This Default Costs Certificate confirms the procedural consequences of a party’s failure to engage with the costs assessment process, resulting in a summary award of AED 680,565.00 against the Respondent.
Why did the Claimant file a request for a Default Costs Certificate in CFI 016/2020 against Dubai Islamic Bank?
The dispute concerns the recovery of legal costs following earlier proceedings in the Court of First Instance. After the Claimant, DIFC Investments, initiated the assessment process by filing a Notice of Commencement of Assessment on 5 May 2020, the Respondent, Dubai Islamic Bank, failed to respond within the mandatory timeframe. Under the Rules of the DIFC Courts (RDC), a party served with a notice of commencement must serve Points of Dispute within 21 days. The Respondent’s failure to meet this deadline triggered the Claimant’s right to seek a default judgment on the quantum of costs.
This procedural default necessitated the intervention of the Deputy Registrar to quantify the liability. The court reviewed the documentation, including the underlying order of H.E. Justice Shamlan Al Sawalehi dated 25 March 2020, to ensure the claim for costs was properly grounded in the court's previous directions. As the Respondent provided no opposition to the figures presented, the court proceeded to certify the full amount claimed.
The Defendant is ordered to pay a total AED 680,565.00 within 21 days from the date of this Order.
Which judicial officer presided over the issuance of the Default Costs Certificate in CFI 016/2020?
The Default Costs Certificate was issued by Deputy Registrar Nour Hineidi of the DIFC Court of First Instance on 29 June 2020. The Registrar exercised the court's administrative and judicial authority to finalize the costs assessment after verifying that the procedural requirements of the RDC had been satisfied by the Claimant and ignored by the Respondent.
What were the respective procedural positions of DIFC Investments and Dubai Islamic Bank regarding the assessment of costs?
DIFC Investments adopted a proactive stance, strictly adhering to the RDC timelines to secure its entitlement to costs. By filing the Notice of Commencement of Assessment on 5 May 2020, the Claimant set the clock for the Respondent to challenge the reasonableness or proportionality of the legal fees incurred. The Claimant’s position was that, absent any Points of Dispute, the court should grant the requested sum in its entirety.
Conversely, Dubai Islamic Bank maintained a position of total non-engagement during this specific phase of the litigation. By failing to file Points of Dispute pursuant to RDC 40.15, the Respondent effectively waived its right to contest the specific items or the total quantum of the costs claimed. This silence left the court with no alternative but to grant the Claimant’s request for a Default Costs Certificate, as the Respondent offered no legal argument or evidence to mitigate the liability.
What was the specific legal question the court had to answer regarding the application of RDC 40.17?
The primary legal issue before the Deputy Registrar was whether the Claimant had satisfied the threshold requirements under RDC 40.17 to obtain a Default Costs Certificate. Specifically, the court had to determine if the Respondent had been properly served and if the statutory period for filing Points of Dispute under RDC 40.15 had expired without any action from the Respondent. The court was not tasked with conducting a detailed line-by-line assessment of the bill of costs, but rather with confirming that the procedural default entitled the Claimant to the requested relief as a matter of course.
How did Deputy Registrar Nour Hineidi apply the test for granting a Default Costs Certificate?
The Deputy Registrar followed a structured verification process to ensure the integrity of the court’s records. First, the court confirmed the filing date of the Notice of Commencement of Assessment. Second, it calculated the 21-day period mandated by RDC 40.15 to determine if the Respondent remained in default. Third, the court cross-referenced the request against the previous judicial history of the case, specifically the order of H.E. Justice Shamlan Al Sawalehi dated 25 March 2020, to ensure that the costs being claimed were consistent with the court's prior rulings on liability.
Upon confirming that the Respondent had failed to file Points of Dispute, the Deputy Registrar concluded that the requirements for a default certificate were met. The reasoning was straightforward: the RDC provides a clear mechanism for the recovery of costs when a party fails to participate in the assessment process. By failing to file the necessary documentation, the Respondent forfeited its opportunity to challenge the quantum.
The Defendant is ordered to pay a total AED 680,565.00 within 21 days from the date of this Order.
Which RDC rules were central to the court's decision to grant the Default Costs Certificate?
The court relied primarily on RDC 40.17, which governs the procedure for obtaining a Default Costs Certificate when a party fails to serve Points of Dispute. This rule acts as a procedural enforcement mechanism, ensuring that the costs assessment process is not indefinitely delayed by a party’s inaction. Additionally, RDC 40.15 was central to the court's reasoning, as it defines the 21-day window for the Respondent to serve Points of Dispute following the service of the Notice of Commencement of Assessment. The failure to comply with RDC 40.15 was the factual trigger for the application of RDC 40.17.
How did the court utilize the Order of H.E. Justice Shamlan Al Sawalehi in the context of this costs assessment?
The Order of H.E. Justice Shamlan Al Sawalehi dated 25 March 2020 served as the foundational authority for the costs assessment. In the DIFC Courts, a costs assessment is not an independent proceeding but an ancillary step to a substantive judgment or order. The Deputy Registrar reviewed this order to verify that the Claimant had a valid, court-sanctioned entitlement to recover costs from the Respondent. By acknowledging this order, the court ensured that the Default Costs Certificate was consistent with the substantive outcome of the litigation and that the costs awarded were properly linked to the legal work performed in the underlying dispute.
What was the final disposition and the specific monetary relief ordered by the court?
The court granted the Claimant’s request in full. The Deputy Registrar issued a Default Costs Certificate ordering the Respondent, Dubai Islamic Bank, to pay the total sum of AED 680,565.00 to the Claimant. The order mandated that this payment be made within 21 days of the date of the order, which was 29 June 2020. This disposition effectively concluded the costs assessment phase of the dispute, providing the Claimant with an enforceable instrument for the recovery of its legal expenses.
What are the wider implications for practitioners regarding the management of costs assessments in the DIFC?
This case serves as a stark reminder of the risks associated with ignoring procedural deadlines in the DIFC Courts. Practitioners must treat the 21-day window under RDC 40.15 with the same level of urgency as any other court-imposed deadline. Failure to file Points of Dispute is not merely a procedural oversight; it is a waiver of the right to challenge the quantum of costs, which can lead to significant financial exposure, as evidenced by the AED 680,565.00 award here.
Litigants should also note that the DIFC Courts maintain a strict adherence to the RDC, and the Registrar will not hesitate to issue a Default Costs Certificate when the rules are not followed. For those representing respondents, the lesson is clear: if you intend to challenge a bill of costs, you must do so within the prescribed timeframe, or you risk being bound by the Claimant’s assessment by default. This case is part of a broader series of orders in the same matter, including:
- DIFC INVESTMENTS v DUBAI ISLAMIC BANK [2020] DIFC CFI 016 — Denial of stay on costs assessment pending appeal (14 May 2020)
- DIFC Investments v Dubai Islamic Bank [2020] DIFC CFI 016 — Interim payment of costs on account (17 May 2020)
- DIFC INVESTMENTS v DUBAI ISLAMIC BANK [2020] DIFC CFI 016 — Payment on account of costs (19 May 2020)
Where can I read the full judgment in DIFC Investments v Dubai Islamic Bank [2020] DIFC CFI 016?
The full text of the Default Costs Certificate can be accessed via the DIFC Courts website or the following CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-016-2020_20200629.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| DIFC Investments v Dubai Islamic Bank | CFI 016/2020 | Order of H.E Justice Shamlan Al Sawalehi dated 25 March 2020 |
Legislation referenced:
- Rules of the DIFC Courts (RDC): Rule 40.15
- Rules of the DIFC Courts (RDC): Rule 40.17