This consent order formalizes a settlement between ED&F Man Capital Markets and former employees and competitors, resolving DIFC litigation while preserving the parties' rights to pursue ongoing legal action in the United States.
What was the specific nature of the dispute in ED&F Man Capital Markets Mena v Sayyed Hussain and what was the financial stake involved?
The lawsuit, filed under case number CFI-015-2018, centered on allegations of breach of contract, misuse of confidential information, and potential solicitation of staff by former employees and a competing entity, RJ O’Brien MENA Capital Limited. The Claimants, ED&F Man Capital Markets Mena Limited and ED&F Man Capital Markets Limited, sought to protect their business interests against the First Defendant, Sayyed Hussain, the Second Defendant, RJ O’Brien MENA Capital Limited, and the Third Defendant, Stephen Ghallami. The dispute was part of a wider international conflict involving parallel litigation in the United States District Court for the Northern District of Illinois.
The financial stake in the DIFC proceedings was crystallized in the settlement agreement, which required the Defendants to pay the Claimants US$850,000 as a contribution toward legal costs. This payment was made without any admission of liability by the Defendants. The settlement was designed to resolve the DIFC-based claims while explicitly ensuring that the resolution did not prejudice the Claimants' ability to continue their litigation in the United States. As noted in the court documentation:
The Defendants’ undertakings and the Claimants’ cross-undertaking to the Court issued on 3 April 2018 are discharged with the exception of paragraph 7 of Schedule A, paragraph 8 of Schedule B and paragraph 8 of Schedule C (Confidential Information).
For further context on the procedural history of this matter, see ED&F MAN CAPITAL MARKETS MENA v SAYYED HUSSAIN [2018] DIFC CFI 015 — Consent order and undertakings regarding liability trial (05 April 2018).
Which judge presided over the consent order in CFI-015-2018 and in which division of the DIFC Courts was it issued?
The consent order was issued by Deputy Registrar Nour Hineidi on 17 December 2018. The matter was handled within the DIFC Court of First Instance, which maintains jurisdiction over commercial and employment-related disputes of this nature. The order was issued at 3:00 PM, finalizing the stay of proceedings upon the agreed terms set out in the schedules attached to the order.
What were the positions of the parties regarding the continuation of US proceedings in ED&F Man Capital Markets Mena v Sayyed Hussain?
The parties held distinct positions regarding the interplay between the DIFC settlement and the ongoing US Proceedings (Case Number 18-cv-05704). The Claimants insisted that the settlement must not act as a release or discharge of any claims in the US litigation. They successfully negotiated terms that allowed them to submit evidence to the US court, regardless of whether that evidence had been presented in the DIFC.
Conversely, the Defendants sought to ensure that the DIFC settlement did not constitute a submission to the jurisdiction of US courts or a waiver of any defenses they might raise in the American proceedings. A critical component of the settlement was the non-recruitment undertaking provided by the Second Defendant. As specified in the order:
RJ O’Brien MENA Capital Limited hereby undertakes not until 15 December 2019 to recruit any of the First Claimant’s brokers, senior executives or sales staff employed by the First Claimant as at 15 December 2018.
What was the precise legal question regarding the stay of proceedings that the DIFC Court had to answer in CFI-015-2018?
The Court was tasked with determining whether it could grant a stay of proceedings that effectively resolved the DIFC dispute while simultaneously creating a "trigger" mechanism for lifting that stay. The legal question involved the Court's authority to oversee a settlement that remained "live" in the event that any third party attempted to use the DIFC settlement as a jurisdictional bar or defense in the parallel US proceedings. The Court had to ensure that the stay was not a final dismissal of the Claimants' rights, but rather a conditional pause that protected the integrity of the ongoing international litigation.
How did the Court apply the doctrine of consent and the preservation of rights in the settlement of CFI-015-2018?
