This consent order formalizes a comprehensive stay of all costs-related proceedings in the DIFC Court, effectively pausing the enforcement of an interim costs order while the parties litigate complex set-off claims across Dubai and Sharjah courts.
What specific procedural impasse in CFI 028/2023 necessitated the intervention of the DIFC Court regarding the Interim Costs Order?
The dispute centers on the enforcement of an Interim Costs Order originally issued by H.E. Justice Nassir Al Nasser on 18 September 2023. Following this order, the Defendants initiated detailed assessment proceedings in February 2024, which subsequently triggered a series of procedural filings, including a request for a default costs certificate and multiple revisions to the bill of costs. The situation reached a critical juncture when the Fifth Defendant, 1897 (Cayman) Limited, commenced enforcement proceedings in the Dubai Execution Court (Execution File No. 108 of 2023) to recover the amounts stipulated in the Interim Costs Order.
Simultaneously, the Claimant, Globe Investment Holdings Limited, sought to leverage a Sharjah Judgment dated 6 April 2021 to offset these costs against debts allegedly owed by the Second to Fourth Defendants. This led to the filing of the "Dubai Set off Claim" (Case No. 633 of 2024) and the "Sharjah Set off Claim" (Case No. 999 of 2024). The impasse arose because the DIFC Court’s costs assessment process was running parallel to these external claims, creating a risk of conflicting outcomes regarding the enforceability of the Interim Costs Order. As noted in the court records:
The issue of the detailed assessment of the costs of these proceedings, the payment of the Interim Costs Order, and the issuance of any further costs orders, shall be stayed pending the final and unappealable determination of the Dubai Set off Claim, the Sharjah Set off Claim, and the Joinder Application.
Which judicial officer presided over the issuance of the 12 July 2024 Consent Order in the Court of First Instance?
The Consent Order was issued by Assistant Registrar Hayley Norton within the DIFC Court of First Instance. The order was formally issued on 12 July 2024 at 3:00 PM, following a series of procedural developments that included previous orders dated 9 May 2024 and 15 May 2024 concerning the submission of revised bills of costs.
What legal arguments did the parties advance regarding the interplay between the DIFC Interim Costs Order and the Sharjah Judgment?
The parties reached a consensus that the enforcement of the DIFC Interim Costs Order could not be viewed in isolation from the broader financial obligations existing between the Claimant and the Second to Fourth Defendants. The Claimant argued that the debts established by the Sharjah Judgment of 6 April 2021 provided a valid basis for a set-off against the costs awarded in the DIFC proceedings. By initiating the Dubai Set off Claim (Case No. 633 of 2024) and the Sharjah Set off Claim (Case No. 999 of 2024), the Claimant effectively contended that the DIFC Court should not facilitate the collection of costs while the underlying debt obligations were being contested and potentially offset in the onshore courts.
The Defendants, while initially pursuing enforcement through the Dubai Execution Court, ultimately agreed to the stay. This suggests a strategic recognition that the finality of the costs assessment in the DIFC would be premature if the underlying liability could be extinguished or reduced by the outcome of the set-off claims. The Joinder Application (No. 788062 of 2024) filed by the Claimant further underscores the parties' shared position that the Second to Fourth Defendants must be brought into the Execution Proceedings to ensure that any set-off is applied against the correct legal entities.
What was the precise jurisdictional and procedural question the Court had to address regarding the stay of costs?
The Court was tasked with determining whether it was appropriate to exercise its discretion to stay the detailed assessment of costs and the enforcement of an existing Interim Costs Order in light of pending, related litigation in the Dubai and Sharjah courts. The doctrinal issue involved the court’s power to manage its own process (case management) to avoid the risk of inconsistent judgments or the enforcement of a debt that might be subject to a valid set-off claim. The court had to decide if the "final and unappealable determination" of external claims was a necessary condition precedent to the continuation of the DIFC costs assessment process.
How did the Court apply its case management powers to resolve the competing interests of the parties?
