This consent order marks a procedural pivot in the ongoing litigation between KBC Aldini Capital and David Baazov, resolving a contentious strike-out application regarding the inclusion of US law in the Claimant’s pleadings.
What were the specific procedural disputes between KBC Aldini Capital and David Baazov that led to the 27 November 2018 consent order?
The litigation, filed under CFI-002-2017, involves KBC Aldini Capital Limited as the Claimant and a trio of Respondents: David Baazov, Canaccord Genuity Corp, and Canaccord Genuity (Dubai) Limited. The dispute reached a procedural impasse in November 2018 when the Claimant sought to re-amend its previously amended Particulars of Claim, which had been filed on 27 June 2017. This request triggered a defensive maneuver from the First Defendant, David Baazov, who filed an Application Notice on 11 November 2018.
The First Defendant’s application specifically sought to strike out paragraphs within the Claimant’s Amended Particulars of Claim that referenced US law. Rather than litigating the merits of the strike-out application, the parties reached a consensus. The resulting order formalised the agreement to allow the Claimant’s re-amendments, effectively rendering the First Defendant’s strike-out application moot. As noted in the order:
The Claimant shall file and serve its Reply to the First Defendant’s Defence by 20 December 2018.
This order follows a series of procedural developments in the same case family, including KBC ALDINI CAPITAL v DAVID BAAZOV [2017] DIFC CFI 002 — Procedural limitations on default judgment (12 February 2017), KBC ALDINI CAPITAL v DAVID BAAZOV [2017] DIFC CFI 002 — Procedural order regarding legal representation (09 April 2017), and KBC ALDINI CAPITAL v DAVID BAAZOV & OTHERS [2017] DIFC CFI 002 — Extension of time for service of process (28 December 2017).
Which judge presided over the issuance of the consent order in CFI-002-2017?
The consent order was issued by Assistant Registrar Ayesha Bin Kalban of the DIFC Courts, Court of First Instance, on 27 November 2018 at 9:00 am.
What were the respective positions of KBC Aldini Capital and David Baazov regarding the amendment of pleadings?
The Claimant, KBC Aldini Capital, pursued a strategy of refining its case by seeking permission to re-amend its Particulars of Claim, specifically referencing a draft document dated 5 November 2018. The First Defendant, David Baazov, initially opposed the scope of these pleadings by challenging the relevance or admissibility of US law references. By filing an Application Notice on 11 November 2018, the First Defendant signaled an intent to have those specific portions of the claim struck out. However, the parties ultimately opted for a negotiated resolution, allowing the Claimant to proceed with its re-amended pleadings while the First Defendant withdrew its challenge, thereby avoiding a contested hearing on the strike-out application.
What was the jurisdictional or doctrinal question the court had to address regarding the amendment of pleadings?
The court was tasked with determining whether the parties could, by consent, bypass the formal requirements for amending pleadings under the Rules of the DIFC Courts (RDC) and resolve a pending strike-out application without judicial adjudication. The doctrinal issue centered on the court's discretion to permit amendments to pleadings that introduce new legal frameworks—in this instance, US law—and whether such amendments are permissible when they are the subject of a live strike-out application. By entering a consent order, the court effectively exercised its case management powers to facilitate the progression of the case without requiring a ruling on the substantive merits of the strike-out application.
How did the court exercise its case management discretion to resolve the dispute between KBC Aldini Capital and David Baazov?
The court exercised its authority by formalizing the parties' agreement into a binding order. By approving the draft Re-Amended Particulars of Claim dated 5 November 2018, the court streamlined the litigation process, ensuring that all parties were aligned on the scope of the dispute. The judge ensured that the procedural timeline was reset, providing clear deadlines for the filing of the Defence and the subsequent Reply. This approach reflects the DIFC Court’s preference for party-led resolution of procedural disputes, as evidenced by the following provision:
Costs in the Application, together with those flowing from the amendments to the Amended Particulars of Claim (the “Re-Amended Particulars of Claim”) shall be reserved until the Case Management Conference.
Which specific RDC rules and procedural authorities were relevant to the amendment of pleadings in CFI-002-2017?
While the order is a consent-based document, it operates within the framework of the Rules of the DIFC Courts (RDC) governing the amendment of statements of case. Specifically, RDC Part 17 provides the mechanism for amending a statement of case, either with the court's permission or by consent of the parties. The strike-out application, which was withdrawn, would have been governed by RDC Part 4, which allows the court to strike out a statement of case if it appears to the court that the statement of case discloses no reasonable grounds for bringing or defending the claim.
How did the court treat the issue of costs in relation to the withdrawn strike-out application?
The court adopted a "reserved" approach to costs. Rather than awarding costs to the prevailing party or ordering each side to bear their own costs, the court deferred the determination of liability for the costs associated with the First Defendant’s Application and the subsequent amendments to the Re-Amended Particulars of Claim. These costs were reserved until the Case Management Conference, ensuring that the judge presiding over the substantive management of the case would have the full context of the litigation before making a final determination on cost allocation.
What was the final disposition of the court regarding the First Defendant’s application and the timeline for the case?
The court ordered that the First Defendant’s Application to strike out the references to US law be withdrawn. The order established a rigid schedule for the remaining procedural steps: the Claimant was required to serve the Re-Amended Particulars of Claim by 22 November 2018, the First Defendant was required to file and serve its Defence by 29 November 2018, and the Claimant was required to file and serve its Reply to the Defence by 20 December 2018. The Claimant was also tasked with serving the order on all three Defendants.
What are the practical implications for litigants seeking to amend pleadings involving foreign law in the DIFC?
This case demonstrates that the DIFC Courts are highly amenable to consent-based procedural adjustments, even when those adjustments involve complex issues such as the introduction of foreign law. Practitioners should note that while a strike-out application can be a powerful tool to challenge the inclusion of foreign law in pleadings, it is often used as a bargaining chip to force a re-drafting of the claim. Litigants should anticipate that the court will likely reserve costs on such procedural skirmishes, meaning that the ultimate financial burden will be determined at a later stage, such as a Case Management Conference, rather than at the time of the amendment.
Where can I read the full judgment in KBC ALDINI CAPITAL v DAVID BAAZOV [2018] DIFC CFI 002?
The full text of the consent order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0022017-kbc-aldini-capital-limited-v-1-david-baazov-2-canaccord-genuity-corp-3-canaccord-genuity-dubai-limited-4 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-002-2017_20181127.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- Rules of the DIFC Courts (RDC) Part 17 (Amendment of Statement of Case)
- Rules of the DIFC Courts (RDC) Part 4 (Strike Out)