the confidentiality undertakings or consented to disclosure of the confidential information. He then considered at what price TVM might have been willing to release or relax the undertakings. TVM’s primary claim, advanced on the opinion of an expert witness (Dr A) that the value of the right lost was AED 14.5m, was rejected. The judge conducted the assessment for himself. For its part, TVM would not have been prepared to sell the use of the information to a person who would have been seen as a would-be competitor at a low price. The dominant factor was how much H would have been prepared to pay. He had gone to some trouble to obtain the information illicitly, including having misrepresented that he had been instructed on behalf of a wealthy family. Ordinarily, high worth was placed on one’s credibility and H had to have seen a not insignificant value in having the information. On that basis, the judge awarded damages of AED 250,000 in respect of the established breaches of the confidentiality agreement. He then turned to the issue of costs. As TVM had largely succeeded in the proceedings, although its case on quantum had not been accepted, H was ordered to pay TVM’s costs except those of, and incidental to, obtaining Dr A’s reports and calling him as a witness. H appealed.
Submissions
Disposition
Holding
Appearances
Legislation referred to in judgment
Cases referred to in judgment
Wrotham Park Estate Company v Parkside Homes Ltd [1974] 2 All ER 321
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