This order addresses the residual financial disputes between The Industrial Group and Abdelazim El Shikh El Fadil Hamid following a complex litigation involving employment penalties and tort claims, specifically regarding interest calculations and the parameters for cost assessments.
How did the Court determine the interest entitlement on the AED 244,640 penalty award in The Industrial Group v Abdelazim El Shikh El Fadil Hamid?
The dispute centered on the Defendant’s entitlement to interest on a penalty sum of AED 244,640, which had been the subject of previous appellate proceedings. Following the Court of Appeal’s decision in CA-005-2022, which remitted the interest application to the trial judge, Justice Sir Richard Field evaluated the appropriate accrual periods and rates. The Court determined that the interest should be split into two distinct phases: the pre-judgment period and the post-judgment period.
For the period between 28 August 2019 and 6 April 2022, the Court applied the rate previously established in the Order with Reasons dated 17 June 2022. From 6 April 2022 onwards, the Court applied the standard judgment rate of 9% per annum. As noted in the order:
The Claimant shall pay the Defendant interest on the amount of AED 244,640 from 28 August 2019 to 6 April 2022, at the rate awarded in respect of the amount of AED 820,585 as set out in paragraph 3 of the Order with Reasons of Justice Sir Richard Field dated 17 June 2022
This decision ensured consistency with earlier rulings while addressing the specific stay of execution that had previously prevented the accrual of interest on the penalty sum. Further details on the procedural history of this case can be found in THE INDUSTRIAL GROUP v ABDELAZIM EL SHIKH EL FADIL HAMID [2019] DIFC CFI 029 — Refusal of permission to appeal default judgment (16 January 2019).
Which judge presided over the assessment of costs and interest in the CFI 029/2018 proceedings?
Justice Sir Richard Field presided over this application in the Court of First Instance. The hearing and subsequent order, issued on 10 March 2023, followed a series of procedural orders and judgments managed by the same judge, ensuring continuity in the oversight of the complex cost-sharing arrangements between the parties.
What were the competing arguments regarding the allocation of costs between Employment and Tort claims in CFI 029/2018?
The Defendant, Abdelazim El Shikh El Fadil Hamid, sought a definitive ruling on the apportionment of costs, given that he had succeeded on his Employment Law claims but failed on his Tort claims (abuse of process and malicious prosecution). The Claimant, The Industrial Group, argued for a specific division that reflected the time and resources spent defending the unsuccessful Tort claims.
The Defendant also attempted to compel the Claimant to pay the assessment fees required to initiate the Registrar’s cost assessment process, arguing that the Claimant’s conduct necessitated the intervention. The Claimant resisted this, maintaining that the Court lacked the jurisdiction to shift the burden of procedural assessment fees onto the opposing party.
What was the jurisdictional question regarding the Court’s power to provide guidance to the Registrar on cost assessments?
The primary legal question was whether the Court of First Instance retained the authority to dictate the specific percentage split of costs between distinct heads of claim (Employment vs. Tort) and whether it could order a party to pay the other’s procedural assessment fees. The Court had to determine if its role as the trial judge allowed it to set parameters for the Registrar’s detailed assessment, or if such matters were exclusively within the Registrar’s discretion under the Rules of the DIFC Courts (RDC).
How did Justice Sir Richard Field justify his authority to provide guidance on the split of costs?
Justice Sir Richard Field relied on the principle that the trial judge is uniquely positioned to interpret the complexity and weight of the issues litigated. By having presided over the proceedings from inception to trial, the judge concluded that he was best suited to provide the Registrar with a framework for the assessment. He stated:
In my view, the orders already made regarding the parties’ costs do not preclude the Court from opining on the parameters in which the assessment of the parties’ costs ought to be undertaken by the Registrar.
This reasoning allowed the Court to set a 35% limit on costs attributable to the Tort claims, providing the Registrar with a clear directive to avoid protracted disputes during the assessment phase.
Which DIFC statutes and RDC rules were applied by the Court in this order?
The Court primarily referenced Article 18 of the Employment Law 2005, which governed the underlying penalty claim. Procedurally, the Court operated under the framework of the RDC, specifically noting the requirements for detailed assessments. While the Court exercised its inherent jurisdiction to provide guidance, it remained constrained by the RDC regarding the payment of assessment fees, ultimately refusing to shift that burden.
How did the Court distinguish the application of interest rates based on previous DIFC precedents?
The Court utilized the logic established in the Order with Reasons dated 17 June 2022 to maintain parity in interest calculations. By linking the interest on the AED 244,640 penalty to the rate previously applied to the AED 820,585 sum, the Court ensured that the Defendant was compensated for the period during which the penalty was stayed pending appeal. The Court explicitly rejected the Claimant’s contention that interest should not apply during the period of the stay, finding that the stay did not extinguish the underlying liability for interest.
What was the final disposition regarding the Defendant’s application for costs and interest?
The Court granted the application in part. It ordered the Claimant to pay interest on the AED 244,640 penalty at the established rate for the period of 28 August 2019 to 6 April 2022, and at 9% per annum thereafter. It set the cost allocation for Tort claims at 35%. Crucially, the Court refused the Defendant’s request to force the Claimant to pay the costs assessment fees, stating:
The Defendant’s application that the Claimant must pay the fee that would otherwise be payable by the Defendant to start costs assessment proceedings is refused.
The Claimant was ordered to pay 70% of the Defendant’s costs associated with the application itself.
How does this ruling change the approach to cost assessment guidance in DIFC litigation?
This order reinforces the practice of seeking judicial guidance on cost apportionment at the conclusion of a trial, rather than leaving the Registrar to determine the split without judicial input. Practitioners should anticipate that trial judges will actively define the parameters of cost assessments to streamline the process. However, the ruling also serves as a reminder that the Court will not deviate from standard procedural rules regarding the payment of assessment fees, regardless of the merits of the underlying dispute.
Where can I read the full judgment in The Industrial Group v Abdelazim El Shikh El Fadil Hamid [2023] DIFC CFI 029?
The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/fi-0292018-industrial-group-ltd-v-abdelazim-el-shikh-el-fadil-hamid or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-029-2018_20230310.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| The Industrial Group v Abdelazim El Shikh El Fadil Hamid | CA-005-2022 | Remitted interest application to judge below |
Legislation referenced:
- Employment Law 2005, Article 18
- RDC 36.31 (2)