Our Litigation lawyers at Al Tamimi & Company provide insights on Federal Supreme Court Cassation judgment on Disregarding an expert report
Said Refaei Senior Associate, Litigation
Sara Omer Ali Associate, Litigation
Court-appointed experts, whose role is to assist the judge in relation to specific issues, play an important role in UAE court proceedings. Indeed, it is common practice for the court to adopt the report of the court-appointed expert. However, as article 90 of the Law of Evidence (Federal Law No. 10 of 1992 concerning Law of Evidence in Civil and Commercial Transactions) makes clear, the opinion of the court-appointed expert is not binding on the court. Hence, a court may rule in contradiction to the opinion of the expert (article 90). If the court does so it is required to, “show in its ruling the reasons which led it not to accept this opinion in full or in part” (article 90). In this article, we review a recent ruling of the Federal Supreme Court (Judgment 683-769 of 2021), which considered the meaning and effect of article 90.
The case was filed by a subcontractor (the Claimant) against the owner and the main contractor of a project (the Defendants) in the Emirate of Sharjah. The subcontract agreement governed the manufacture, supply and installation of aluminium, glass and cladding works by the Claimant to the Defendants. The Claimant claimed that it had completed the works but the defendants had withheld payment.
The Defendants filed a counterclaim in which they alleged that the Claimant had not completed the works and did not perform the works in accordance with the specifications of the subcontract agreement. They requested compensation for the alleged incomplete works. Additionally, one of the main disputed items was the aluminium provided by the Claimant thus, the Defendants requested the subcontractor appointed by the Claimant, which had provided the aluminium, to be joined as a party to the proceedings.
The Court of First Instance appointed an expert committee to look into the matter. The expert committee issued its report in which it expressed its finding that the Claimant had completed the works and was owed the amount of AED 3,061,734. The Court of First Instance issued its judgment based on the expert report in which it ordered the defendants to pay the amount of AED 3,061,734 plus 6% legal interest per annum from the date the case was filed. The Court dismissed the counterclaim filed by the Defendants and issued a judgment in favour of the subcontractor. The court ordered the Claimant to pay the subcontractor AED 500,000.
The parties appealed the judgment issued by the Court of First Instance. Considering that the parties disputed the findings of the experts appointed at the Court of the First Instance stage, the Court of Appeal appointed a new panel of experts to review the matter. The Court of Appeal issued its judgment based on the new expert report in which it found the following:
It ordered the Defendants to pay the amount of AED 10,628,083 and upheld the part related to the interest.
The appeal filed by the Defendants was rejected.
The parties filed an appeal before the Court of Cassation. The Defendants argued that the Court of Appeal based its judgment on the defective expert report without looking at the clauses mentioned in the subcontract agreement.
The Defendants argued that the subcontract agreement specifically mentioned the technical specification of the materials (aluminium) to be used in the project, providing that the aluminium should be Japanese aluminium. However, the Claimant supplied Chinese aluminium, which it alleged does not have the same quality and is cheaper. They stated that the experts only examined if the aluminium was supplied and not whether it was provided in accordance with the specifications.
Moreover, the Defendants argued that the same clause provides that where there is an unjustified delay by the Claimant in delivery of the material, the Claimant must pay delay penalties in accordance with clause 7 of the subcontract agreement. The Defendants supported their claims by including a report issued by the Civil Defence that stated that the external materials were not fire resistant and that the aluminium used was prohibited in the Emirate of Sharjah. Based on such a finding, the Civil Defence declined to issue a compliance certificate for the project.
The Court of Cassation accepted the arguments raised by the Defendants. The Court of Cassation held that it is well established that the interpretation of contracts, agreements, and writings and the understanding of their clauses and terms is guided by the language of the contract, with a view to ascertaining the intention of the parties. This is strictly a legal issue committed to the trial court’s discretion that may not be left for the experts to determine. While the trial court has full discretion to adopt the report of an expert it has appointed, on its findings, the report’s conclusions must be consistent with what is established in the documents. Moreover, a judgment that relies on an expert report without addressing party objections against it that include a substantive defence which, if correct, would have changed the outcome of proceedings and the assessment of the expert’s work and his conclusion, is marred by defective reasoning.
In this case, the Court of Appeal relied on the expert report in making its award against the Defendants without addressing their defences and objections to the report. Significantly, those defences and objections were based on documents that included the subcontract clauses containing the specifications, quality, and country of manufacture of the aluminium and the Civil Defence report. Only then could the Court of Appeal have determined the extent of the Claimant’s compliance with their contractual obligations and, accordingly, their entitlement to the amounts awarded to them. Additionally, it did not take account of evidence that the cladding used in the project did not conform to subcontract specifications.
The expert report did not cover any of the material evidence on which the Defendants relied and asserted in their defence. And yet, the Court of Appeal adopted the expert report on its findings without addressing this defence in a proper response given its potential for changing the outcome of proceedings. The Court of Appeal’s judgment was marred by defective reasoning and error in the application of the law and was reversed. As a result, the Cassation Court reversed the Court of Appeal judgment and referred it to the Court of Appeal to reconsider the case by a different panel of judges.
The Court is not obliged to issue its judgment based only on the expert report. The expert’s role in the case is to assist the court in determining issues of fact. However, the Court is obliged to examine and determine the legal issues in the case based on all the evidence submitted to it.
For further information, please contact Said Refaei or Sara Omer Ali.
Published in September 2022
