This order addresses the procedural boundaries of quantum assessments in complex mis-selling litigation, specifically concerning the exclusion of evidence that falls outside the scope of previously defined court orders.
What specific US$37 million claim-related evidence did Rafed Abdel Mohsen Bader Al Khorafi seek to introduce in the quantum phase of CFI-026-2009?
The dispute centers on the Claimants' attempt to introduce a fourth witness statement (RAK 4) from Mr. Rafed Al Khorafi, which sought to bring into the quantum assessment losses allegedly stemming from a forced sale of land in Kuwait. The Claimants argued that these losses were a direct consequence of the mis-selling of financial products by Bank Sarasin-Alpen (ME) Limited and Bank Sarasin & Co. Ltd. The Defendants, however, maintained that the scope of the quantum hearing was strictly limited by the Court’s previous orders to specific categories of loss, namely those arising from the lending relationship with Al Ahli Bank Kuwait (ABK) used to fund the investments.
The Court was tasked with determining whether the RAK 4 statement, which detailed business dealings beyond the scope of the ABK lending relationship, was admissible under the existing orders. Justice Roger Giles scrutinized the language of the previous orders, which restricted further evidence to events occurring after 10 July 2013 and limited the scope of recoverable losses to those arising from the relationship with ABK. As noted in the Schedule of Reasons:
The issue is the scope of the words “
losses arising out of the Claimants’ relationship with ABK
”, an issue of construction of the orders informed amongst other things by the evidentiary restriction.
How did Justice Roger Giles apply RDC 44.8 in the Court of First Instance to deny the Claimants' appeal?
Justice Roger Giles presided over this application for permission to appeal against the decision of Deputy Chief Justice Sir John Chadwick, issued on 13 January 2015. The application was determined by Justice Giles in the Court of First Instance on 25 February 2015. In reaching his decision, the Judge relied on the threshold requirements set out in the Rules of the DIFC Courts (RDC), specifically noting:
I may give permission to appeal only where I consider that the appeal would have a real prospect of success, or there is some other compelling reason why the appeal should be heard (RDC 44.8).
What arguments did the Claimants advance regarding the significance of the 27 October 2014 hearing in their bid to admit the RAK 4 statement?
The Claimants contended that the Deputy Chief Justice’s decision to exclude the RAK 4 statement was procedurally unfair and that the scope of the quantum hearing had been improperly narrowed. They argued that statements made during the hearing on 27 October 2014 supported a broader interpretation of the recoverable losses, suggesting that the court had previously signaled a willingness to consider a wider range of financial impacts resulting from the mis-selling.
Conversely, the Court found that the Claimants had been afforded ample opportunity to present their case regarding the scope of the evidence. Justice Giles emphasized that the Claimants had full opportunity to make submissions during the relevant proceedings and that the interpretation of the order was a matter of construction rather than a misunderstanding of the procedural history. The Court observed:
I have not accepted that what was said on 27 October 2014 had the significance attributed to it by the Claimants, but it is clear beyond doubt that whether the RAK 4 loss was within the terms of the order was raised and that the Claimants had full opportunity to put submissions to support that it was.
What was the precise doctrinal issue regarding the construction of court orders that the Court had to resolve?
The core legal question was one of contractual and judicial construction: whether the phrase "losses arising out of the Claimants’ relationship with ABK" in the court’s order of 28 October 2014 could be expanded to include losses from separate business dealings, such as the forced sale of land in Kuwait. The Court had to determine if the evidentiary restriction imposed by the Deputy Chief Justice—limiting evidence to events after 10 July 2013—was intended to be an exhaustive boundary for the quantum assessment or merely a temporal one.
The doctrinal challenge lay in balancing the court's power to manage its own procedure and define the scope of damages against the Claimants' right to fully prove their losses. The Court had to decide if the "relationship with ABK" was a defined, limited category of lending or a broader umbrella under which all subsequent financial distress could be claimed.
How did Justice Roger Giles apply the test for "real prospects of success" to the Claimants' appeal?
Justice Giles applied a rigorous assessment of the merits of the proposed appeal, concluding that the Deputy Chief Justice’s interpretation of the scope of the quantum hearing was legally sound. He reasoned that the limitation on evidence was a necessary exercise of the court's case management powers to ensure that the quantum phase did not devolve into a re-litigation of the substantive liability issues or an expansion of the claim beyond what was originally pleaded.