The Court utilized its inherent powers to record a settlement by consent, ensuring that the terms were enforceable as a court order. The reasoning focused on the balance between finality in the DIFC and the preservation of the Claimants' rights to pursue the Third Defendant in the US. By incorporating the schedules into the order, the Court allowed the parties to define the scope of the stay, including the specific conditions under which the stay would be lifted. The Court also addressed the status of the Third Defendant, Stephen Ghallami, by ordering the discontinuation of proceedings against him, provided that specific conditions were met. As stated in the order:
Further and without prejudice to the Claimants’ rights to make the conduct, acts or omissions of the Third Defendant the subject of the US Proceedings, those Proceedings shall be discontinued as against him.
Which DIFC statutes and RDC rules were invoked to govern the stay and the preservation of evidence in CFI-015-2018?
The order explicitly referenced the Rules of the DIFC Courts (RDC) to preserve the Claimants' rights regarding document production and future applications. Specifically, the order cited RDC 28.64 and 28.66, as well as RDC 30.65-30.70, which relate to the management of documents and the Court's power to intervene in the disclosure process. Additionally, the settlement was framed within the broader context of DIFC Law No. 5 of 2005 (the Law on the Application of Civil and Commercial Laws in the DIFC) and the DIFC Law of Damages and Remedies No. 7 of 2005, which underpin the Court's authority to award costs and manage remedies in commercial disputes.
How did the Court treat the previous undertakings and the cross-undertakings in the context of the final order?
The Court applied a selective approach to the discharge of previous undertakings. While the general cross-undertakings provided by the Claimants on 28 March 2018 were discharged, the Court maintained specific protections regarding confidential information. By discharging the majority of the April 2018 undertakings while carving out specific paragraphs related to confidentiality, the Court ensured that the Claimants' trade secrets remained protected even after the DIFC proceedings were stayed. This approach allowed for a clean break in the litigation while maintaining the necessary safeguards for the parties' proprietary information.
What was the final disposition and the specific relief granted in the consent order of 17 December 2018?
The Court ordered a stay of all further proceedings in CFI-015-2018, except for the purpose of enforcing the terms of the settlement. The key components of the relief included:
1. A payment of US$850,000 by the Defendants to the Claimants as a contribution to legal costs.
2. A formal discontinuation of proceedings against the Third Defendant, Stephen Ghallami.
3. A non-recruitment undertaking by RJ O’Brien MENA Capital Limited until 15 December 2019.
4. An express provision that the stay would be lifted automatically if any party attempted to use the DIFC settlement as a jurisdictional bar in the US Proceedings.
5. No order as to costs beyond the agreed contribution.
What are the wider implications for practitioners regarding the use of consent orders in parallel international litigation?
This case serves as a template for practitioners managing cross-border employment and commercial disputes. It demonstrates that the DIFC Court is willing to facilitate settlements that do not necessarily end the entire dispute, provided the parties clearly define the boundaries of the stay. Practitioners must be aware that a "stay" in the DIFC does not have to mean the end of the matter; it can be a strategic tool to pause local litigation while allowing international proceedings to continue. The inclusion of "trigger" clauses—whereby a stay is lifted if a party breaches the spirit of the settlement in a foreign court—is a sophisticated mechanism that practitioners should consider when drafting consent orders in multi-jurisdictional cases.
Where can I read the full judgment in ED&F Man Capital Markets Mena v Sayyed Hussain [2018] DIFC CFI 015?
The full text of the consent order is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0152018-1-edf-man-capital-markets-mena-limited-2-edf-man-capital-markets-limited-v-1-sayyed-hussain-2-rj-obrien-mena-capital-3
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| ED&F Man Capital Markets Mena v Sayyed Hussain | [2018] DIFC CFI 015 | Previous order dated 05 April 2018 |
Legislation referenced:
- DIFC Law 5 of 2005
- DIFC Law of Damages and Remedies No. 7 of 2005
- RDC 28.1
- RDC 28.64
- RDC 28.66
- RDC 30.65-30.70