What was the nature of the dispute in Omar Ben Hallam v Natixis and why did the Claimant seek to vary the costs order?
The litigation involved an employment dispute between the Claimant, Omar Ben Hallam, and the Defendant, Natixis, concerning a claim valued at AED 4.2 million. Following a judgment issued on 19 September 2025, in which the Claimant’s claims were either struck out or dismissed, the Court directed the parties to file costs submissions. Subsequently, the Claimant filed a "No Costs Application," attempting to leverage the newly introduced Practice Direction No. 1 of 2025 to retroactively set aside the liability for costs established by the Court’s earlier judgment.
The Claimant’s application sought a variation of the September 2025 judgment, arguing that the new Practice Direction—which mandates that each party in an employment dispute generally bears its own legal costs—should apply to his case. He further requested the anonymisation of the proceedings and the removal of the case from public domains. As noted in the Court’s order:
This No Costs Application is brought by the Claimant seeking an order to vary the Judgment dated 19 September 2025 insofar as it relates to costs.
The Claimant’s attempt to avoid the financial consequences of his unsuccessful litigation was fundamentally an effort to apply a prospective rule to a settled procedural outcome. For further context on the procedural history of this case, see OMAR BEN HALLAM v NATIXIS [2025] DIFC CFI 016 — Strict procedural compliance for retrospective extensions of time (12 June 2025).
Which judge presided over the No Costs Application in CFI 016/2025 and in which division was it heard?
The application was heard by H.E. Deputy Chief Justice Ali Al Madhani, sitting in the Court of First Instance of the DIFC Courts. The order was issued on 3 February 2026, following the Claimant’s filing of the No Costs Application on 29 October 2025.
What were the specific legal arguments advanced by Omar Ben Hallam and Natixis regarding the application of Practice Direction No. 1 of 2025?
The Claimant argued that the Court should exercise its discretion to vary the costs order in light of the policy shift introduced by Practice Direction No. 1 of 2025, which aims to enhance access to justice by removing the threat of adverse costs in employment matters. He contended that the Court should apply the "no-costs" rule to his case to align with the new regulatory environment.
Conversely, Natixis argued that the Practice Direction lacked retrospective effect. The Defendant submitted that the costs order was already a settled matter of the Court’s 19 September 2025 judgment and could not be overturned by a subsequent Practice Direction. Furthermore, the Defendant argued that even if the Court were to consider the new rules, the Claimant’s conduct of the proceedings had been unreasonable, justifying an adverse costs order on an indemnity basis. As the Court recorded:
Third, if the Court accepts that the costs issue remains live, the Defendant submits that the Court should exercise its discretionary case management powers to issue an adverse costs order on the indemnity basis within 14 days summarily assessed in the sum of AED 390,910.77, which is the same amount as filed on 26 September 2025, under paragraph 3.2 of the Practice Direction.
Did the DIFC Court have the jurisdictional power to apply Practice Direction No. 1 of 2025 retrospectively to a costs order issued on 19 September 2025?
The central legal issue was whether the Court possessed the authority to apply Practice Direction No. 1 of 2025 to a judgment finalized before the Practice Direction came into effect on 1 October 2025. The Court had to determine if the "no-costs" rule could be used to reopen a costs liability that had already been established by a prior judicial order. The doctrinal question focused on the limits of the Court’s power to vary existing orders based on subsequent changes in procedural guidance, specifically whether the Practice Direction contained any language granting it retrospective force.
How did H.E. Deputy Chief Justice Ali Al Madhani reason that the Practice Direction did not apply to the Claimant’s costs liability?
The Court reasoned that Practice Direction No. 1 of 2025 is prospective in nature and contains no provisions that would allow for the reopening of costs orders made prior to its effective date. The Judge emphasized that the Claimant had not appealed the original judgment, and therefore, the costs order remained a binding obligation. The Court noted that the Claimant himself had previously acknowledged that costs would be payable, which contradicted his later attempt to rely on the new Practice Direction.
Regarding the quantum of costs, the Court rejected the Defendant’s request for indemnity costs, opting instead for a more moderate assessment. The Court’s reasoning for the final quantum was:
I concede with the Claimant that AED 70,000 is the appropriate quantum to award costs. The Claim was essentially struck out at the earliest opportunity.
This decision reflects the Court's balance between acknowledging the Defendant's success and ensuring that the costs awarded remained proportionate to the circumstances of the case.
Which specific DIFC statutes and RDC rules were applied by the Court in determining the costs liability?
The Court relied upon the Rules of the DIFC Courts (RDC), specifically RDC 38.7 and RDC 38.8, which govern the Court’s discretion in awarding costs. Additionally, the Court referenced DIFC Law No. 2 of 2025 regarding the power to stay enforcement proceedings. The Defendant had also invoked RDC 38.17 in support of its argument for indemnity costs:
The Defendant relies on Practice Direction 5 of 2014 to have costs assessed on an indemnity basis: “Costs on the Indemnity Basis — RDC 38.17 1.
The Court ultimately determined that the costs issue was governed by the established rules of the Court rather than the new, prospective Practice Direction.
How did the Court utilize the Claimant’s own prior submissions in determining the final costs award?
The Court utilized the Claimant’s earlier filings to establish a reasonable range for the costs award. Despite the Claimant’s attempt to argue for "no costs" under the new Practice Direction, the Court noted that the Claimant had previously conceded that a certain amount of costs was appropriate. This prior admission served as a benchmark for the Court’s assessment. As the Court observed:
This is evidenced in the Claimant’s costs submissions, filed on 1 October 2025, which submitted that an award in the range of AED 70,000 to AED 100,000 was reasonable and proportionate.
By referencing this, the Court demonstrated that the Claimant’s own assessment of the case’s value and the associated costs provided a logical basis for the final award of AED 70,000, effectively neutralizing the Claimant’s later attempt to avoid all liability.
What was the final outcome of the No Costs Application and the specific orders made by the Court?
The Court dismissed the Claimant’s No Costs Application in its entirety. It ordered that there be no order as to costs specifically for the application itself. However, the Court upheld the original liability for costs stemming from the 19 September 2025 judgment, ordering the Claimant to pay AED 70,000 to the Defendant. This amount was deemed appropriate given that the claim was struck out at an early stage. The Court’s rationale for the final award was:
Therefore, given the Claimant’s conduct, total Claim value of AED 4.2 million, the serious allegations making the substance of the Claim, the fact that the Claim was defeated early and that costs sought are only at 10% of the value, it is proportionate to award all costs sought. 33.
What are the wider implications of this ruling for DIFC employment litigation practitioners?
This ruling serves as a clear warning to practitioners that new Practice Directions, such as Practice Direction No. 1 of 2025, will not be interpreted as having retrospective effect unless explicitly stated. Litigants cannot use subsequent regulatory changes to reopen settled costs orders or to escape liabilities established in prior judgments. Practitioners must anticipate that the Court will strictly adhere to the effective dates of new rules and will not permit the "no-costs" regime to undermine the finality of existing court orders. Furthermore, the case highlights that the Court will continue to rely on the parties' own prior submissions regarding costs when determining the final quantum, even when those parties later attempt to shift their legal strategy.
Where can I read the full judgment in Omar Ben Hallam v Natixis [2026] DIFC CFI 016?
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-0162025-omar-ben-hallam-v-natixis-2 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-016-2025_20260203.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- DIFC Law No. 2 of 2025
- Practice Direction No. 1 of 2025
- Practice Direction No. 5 of 2014
- RDC 38.7
- RDC 38.8
- RDC 38.17