Kahlon v Liberty Steel Group Ltd & ors

Mr Kahlon’s claims concerned a $30 million long-term incentive plan (LTIP); annual bonus payments; the lost opportunity to secure equivalent remuneration for a further 10 years to 2032; certain other entitlements; and treble damages under Article 40(2) of the DIFC Law of Damages and Remedies. In his claims against Mr Gupta personally, Mr Kahlon alleged Mr Gupta had acted fraudulently to prevent him from recovering his entitlements or to delay his doing so.

Following a two-week trial, H.E. Justice Lord Angus Glennie dismissed Mr Kahlon's claims in full. In its judgment dated 26 February 2026, the Court accepted that the parties had concluded a binding agreement in relation to the $30 million LTIP and bonus, and that Mr Kahlon’s employment had been novated from D2 (a UAE company) to D1 (a DIFC company). However, it found that the conditions for those entitlements were not met, and that Mr Kahlon’s employment was validly terminated under DIFC law before any LTIP could have fallen due. The claims against Mr Gupta also failed, and all allegations of dishonesty against Mr Gupta were rejected.

Justice Lord Glennie's judgment addresses a number of matters of general importance:

1. Applicable law: It is the first decision to resolve a conflict between two applicable law statutes in the DIFC: the Law on the Application of Civil and Commercial Laws (No 3 of 2004), as amended by Law 8 of 2024 (the “2004 Application Law”); and the Law Relating to the Application of DIFC Laws (No 10 of 2005) (the “2005 Application Law"). Article 8 of the 2004 Application sets out a ‘waterfall’ determining the law governing rights and liabilities in civil and commercial matters. The 2005 Application Law makes provision for the law applicable to contracts, amongst other things. The Court held that Article 10 of the 2005 Application Law (concerning contracts without an express choice of law clause) prevails over the waterfall, with the consequence that such a contract is governed by DIFC law regardless of whether it is more closely connected with another law: at [76]-[92].
2. Application of the DIFC Employment Law: It holds that the DIFC Employment Law has no application to an employment claim against an onshore UAE company: at [130]. This is significant since (in light of the point above) DIFC law will apply to such a claim in the absence of an express choice of law. That would appear to have the consequence that such claims, when brought before the DIFC Court, would be subject to neither of the limitation periods in the DIFC Employment Law (six months) or the UAE Labour Law (one year).
3. Uncertain contracts: It provides useful guidance on the DIFC Court’s approach to the enforceability of uncertain contracts: “the court will only conclude that there was not in fact a contract reluctantly and as a last resort – if the contract can be made to work the court will do its best to give effect to it”. As a result, the Court concluded that there was a binding agreement in relation to LTIP, even though the metrics were expressly yet to be agreed. The decision to award the bonus was discretionary, provided that it had to made rationally, in good faith and based on evidence: at [109]-[115].
4. Implied duties in employment contracts: It explains that (unlike in English law) there is no implied term of trust and confidence in an employment contract under DIFC law, because any restriction on the right of the employer to terminate would cut across the statutory provisions in the DIFC Employment Law. However, that does not mean that there is no scope for any implied term in an employment contract, and each suggested implication must be tested by reference to the express terms and the Employment Law: at [129]-[132].
5. Novation: The judgment indicates that the Court is willing to have regard to the “reality of the working relationship” to show a novation of employment from one employer to another, without the need to identify a specific offer and acceptance by words or conduct constituting the new employment contract: at [62].
6. UAE law of deceit: The onshore UAE law of deceit is “practically identical to liability under the common law”: at [158].

On 1 July 2026, the Court of Appeal (H.E. Justice Robert French) refused permission to appeal. Of the above points of principle, the proposed appeal raised only the fourth, and the Court refused permission without needing to resolve the issue.

Andrew Trotter, Tom Watret and Grant Kynaston appeared for the Companies, instructed by Davidson & Co and Mishcon de Reya.

Daniel Burgess appeared for Mr Gupta (leading Max Marenbon of Serle Court and Nathalie Koh of Fountain Court), instructed by Al Tamimi.

The full judgments and orders in the matter are available here (by searching “CFI-070-2022”).