AL RIHAB REAL ESTATE COMPANY v EMIRATES NBD BANK [2021] DIFC CA 006/2020 — Registrar clarifies requirements for payment of costs on account (23 December 2021)

This order clarifies the procedural threshold for recovering costs on account in the DIFC Court of Appeal, emphasizing that vague statements of costs are insufficient for judicial approval.

What was the specific dispute regarding the recovery of costs between Al Rihab Real Estate Company and Emirates NBD Bank in CA 006/2020?

The dispute centered on the Defendant’s, Emirates NBD Bank, application for an order for payment of costs on account following the conclusion of appellate proceedings. Having secured a favorable outcome in the Court of Appeal, the Bank sought to recover its legal expenses incurred during the appeal and the reference to the Union Supreme Court. However, the Registrar found the documentation provided by the Bank to be inadequate for the purpose of quantifying a payment on account.

The core of the disagreement was whether the Court could rely on previously filed "Statements of Costs" to determine the quantum of a payment on account. The Registrar determined that these documents lacked the necessary precision to justify an immediate order. As noted in the judgment:

In my view, it is not correct to make an order for payment of costs on account on the basis of looking only at the various statements of costs (“Statements”) filed under CA-006-2020.

Which judge presided over the assessment of the costs application in CA 006/2020?

The application was heard and determined by Registrar Nour Hineidi. The order was issued on 23 December 2021 within the DIFC Court of Appeal division, following a review of the Defendant’s application dated 7 July 2021 and subsequent cost submissions filed on 24 November 2021.

What were the respective positions of Al Rihab Real Estate Company and Emirates NBD Bank regarding the assessment of costs?

Emirates NBD Bank (the Defendant/Respondent) sought an order for payment of costs on account, relying on the Statements of Costs it had submitted to the Court. The Bank’s position was that these documents provided a sufficient basis for the Court to exercise its discretion and order an immediate payment of a portion of its legal fees.

Al Rihab Real Estate Company (the Claimant/Appellant) was the respondent to this specific application. While the order does not detail specific counter-arguments from Al Rihab, the Registrar’s decision reflects a broader judicial concern regarding the adequacy of evidence. The Registrar effectively sided with the necessity for procedural rigor, rejecting the Bank’s reliance on vague statements and mandating the filing of a formal Draft Bill of Costs supported by an affidavit to ensure transparency and accuracy before any funds are released on account.

What was the precise legal question the Registrar had to answer regarding the basis of costs assessment?

The Registrar had to determine the appropriate procedural mechanism for ordering a payment on account when the Court of Appeal’s previous order was silent on the specific basis of assessment. Furthermore, the Registrar had to decide whether the existing "Statements of Costs" provided by the Defendant met the evidentiary standard required to justify an order for payment on account, or if a more formal, verified submission was required to protect the interests of both parties.

How did Registrar Nour Hineidi apply the test for costs assessment in the absence of an express order?

The Registrar applied a two-fold reasoning process. First, she identified that because the Court of Appeal had not specified the basis of assessment, the default position under the Rules of the DIFC Courts (RDC) must apply. Second, she determined that while the Court aims to avoid keeping a successful party out of its money, it cannot do so based on "vague" information.

The Registrar emphasized that the process of detailed assessment is inevitable, and therefore, the submission of a Draft Bill is a necessary and sensible step. As the Registrar explained:

Pursuant to RDC r.38.20, given that the Court of Appeal has made an order on costs without indicating the basis on which costs are to be assessed, it then follows that this head of costs will be assessed on the standard basis.

Which specific DIFC statutes and RDC rules governed the Registrar’s decision in this matter?

The primary authority cited was RDC r.38.20, which dictates the default basis of assessment when an order for costs is made without specifying whether it is on the standard or indemnity basis. The Registrar also relied on the Court’s inherent case management powers to regulate the filing of cost documentation. Additionally, the Registrar referenced the Court of Appeal’s previous orders dated 1 November 2021 and 5 April 2021, which had already addressed the underlying liability for costs regarding the Security Application and the reference to the Union Supreme Court, respectively.

How did the Registrar utilize the cited authorities to reach her conclusion?

The Registrar used RDC r.38.20 to establish that the "standard basis" was the mandatory default for the assessment of costs in this case. She then utilized the procedural history of the case—specifically the previous Court of Appeal rulings—to clarify that the liability for costs was already settled, leaving only the quantification to be resolved. The Registrar’s reasoning was anchored in the necessity of procedural compliance:

These are my reasons: (a) the information on accrued costs, as contained in the Statements, are vague; (b) the Court of Appeal has already ruled that costs are to be assessed by the Registrar, if not agreed.

What was the final disposition of the application and the specific orders made by the Registrar?

The Registrar dismissed the Defendant’s application for costs on account in its current form. However, she provided a clear path forward for the Bank to receive payment. The order mandated that the Court would grant an order for 50% of costs to be paid on account, but only upon the satisfaction of specific conditions:

The Court will make an order for 50% of costs to be paid on account as soon as the Court receives a draft bill of costs (“Draft Bill”) supported by a short affidavit verifying the truthfulness and reasonable accuracy of the information contained in the Draft Bill.

The Registrar further clarified that a separate Draft Bill must be filed for the Court of First Instance proceedings (CFI-037-2020) if the party wished to recover those costs as well.

What are the wider implications of this order for DIFC practitioners regarding cost applications?

This order serves as a strict reminder that the DIFC Courts will not grant payments on account based on informal or vague cost statements. Practitioners must anticipate that the Registrar will require a formal Draft Bill of Costs, regardless of the stage of proceedings. Furthermore, the requirement for a supporting affidavit verifying the "truthfulness and reasonable accuracy" of the costs claimed introduces a heightened evidentiary burden. Litigants should avoid filing applications for payment on account until they are prepared to submit a verified Draft Bill, as the Court has indicated that an email request to the Registrar will suffice once the proper documentation is in place.

Where can I read the full judgment in Al Rihab Real Estate Company v Emirates NBD Bank [2021] DIFC CA 006/2020?

The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-appeal/ca-006-2020-al-rihab-real-estate-company-llc-v-emirates-nbd-bank-pjsc-2

Cases referred to in this judgment:

Legislation referenced:

• Rules of the DIFC Courts (RDC) r.38.20