This order addresses the procedural mechanism for securing an interim payment of legal costs following the entry of a default judgment in the DIFC Court of First Instance.
What was the specific financial dispute regarding the interim costs payment in Five Holding v Qatar Insurance Company?
The dispute arose following a successful application for default judgment by Five Holding Limited and Five Hotel FZE against Qatar Insurance Company. Having secured a judgment on 14 March 2021, the Claimants sought to recover their legal expenses incurred during the proceedings. The core of this specific application concerned the Claimants' request for an interim payment on account of costs, as the final assessment of the total bill of costs remained pending.
The Claimants filed a Notice of Commencement of Assessment of Bill of Costs on 12 September 2021, invoking the court's power to order a payment on account. The Registrar, Nour Hineidi, reviewed the request for 50% of the total costs claimed in the Bill of Costs. The court determined that the Claimants were entitled to this interim relief, resulting in a specific monetary order:
The Defendant is ordered to pay a total AED 82,942.50 (the “Amount Payable” ) into Court by 26 September 2021.
This amount was calculated as exactly 50% of the total costs submitted by the Claimants in their Bill of Costs, ensuring the Claimants received partial recovery while the full assessment process continued.
Which DIFC judicial officer presided over the costs assessment in CFI 028/2021?
The order was issued by Registrar Nour Hineidi of the DIFC Court of First Instance. The decision was rendered on 13 September 2021, following the Claimants' request submitted to the Registry on 12 September 2021.
What were the respective positions of Five Holding and Qatar Insurance Company regarding the costs recovery?
The Claimants, Five Holding Limited and Five Hotel FZE, argued that they were entitled to an immediate interim payment of their legal costs following the Default Judgment dated 14 March 2021. Their position was anchored in the principle that a successful party should not be kept out of pocket for the entirety of the litigation duration while the formal assessment of the bill of costs is ongoing. They relied upon Practice Direction No. 5 of 2014, which governs the DIFC Courts’ Costs Regime, specifically paragraph 5, to justify their request for a 50% payment on account.
The Defendant, Qatar Insurance Company, did not successfully contest the principle of the interim payment in this specific order. The Registrar’s decision reflects that the Claimants' request was processed and granted based on the documentation provided in the case file, including the Notice of Commencement of Assessment of Bill of Costs. The Claimants’ counsel effectively utilized the procedural framework of Part 40 of the Rules of the DIFC Court (RDC) to bypass the delay inherent in a full, contested assessment of every item in the bill.
What was the precise legal question regarding the application of Practice Direction No. 5 of 2014 in this matter?
The court had to determine whether the Claimants had met the threshold requirements to justify an interim payment on account of costs under the DIFC Costs Regime. Specifically, the Registrar had to decide if the request for 50% of the total claimed costs was reasonable and consistent with the court's discretion under Practice Direction No. 5 of 2014. The legal issue was not the final quantification of the costs, but rather the procedural propriety of ordering a substantial interim payment before the final assessment of the Bill of Costs was concluded.
How did Registrar Nour Hineidi apply the test for interim costs payments?
Registrar Hineidi exercised the court's discretion by evaluating the Claimants' request against the established costs regime. The reasoning focused on the entitlement of a prevailing party to receive a portion of their costs once a judgment has been entered, provided the request is supported by a Bill of Costs. By granting the request, the Registrar affirmed that the 50% threshold is a standard and appropriate measure for interim payments in the DIFC when the underlying liability for costs has already been established by a default judgment.
The Registrar’s order mandated specific administrative steps to ensure the funds were secured within the court's jurisdiction. The order explicitly stated:
The Defendant must contact the Court before 19 September 2021 to obtain details for the Courts’ Escrow Account for transfer of the Amount Payable.
This reasoning ensures that the "Amount Payable" is held in the Court's Escrow Account, providing security for the Claimants while protecting the Defendant’s interests should the final assessment result in a lower figure than the interim payment.
Which specific DIFC rules and practice directions governed the assessment of costs in this case?
The primary authority cited in the order is Part 40 of the Rules of the DIFC Court (RDC), which provides the procedural framework for the assessment of costs. Furthermore, the Registrar relied heavily on Practice Direction No. 5 of 2014, specifically paragraph 5, which outlines the DIFC Courts’ Costs Regime. This Practice Direction serves as the essential guide for practitioners when requesting payments on account, as it provides the court with the necessary authority to order such payments before the final bill is fully assessed.
How did the court utilize the procedural framework of the RDC to facilitate the payment?
The court utilized the RDC to bridge the gap between the entry of the Default Judgment and the finalization of the Bill of Costs. By referencing Part 40, the Registrar ensured that the process remained within the strictures of the DIFC Court’s procedural rules. The court treated the Notice of Commencement of Assessment of Bill of Costs as the foundational document that allowed for the exercise of discretion under Practice Direction No. 5 of 2014. This procedural pathway allows claimants to secure liquidity without waiting for the potentially lengthy process of a full, item-by-item assessment of every legal fee incurred.
What was the final disposition and the specific monetary relief ordered by the Registrar?
The Registrar granted the Claimants' request in full. The order explicitly directed the Defendant, Qatar Insurance Company, to pay the sum of AED 82,942.50. This amount was designated as the "Amount Payable" and represented 50% of the total costs claimed by the Claimants in their Bill of Costs. The Defendant was given a strict deadline of 26 September 2021 to deposit these funds into the Court's Escrow Account.
What are the practical takeaways for practitioners regarding interim costs applications in the DIFC?
Practitioners should note that the DIFC Court is highly receptive to requests for interim payments on account of costs, provided there is a clear judgment in favor of the applicant. The use of Practice Direction No. 5 of 2014 is essential; counsel should ensure that their Notice of Commencement of Assessment of Bill of Costs is filed promptly to trigger the court's jurisdiction to order these payments. The 50% figure utilized in this case serves as a useful benchmark for what the court considers a reasonable interim amount. Litigants must anticipate that once a default judgment is entered, the court will facilitate the recovery of costs with efficiency, and failure to comply with an interim payment order—such as the requirement to contact the court for escrow details—will be viewed as a breach of a direct court order.
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 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-3
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No specific case law precedents were cited in this order. |
Legislation referenced:
- Practice Direction No. 5 of 2014 (DIFC Courts’ Costs Regime)
- Part 40 of the Rules of the DIFC Court (RDC)