Following the dismissal of the Claimants' application to lift a stay of proceedings, the DIFC Court of First Instance addressed the Defendant's request for an interim payment of legal costs. This order clarifies the procedural mechanism for securing a payment on account pending the final assessment of a bill of costs.
Why did Qatar Insurance Company seek a payment on account of AED 75,276.67 from Five Holding and Five Hotel FZE?
The dispute arose from the Claimants' unsuccessful attempt to lift a stay of proceedings previously ordered by H.E. Justice Omar Al Muhairi on 14 April 2021. Following the dismissal of this "Stay Application" by Justice Wayne Martin on 4 August 2021, the Defendant was awarded its costs. Qatar Insurance Company subsequently filed a Notice of Commencement of Assessment of Bill of Costs. To mitigate the financial burden of the ongoing litigation, the Defendant invoked the DIFC Courts’ Costs Regime to secure an immediate partial recovery of the legal fees incurred during the stay application proceedings.
This amount represents 50% of the total amount claimed by the Defendant in the Bill of Costs.
The court recognized that the Defendant had a legitimate interest in receiving a portion of its costs before the final, potentially lengthy, assessment process concluded. By granting the request, the Registrar ensured that the Claimants, as the unsuccessful parties in the interlocutory application, provided a reasonable interim payment to the Defendant.
Which judicial officer presided over the costs assessment in CFI 028/2021?
Registrar Nour Hineidi presided over this matter within the DIFC Court of First Instance. The order was issued on 9 September 2021, following the procedural history established by earlier orders from H.E. Justice Omar Al Muhairi and Justice Wayne Martin.
What arguments did Qatar Insurance Company advance to justify the interim payment under the DIFC Costs Regime?
Qatar Insurance Company relied upon the procedural framework established by Practice Direction No. 5 of 2014, specifically paragraph 5, which governs the DIFC Courts’ Costs Regime. The Defendant argued that having been awarded costs by Justice Wayne Martin on 4 August 2021, it was entitled to a reasonable payment on account while the full bill of costs underwent the formal assessment process. By submitting a Notice of Commencement of Assessment of Bill of Costs, the Defendant demonstrated its compliance with the procedural requirements necessary to trigger the court's discretion to order an interim payment. The Claimants, having failed in their Stay Application, were effectively positioned as the debtors in this specific costs dispute, with the Defendant asserting that a 50% payment was a proportionate and standard interim measure.
What was the precise jurisdictional question regarding the Registrar’s authority to order a payment on account?
The court had to determine whether the Defendant had satisfied the threshold requirements under Part 40 of the Rules of the DIFC Court (RDC) and Practice Direction No. 5 of 2014 to warrant an order for payment on account. The doctrinal issue centered on the court's discretion to award a portion of costs before the final quantum of those costs had been formally assessed or agreed upon by the parties. The Registrar was required to balance the Defendant's right to recover costs incurred in a successful application against the principle that such payments should be interim in nature and not exceed a reasonable estimate of the final recoverable amount.
How did Registrar Nour Hineidi apply the test for interim costs recovery in this matter?
The Registrar exercised her discretion by reviewing the Defendant’s request in light of the existing case file and the governing Practice Direction. The reasoning focused on the fact that the liability for costs had already been established by Justice Wayne Martin’s order. By granting the request for 50% of the claimed amount, the Registrar applied a standard, conservative benchmark often used in DIFC practice to ensure that the interim payment does not overreach the likely final assessment.
The Claimant is ordered to pay a total AED 75,276.67 (the “Amount Payable”) into Court by 22 September 2021.
This reasoning ensures that the successful party is not unduly prejudiced by the delay inherent in the assessment process, while simultaneously protecting the paying party from an excessive interim demand. The Registrar’s decision reflects a pragmatic approach to case management, ensuring that costs disputes do not unnecessarily impede the progress of the primary litigation.
Which specific RDC rules and Practice Directions governed the Registrar’s decision?
The Registrar’s order was primarily grounded in Part 40 of the Rules of the DIFC Court, which provides the procedural framework for the assessment of costs. Furthermore, the order explicitly cited Practice Direction No. 5 of 2014, specifically paragraph 5, which outlines the DIFC Courts’ Costs Regime. This Practice Direction serves as the primary authority for the court’s ability to award payments on account, providing the necessary guidance for Registrars when determining the appropriate percentage of costs to be paid before a final bill is settled.
How did the court utilize the precedent of the previous orders in CFI 028/2021?
The court treated the previous orders as the foundational basis for the current costs assessment. Specifically, the Order of H.E. Justice Omar Al Muhairi dated 14 April 2021 established the initial stay, while the Order of Justice Wayne Martin dated 4 August 2021 served as the substantive trigger for the costs award. The Registrar did not revisit the merits of the stay application; rather, she accepted the established liability for costs as a settled fact. This reliance on the procedural history allowed the Registrar to focus exclusively on the quantum of the interim payment, demonstrating the court's commitment to finality in interlocutory matters.
What were the specific terms of the order regarding the payment of the AED 75,276.67?
The Registrar granted the Defendant’s request in full, ordering the Claimants to pay the sum of AED 75,276.67. This amount was explicitly defined as 50% of the total costs claimed in the Defendant's Bill of Costs. The order mandated that the payment be made into the Court’s Escrow Account by 22 September 2021. Furthermore, the Claimants were instructed to coordinate with the Court Registry to obtain the necessary banking details for the transfer.
The Claimant must contact the Court before 15 September 2021 to obtain details for the Courts’ Escrow Account for transfer of the Amount Payable.
Failure to comply with these specific deadlines would likely result in further enforcement action or procedural sanctions, highlighting the mandatory nature of the Registrar’s directions.
What does this order imply for future litigants regarding the recovery of costs in the DIFC?
This case reinforces the expectation that parties who are awarded costs in interlocutory applications should proactively utilize Practice Direction No. 5 of 2014 to secure interim payments. Practitioners should anticipate that where liability for costs is clear, the DIFC Court will be receptive to requests for 50% payments on account, provided the application is supported by a properly filed Bill of Costs. This practice serves to maintain the liquidity of the successful party and discourages the use of the assessment process as a tool for delay. Litigants must be prepared to provide clear evidence of their costs and adhere strictly to the procedural timelines set by the Registrar to avoid unnecessary friction in the recovery process.
Where can I read the full judgment in Five Holding v Qatar Insurance Company [2021] DIFC CFI 028?
The full order can be accessed via the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-028-2021-1-five-holding-limited-2-five-hotel-fze-v-qatar-insurance-company-2
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Five Holding v Qatar Insurance Company | CFI 028/2021 | Primary matter |
Legislation referenced:
- Part 40 of the Rules of the DIFC Court
- Practice Direction No. 5 of 2014 (DIFC Courts’ Costs Regime)