Foreign law principles in the Gibraltar courts - Supreme Court orders repayment of €1.3 million deposit under Serbian law contract

Last week, Mr Justice Happold handed down an ex-tempore judgment in the Supreme Court of Gibraltar in the Dijkstra Logistics FZE v Galilee Limited (2025/ORD/070) proceedings, ordering the Defendant to repay a deposit of €1.3 million to the Claimant, together with interest and costs.

The contract between the parties was governed by Serbian law, and most of the trial concerned its interpretation under the Serbian Law of Contract and Torts (the “LCT”).

Dijkstra was represented by Moshe Levy, Samuel Marrache, Brian Caetano and Louise Martinez of Hassans. Moshe Levy and Samuel Marrache conducted the advocacy at trial. 

Background

Dijkstra contracted with Galilee for air charter services and paid a deposit of €1.3 million (the “Deposit”). No services were ever requested by Dijkstra and none were therefore delivered, and Dijkstra claimed repayment of the Deposit in unjust enrichment. Galilee’s case was that the Deposit was non-refundable and had been paid out to third parties.

Foreign law and the role of experts

Both parties were given permission to adduce Serbian law expert evidence by reference to a list of issues. However, as Happold J pointed out at the start of the trial, and the parties agreed, some of those issues required the experts to go beyond their proper role as described by the Privy Council in Vizcaya Partners Ltd v Picard [2016] UKPC 5 at paragraph 60, and to impinge on the role of the judge. 

As explained in Vizcaya Partners Ltd v Picard [2016] UKPC 5 and applied in BNP Paribas v Trattamento (2019) EWCA Civ 768, the role of foreign law experts in relation to contractual interpretation is a limited one. It is confined to identifying what the rules of contractual interpretation are, and it is not the role of experts to express opinions as to what the contract means. Those elements of the expert evidence which expressed such opinions were therefore irrelevant and inadmissible. 

Happold J also observed that, Serbia being a civil law system, court decisions do not have precedent value. Judgments and academic writing may be influential, but they are not themselves a source of law, and the court’s task was to look at the legislation.

Was the Deposit refundable?

Happold J held that the Deposit was refundable. Among other reasons, he found that the clause in the contract relied on by the Defendant to resist restitution did not apply to the Deposit. That clause was restricted to the price of individual charters actually ordered by the Claimant (of which there were none), and not to the global deposit payment made by the Claimant. Happold J added that in any event, any genuine ambiguity under the contract would fall to be determined in the Claimant’s favour in accordance with Article 100 of the LCT, given that the Defendant had prepared and proposed the contract (Article 100 prescribed a rule akin to contra proferentem under Gibraltar law). The Deposit was found to be an advance payment (avans), which was refundable under Serbian law. 

Comment

The judgment offers useful lessons for parties litigating foreign law disputes in Gibraltar. The most important of these lessons is that experts on foreign law should explain the foreign law and leave its application, and the construction of the contract, to the judge. 

Enquiries: moshe.levy@hassans.gi samuel.marrache@hassans.gi brian.caetano@hassans.gi louise.martinez@hassans.gi 

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