The Civil Court in Dubai recently made a significant ruling regarding a lawsuit filed by a company against three former employees.
The company accused these individuals of establishing a parallel company and poaching its clients for the benefit of the new venture. The plaintiff sought compensation totaling 200,000 dirhams, alleging that the defendants engaged in unfair competition practices by soliciting clients away from the original company. However, the court found that the lawsuit lacked substantial evidentiary support for these claims.
The company, which had been operating in the shipping and customs clearance sector for over 35 years, claimed that the defendants had been long-time employees until the outbreak of the COVID-19 pandemic. During this period, the company alleged that the defendants manipulated clearance procedures and subsequently established a competing entity. Moreover, they accused the defendants of misleading clients by presenting the new company as an extension of the original one, leading to substantial financial losses.
Efforts to resolve the matter directly with the defendants proved futile, as they ignored requests for compensation and continued operating independently. In response to the lawsuit, the defendants argued procedural irregularities in its filing, questioning the jurisdiction of the court and asserting that the company failed to follow proper legal channels before resorting to litigation.
However, the court rejected these arguments, affirming its jurisdiction over the case and the validity of the lawsuit. It clarified that the lawsuit was filed in accordance with established legal procedures, refuting claims of procedural errors.
Turning to the substance of the case, the court cited legal precedent suggesting that mere competition does not necessarily entail liability unless accompanied by misconduct, such as the unauthorized disclosure of proprietary information. In this instance, the court found the evidence presented by the plaintiff insufficient to establish the alleged competition or quantify the damages suffered.
Consequently, the court ruled in favor of the defendants, dismissing the case and ordering the plaintiff company to cover the legal costs associated with the proceedings. This ruling underscores the importance of substantiating claims with sufficient evidence in legal disputes and highlights the need for companies to protect their interests through proper contractual agreements and safeguards against unfair competition practices.
