The DIFC Court of First Instance confirms the quantum of liquidator fees payable as an expense of the liquidation in the ongoing winding-up proceedings of Bank Sarasin-Alpen (ME) Limited.
What was the specific monetary value of the liquidator’s fees approved by the court in the liquidation of Bank Sarasin-Alpen (ME) Limited?
The dispute concerns the finalization of remuneration for Mr. Shahab Haider of Sajjad Haider Chartered Accountants LLP, who was appointed as the Liquidator of Bank Sarasin-Alpen (ME) Limited following the court-ordered winding up of the entity. The matter reached the Court of First Instance via Application Notice CFI-005-2016/4, filed on 30 August 2018, which sought a formal judicial determination on the fees accrued during the liquidation process.
The court was tasked with reviewing the time-cost records submitted by the Liquidator to ensure they aligned with the previous directives regarding the winding-up process. The court ultimately determined that the fees were reasonable and necessary for the administration of the insolvent estate. As noted in the final order:
The Liquidator’s fees are fixed on a time cost basis to be paid as an expense of the liquidation in the amount of USD 75,029.17.
This decision provides finality to the specific billing period under review, ensuring that the Liquidator is compensated for the professional services rendered in managing the bank's assets and liabilities. Further details regarding the case history can be found at the DIFC Courts judgment portal.
Which judge presided over the determination of liquidator remuneration in CFI-005-2016 on 23 September 2018?
H.E. Justice Omar Al Muhairi presided over this matter in the DIFC Court of First Instance. Justice Al Muhairi has been the primary judicial authority throughout the lifecycle of the Bank Sarasin-Alpen (ME) Limited liquidation, having issued the original Winding Up Order on 2 May 2016 and overseeing subsequent applications regarding the liquidator's conduct and remuneration.
What were the positions of the applicants and the liquidator regarding the fee structure in the Bank Sarasin-Alpen liquidation?
The applicants, Mr. Rafed Abdel Mohsen Bader Al Khorafi, Mrs. Amrah Ali Abdel Latif Al Hamad, and Mrs. Alia Mohamed Sulaiman Al Rifai, were the original parties who sought the winding up of the respondent bank. The Liquidator, Mr. Shahab Haider, acted as the applicant for the specific order dated 23 September 2018.
The Liquidator’s position was grounded in the principle that his remuneration should be calculated by reference to the time properly spent by himself and his staff on the liquidation. This approach was consistent with the court’s prior mandate that fees be fixed on a "time cost basis." The applicants did not contest the application, and the court found the requested amount of USD 75,029.17 to be a fair reflection of the work performed in discharging the Liquidator's statutory duties under the DIFC Insolvency Law.
What was the precise legal question regarding the Liquidator’s remuneration that H.E. Justice Omar Al Muhairi had to resolve?
The court was required to determine whether the time-cost records submitted by the Liquidator justified the requested payment of USD 75,029.17 as an expense of the liquidation. The doctrinal issue centered on the court's supervisory role in ensuring that the remuneration of a court-appointed liquidator is both reasonable and proportionate to the tasks performed.
Under the framework established by the Winding Up Order of 2 May 2016, the court retained the authority to fix the Liquidator’s fees. The legal question was not merely whether the work was performed, but whether the time spent was "properly spent" in accordance with the standards required for the administration of an insolvent DIFC entity.
How did H.E. Justice Omar Al Muhairi apply the time-cost basis test to the Liquidator’s fee application?
Justice Al Muhairi’s reasoning followed a structured review of the Liquidator’s application notice. The court examined the nexus between the professional services provided by Sajjad Haider Chartered Accountants LLP and the specific requirements of the liquidation process. By confirming that the fees were to be paid as an "expense of the liquidation," the court affirmed the priority of these costs over other unsecured claims.
The court’s reasoning was explicitly tied to the previous orders in the case, which had already established the methodology for fee calculation. As stated in the order:
The Liquidator’s fees are fixed on a time cost basis to be paid as an expense of the liquidation in the amount of USD 75,029.17.
This reasoning ensures that the liquidation process remains transparent and that the court maintains oversight of the depletion of the estate's assets, preventing excessive or unsubstantiated charges.
Which specific provisions of the DIFC Insolvency Law No. 3 of 2009 governed the court’s authority to fix liquidator fees?
The court exercised its jurisdiction under the DIFC Insolvency Law No. 3 of 2009. While the specific order relies on the inherent supervisory powers of the court over its appointed officers, the framework for liquidator remuneration is derived from the broader provisions of the Insolvency Law, which mandates that the court must approve the costs of the liquidation to protect the interests of creditors and stakeholders.
How did the court’s previous orders in the Al Khorafi v Bank Sarasin-Alpen case family influence the 23 September 2018 decision?
The court relied heavily on the precedent set by the Winding Up Order of 2 May 2016, which explicitly mandated that the Liquidator’s remuneration be fixed by reference to time spent. This case family has seen multiple interventions by the court to manage the liquidation:
- MR RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN-ALPEN [2016] DIFC CFI 005 — Winding up order despite pending appeal (02 May 2016)
- AL KHORAFI v BANK SARASIN-ALPEN [2016] DIFC CFI 005 — Liquidator remuneration and periodic court oversight (28 December 2016)
- RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN-ALPEN [2017] DIFC CFI 005 — Judicial approval of liquidator remuneration (12 July 2017)
These prior orders established a consistent practice of periodic judicial review, ensuring that the Liquidator’s fees were not paid in a lump sum without scrutiny, but rather in stages subject to court approval.
What was the final disposition and the specific relief granted by the court in the order dated 23 September 2018?
The court granted the application in full. The disposition was as follows:
1. The Liquidator’s fees were fixed on a time-cost basis.
2. The total amount approved was USD 75,029.17.
3. The court ordered that this amount be paid as an expense of the liquidation, granting it priority status in the distribution of the respondent's assets.
What are the practical implications for liquidators operating within the DIFC regarding fee applications?
Practitioners must anticipate that the DIFC Court will maintain a rigorous "time-cost" oversight mechanism for all liquidations. Liquidators are expected to maintain meticulous records of time spent by all staff members and must be prepared to justify these costs in periodic applications. The Al Khorafi case serves as a template for how liquidators should structure their fee requests to ensure swift judicial approval, emphasizing the necessity of transparency and alignment with the court’s initial winding-up directives.
Where can I read the full judgment in MR RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN-ALPEN [2018] DIFC CFI 005?
The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0052016-1-mr-rafed-abdel-mohsen-bader-al-khorafi-2-mrs-amrah-ali-abdel-latif-al-hamad-3-mrs-alia-mohamed-sulaiman-al-rifai-v-2
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| MR RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN-ALPEN | [2016] DIFC CFI 005 | Primary case family; source of Winding Up Order |
Legislation referenced:
- DIFC Insolvency Law No. 3 of 2009