The Judge concluded that there was no error in the Deputy Chief Justice's reasoning and that the Claimants' attempt to introduce the RAK 4 evidence was an attempt to circumvent the established boundaries of the case. As stated in the Schedule of Reasons:
In my opinion, for the reasons above, the Judge’s decision was correct and the appeal would not have real prospects of success, either as to the substantive issue or on the procedural fairness ground.
Which specific DIFC Regulatory Law provisions and RDC rules were central to the Court's analysis of the Defendants' liability and the appeal process?
The Court’s analysis of the underlying liability was anchored in Article 65(2)(b) of the DIFC Regulatory Law (DIFC Law No 1 of 2004) regarding the First Defendant, and Article 94 of the same law regarding the Second Defendant. These provisions formed the basis for the compensation orders previously issued.
Regarding the procedural appeal, the Court relied heavily on RDC Part 44. Specifically, RDC 44.8 provided the primary test for granting permission to appeal, while RDC 44.12 and RDC 44.27 governed the procedural handling of the application, allowing the Judge to decide the matter without a hearing or further submissions from the Defendants. RDC 44.14 mandated the provision of the Schedule of Reasons. Additionally, the Court referenced Articles 18 and 32 of the Law of Damages and Remedies 2005 as the statutory basis for the interest and damages sought by the Claimants.
How did the Court utilize the judgment of 21 August 2014 in interpreting the scope of the quantum hearing?
The judgment of 21 August 2014 served as the foundational document for interpreting the scope of the quantum hearing. Justice Giles used the Deputy Chief Justice’s own reasoning from that judgment to clarify the categories of loss. Paragraphs 428 and 429 of the August 2014 judgment were critical, as they explicitly categorized the losses the Claimants were entitled to recover.
The Court used these paragraphs to demonstrate that the Claimants had previously defined their own claim as being limited to the investment losses and the specific lending relationship with ABK. By citing the August 2014 judgment, Justice Giles established that the Claimants were attempting to deviate from the very categories they had previously identified as the basis for their compensation, thereby justifying the exclusion of the RAK 4 statement.
What was the final disposition of the application and the specific orders regarding the Claimants' appeal?
The Court refused permission to appeal. Justice Giles determined that the requirements for an appeal under RDC 44.8 were not satisfied. The order confirmed that the decision of the Deputy Chief Justice to exclude the RAK 4 witness statement remained in force. The Court explicitly noted that there was no "compelling reason" to hear the appeal, as the issue was one of construction of a specific court order rather than a point of wider legal principle.
I do not understand the Claimants to suggest another compelling reason why the appeal should be heard, but for completeness, I am not satisfied that there is such a reason.
The order also specified that the reasons for the refusal were contained in the attached Schedule of Reasons, in compliance with RDC 44.14.
How does this decision change the practice for litigants seeking to expand the scope of quantum hearings in the DIFC?
This decision serves as a stern warning to practitioners regarding the importance of precision in the drafting of court orders and the definition of recoverable losses. It reinforces the principle that once a court has defined the scope of a quantum assessment, litigants cannot unilaterally expand that scope by introducing new evidence that falls outside the defined categories of loss.
Practitioners must anticipate that the DIFC Courts will strictly construe the language of their own orders. If a claimant intends to seek compensation for losses beyond the primary investment relationship, those claims must be clearly pleaded and included in the court’s initial orders. Attempting to introduce such evidence at the quantum stage will likely be rejected as an attempt to re-litigate the scope of the claim, as the Court views such matters as issues of construction rather than points of principle.
Where can I read the full judgment in Rafed Abdel Mohsen Bader Al Khorafi v Bank Sarasin-Alpen [2015] DIFC CFI 026?
The full order and Schedule of Reasons 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-bank-saras
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Rafed Abdel Mohsen Bader Al Khorafi v Bank Sarasin-Alpen | CFI-026-2009 | Judgment of 21 August 2014 regarding mis-selling of investments used to define scope of quantum |
Legislation referenced:
- DIFC Regulatory Law (DIFC Law No 1 of 2004) Article 65 (2) (b)
- DIFC Regulatory Law (DIFC Law No 1 of 2004) Article 94
- Law of Damages and Remedies 2005 Articles 18 and 32
- RDC 44
- RDC 44.8
- RDC 44.12
- RDC 44.14
- RDC 44.27