Session Date: 17 November 2009

Appeal by Cassation No. 69 of 2009 – civil appeal by cassation
 

(1) Obligation “effect of obligation: implementation of the obligation: notice of default” – “contract “effects of contract”.
 

Notice of default – its objective – placing the debtor in the position of falling short of implementing the obligation – when the implementation of the obligation becomes irrelevant due to an act by the debtor – its meaning – no cause for a notice of default – Section 183 of the Civil Law – (an example in relation to a claim for renunciation and compensation for nonperformance of a contract for the organisation and procurement of a wedding ceremony.

(2) Contract – court of first instance “its power to ascertain a contractual default” “issues of fact” – liability “contractual liability: among its pillars: default”.

Ascertaining a default by a contract party represented in his nonperformance of his obligation that entails his contractual responsibility – fact – that the court of first instance has exclusive power to assess the same – its condition – that such ascertainment be reasonable and would support the court’s conclusion.

(3) Jurisdiction “the jurisdiction of the execution judge” – the execution judge: his jurisdiction” – attachment “attachment of the debtor’s rights against third parties”.

The jurisdiction of the court of first instance to order the attachment of the debtor’s rights against third parties – its two situations – 1) the lack of an execution bond – 2) where the amount of debt is not specified – Section 446 Procedures – an attachment order issued by other than the execution judge – in other than the aforesaid cases – legally appropriate.

1-    The meaning of notice of default – it is the placing of the debtor in the position of falling short of implementing an obligation, thereby, under Section 183 of the Civil Law, it becomes redundant following the irrelevance of such implementation due to an act by the debtor. It has been established that the contract to procure a wedding ceremony has a specific date, after which the implementation of the obligation becomes irrelevant, resulting in the redundancy of any notice of default. The argumentation in the judgment was deduced from the letter sent by the Respondent to the Appellant on 24.7.2006 that the Respondent had failed to implement his obligation up until the date of such letter. The contention is e baseless.

2-    It is established jurisprudence of this Court that the ascertainment of default represented by a breach by a contract party of his obligation that forms the basis of his contractual responsibility is a matter which is exclusively to be ascertained by the court of first instance, so long as such ascertainment is based on reasonable grounds and supports the conclusion reached by such court.

3-    Precautionary attachment of a debtor’s rights against third parties is not an exclusive jurisdiction of the first instance court alone. This is because Section 446 of the Civil and Commercial Procedures Law provided for such jurisdiction in the two cases where there is no execution bond, or where the amount of debt is not specified. Where the amount of two million Riyals the subject-matter of the attachment order, is definitely in existence, immediately payable, and proven to exist by a clear document (i.e. the contract concluded by the two parties, regardless of dispute), the issuance of such attachment order would then be in line with the law.  

The Court

Having reviewed the documents, and having heard the report read out by the Judge-Rapporteur, and heard the submissions, and after the deliberations;

Whereas the appeal by cassation has satisfied its formalities;

The facts, as revealed in the judgment appealed by cassation and other documents, may be summed up as follows. The Respondent brought against the Appellant the claim No.  373/2007 – civil – general – applying for a judgment, first, to renounce the contract dated 1.5.2006 to design and implement a partying hall and organize a wedding ceremony, secondly, to order the Appellant to refund to the Respondent the amount of two million Riyals being an advance payment received upon agreement, and thirdly, the payment of fifteen million Riyals in compensation. He states that by virtue of a contract dated 1.5.2006 he agreed with the Appellant on the designing and implementation of a partying hall and the organisation of a wedding party for which a specific date, 7.9.2006, was fixed, against the payment of eight million Riyals of which he paid upon contracting two million Riyals. It was agreed that the Appellant should complete the implementation of all the agreed works at a maximum date of 1.9.2006. Although the Respondent executed all his obligations, including the issuance of necessary visas and licences, the Appellant failed to implement the contract, despite being asked on 26.8.2006 to deliver the drawings and décor for the hall, which he didn’t, thereby the Respondent brought the claim. The Appellant brought a counter-claim applying for a judgment ordering the Respondent to pay to him an amount of six million Riyals being the balance of his dues under the contract, and compensation for the implementation of his obligations towards his subcontractors commissioned to execute his obligations, after which he received a letter dated 24.7.2006 postponing the date of the wedding. He stated that the non-performance was not caused by him but rather by the Respondent; thereby he had the right to apply for compensation to cover his damages. Accordingly he brought his claim. The Respondent likewise brought the combined claim No. 435/2007 civil – general – against the Appellant, (…) Bank in Kuwait, and (…) Bank, Beirut Branch, applying for a judgment renouncing the contract, the subject-matter of the dispute, the refunding of two million Riyals, declaring the validity of his right and the precautionary attachment, on which an order was issued following the statement No. 164/2006, and relieving the party in possession of the attached right from the litigation. The court issued a judgment, as regards the original claim, ordering the Respondent to pay to the Appellant five hundred thousand Riyals in compensation. As regards the claim No. 435/2007 the court ordered the relieving of (…) Bank in Kuwait and (…) Bank, Beirut Branch from the litigation, declared the validity of the right and the attachment, and rejected all other applications. The Respondent lodged an appeal No. 1124/2008 and the Appellant lodged an appeal No. 1139/2008. The court combined the two appeals and issued a judgment on 30.3.2009, in relation to the appeal No. 1124/2008, ordering the renunciation of the contract dated 1.5.2006 for the designing and implementation of the partying hall and the organisation of a wedding ceremony, and otherwise confirming the appealed judgment on the original claim. As regards the appeal No. 1139/2008 the court quashed the appealed judgment as far as the counter-claim is concerned, rejected it, and confirmed the appealed judgment relating to the combined claim No. 435/2007 – civil – general. The Appellant lodged against this judgment an appeal by cassation which was presented to this Court, at the deliberations chamber, and a session was fixed for its consideration.

