What was the total amount of accrued interest and costs claimed by Mikhart against Meraf in the September 2023 hearing?
The dispute concerns the recovery of ancillary financial relief following a successful claim for a principal sum of AED 899,462. Following the court’s initial judgment on 5 July 2023, the matter proceeded to an Interest and Costs Hearing to finalize the outstanding liabilities of the Defendant. The Claimant sought a specific quantum for interest that had accrued up to the date of the hearing, alongside the reimbursement of legal costs incurred throughout the proceedings.
As noted in the court’s schedule of reasons:
The Claimant now claims AED 341,675.95 accrued interest as of 21 September 2023 and AED 23,136.75 in costs, for the reasons and as set out in its Skeleton Argument. 7.
The Claimant’s position was that these figures represented the accurate reflection of the contractual interest rate of 2% per month, which had been previously miscalculated in the initial Particulars of Claim. The court accepted these figures as the final amounts due for the specified period, alongside an ongoing daily accrual rate.
Which judge presided over the Interest and Costs Hearing in CFI 010/2023 and when did the proceedings take place?
The Interest and Costs Hearing was presided over by Justice Sir Peter Gross, sitting in the DIFC Court of First Instance. The hearing was held on 21 September 2023, following the court’s earlier judgment on the merits delivered on 5 July 2023. The resulting order was formally issued by the Assistant Registrar on 22 September 2023.
How did the Claimant and Defendant approach the Interest and Costs Hearing in CFI 010/2023?
The Claimant, represented by Mr. Mastu under the supervision of Mr. Mepit, actively pursued the interest and costs application by filing a detailed Skeleton Argument on 14 September 2023. This submission provided the necessary arithmetic breakdown to correct the interest calculation error from the original Particulars of Claim. The Claimant also informed the court that while there had been informal discussions with the Defendant, these had failed to produce a resolution or payment of the principal sum.
The Defendant, Meraf, failed to engage with the court’s directions. Despite the court’s explicit instructions regarding the filing of a rebuttal, the Defendant did not submit a skeleton argument nor attend the hearing. As the court noted:
If the Defendant objects to the Claimant’s claim for interest and costs, it must produce a skeleton argument to be delivered to the Claimant and the Court, 2 days in advance of the Interest and Costs Hearing. [Q2]
The Defendant’s absence and failure to respond to Registry communications left the court to proceed on the basis of the Claimant’s unopposed submissions.
What was the specific doctrinal issue regarding the interest calculation that Justice Sir Peter Gross had to resolve?
The court was tasked with determining whether it could award interest based on a rate of 2% per month when the original Particulars of Claim had erroneously reflected a calculation based on 2% per annum. The doctrinal issue centered on the court’s ability to rectify a clear arithmetical error in the pleadings to ensure the award reflected the actual contractual entitlement of the Claimant. Justice Sir Peter Gross had to decide if the Claimant was entitled to the corrected sum of AED 341,675.95, given that the underlying contractual rate of 2% per month was correctly stated in the text of the Particulars of Claim, even if the resulting calculation was flawed.
How did Justice Sir Peter Gross apply the principle of arithmetical accuracy to the interest claim?
Justice Sir Peter Gross adopted a pragmatic approach to the Claimant’s request for correction. By reviewing the Skeleton Argument and the underlying contractual terms, the court verified that the error was purely computational rather than a change in the substantive claim. The judge confirmed that the corrected figures were consistent with the intended 2% monthly rate.
Regarding the validity of the corrected calculation, the court observed:
The sums now claimed tally arithmetically with 2% per month.
This reasoning allowed the court to bypass the error in the initial filing and grant the relief sought, ensuring that the final order reflected the true financial position between the parties.
Which specific DIFC procedural rules and directions governed the Interest and Costs Hearing?
The hearing was governed by the directions set out in the 5 July 2023 Judgment, which mandated the filing of skeleton arguments by both parties. Specifically, the court relied on the following procedural framework:
- The requirement for the Claimant to calculate interest due up to the date of the hearing.
- The requirement for the Claimant to provide short submissions on costs.
- The Defendant’s right to object via a skeleton argument filed 2 days in advance of the hearing.
- The court’s authority to award costs under the general principles of the Rules of the DIFC Courts (RDC), specifically addressing the Claimant’s entitlement to recover court costs.
How did the court address the Claimant's entitlement to costs under the RDC?
The court followed the standard procedure for costs assessment in undefended matters. Justice Sir Peter Gross required the Claimant to justify the costs claimed through a skeleton argument, as per the directions:
(b) With regard to costs, the skeleton argument should make such short submissions as are appropriate going to the Claimant’s entitlement to an order for costs, together with the amount of costs claimed. 4.
The court found the requested amount of AED 23,136.75 to be reasonable, characterizing them essentially as court costs, and ordered the Defendant to pay this sum within 21 days.
What was the final disposition and the specific monetary relief ordered by the court?
The court granted the Claimant’s application in full. The order required the Defendant to pay AED 341,675.95 for accrued interest and AED 23,136.75 for costs, both within 21 days. Furthermore, the court established a mechanism for ongoing interest to prevent further loss to the Claimant:
Interest continues to accrue from 21 September 2023, until payment at the day rate of AED 599.63 and the Defendant is liable to pay the Claimant any such additional sums as have accrued. [Q4]
The Defendant was also ordered to pay any additional interest accruing from the date of the hearing at the specified daily rate.
What are the practical implications for litigants regarding interest calculations and default proceedings in the DIFC?
This case serves as a reminder that the DIFC Court will prioritize arithmetical accuracy over initial pleading errors, provided the underlying contractual basis is clear. Litigants should ensure that their Particulars of Claim are meticulously checked for consistency between the stated rate and the calculated sum. Furthermore, the case highlights the risks for defendants who choose to ignore court directions; the court will readily grant the Claimant’s unopposed calculations if the Defendant fails to file a skeleton argument or attend the hearing. Practitioners must anticipate that the court will enforce strict timelines for the submission of skeleton arguments in interest and costs hearings.
Where can I read the full judgment in Mikhart v Meraf [2023] DIFC CFI 010?
The full text of the order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0102023-mikhart-v-meraf
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No external case law cited in the order. |
Legislation referenced:
- Rules of the DIFC Courts (RDC) - General provisions regarding costs and interest.