RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN-ALPEN [2015] DIFC CFI 026 — Permission to appeal and conditional payment orders (03 February 2015)

This order addresses the procedural threshold for appellate review in the long-running litigation between Rafed Abdel Mohsen Bader Al Khorafi and Bank Sarasin-Alpen, specifically concerning the conditions under which a defendant may pursue an appeal following an adverse judgment.

What was the specific dispute regarding the enforcement of the judgment against Bank Sarasin-Alpen (ME) Limited and Bank Sarasin & Co. LTD?

The litigation, initiated under CFI-026-2009, involves claims brought by Rafed Abdel Mohsen Bader Al Khorafi and others against Bank Sarasin-Alpen (ME) Limited and its parent entity, Bank Sarasin & Co. LTD. Following a judgment delivered by the Deputy Chief Justice on 21 August 2014 and a subsequent order on 28 October 2014, both defendants sought to challenge the court's findings. The core of the current dispute centers on the defendants' right to challenge the first-instance decision and the claimants' insistence that such a right should be curtailed by financial security.

As the court noted regarding the claimants' position:

The Claimants asked that any grant of permission to the Second Defendant be on the condition that it pay into Court any judgment sum(s) and costs ordered to be paid at first instance.

This request highlights the high stakes of the litigation, as the claimants sought to ensure that the financial relief awarded at the trial level would not be rendered illusory by a protracted appellate process. This order is a continuation of the procedural history of the case, following earlier milestones such as AL KHORAFI v BANK SARASIN-ALPEN [2011] DIFC CA 026 — Permission to appeal granted (24 May 2011).

Which judge presided over the application for permission to appeal in CFI-026-2009?

Justice Roger Giles presided over this matter in the Court of First Instance. The order was issued on 3 February 2015, following a review of the defendants' appeal notices filed in November 2014 and the subsequent skeleton arguments and submissions exchanged between the parties in late 2014 and early 2015.

What specific legal arguments did the Claimants and the Second Defendant advance regarding the conditions for appeal?

The claimants argued that the Second Defendant, Bank Sarasin & Co. LTD, should be required to pay the judgment sum and associated costs into the DIFC Court as a prerequisite for proceeding with its appeal. This argument was rooted in a desire to protect the fruits of their victory at first instance. Conversely, the Second Defendant sought unconditional permission to appeal, contesting the necessity or fairness of such a financial barrier. The court acknowledged the complexity of these competing interests, noting that the matter required further deliberation on whether the imposition of such a condition was appropriate under the circumstances.

What was the precise doctrinal issue the court had to resolve regarding RDC 44.8(2)?

The court was tasked with determining whether the grounds for appeal presented by the defendants met the threshold for permission under the Rules of the DIFC Courts (RDC). Specifically, the court had to decide if the appeal had a real prospect of success or if there was some other compelling reason for the appeal to be heard. Beyond the threshold test, the court faced the secondary, discretionary issue of whether it possessed the authority to impose a "pay-into-court" condition on the Second Defendant, and whether such a condition was equitable given the nature of the underlying banking dispute.

How did Justice Roger Giles apply the test for granting permission to appeal?

Justice Giles applied the standard set forth in RDC 44.8(2), which governs the criteria for granting permission to appeal in the DIFC. He concluded that the defendants had satisfied the requirements to move forward with their challenge. The reasoning was straightforward:

Permission to appeal should be granted to each of the Defendants on the basis of RDC 44.8(2).

However, the judge distinguished the position of the Second Defendant by reserving judgment on whether that permission should be made conditional, thereby ensuring that the court maintained control over the potential financial security of the claimants while allowing the appellate process to be initiated.

Which RDC rules and statutory authorities were applied in this order?

The primary authority cited is RDC 44.8(2), which provides the framework for the court to grant permission to appeal. The court also relied on its inherent case management powers to structure the timeline for further submissions regarding the conditional payment issue. By setting specific deadlines for the claimants and the Second Defendant to file submissions (paragraphs 3, 4, and 5 of the order), Justice Giles utilized the procedural flexibility afforded by the RDC to ensure a fair hearing on the conditional payment question.

How did the court address the allocation of costs for the permission to appeal applications?

The court adopted a provisional approach to the costs of the applications, aiming to align the financial burden with the eventual outcome of the appeals. Justice Giles stated:

I propose that the costs of the applications be costs in the appeals. There is a theoretical possibility that, if the condition is imposed, the Second Defendant will not proceed with its appeal.

This approach reflects a cautious stance, ensuring that the court remains open to adjusting the cost order if the Second Defendant decides that the financial burden of a conditional appeal is too high to proceed.

What was the final disposition and the specific orders made by the court?

The court granted permission to appeal to both the First and Second Defendants. However, the permission for the Second Defendant was explicitly made "subject to determination of whether the grant of permission should be conditional on payment into Court of any judgment sum(s) and costs ordered to be paid at first instance." The court also established a strict briefing schedule for the parties to argue the conditional payment issue, concluding with:

I will order that the costs be costs in the appeals, but the order is subject to (a) any application for a different order made within seven days; and (b) consideration of a different order in the event that the Second Defendant’s appeal does not proceed.

What are the practical implications for litigants seeking to appeal DIFC Court judgments?

This order serves as a reminder that obtaining permission to appeal is not the end of the procedural hurdles for a defendant. Even when permission is granted, claimants may successfully argue for the imposition of financial conditions—such as paying the judgment sum into court—to mitigate the risk of dissipation of assets or to ensure the enforceability of the final judgment. Practitioners must be prepared to argue the financial capacity of their clients and the potential prejudice to the respondent if an appeal is allowed to proceed without security.

Where can I read the full judgment in RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN-ALPEN [2015] DIFC CFI 026?

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-0262009-1-rafed-abdel-mohsen-bader-al-khorafi-2-amrah-ali-abdel-latif-al-hamad-3-alia-mohamed-sulaiman-al-rifai-v-1-bank-sar-2 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-026-2009_20150203.txt.

Cases referred to in this judgment:

Legislation referenced:

• RDC 44.8(2)