The DIFC Court of First Instance issued a consent order to streamline the ongoing litigation surrounding the liquidation of Bank Sarasin-Alpen (ME) Limited by consolidating jurisdictional challenges.
How did the DIFC Court of First Instance address the competing jurisdictional challenges in CFI 005/2016 involving the Bank J. Safra Sarasin entities?
The dispute concerns the long-running litigation initiated by Mr Rafed Abdel Mohsen Bader Al Khorafi and others against Bank Sarasin-Alpen (ME) Limited, which is currently in liquidation. The matter has evolved into a complex multi-party proceeding involving the Official Liquidator, Mr Shahab Haider, and third-party entities, specifically Bank J. Safra Sarasin Asset Management (Middle East) Ltd and Bank J. Safra Sarasin AG. The current procedural impasse centers on the Applicants' attempts to contest the Court’s jurisdiction over them.
As noted in the court record:
The First Application and the Second Application shall be heard together.
This consolidation is intended to prevent fragmented litigation and ensure that the Court addresses the jurisdictional nexus for both Bank J. Safra Sarasin entities simultaneously. The stakes remain high, as the outcome of these challenges will determine whether these entities remain parties to the substantive claims brought by the Claimants or are dismissed from the proceedings entirely. For further context on the history of this liquidation, see MR RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN-ALPEN [2016] DIFC CFI 005 — Winding up order despite pending appeal (02 May 2016).
Which judicial officer presided over the issuance of the 4 July 2023 consent order in the DIFC Court of First Instance?
The consent order was issued by Assistant Registrar Delvin Sumo, acting within the Court of First Instance. The order was formally issued at 3:00 PM on 4 July 2023, following the agreement of the parties to consolidate the jurisdictional challenges and establish a strict timetable for the submission of evidence and legal arguments.
What specific procedural arguments were advanced by the Applicants regarding the jurisdiction of the DIFC Courts in CFI 005/2016?
The Applicants, Bank J. Safra Sarasin Asset Management (Middle East) Ltd and Bank J. Safra Sarasin AG, formally signaled their intent to challenge the Court’s jurisdiction. The First Applicant filed Application No. CFI-005-2016/7 on 21 June 2023, while the Second Applicant filed its Acknowledgment of Service on 20 June 2023. By consenting to the order, the parties effectively acknowledged that their respective challenges share sufficient commonality to warrant a joint hearing. The Respondents, including the Official Liquidator, have been tasked with filing evidence in answer to these challenges, setting the stage for a substantive debate on whether the DIFC Court possesses the requisite authority over these specific corporate entities in the context of the ongoing liquidation.
What is the primary doctrinal question the Court must resolve regarding the jurisdictional nexus of the Bank J. Safra Sarasin entities?
The core issue is whether the DIFC Court has the jurisdictional competence to bind the Bank J. Safra Sarasin entities to the proceedings involving the liquidation of Bank Sarasin-Alpen (ME) Limited. The Court must determine if the Applicants fall within the jurisdictional gateways provided by the DIFC Law, or if the nature of their involvement—or lack thereof—precludes the Court from exercising authority over them. This involves an analysis of whether the claims against these entities are sufficiently connected to the DIFC or the subject matter of the liquidation to satisfy the requirements for personal or subject-matter jurisdiction under the DIFC Courts Law.
How did the Court structure the procedural path for resolving the jurisdictional challenges through the 4 July 2023 order?
The Court utilized a consent-based framework to manage the litigation timeline, ensuring that the jurisdictional arguments are presented in a coordinated fashion. By ordering that the applications be heard together, the Court avoids the risk of inconsistent findings and reduces the burden on the parties. The reasoning relies on the principle of procedural efficiency, as evidenced by the specific deadlines set for evidence and skeleton arguments.
As stated in the order:
The First Application and the Second Application shall be heard together.
This directive forces the parties to align their evidentiary submissions, with the Respondents required to file their evidence by 4 August 2023, followed by the Applicants' reply by 18 August 2023, and the exchange of skeleton arguments by 25 August 2023. This structured approach ensures that the Court will have a comprehensive record before it when it eventually decides the jurisdictional merits.
Which specific Rules of the DIFC Courts (RDC) and jurisdictional principles govern the filing of these challenges?
While the order itself is a procedural consent instrument, the underlying challenges are governed by the RDC, specifically those rules pertaining to challenging the Court's jurisdiction (Part 12 of the RDC). The Applicants are required to demonstrate that the Court lacks jurisdiction under the Judicial Authority Law (Dubai Law No. 12 of 2004, as amended). The procedural requirements for filing an Acknowledgment of Service and the subsequent application to dispute jurisdiction are strictly enforced to ensure that the defendant does not inadvertently submit to the Court's jurisdiction.
How does the current jurisdictional challenge relate to the broader history of the Al Khorafi v Bank Sarasin-Alpen litigation?
The current challenges are the latest in a series of procedural maneuvers in a case that has seen extensive judicial oversight. Previous orders have addressed the winding up of the bank, the remuneration of the liquidator, and the oversight of the liquidation process. The Court has consistently maintained a rigorous approach to the liquidation, as seen in AL KHORAFI v BANK SARASIN-ALPEN [2016] DIFC CFI 005 — Liquidator remuneration and periodic court oversight (28 December 2016) and RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN-ALPEN [2017] DIFC CFI 005 — Judicial approval of liquidator remuneration (12 July 2017). The current jurisdictional dispute is a continuation of the efforts by third parties to distance themselves from the liabilities associated with the liquidated entity.
What was the final disposition of the 4 July 2023 order regarding the conduct of the proceedings?
The Court granted the order by consent, effectively consolidating the First and Second Applications. The order mandates that the Applicants file their formal applications by 7 July 2023, with a subsequent timeline for evidence and skeleton arguments running through late August 2023. The Court also ordered that the costs of the application be "costs in the case," meaning the ultimate liability for these costs will be determined at the conclusion of the substantive proceedings.
What are the practical implications for practitioners managing multi-party liquidation proceedings in the DIFC?
This order highlights the importance of procedural coordination in complex DIFC litigation. Practitioners should note that when multiple parties seek to challenge jurisdiction, the Court is likely to favor consolidation to ensure judicial economy. The strict adherence to the timetable—with deadlines set for 4:00 PM on specific dates—serves as a reminder that the DIFC Courts maintain a high standard of procedural compliance. Litigants must anticipate that the Court will prioritize the efficient resolution of jurisdictional threshold issues before allowing the case to proceed to the merits of the liquidation claims. For further reading on the winding up of subsidiaries, see SHAHAB HAIDER v SARASIN ALPEN PARTNERS [2017] DIFC CFI 005 — Formalizing the winding up of a financial subsidiary (06 August 2017).
Where can I read the full judgment in MR RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN-ALPEN [2023] DIFC CFI 005?
The full text of the consent order can be accessed via the DIFC Courts website at 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-ali-mohamed-sulaiman-al-rifai-v-2 or via the CDN link at https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-005-2016_20230704.txt.
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 litigation context |
| SHAHAB HAIDER v SARASIN ALPEN PARTNERS | [2017] DIFC CFI 005 | Procedural history |
Legislation referenced:
- DIFC Courts Law (Dubai Law No. 10 of 2004)
- Judicial Authority Law (Dubai Law No. 12 of 2004, as amended)
- Rules of the DIFC Courts (RDC), specifically Part 12 (Jurisdiction)