What was the specific monetary dispute regarding the Claimant’s costs in Eli Mydlarz v Sadapay Technologies Ltd?
The dispute centered on the Claimant’s application for costs following the Court’s refusal of the Defendant’s permission to appeal (PTA) application. The Claimant sought a total of AED 53,650 for the work performed by their legal counsel in responding to the PTA application. This figure was based on 14.5 hours of work billed at an hourly rate of AED 3,700.
The Defendant challenged this amount, arguing that the time claimed was unreasonable given the brevity of the submission—only 2.5 pages—and the fact that the work overlapped significantly with two other linked cases. As noted in the Court’s assessment:
The Claimant seeks the sum of AED 53,650 which is made up as to 14 hours and 30 minutes of work by Noorhan Abdullatif AlZaabi at a rate of AED 3,700 per hour.
Which judge presided over the costs assessment in CFI 035/2025 and in what division?
The matter was heard by H.E. Justice Roger Stewart in the DIFC Court of First Instance. The order assessing the costs was issued on 16 December 2025, following the Court’s earlier decision on 20 November 2025, which had refused the Defendant’s PTA application and ordered the Defendant to pay the Claimant’s costs of responding to that application.
What were the specific arguments advanced by Eli Mydlarz and Sadapay Technologies regarding the Statement of Costs?
The Defendant, Sadapay Technologies, argued that the costs were inflated on three grounds: the absence of proof of payment, an unreasonably high hourly rate, and an unreasonable amount of time spent on the submission. Specifically, the Defendant highlighted that the submissions were only 2.5 pages long and that the legal work was duplicated across three linked cases, resulting in a total claim of 43.5 hours for three short submissions.
The Claimant, Eli Mydlarz, defended the claim by asserting that the Statement of Costs was fully compliant with RDC 38.34–38.36 and signed with a statement of truth. Counsel argued that the hourly rate was justified by the practitioner’s 13 years of DIFC litigation experience and that the time spent included necessary tasks such as reviewing the PTA materials, consulting with the client, and tailoring submissions for each individual claim. Regarding the documentation, the Court dismissed the Defendant's evidentiary challenge:
I do not consider that there is any merit in the Defendant’s submission that there has been no invoice or proof of payment produced. As the Claimant asserts, the Statement of Costs was in the required form, compliant with the Court orders and signed with a statement of truth.
What was the jurisdictional and doctrinal question the Court had to answer regarding the assessment of costs?
The Court was tasked with determining the appropriate quantum of costs on the "standard basis" under the Rules of the DIFC Courts (RDC). The core doctrinal issue was whether the time claimed for preparing opposition to a PTA application was proportionate and reasonable, particularly when the litigation involved multiple linked actions. The Court had to decide if the "substantial overlap" in legal arguments and authorities across the three cases necessitated a reduction in the hours allowed, even if the individual submissions were technically distinct.
How did Justice Roger Stewart apply the proportionality test to the costs claimed in CFI 035/2025?
Justice Stewart applied the test set out in RDC 38.18, which mandates that the Court must resolve any doubts regarding the reasonableness or proportionality of costs in favor of the paying party. Upon reviewing the skeleton arguments from all three linked cases, the Court found that while the arguments were substantively different, they shared significant common ground, particularly regarding the lateness of the appeals and the cited authorities.
The Court concluded that the total time claimed—amounting to nearly 5.5 days of work—was excessive. As the Court observed:
It follows that it appears very likely that the overall time taken for all three actions in preparing opposition to the permission to appeal applications was 43.5 hours with the work being performed on all three cases and then divided in three.
The Court ultimately determined that the total time claimed or the rates charged were excessive, leading to a reduction in the allowed hours to 19 hours total for all three cases, resulting in an award of AED 23,433.33 per case.
Which RDC rules and specific legal standards were applied to the assessment of costs?
The Court relied on the following RDC provisions:
* RDC 38.20(1): Establishes that where an order is silent on the basis of assessment, the standard basis applies.
* RDC 38.17: Prohibits the allowance of costs that are unreasonably incurred or unreasonable in amount.
* RDC 38.18: Mandates that the Court allow only proportionate costs and resolve doubts in favor of the paying party.
* RDC 38.21: Requires the Court to consider all circumstances when deciding if costs were proportionately and reasonably incurred.
* RDC 38.34–38.36: Governs the form and requirements of the Statement of Costs.
How did the Court use the principle of "substantial overlap" to distinguish this case from standard costs assessments?
The Court utilized the "substantial overlap" doctrine to scrutinize the efficiency of the legal work. By comparing the Statements of Costs across the three linked actions, Justice Stewart identified that the fee-earner had performed work on all three cases simultaneously and then divided the total time by three. The Court reasoned that because the arguments traversed similar legal principles and authorities, the total time claimed for the three submissions was disproportionate to the actual effort required, thereby triggering the Court's duty under RDC 38.18 to resolve the doubt in favor of the Defendant.
What was the final disposition and the specific order regarding the payment of costs?
The Court assessed the Claimant’s costs at AED 23,433.33, a significant reduction from the AED 53,650 originally claimed. The Court ordered the Defendant to pay this amount by 29 December 2025.
The said costs shall be paid by the Defendant to the Claimant by 29 December 2025.
What are the wider implications of this ruling for DIFC practitioners handling linked litigation?
This decision serves as a warning to practitioners that the DIFC Court will actively scrutinize costs in linked or "batch" litigation. Practitioners must be prepared to demonstrate that time entries are not merely a division of total hours spent across multiple files but are specifically tailored to the unique requirements of each case. When legal arguments overlap, the Court will expect a high degree of efficiency, and failure to account for this overlap will likely result in the Court exercising its power under RDC 38.18 to resolve doubts in favor of the paying party, leading to significant reductions in recoverable costs.
Where can I read the full judgment in Eli Mydlarz v Sadapay Technologies [2025] DIFC CFI 035?
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-0352025-eli-mydlarz-v-sadapay-technologies-ltd-2 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-035-2025_20251216.txt.
Cases referred to in this judgment:
(None specifically cited by name in the provided text; the Court relied on RDC provisions.)
Legislation referenced:
- Rules of the DIFC Courts (RDC): 38.17, 38.18, 38.20(1), 38.21, 38.34–38.36.