This order quantifies the substantial financial losses suffered by the Claimants following the Court’s October 2015 judgment, while navigating complex appellate stays regarding additional damages under DIFC law.
What was the total quantum of losses awarded to the Claimants in Al Khorafi v Bank Sarasin-Alpen [2015] DIFC CFI 026?
The litigation concerns a long-standing banking dispute involving Mr. Rafed Abdel Mohsen Bader Al Khorafi, Mrs. Amrah Ali Abdel Latif Al Hamad, and Mrs. Alia Mohamed Sulaiman Al Rifai against Bank Sarasin-Alpen (ME) Limited and Bank Sarasin & Co. Ltd. Following the Court’s judgment on 7 October 2015, the Deputy Chief Justice Sir John Chadwick moved to quantify the losses under Heads (B), (C), and (D). The total liability imposed on the First Defendant, Bank Sarasin-Alpen (ME) Limited, amounted to US$59,611,899, which included US$24,583,425 in compensatory damages and US$35,028,474 in additional damages under Article 40(2) of the Law of Remedies and Damages.
The Second Defendant, Bank Sarasin & Co. Ltd, was ordered to pay US$24,583,425, representing the losses quantified under the specified heads. The Court established a framework for joint and several liability regarding the compensatory portion, while isolating the additional damages as the sole liability of the First Defendant. This order follows a series of procedural developments in the case family, including AL KHORAFI v BANK SARASIN-ALPEN [2011] DIFC CA 026 — Permission to appeal granted (24 May 2011) and AL KHORAFI v BANK SARASIN-ALPEN [2011] DIFC CFI 026 — Jurisdictional dismissal of foreign banking entity (31 March 2011).
Which judge presided over the quantum determination in CFI 026/2009 on 3 November 2015?
The quantum determination and the subsequent order for payment were presided over by the Deputy Chief Justice Sir John Chadwick sitting in the DIFC Court of First Instance. The order was issued on 3 November 2015, following hearings held on 2 and 3 March 2015, and serves as a critical procedural milestone in the ongoing enforcement and appellate phases of this high-value banking litigation.
What were the specific arguments regarding the stay of execution and the payment of additional damages under Article 40(2)?
The Defendants sought to stay the execution of the judgment pending the outcome of the appeal in CA 003/2015. The Claimants, conversely, sought immediate payment of the quantified sums. The First Defendant specifically contested the imposition of additional damages, arguing that the Court’s application of Article 40(2) of the Law of Remedies and Damages (DIFC Law No 7 of 2005) required further appellate scrutiny.
The Court balanced these positions by granting a conditional stay. The Second Defendant was permitted to pay the compensatory sum into Court rather than directly to the Claimants, provided such payment occurred within 10 days, thereby preserving the status quo until the Court of Appeal delivered its judgment in CA 003/2015. The Court noted:
I am not persuaded (pending the delivery of the judgments of the Court of Appeal in appeal CA 003/2015) that the Defendants (or either of them) have a real prospect of success on the other points determined against them in my judgment dated 7 October 2015.
What was the precise legal question regarding the interplay between Article 40(2) of the Law of Remedies and Damages and Article 94(2) of the Regulatory Law?
The Court faced a significant doctrinal challenge regarding the scope of "additional damages" under DIFC law. Specifically, the Court had to determine whether Article 40(2) of the Law of Remedies and Damages could be invoked to award damages in addition to compensation already provided under Article 94(2) of the Regulatory Law. This raised questions about the legislative intent behind punitive or additional financial penalties in the DIFC banking sector and whether such awards were intended to be cumulative or mutually exclusive.
How did Sir John Chadwick justify the granting of permission to appeal regarding the additional damages award?
Sir John Chadwick reasoned that the interpretation of Article 40(2) was a matter of significant legal principle that warranted guidance from the Court of Appeal. He acknowledged that the application of this article in conjunction with the Regulatory Law was a novel issue for the DIFC Courts. Consequently, he determined that the appellate court should have the final say on the circumstances under which such damages are appropriate.
The reasoning is summarized in the Court's schedule:
I am satisfied that it is appropriate that the Court of Appeal should have the opportunity to consider in principle the circumstances in which an award of additional damages under Article 40(2) of the Law of Remedies and Damages can be made, both (i) in conjunction with an award of compensation under Article 94(2) of the Regulatory Law and (ii) more generally.
Which specific DIFC statutes and regulations were applied to determine the liability of the Defendants?
The Court relied primarily on the Law of Remedies and Damages (DIFC Law No 7 of 2005), specifically Article 40(2), which provides the basis for the additional damages award. Additionally, the Court referenced Article 94(2) of the Regulatory Law regarding the compensation of losses. These statutes were interpreted in the context of the Court's prior judgment dated 7 October 2015, which established the underlying liability of the Defendants for the losses categorized under Heads (B), (C), and (D).
How did the Court utilize the cited case law in the context of the stay of execution?
The Court utilized CA 003/2015 as the primary reference point for the stay of execution. Because the issues of additional damages were already before the Court of Appeal in that matter, Sir John Chadwick determined that it would be procedurally improper to enforce the payment of the additional damages portion of the award until the appellate court had provided clarity. Furthermore, the Court referenced CFI 036/2014, which concerned previous monies paid into Court, to clarify that it would not make anticipatory orders for the release of those funds while the current appeal remained pending.
What was the final disposition and the specific orders made regarding the payment of US$59,611,899?
The Court ordered the First Defendant to pay a total of US$59,611,899, comprising US$24,583,425 in compensatory damages and US$35,028,474 in additional damages. The Second Defendant was ordered to pay US$24,583,425. The Court granted the First Defendant permission to appeal the additional damages portion of the order:
The First Defendant is granted permission to appeal from so much of paragraph 1 of this Order as provides that it shall pay to the Claimants US$35,028,474 by way of additional damages under Article 40(2) of the Law of Remedies and Damages (DIFC Law No 7 of 2005).
Regarding costs, the Court ordered:
The costs of and occasioned by the Quantum Determination (including the costs of the Defendants’ applications which were determined by the Order dated 4 February 2015) shall be determined by the Court on the papers and without a hearing.
What are the wider implications of this order for DIFC banking litigation?
This order highlights the caution with which the DIFC Courts approach the application of Article 40(2) of the Law of Remedies and Damages. By granting permission to appeal and staying the execution of the additional damages award, the Court has signaled that the threshold for "additional damages" in banking disputes remains a subject of intense judicial scrutiny. Practitioners must now anticipate that any award of damages exceeding standard compensatory measures will likely be subject to appellate review, and that stay applications are highly likely to succeed where the legal basis for such "additional" awards is novel or contested.
Where can I read the full judgment in Mr 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-mr-rafed-abdel-mohsen-bader-al-khorafi-2-mrs-amrah-ali-abdel-latif-al-hamad-3-mrs-alia-mohamed-sulaiman-al-rifai-v or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-026-2009_20151103.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Al Khorafi v Bank Sarasin-Alpen | CA 003/2015 | Pending appeal regarding additional damages |
| Al Khorafi v Bank Sarasin-Alpen | CFI 036/2014 | Related proceedings regarding monies paid into Court |
Legislation referenced:
- Law of Remedies and Damages (DIFC Law No 7 of 2005) Article 40(2)
- Regulatory Law Article 94(2)