Following the dismissal of the Claimants' application to lift a stay of proceedings, the Registrar has ordered a significant interim payment of costs to the Defendant, reinforcing the DIFC Court’s strict approach to cost recovery during interlocutory disputes.
What was the specific dispute between Five Holding Limited and Orient Unb Takaful regarding the Stay Application in CFI 027/2021?
The litigation involves a dispute between Five Holding Limited and Five Hotel Jumeirah Village LLC (the Claimants) and Orient Unb Takaful PJSC (the Defendant). The core of this specific procedural skirmish concerned the Claimants’ attempt to lift a stay of proceedings that had been previously imposed by the Court. The Claimants filed an application on 18 May 2021 seeking to vacate the stay ordered by H.E. Justice Omar Al Muhairi on 14 April 2021.
The Defendant successfully resisted this application, leading to its dismissal by Justice Wayne Martin on 4 August 2021. As a consequence of that dismissal, the Defendant was awarded its costs of the Stay Application. The current order addresses the quantification of those costs on an interim basis.
The Claimant is ordered to pay a total AED 74,934.17 (the
“Amount Payable”
) into Court by 22 September 2021.
The dispute highlights the financial stakes involved in procedural motions within the DIFC Courts, where unsuccessful applications can lead to substantial immediate liabilities for the moving party, even before the final assessment of the total bill of costs is completed.
Which judicial officer presided over the order for payment on account in CFI 027/2021?
The order was issued by Registrar Nour Hineidi of the DIFC Court of First Instance on 9 September 2021. The Registrar exercised the Court's authority to manage the financial aspects of the litigation following the substantive dismissal of the Stay Application by Justice Wayne Martin in the preceding month.
What arguments did Orient Unb Takaful PJSC advance to secure an interim payment of AED 74,934.17 from Five Holding Limited?
Following the order by Justice Wayne Martin that the Defendant be awarded its costs of the Stay Application, the Defendant moved to secure an immediate payment. On 7 September 2021, the Defendant filed a Notice of Commencement of Assessment of Bill of Costs. Simultaneously, the Defendant requested that the Court order the Claimants to pay 50% of the total costs claimed in that bill on an interim basis.
The Defendant relied upon the procedural framework provided by the Rules of the DIFC Court (RDC) and the relevant Practice Direction. By seeking payment on account, the Defendant aimed to mitigate the financial prejudice of being out-of-pocket for the legal expenses incurred while successfully defending against the Claimants' unsuccessful motion to lift the stay. The Defendant’s position was that a 50% payment on account is a reasonable and standard exercise of the Court’s discretion when a party has been awarded costs but the final assessment process is still pending.
What was the specific legal question Registrar Nour Hineidi had to determine regarding the application of Practice Direction No. 5 of 2014?
The primary legal question before the Registrar was whether it was appropriate to exercise the Court's discretion to order an interim payment of costs—specifically 50% of the claimed amount—prior to the final determination of the Bill of Costs. The Registrar had to interpret the scope of the DIFC Courts’ Costs Regime, specifically paragraph 5 of Practice Direction No. 5 of 2014, to determine if the Defendant had met the threshold for an order for payment on account.
The Registrar was tasked with balancing the Claimants' right to have the costs assessed for reasonableness against the Defendant's entitlement to recover a portion of its expenditure immediately, given that the underlying application (the Stay Application) had already been dismissed with a costs order in the Defendant's favor.
How did Registrar Nour Hineidi apply the test for interim costs under the DIFC Courts’ Costs Regime?
Registrar Hineidi reviewed the procedural history, including the dismissal of the Stay Application by Justice Wayne Martin and the subsequent filing of the Bill of Costs by the Defendant. The Registrar evaluated the request for 50% of the claimed costs against the criteria set out in Practice Direction No. 5 of 2014.
This amount represents 50% of the total amount claimed by the Defendant in the Bill of Costs.
By granting the request, the Registrar affirmed that the Defendant was entitled to a significant portion of its costs on account, pending the final assessment. The reasoning follows the standard practice in the DIFC Courts of ensuring that a successful party is not unduly burdened by the delay inherent in the formal assessment process, provided the amount requested is proportionate and supported by the filed Bill of Costs.
Which specific RDC rules and Practice Directions governed the Registrar’s decision to award costs on account?
The Registrar’s order was grounded in Part 40 of the Rules of the DIFC Court (RDC), which governs the assessment of costs. Furthermore, the decision was specifically informed by Practice Direction No. 5 of 2014, titled "DIFC Courts’ Costs Regime." Paragraph 5 of this Practice Direction provides the specific mechanism for a party to request, and the Court to grant, a payment on account of costs before the final assessment is concluded.
How did the Court utilize the procedural history of CFI 027/2021 to justify the order for payment?
The Court relied on the order of Justice Wayne Martin dated 4 August 2021, which had already established the principle that the Defendant was entitled to its costs of the Stay Application. By citing this previous order, the Registrar established the necessary legal foundation for the current order. The Registrar noted that the Defendant’s request was made pursuant to the Notice of Commencement of Assessment of Bill of Costs, ensuring that the procedural requirements for cost recovery were strictly followed.
What was the final disposition and the specific timeline for the payment of AED 74,934.17?
The Registrar granted the Defendant's request in full. The Claimants were ordered to pay the sum of AED 74,934.17 into the Court’s escrow account. The order set a strict deadline for compliance, requiring the payment to be made by 22 September 2021.
The Claimant must contact the Court before 15 September 2021 to obtain details for the Courts’ Escrow Account for transfer of the Amount Payable.
This order ensures that the Defendant receives a substantial portion of its legal costs without waiting for the potentially lengthy process of a full, itemized assessment of the Bill of Costs.
What are the wider implications for litigants in the DIFC regarding the recovery of costs on account?
This order serves as a reminder that the DIFC Courts are proactive in managing the financial aspects of litigation. Litigants should anticipate that if they are unsuccessful in an interlocutory application and a costs order is made against them, the Court is likely to grant a request for a significant payment on account (typically 50%) if the prevailing party follows the correct procedure under Practice Direction No. 5 of 2014. Practitioners must ensure that their clients are prepared for immediate cash-flow impacts following adverse interlocutory rulings, as the Court will not hesitate to enforce payment deadlines through the use of the Court’s escrow account.
Where can I read the full judgment in Five Holding Limited v Orient Unb Takaful PJSC [2021] DIFC CFI 027?
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-027-2021-1-five-holding-limited-2-five-hotel-jumeirah-village-llc-v-orient-unb-takaful-pjsc-2 or via the CDN mirror: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-027-2021_20210909.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Five Holding Limited v Orient Unb Takaful PJSC | CFI 027/2021 | Primary matter |
Legislation referenced:
- Rules of the DIFC Court (RDC), Part 40
- Practice Direction No. 5 of 2014 (DIFC Courts’ Costs Regime), paragraph 5