This order addresses the final costs allocation in a high-stakes employment dispute where the Claimant’s claims were dismissed as time-barred under the DIFC Employment Law, despite the court finding substantive merit in his wrongful termination allegations.
What was the nature of the dispute between Faizal Babu Moorkath and Expresso Telecom Group regarding the USD 2 million loss?
The litigation arose from the summary termination of Faizal Babu Moorkath by Expresso Telecom Group Ltd on 23 March 2022. The Defendant alleged that the Claimant, alongside the company’s CEO, was responsible for the "squandering and wasting" of USD 2 million through two specific transactions in 2016 and 2017. The first involved a cheque for AED 3,677,500 to purchase USD 1 million in cash, while the second involved a transfer order for AED 3,679,000. The Defendant contended these disbursements were made to third parties with no connection to the Sudatel group, justifying the summary dismissal.
In response, the Claimant initiated proceedings seeking three months’ salary in lieu of notice, unpaid end-of-service benefits, and damages for loss of employment opportunity due to the Defendant’s failure to cancel his visa. The Defendant counterclaimed for AED 7,356,500, asserting this amount represented the economic loss suffered due to the Claimant’s alleged negligence. The court ultimately dismissed both the primary claim and the counterclaim, leading to the following order:
After considering the parties’ submissions and for the reasons which follow there will be orders in relation to costs as follows: (i) The parties will bear their own costs of the Claimant’s claim.
[Source: CFI 008/2023]
Which judge presided over the costs hearing in CFI 008/2023 and in which division was the matter heard?
The matter was presided over by Justice Rene Le Miere in the DIFC Court of First Instance. The order regarding costs was issued on 19 April 2024, following the court’s substantive judgment delivered on 14 March 2024.
What were the specific legal arguments advanced by the parties regarding the allocation of costs?
The Claimant argued that he should be awarded his costs for both the claim and the defense of the counterclaim. He contended that the Defendant should not recover any costs for defending the claim, and that his own costs should be summarily assessed on the standard basis, including disbursements for counsel’s fees and court fees.
Conversely, the Defendant argued that the Claimant should be penalized for his conduct throughout the dispute. The Defendant sought a portion of its costs on the basis that the Claimant’s actions necessitated the litigation. The court noted the Defendant's position:
The Defendant submits that the Claimant should be penalised for its conduct of this dispute and the Court should award the Defendant a portion of its costs on account of the Claimant's conduct.
What was the precise doctrinal issue the court had to resolve regarding the application of RDC 38 to a dismissed claim and counterclaim?
The court had to determine whether to depart from the general rule that the unsuccessful party pays the costs of the successful party. Because both the claim and the counterclaim were dismissed, the court faced a situation where neither party was a clear "winner." The doctrinal challenge lay in balancing the fact that the Claimant’s claim was time-barred—a technical success for the Defendant—against the fact that the Claimant had substantively succeeded on the merits of his wrongful termination argument, which had occupied the majority of the trial time.
How did Justice Rene Le Miere apply the principles of judicial discretion under RDC 38 to reach a "no order as to costs" outcome?
Justice Le Miere exercised the court's broad discretion to ensure a just outcome, recognizing that the costs incurred in defending the counterclaim were inextricably linked to the costs of advancing the original claim. The judge concluded that since both parties failed in their respective primary objectives, and because the Claimant had effectively proven the substantive elements of his claim (only to be defeated by the limitation period), a "no order as to costs" was the most equitable solution.
(iii) The parties will bear their own costs of the Claimant’s application for a Production Order of 10 November 2023.
The court reasoned that the Claimant’s success on the substantive issues—despite the limitation bar—meant that the Defendant had not achieved a "victory" that would justify a standard costs award in its favor.
Which specific DIFC statutes and RDC rules were applied by the court in determining the limitation period and costs?
The primary statute governing the dismissal of the claim was Article 10 of the Employment Law 2019, which mandates that the court shall not consider claims presented more than six months after the termination date. Regarding costs, the court relied on the discretionary powers granted under RDC 38.6 through RDC 38.10, which allow the court to make "no order as to costs" or to apportion costs based on the conduct of the parties and the outcome of specific issues within the litigation.
How did the court utilize English and DIFC precedents to guide its discretion on costs?
The court referenced Beoco Ltd v Alfa Laval Co Ltd [1995] QB 137, a seminal English authority on the court’s power to award costs on an issue-by-issue basis or to reflect the relative success of parties on different parts of a claim. Justice Le Miere used this authority to justify the decision to not award the Defendant costs for the claim, despite the Defendant's success on the limitation argument, because the Claimant had successfully occupied the court's time with substantive arguments that the Defendant had failed to refute.
What was the final disposition of the court regarding the monetary relief and costs?
The court dismissed both the Claimant’s claim for AED 7,356,500 and the Defendant’s counterclaim for the same amount. Consequently, the court ordered that each party bear their own costs for the claim, the counterclaim, and the Claimant’s application for a Production Order dated 10 November 2023. No monetary relief was awarded to either party.
What are the practical implications of this ruling for future litigants in the DIFC?
This case serves as a critical reminder that success on a technicality, such as a limitation period under Article 10 of the Employment Law 2019, does not automatically entitle a defendant to a full recovery of costs. Practitioners must anticipate that the DIFC Court will look behind the final judgment to assess which party’s conduct and substantive arguments consumed the majority of the court’s resources. Litigants should be prepared for the court to exercise its discretion under RDC 38 to order "no order as to costs" if the litigation involves a mix of technical wins and substantive losses.
See related procedural history:
- FAIZAL BABU MOORKATH v EXPRESSO TELECOM GROUP [2023] DIFC CFI 008 — Pre-Trial Review vacation by consent (03 January 2023)
- FAIZAL BABU MOORKATH v EXPRESSO TELECOM GROUP [2023] DIFC CFI 008 — Consent order for procedural extension (23 February 2023)
- FAIZAL BABU MOORKATH v EXPRESSO TELECOM GROUP [2023] DIFC CFI 008 — Retrospective procedural relief for late filings (01 May 2023)
- FAIZAL BABU MOORKATH v EXPRESSO TELECOM GROUP [2023] DIFC CFI 008 — Document production and disclosure obligations (11 December 2023)
- FAIZAL BABU MOORKATH v EXPRESSO TELECOM GROUP [2024] DIFC CFI 008 — Procedural extension for trial preparation (17 January 2024)
Where can I read the full judgment in Faizal Babu Moorkath v Expresso Telecom Group [2023] DIFC CFI 008?
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Beoco Ltd v Alfa Laval Co Ltd | [1995] QB 137 | Authority on costs discretion and issue-based allocation |
| Faizal Babu Moorkath v Expresso Telecom Group Ltd | [2023] DIFC CFI 008 | Substantive judgment dismissing claim and counterclaim |
Legislation referenced:
- Employment Law 2019, Article 10
- RDC 38.6
- RDC 38.7
- RDC 38.8
- RDC 38.9
- RDC 38.10