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Lexis^® Middle East

DIFC 027/2013 on 31/05/2015

BGC Brokers LP v Abourahim-on 31/05/2015

Type

Case

Court

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

Jurisdiction

Dubai International Financial Centre

Taxonomy

General Employment & Labour Law, General Contract Law

Copyright

LexisNexis

Decision date

31 May 2015

Hearing/Judgment date

31 May 2015

Panel

Justice Sir Richard Field

Catchwords

Employment – Summary dismissal – Lawfulness – Defendant employee being loaned GBP 200,000 by claimant employer – Parties disputing bonus payment to defendant – Defendant making allegations of improper dealings involving co-workers – Claimant summarily dismissing defendant for blackmail arising from demands for money in return for silence regarding improper business dealings – Claimant issuing proceedings seeking repayment of loan – Whether defendant having blackmailed claimant – Whether employment contract having been lawfully terminated

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Background facts

Referenced documents

Article 59A of DIFC Law No. 4/2005

Table of Contents

Background facts
The claimant was a foreign recognised company within the Dubai International Financial Centre. It carried on business as an inter-dealer brokerage and was authorised and regulated by the Dubai Financial Services Authority (the DFSA). From March 2012, the defendant was employed by the claimant as a manager. The terms of his employment were regulated by three agreements, including an employment contract and a loan agreement. The claimant loaned the defendant GBP200,000, which was to be repayable from his net partnership units. The loan agreement provided that the loan was to be repayable if, inter alia, the defendant was lawfully dismissed from his position. It was to be written off at a rate of one fifth for each complete twelve month period of the initial period that the defendant remained employed by the claimant. Interest was to be due on all sums at 3% per annum. The employment contract provided that the claimant was entitled to summarily dismiss the defendant in circumstances where his conduct warranted termination and a reasonable employer would have terminated his employment and/or where it was entitled to do so at common law. Article59A of DIFC Law No4 of 2005 as amended (the DIFC Employment Law) provided that: ‘An employer or an employee may terminate an employee’s employment for cause in circumstances where the conduct of one party warrants termination and where a reasonable employer or employee would have terminated the employment.’ In early 2013, the defendant began to make veiled suggestions that two of the employees who worked under him were being improperly provided with business by a cousin who worked for a competitor in London. The defendant was informed that he had been overpaid GBP51,000 by way of bonus as part of his remuneration and that that would be deducted when the next bonus payment was made. The defendant considered that the money had been due to him as legitimate expenses which had stood to be paid before distribution among the pool of the bonus. The defendant became increasingly disenchanted with his role and angered by the dispute over his bonus payment. He continued to repeat his allegations regarding his two colleagues and expressed his belief that the claimant was trying to squeeze him out from his employment. In September 2013, the defendant was informed that his next bonus would be paid minus the GBP51,000 which would be re-distributed among those in the pool. The defendant went to see the senior executive officer (the SEO) of the Dubai office and an unscheduled meeting took place. The SEO’s witness statement contended that the defendant had wanted to be released from his contract and paid the GBP51,000 ‘or else’. As discussions continued, according to the SEO, the defendant reiterated his allegations against his colleagues and stated that he required ‘payment for his silence’. The defendant had made vague references to being in possession of documents and taped conversations between him, his colleagues and the competitor in London. The SEO took that to mean that the defendant was seeking a payment in return for his silence arising from his belief that an inappropriate arrangement had been put in place between his colleagues and a broker in London. After the meeting, the SEO emailed the claimant’s employment counsel setting out details of the meeting and the defendant’s demands. That email accorded with his witness statement. The defendant’s witness statement regarding that meeting stated that he had thought it obvious that the claimant had wanted him out and that the SEO had not denied that when he put it to him. The SEO had asked him what he wanted to leave and to sign a document to never speak about what was going on at the claimant. He had said that he would not sign a document to silence him on illegal activities and that if the authorities were to ask him what had happened, then he would tell them the truth. In response to the question of what he wanted in return for leaving, he had said that he wanted his bonus in full, his shares and compensation for the claimant breaking his contract early as it still had three-and-a-half years to run. At a disciplinary meeting, the SEO’s version of events was put to the defendant. He said that the SEO had misunderstood his request for compensation that was due to him and that what he had said had not constituted blackmail. He had told the SEO that he wanted to leave his employment, but was not prepared to leave empty handed. The claimant concluded that the defendant had attempted blackmail and that he should be summarily dismissed. The claimant began an investigation into improper dealings by its employees and asked the defendant to provide the supporting evidence that he had told the SEO that he had. In response to that request, the defendant said that he had no such information and that the SEO had to have misunderstood him. The claimant commenced proceedings seeking recovery of the loan that it had advanced to the defendant.
Issues
Disposition
Holding
Appearances
Legislation referred to in judgment
Cases referred to in judgment
McDuff v KBH Kaanuun Ltd DIFC Case No CA 0003/2014
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