Case Studies
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Employee Wins Labour Dispute Against Two Brokerage Firms in UAE Arbitration

In a recent labour dispute between an individual, represented by NYK Law Firm, and two brokerage firms, the Honourable Labour Court of Dubai rendered a balanced verdict reflecting the intricacies of employment law in the UAE.

The case sheds light on the challenges employees face in asserting their rights and the crucial role of legal representation in navigating complex legal proceedings.

Background

The plaintiff was a sales manager at a commercial brokerage company, the primary defendant. Before his tenure here, he held the position of portfolio manager at another real estate brokerage company, the secondary defendant. His employment with the primary defendant ceased abruptly on April 5, 2023, with termination transpiring without prior notice after 8 months and 21 days of service.

Claims

The plaintiff's claims included commission payments for deals closed during his tenure with the real estate brokerage, payment for invoices incurred during his employment, compensation for untaken annual leave, notice allowance for lack of warning before termination and end-of-service gratuities.

Court Proceedings

NYK Law Firm, representing the plaintiff, presented compelling arguments emphasising his entitlements under the UAE Labour Law and relevant decrees. The court appointed an accounting expert to assess the financial aspects of the case. The expert's report validated the plaintiff’s claims regarding commissions earned during his tenure with the real estate brokerage.

Ruling

The court ruled in favour of the plaintiff on certain claims while rejecting others based on the expert's findings and legal requirements.

Commission Payments: The plaintiff was awarded Dh80,940.13 in commissions for deals closed during his employment with the real estate brokerage.

Invoices: The court rejected the claim for Dh6,400 as the plaintiff failed to provide sufficient evidence to support this claim.

Untaken Annual Leave: The plaintiff was entitled to compensation of Dh1,450 for his unused annual leave upon termination.

Notice Allowance: He was awarded Dh5,000 as a notice allowance due to the lack of a proper notice period provided by the commercial brokerage.

End-of-Service Gratuity: The court ruled to reject this claim as the plaintiff did not meet the criteria outlined in Article 51 of the Labour Law.

NYK Law Firm's successful representation of the plaintiff in this labour dispute highlights the firm's expertise in navigating complex legal matters.

The court's balanced ruling underscores the importance of documentation and adherence to labour laws in employment relationships. This case serves as a reminder of the significance of legal representation in ensuring fair treatment for employees and compliance with employers' obligations.

As the UAE continues to evolve its legal framework, cases like these contribute to shaping a more equitable and transparent labour environment.

(The writer is a legal associate at NYK Law Firm, one of the top legal consultants in Dubai)

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3007. Follow The Law Reporters on WhatsApp Channels.

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Glimmer of Hope for BR Shetty; Legal Battle to Continue

While entrepreneur BR Shetty, the founder of NMC Health headquartered in Abu Dhabi, still faces significant legal challenges, the recent ruling of the Karnataka High Court in India, granting conditional permission to travel abroad, represents a crucial milestone in his legal battles, say legal experts.

“The complexities of Shetty’s case revolve around intricate financial disputes, with his companies grappling with substantial loan defaults amounting to billions of rupees. Despite setbacks in the past, this recent court ruling indicates a potential shift in the legal landscape for Shetty, offering a ray of hope amidst ongoing legal proceedings,”said Sunil Ambalavelil, Chairman of Dubai-based NYK Law Firm.

Shetty returned to UAE on Tuesday morning and was welcomed by non-resident Indian expatriates belonging to his home state Karnataka.

Shetty's entrepreneurial journey has been marred by difficulties, including allegations of fraud and financial mismanagement, which led to the downfall of NMC Health. Nevertheless, amidst the legal turmoil, Shetty's contributions to the healthcare sector remain noteworthy, with NMC Health having once been regarded as a paragon of excellence in the industry,” he added.

The Karnataka High Court decision, delivered by Justice Krishna S Dixit, came amidst ongoing legal proceedings related to loan recovery against Shetty.

The court has imposed strict conditions, such as limitations on property transactions and a commitment to fulfil legal obligations in India. Despite these restrictions, the court's recognition of Shetty's citizenship and personal circumstances underscores the humanitarian aspect of this legal battle.

“This legal victory provides Shetty with a glimmer of hope amidst adversity, reflecting resilience in the face of challenges. As he prepares to reunite with his family and continue medical treatment, the path forward remains uncertain, yet imbued with determination and optimism for the future,” commented a senior associate at Kaden Boriss, an international alliance of independent business consulting firms and legal enterprises.

The court last Friday suspended the Lookout Circulars (LOCs) issued by Bank of Baroda and Punjab National Bank and the endorsement issued by the Bureau of Immigration against Shetty and granted conditional permission for him to travel to Abu Dhabi for treatment.

The order was passed by a bench headed by Justice Krishna, who heard the petition filed by Shetty challenging the look-out circular issued against him by the immigration authorities.

“The office memoranda (OMs) on lookout circular (LOC), issued by the Bureau of Immigration of the Ministry of Home Affairs, which also authorises the heads of the public sector banks to issue LOCs, is not valid in the eyes of law,” the High Court of Karnataka said.

“There can be no delegation to any other entity like the Chairman/Managing Director/Chief Executive of public sector banks to issue the LOC,” the court said, while pointing out that Section 21 of the Passports Act, 1967, enables the central government to delegate its power only to any officer subordinate to the central government or to the state government or to an officer subordinate to the state government or to officer of the Indian Consul abroad.

In 2021, the state's high court rejected Shetty's plea against the action of the Bureau of Immigration restraining him from leaving India based on the LOCs issued by two public sector banks to whom his companies owe around Rs28 billion.

Indian immigration authorities, on November 14, 2020, denied him permission to fly to Abu Dhabi from Bengaluru airport based on the LOCs issued by the banks in relation to the default of loans granted to companies promoted by him.

Shetty, whose wealth was estimated by Forbes to be around $4 billion in 2019, is facing a lawsuit in London by administrators of the debt-ridden NMC Health. In July 2023, NMC filed a $4 billion lawsuit against Shetty and its former CEO, Prasanth Manghat, related to allegations of fraud, which led to its fall in 2020. In November 2023, the UK's financial watchdog found that the hospital operator had committed market abuse by understating its debts by as much as $4 billion.

NMC Health, founded in Abu Dhabi in 1974 by Shetty, was a London-listed healthcare operator running hospitals in the Middle East. It entered the FTSE 100 in 2017 after rapid growth and was valued at £8.6 billion at its peak in 2018.

The Karnataka court, while allowing Shetty to go abroad if no other restriction exists for his travel abroad other than these LOCs, has directed him to file an affidavit giving an undertaking not to alienate or meddle with his properties anywhere in the globe, disclosed or undisclosed, and to come back to India whenever needed for legal proceedings, and not to leave the country without the prior permission.

Noticing that the banks have not initiated any criminal proceedings against him so far, the court said: "Shetty should not resist, on any ground, if any proceedings that may be instituted under the provisions of the Fugitive Economic Offenders Act of 2018, the Extradition Act, 1962, or such other law, or any extradition/rendition proceedings are taken up abroad."

The court observed that no criminal case is pending against the petitioner. "Therefore, the process of forced recovery will not be carried out. Also, the applicant is an Indian citizen and is eligible to travel abroad. He is 80 years old and needs to stay with his wife and children; he should be allowed to travel to UAE," the bench mentioned in its order.

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3007Follow The Law Reporters on WhatsApp Channels.

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