DIFC Investments v Dubai Islamic Bank [2020] DIFC CFI 016 — Interim payment of costs on account (17 May 2020)

This order clarifies the application of the DIFC Courts’ costs regime regarding the interim payment of legal fees pending the final assessment of a Bill of Costs.

What was the specific amount claimed by DIFC Investments in its Bill of Costs against Dubai Islamic Bank in CFI 016/2020?

The dispute centers on the recovery of legal costs incurred by the Claimant, DIFC Investments, following the underlying proceedings against the Respondent, Dubai Islamic Bank. On 5 May 2020, the Applicant initiated the formal assessment process by filing a Notice of Commencement of Assessment. The total sum sought by the Applicant in its Bill of Costs amounted to AED 435,365.

Following this filing, the Applicant sought an interim payment of 50% of these costs before the final assessment was completed. This request was formalized through correspondence sent on 5 May 2020 and supplemented by an explanatory email on 7 May 2020. The core of the dispute at this stage was not the final quantum of the costs, but the entitlement of the Applicant to receive a portion of those costs on account while the assessment process remained ongoing.

Which judge presided over the order for payment on account in the DIFC Court of First Instance on 17 May 2020?

The order was issued by Deputy Registrar Nour Hineidi, sitting in the Court of First Instance. The decision was rendered on 17 May 2020, following the rejection of a stay application previously filed by Dubai Islamic Bank on 7 May 2020, which had been dismissed by H.E. Justice Shamlan Al Sawalehi on 14 May 2020.

What arguments did Dubai Islamic Bank advance to resist the payment of costs on account to DIFC Investments?

While the specific written submissions of Dubai Islamic Bank are not detailed in the final order, the procedural history indicates that the Respondent actively sought to delay the assessment process. Specifically, the Respondent filed an application for a stay of the proceedings on 7 May 2020. By attempting to stay the assessment, the Respondent effectively challenged the immediate enforceability of the costs claim.

The Applicant, DIFC Investments, countered this by relying on the standard practice of the DIFC Courts regarding interim payments. The Applicant argued that the court should exercise its discretion to order a payment on account, representing 50% of the total claimed, to mitigate the financial burden of the ongoing litigation process. The success of the Applicant’s request was contingent upon the court’s rejection of the Respondent’s stay application, which cleared the procedural path for the Deputy Registrar to grant the interim relief.

What was the specific legal question regarding the court's discretion to order payment on account under the DIFC Courts’ Costs Regime?

The primary legal question before Deputy Registrar Nour Hineidi was whether, in the absence of a stay of proceedings, the court should exercise its discretion to order an interim payment of 50% of the total costs claimed in a Bill of Costs before the final assessment is concluded. The court had to determine if the Applicant had established a sufficient basis for an interim payment under the framework provided by Practice Direction No. 5 of 2014, which governs the DIFC Courts’ Costs Regime.

How did Deputy Registrar Nour Hineidi apply the principles of the DIFC Courts’ Costs Regime to grant the interim payment?

The Deputy Registrar’s reasoning was grounded in the procedural necessity of ensuring that the successful party is not unduly prejudiced by the time taken to finalize a detailed assessment of costs. By considering the Applicant’s request alongside the recent dismissal of the Respondent’s stay application, the court determined that there was no remaining procedural barrier to the payment. The Deputy Registrar concluded that an interim payment of 50% of the total claimed amount was appropriate and proportionate.

The Respondent is ordered to pay a total AED 217,682.5, into
Court
, within 14 days of the issuance of this Order and by Sunday, 31 May 2020.

This reasoning reflects the court's commitment to the efficient management of costs, ensuring that the prevailing party receives a portion of their legal expenditure without waiting for the exhaustive, and often lengthy, final assessment process to conclude.

Which specific practice directions and procedural rules governed the assessment of costs in DIFC Investments v Dubai Islamic Bank?

The assessment was governed by Practice Direction No. 5 of 2014, which outlines the DIFC Courts’ Costs Regime. This instrument provides the procedural framework for the recovery of costs and the mechanisms by which parties may request payments on account. The Deputy Registrar also referenced the Rules of the DIFC Courts (RDC) implicitly through the exercise of the court’s inherent case management powers, particularly in the context of the stay application filed by the Respondent.

How did the previous order of H.E. Justice Shamlan Al Sawalehi influence the decision to grant the payment on account?

The order issued by H.E. Justice Shamlan Al Sawalehi on 14 May 2020 was a critical precedent for the Deputy Registrar’s decision. By rejecting the Respondent’s application for a stay, Justice Al Sawalehi effectively affirmed that the assessment process should proceed without further delay. This ruling removed the primary obstacle that the Respondent had placed in the path of the Applicant’s recovery efforts, allowing the Deputy Registrar to proceed with the interim payment order as a logical consequence of the ongoing assessment.

What was the final disposition and the specific deadline for the payment of AED 217,682.5 into court?

The Deputy Registrar granted the Applicant’s request in full. The Respondent, Dubai Islamic Bank, was ordered to pay the sum of AED 217,682.5 into the DIFC Court. This amount was calculated as exactly 50% of the total AED 435,365 claimed in the Bill of Costs. The Respondent was given a strict deadline of 14 days from the issuance of the order, specifically requiring the funds to be deposited by Sunday, 31 May 2020.

What are the practical implications for litigants seeking interim costs payments in the DIFC Courts?

This case serves as a reminder that the DIFC Courts are prepared to facilitate interim payments on account to prevent the erosion of a party's financial position during the assessment phase. Practitioners should note that once a stay application is dismissed, the court is highly likely to grant a reasonable request for a payment on account, provided the amount is proportionate (typically 50%). Litigants should anticipate that the court will prioritize the swift resolution of costs issues once the substantive merits of the case are settled.

Where can I read the full judgment in DIFC Investments v Dubai Islamic Bank [2020] DIFC CFI 016?

The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0162020-difc-investments-ltd-v-dubai-islamic-bank-1 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-016-2020_20200517.txt.

Cases referred to in this judgment:

Legislation referenced:

• Practice Direction No. 5 of 2014 (DIFC Courts’ Costs Regime)