Assistant Registrar Hayley Norton utilized the court’s inherent case management authority to facilitate a consensual resolution that avoids procedural friction. By formalizing the agreement through a Consent Order, the Court effectively suspended the operation of the DIFC Rules (RDC) regarding costs assessment until the external legal landscape is clarified. The reasoning relies on the principle that the enforcement of costs should not prejudice the substantive rights of the parties to pursue set-offs in other jurisdictions. As the order states:
Further, in the event that the Claimant’s Joinder Application is successful, the detailed assessment of the costs of these proceedings and the issuance of any further costs orders shall be further stayed pending the final and unappealable determination of the Claimant’s intended application in the Execution Proceedings seeking to set off of the costs of these DIFC Court Proceedings, including the Interim Costs Order, against the debt owed to the Claimant by the Second to Fourth Defendants pursuant to the Sharjah Judgment.
Which specific DIFC statutes and procedural rules were invoked during the lead-up to this order?
The procedural history of this case is heavily grounded in the Rules of the DIFC Courts (RDC). Specifically, the Defendants were required to comply with paragraph 7 of Practice Direction No. 5 of 2014, which governs the procedure for detailed assessment of costs. The court’s oversight was further necessitated by the Defendants' failure to initially adhere to these requirements, leading to the written directions issued on 1 April 2024. The entire process was governed by the court's power to issue directions and consent orders under the RDC to manage the lifecycle of a claim, particularly regarding the transition from an interim costs order to a final assessment.
How did the Court utilize the precedent of previous procedural orders to structure the current stay?
The Court relied on the procedural history established by the 9 May 2024 and 15 May 2024 orders to maintain continuity. These earlier orders were focused on the technical aspects of the bill of costs, specifically the requirement for the Defendants to file and serve a revised bill. By referencing these orders in the preamble of the 12 July 2024 order, the Court ensured that the stay was not a reset of the proceedings, but rather a strategic pause in an ongoing assessment process. The Court used these previous orders as a baseline to define what exactly was being stayed—namely, the "detailed assessment" and the "payment of the Interim Costs Order"—thereby preventing any ambiguity regarding the scope of the stay.
What was the final disposition of the Court regarding the costs and the stay of proceedings?
The Court ordered a stay of the detailed assessment of costs, the payment of the Interim Costs Order, and the issuance of any further costs orders. This stay is conditional, remaining in effect until the final and unappealable determination of the Dubai Set off Claim, the Sharjah Set off Claim, and the Joinder Application. Furthermore, if the Joinder Application is successful, the stay is extended to cover the determination of the set-off application within the Execution Proceedings. Regarding the costs of the application itself, the Court made "no order as to costs," and granted the parties "liberty to apply," allowing them to return to the court should circumstances change.
What are the wider implications for DIFC practitioners regarding the enforcement of costs when set-off claims exist in onshore courts?
This case serves as a critical reminder that DIFC Court costs orders are not immune to the realities of broader, multi-jurisdictional litigation. Practitioners must anticipate that where a party has a colorable claim for set-off based on judgments from Dubai or Sharjah courts, the DIFC Court is likely to favor a stay of enforcement rather than risk the premature collection of costs. Litigants should be prepared to provide evidence of ongoing set-off claims and joinder applications to justify such a stay. The case highlights the necessity of coordinating enforcement strategies across the DIFC and onshore courts to avoid procedural deadlocks.
Where can I read the full judgment in Globe Investment Holdings v Commercial Bank of Dubai [2024] DIFC CFI 028?
The full text of the Consent Order can be accessed via the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0282023-globe-investment-holdings-limited-v-1-commercial-bank-dubai-2-hortin-holding-limited-3-lodge-hill-limited-4-westdene-6.
A copy is also available via the CDN: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-028-2023_20240712.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No specific case law precedents were cited in the text of the Consent Order. |
Legislation referenced:
- Rules of the DIFC Courts (RDC)
- Practice Direction No. 5 of 2014, Paragraph 7