The appeal by cassation is based on a single reason composed of five viewpoints. In the first viewpoint the Appellant contends against the appealed judgment that it erred in the application of the law, and involved bad argumentation. He states that the papers did not include any notice for default with a view to renounce. However, the judgment described the letter by the Respondent to the Appellant, which postponed for the Respondent’s personal reasons, as notice of default. Since such letter did not include such notice of default, the judgment becomes defective and worthy of appeal by cassation.

This contention is inappropriate. A notice of default is intended to place the debtor in the position of falling short of implementing his obligations. Accordingly, such notice is redundant, under Section 183 of the Civil Law, after such implementation has become irrelevant due to an act of the debtor. It has been established that the contract relates to the procurement of a wedding ceremony at a specific date, after which the implementation becomes irrelevant, with no need for a notice of default since the date of the ceremony has expired. The viewpoint in the argumentation of the judgment is derived from the letter addressed by the Respondent to the Appellant on 24.7.2006 that the Respondent had not commenced the implementation of his obligations until the date of such letter. The contention is therefore baseless.

In the second through to the fourth viewpoints of reason for the appeal by cassation the Appellant contends against the judgment appealed by cassation that it erred in the application of the law and involved bad argumentation. The judgment ordered the renunciation of the contract based on non-performance by the Appellant of his obligations, while such non-performance relates to the Respondent, who sent a letter to the Appellant for postponement, after which the Appellant prompted him on 23.8.2006 to speed up the specification of a date for the resumption of the contract implementation. However, he received no response from the Respondent who instead notified him of renunciation of the contract. The judgment did not consider the Appellant’s documents which prove his agreements with subcontractors commissioned by him to do some contracting works in implementation of the contract. The judgment refused to order compensation for his costs incurred towards the implementation of the contract, which renders such judgment defective and worthy of appeal by cassation.

This contention is inadmissible. The ascertainment of default represented by a breach by a contract party of his obligation that forms the basis of his contractual responsibility is a matter which is exclusively to be ascertained by the court of first instance, so long as such ascertainment is based on reasonable grounds and supports the conclusion reached by such court. The judgment appealed by cassation found that the Respondent had implemented his obligations under the contract. He paid the two million Riyals in advance payment to the Appellant as agreed. He also obtained the licences and visas for the entry of the Appellant’s work team and subcontracted companies, while the Appellant failed to implement his obligations under the contract, which prompted the Respondent to notify him on 26.8.2006 to deliver the drawings and décor for the hall, as per Article 4 of the contract, and to complete the works on 1.9.2006, but he failed to arrive at the time specified, nor were any visits recorded for the relevant people at the works site. This is not affected by the Appellant’s pleading that he subcontracted with other companies, since he did not reveal this to the Respondent as agreed. The letter addressed by the Respondent to the Appellant on 24.7.2006 notifying him of the postponement of the wedding ceremony was intended to prove that the Appellant, until the date of such letter, did not commence the implementation of the contract. Another letter followed, on 31.8.2006, altering the date to accommodate the requirements of the Appellant. Nevertheless, the Appellant failed to arrive to Doha for implementation, which prompted the Respondent to enter into contracts with other parties to complete the wedding ceremony. Since such reasoning is based on reasonable grounds, sufficient to justify the same and is supported by the documents, contention against the judgment as stated in the above viewpoints would only amount to mere argumentation on a matter which is exclusively for the court of first instance to determine, and may not be raised before the Cassation Court. Such contention becomes therefore baseless.

In his fifth viewpoint of the reasons for the appeal by cassation the Appellant contends against the judgment appealed by cassation that it erred in the application of the law and involved deficient reasoning. The precautionary attachment order No. 164/2007 issued null and void as it was issued by a judge other than the execution judge, while the attachment of the debtor’s right with third parties is always the exclusive right of the execution judge, as per Section 446 of the Civil and Commercial Procedures Law. He also pleaded the lack of notification with the attachment order within the ten days following its issuance. The judgment stated general reasons that the papers included several notifications through the diplomatic channels without stating such notifications, which do not qualify as a response to his pleading. Furthermore, the said attachment order was issued in breach of the rules of jurisdiction, because the subjects of attachment were outside Qatar, which causes the judgment to be defective and worthy of appeal by cassation.

This contention is inappropriate. Precautionary attachment of a debtor’s rights against third parties is not an exclusive jurisdiction of the first instance court alone. This is because Section 446 of the Civil and Commercial Procedures Law provided for such jurisdiction in the two cases, where there is no execution bond, or where the amount of debt is not specified. Where the amount of two million Riyals the subject-matter of the attachment order, is definitely in existence, immediately payable, and proven to exist by a clear document (i.e. the contract concluded by the two parties, regardless of dispute), the issuance of such attachment order would then be in line with the law.  In connection to what the Appellant states on the lack of notification with the attachment under Section 449 Procedures, that is not valid. This is because it is evident from the letter of the Consulate Directorate at the Foreign Ministry dated 3.7.2007 that such notification was implemented in the State of Kuwait, which is sufficient from the voluntary response by the Ministry, as per the provisions of Sections 8 and 10 of the Procedures Law. Furthermore, the precautionary attachment order was validly issued, without any breach of the international jurisdiction rules, since the matter relates to the rules governing the execution of foreign judgments in other states. The entire contention is therefore baseless.

Fore the aforesaid, the appeal by cassation shall be disallowed.