This order quantifies the costs liability of the Second Defendant, Bank J. Safra Sarasin Limited, following the Court’s dismissal of its application for strike-out and summary judgment in the ongoing banking litigation.
What was the specific nature of the dispute between Mr Rafed Abdel Mohsen Bader Al Khorafi and Bank J. Safra Sarasin Limited that led to the USD 260,000 costs order?
The litigation involves a complex banking dispute initiated by Mr Rafed Abdel Mohsen Bader Al Khorafi, Mrs Amrah Ali Abdel Latif Al Hamad, and Mrs Alia Mohamed Sulaiman Al Rifai against Bank Sarasin-Alpen (ME) Limited and its parent entity, Bank J. Safra Sarasin Limited. The Claimants allege significant financial losses arising from investment activities managed by the Defendants. The matter has been subject to extensive procedural maneuvering, including multiple interlocutory applications regarding the viability of the claims.
The specific order dated 9 July 2018 addresses the aftermath of the Second Defendant’s unsuccessful attempt to terminate the proceedings prematurely. The court had previously ruled on the Second Defendant’s application for strike-out and/or summary judgment in an order dated 18 April 2018. As noted in the procedural history:
UPON the Second Defendant’s application for strike-out and/or summary judgment by Application Notice dated 1 June 2017 (the “Application”) having been disposed of by the Court’s Order dated 18 April 2018.
The current order serves to finalize the financial consequences of that failed application, requiring the Second Defendant to compensate the Claimants for the legal expenses incurred in defending against the strike-out attempt. For further context on the procedural history of this case, see MR RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN ALPEN [2018] DIFC CFI 014 — Abuse of process and time-bar in banking litigation (18 April 2018).
Which judge presided over the costs assessment in the Court of First Instance on 9 July 2018?
The costs assessment and the resulting order were presided over by Justice Sir David Steel, sitting in the DIFC Court of First Instance. The order was issued on 9 July 2018 at 1:00 PM, following a hearing where Counsel for the Claimants and Counsel for the Second Defendant presented their respective positions regarding the quantum of costs and the Second Defendant’s concurrent application for permission to appeal.
What specific legal arguments did the Second Defendant, Bank J. Safra Sarasin Limited, advance regarding the costs of the Application?
The Second Defendant, Bank J. Safra Sarasin Limited, sought to mitigate its exposure by filing an Application Notice on 9 May 2018, which requested both permission to appeal the Court’s earlier ruling and a stay of proceedings pending the outcome of that appeal. By challenging the underlying decision that dismissed their strike-out application, the Second Defendant argued that the costs of the initial application should not be immediately payable or should be subject to the outcome of the appellate process.
Conversely, the Claimants argued that having successfully defended the strike-out and summary judgment application, they were entitled to the immediate recovery of their costs. The Court, having heard both sides, determined that the Second Defendant was liable for the costs of the Application, rejecting the attempt to defer payment through the stay application. This follows a series of procedural adjustments in the case, such as AL KHORAFI v BANK SARASIN ALPEN [2016] DIFC CFI 014 — Procedural timeline adjustment via consent order (21 November 2016).
What was the precise doctrinal issue the Court had to resolve regarding the Second Defendant’s liability for costs?
The Court was tasked with determining whether the Second Defendant’s unsuccessful strike-out and summary judgment application warranted an immediate costs order in favor of the Claimants, notwithstanding the Second Defendant’s subsequent request for permission to appeal. The doctrinal issue centered on the court’s discretion under the Rules of the DIFC Courts (RDC) to award costs following an interlocutory application and whether the pendency of a potential appeal constitutes sufficient grounds to stay the enforcement of a costs order.
How did Justice Sir David Steel apply the principles of cost recovery to the Second Defendant’s application?
Justice Sir David Steel exercised the court’s discretion to award costs to the prevailing party in the interlocutory application. The reasoning followed the standard principle that costs should generally follow the event, particularly where a party has unsuccessfully attempted to strike out a claim or obtain summary judgment. The court noted the procedural posture of the case:
UPON the Claimants having applied for their costs of the Application, and the Second Defendant having applied for permission to appeal and for a stay pending appeal by Application Notice dated 9 May 2018.
By ordering the payment of USD 260,000, the Court affirmed that the Claimants were entitled to be compensated for the costs of the Application regardless of the Second Defendant’s desire to appeal the substantive dismissal of their strike-out motion. The court maintained the integrity of the interlocutory process by ensuring that the costs of the failed application were settled promptly.
Which specific RDC rules and DIFC statutes governed the Court’s authority to award costs in CFI-014-2016?
The Court’s authority to award costs is derived from the Rules of the DIFC Courts (RDC), specifically Part 38, which governs the court’s general power to award costs. Under RDC 38.7, the court has the discretion to determine by whom and to what extent costs are to be paid. Furthermore, the court’s ability to manage the timing of these payments is supported by RDC 38.10, which allows for the assessment of costs on an interim basis. These rules provide the framework for the Court of First Instance to ensure that parties are not unduly burdened by the costs of unsuccessful interlocutory applications.
How did the Court distinguish the current costs order from previous procedural directions in the Al Khorafi case family?
The Court treated this costs order as a distinct finalization of the interlocutory phase regarding the strike-out application. Unlike earlier orders, such as AL KHORAFI v BANK SARASIN ALPEN [2017] DIFC CFI 014 — Procedural amendment to consent order for service of particulars (06 February 2017) or RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN ALPEN [2017] DIFC CFI 014 — Procedural extension for filing Defence (16 March 2017), which dealt with administrative timelines and service, this order addressed the substantive financial liability of the Second Defendant. The Court ensured that the costs of the Application were quantified at USD 260,000, creating a clear, enforceable obligation that is separate from the ongoing merits of the case.
What was the final disposition and the specific monetary relief ordered by the Court?
The Court ordered that the Second Defendant, Bank J. Safra Sarasin Limited, pay the Claimants’ costs of the Application in the sum of USD 260,000. The order stipulated a strict deadline for this payment:
IT IS ORDERED THAT the Second Defendant shall pay the Claimants’ costs of the Application in the sum of USD 260,000 by no later than 4pm on Monday, 9 July 2018.
This disposition effectively concluded the costs dispute related to the strike-out application, providing the Claimants with immediate relief for the legal expenses incurred during that specific phase of the litigation.
How does this costs order impact the practice of banking litigation within the DIFC?
This order reinforces the principle that interlocutory applications, particularly those seeking to strike out claims or obtain summary judgment, carry significant cost risks for the applicant. Practitioners must anticipate that unsuccessful applications of this nature will likely result in immediate costs orders, regardless of whether an appeal is contemplated. This serves as a deterrent against the use of aggressive interlocutory tactics that may be perceived as delaying the progression of the case toward trial. It also highlights the importance of robust cost budgeting and the potential for substantial financial exposure in high-stakes banking disputes.
Where can I read the full judgment in Mr Rafed Abdel Mohsen Bader Al Khorafi v Bank Sarasin-Alpen [2018] DIFC CFI 014?
The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0142016-1-mr-rafed-abdel-mohsen-bsder-al-khorafi-2-mrs-amrah-ali-abdel-latif-al-hamad-3-mrs-alia-mohamed-sulaiman-al-rifai-v or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-014-2016_20180709.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| MR RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN ALPEN | [2018] DIFC CFI 014 | Primary order disposing of the strike-out application. |
Legislation referenced:
- Rules of the DIFC Courts (RDC), Part 38 (Costs)
- Rules of the DIFC Courts (RDC), Rule 38.7 (Court's discretion)
- Rules of the DIFC Courts (RDC), Rule 38.10 (Interim assessment)