NAEL v NIAMH [2025] DIFC CA 015 — Immediate assessment of costs and disclosure of interest rates (14 March 2025)

The DIFC Court of Appeal has issued a decisive order following the dismissal of Niamh’s appeal, exercising its discretion to perform an immediate assessment of costs rather than referring the matter to the Registrar, while simultaneously mandating the disclosure of specific interest rate data to resolve outstanding enforcement disputes.

What was the specific financial dispute between Nael and Niamh regarding the enforcement of the arbitral award and the subsequent costs orders?

The litigation centers on the enforcement of an arbitral award and the associated costs arising from multiple procedural challenges initiated by Niamh. The dispute involves a significant sum of AED 646,535.00 in costs, which the Court of Appeal has now ordered Niamh to pay. This amount aggregates costs from three distinct previous orders issued by H.E. Justice Shamlan Al Sawalehi, covering jurisdiction challenges, applications to set aside the recognition and enforcement (R&E) order, and the costs of the permission to appeal application.

Beyond the fixed costs, the parties remain in a dispute regarding the calculation of interest due under the original R&E Order. The Court noted that Niamh’s conduct throughout the proceedings necessitated a firm intervention to prevent further delays. As the Court observed in its reasoning:

The Court is satisfied and holds that Niamh has engaged in a shoddy and disreputable last-ditch attempt to avoid or delay its liability to make payment under the Guarantees, under the Award and the judgment recognizing and enforcing it.

Which bench presided over the immediate assessment of costs in CA 015/2024?

The Order was issued by the DIFC Court of Appeal on 14 March 2025. The Court exercised its inherent authority to finalize the assessment of costs following the dismissal of the appeal on 9 January 2025, bypassing the standard referral to the Registrar to ensure procedural efficiency.

What were the specific legal arguments advanced by Nael and Niamh regarding the assessment of costs?

Nael argued that Niamh, as a sophisticated banking institution, was fully aware of its obligations and that its continued resistance to paying the costs ordered by the lower court was a tactical delay. Nael sought an immediate assessment of costs, emphasizing that the Court had the power to bypass the Registrar under the RDC to bring finality to the litigation.

Niamh, conversely, attempted to contest the interest calculations and the quantum of costs. However, the Court found that Niamh’s position lacked merit, particularly given its status as a bank represented by experienced counsel. The Court noted:

(v) Niamh is a bank represented by an experienced law firm, which would be aware of all of these matters. In those circumstances, the Court is satisfied that Niamh recognises Nael’s entitlement to interest on costs at the rate lately claimed and does not wish to contend to the contrary.

What was the precise doctrinal issue the Court had to resolve regarding the assessment of costs under RDC Part 40?

The Court had to determine whether it possessed the jurisdictional authority to perform an immediate assessment of costs rather than referring the matter to the Registrar for a detailed assessment under RDC Part 40. The doctrinal question was whether the Court of Appeal could exercise its own discretion to finalize the costs quantum to prevent further procedural obstruction by the Defendant, particularly when the grounds for appeal had been dismissed and the underlying liability was clear.

How did the Court justify its decision to bypass the Registrar and conduct an immediate assessment of costs?

The Court relied on its inherent case management powers and the specific directions provided in its earlier judgment of 9 January 2025. By exercising this power, the Court sought to avoid the delay and expense of a detailed assessment process. The Court’s reasoning was grounded in the need for judicial efficiency and the prevention of further "shoddy" attempts to delay payment. The Court explicitly stated:

This Court has therefore, by paragraph 2 of its Order of 9 January 2025, exercised its power and responsibility to undertake the necessary assessments instead of the Registrar.

Which DIFC statutes and RDC rules were applied to the assessment of costs and interest disclosure?

The Court applied Article 44(1)(b)(ii) of the DIFC Law, which provides the framework for the Court’s authority. Regarding the procedural assessment of costs, the Court relied on RDC 38.34 and 38.35, which govern the filing of written statements of costs. Furthermore, the Court invoked RDC 44.19(2) to justify the necessity of the appeal being heard by the apex court, noting:

It is plain to this Court, that the grant of permission by the Judge was based on there being a compelling reason for this Court to hear and pronounce its findings, on an appeal where the grounds relied on were of such a nature, as to require consideration by the apex Court in this jurisdiction, under RDC 44.19 (2).

How did the Court utilize the precedent of Balmoral Group Ltd v Borealis Ltd in its reasoning?

While the Court focused heavily on the RDC and its own previous orders, it relied on the principles of proportionality and the standard of indemnity costs established in cases like Vegie Bar LLC v ENBD Properties PJSC and Gulf Petrochem FZC LLC v Petrochina International. The Court utilized these precedents to reinforce that indemnity costs are appropriate when a party engages in conduct designed to avoid or delay liability, aligning with the English law principles found in Balmoral Group Ltd v Borealis Ltd regarding the court's discretion in cost assessments.

What was the final disposition and the specific orders made regarding monetary relief and interest?

The Court ordered Niamh to pay a total of AED 646,535.00 in costs. Additionally, the Court issued a strict timeline for the disclosure of interest rate information to facilitate the final calculation of interest due under the R&E Order. The Court ordered:

The Defendant/Appellant shall provide to the Claimant/Respondent within 7 days of the date hereof, the relevant interest rate(s) from time to time applying, and all documentation substantiating those rates through the relevant periods, referred to in the R&E Order, namely, the official base rate of the Defendant’s commercial lending rate as of the date of 1 October 2020, from that date (being the date of the Demands) until the date hereof (the “interest rate information and documentation”).

Furthermore, the Court mandated that if the parties cannot agree on the interest calculation, the Court will determine the amount without a further hearing. It also stipulated:

The Defendant/Appellant shall pay interest on the costs awarded under paragraph 1 hereof, at the rate of 9% per annum from the date hereof to the date of payment in full.

What are the wider implications of this ruling for DIFC practitioners regarding costs and enforcement?

This judgment serves as a warning to litigants who attempt to use procedural challenges to delay the enforcement of arbitral awards. By performing an immediate assessment of costs, the Court of Appeal has signaled a preference for finality over the traditional, more protracted detailed assessment process. Practitioners must anticipate that the Court will not hesitate to use its powers under the RDC to penalize "shoddy" conduct with indemnity costs and will actively intervene to ensure that interest calculations are not used as a secondary tool for delay.

Where can I read the full judgment in Nael v Niamh [2025] DIFC CA 015?

The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-appeal/ca-0152024-nael-v-niamh

Cases referred to in this judgment:

Legislation referenced:

• DIFC Law Article 44(1)(b)(ii)
• RDC 38.7(1)
• RDC 38.34
• RDC 38.35
• RDC 40.4
• RDC 40.5
• RDC 44.19(2)