The DIFC Court of First Instance addresses the tension between enforcing monetary judgments and the risk of non-recoverability when cross-border enforcement in the Kingdom of Saudi Arabia (KSA) poses unique legal barriers to the repayment of interest.
What specific dispute between Alawwal Capital JSC and Rasmala Investment Bank Limited necessitated a stay of execution application?
The litigation arises from the marketing of a Shariah-compliant investment fund by Rasmala Investment Bank Limited to Alawwal Capital JSC, a claimant incorporated in the Kingdom of Saudi Arabia. Following a judgment in favor of Alawwal Capital JSC, the court issued an order on 14 July 2025 detailing the financial consequences of that judgment. Rasmala Investment Bank Limited subsequently sought a stay of execution pending a renewed application for permission to appeal to the Court of Appeal.
The core of the dispute regarding the stay centers on the potential inability of the Defendant to recover interest payments should the appeal succeed. The Defendant argued that because the Claimant is a KSA-based entity, any repayment of interest ordered by an appellate court would likely be unenforceable under KSA law, which historically disfavors the enforcement of interest-bearing obligations. As noted in the court's reasoning:
The special circumstances identified are:
(a) That the Claimant is incorporated in the Kingdom of Saudi Arabia (“the KSA”) with the consequence that if sums were paid to the Claimant which were required to be repaid following a successful appeal it would be necessary to enforce the Court of Appeal’s order in the KSA.
Which judge presided over the stay of execution application in CFI 038/2023?
H.E. Justice Roger Stewart KC presided over the application for a stay of execution in the Court of First Instance. The order was issued on 25 September 2025, following the Defendant’s application dated 3 September 2025, which sought to pause the financial obligations mandated by the court’s earlier 14 July 2025 order.
What arguments did Rasmala Investment Bank advance to justify a stay of the 14 July Order?
Rasmala Investment Bank Limited, represented by the second affidavit of Paham Behesti, argued that "special circumstances" existed under RDC 48.53 to justify a stay. The Defendant relied heavily on an expert legal opinion from Al Sharif Law, which posited that KSA courts would likely refuse to enforce an order for the repayment of interest. The Defendant contended that if they were forced to pay the interest component of the judgment now, and subsequently won their appeal, they would be left with an unenforceable claim against a KSA entity, resulting in irreparable financial prejudice.
Conversely, while the Claimant did not serve evidence in opposition, the court weighed the prejudice to the Claimant in being kept out of its money against the Defendant’s risk of non-recoverability. The Defendant sought a broad stay of the entire order, but the court ultimately limited the relief to the interest-specific portion of the judgment, requiring the Defendant to pay the disputed interest amount into court as a safeguard.
What was the precise legal question H.E. Justice Roger Stewart KC had to answer regarding the stay of execution?
The court was tasked with determining whether the Defendant had demonstrated "special circumstances" under RDC 48.53 that would render it "inexpedient" to enforce the 14 July Order pending the outcome of a renewed application for permission to appeal. Specifically, the court had to decide if the risk of non-recoverability of interest payments in the KSA constituted a sufficient ground to stay the execution of a judgment that is otherwise generally enforceable pending appeal. The court also had to determine if this risk warranted a stay of the entire financial order or if it could be bifurcated to protect the Claimant’s interests while mitigating the Defendant’s risk.
How did H.E. Justice Roger Stewart KC apply the test for special circumstances in this case?
Justice Stewart KC applied the principle that while judgments are not generally stayed pending appeal, the court must balance the relative risk of injustice to both parties. He utilized the framework established in Rohan v Daman Real Estate [2012] CFI 025, which mandates an assessment of the risk of the appellant being unable to recover monies if a stay is refused versus the risk of the respondent being unable to enforce the judgment if a stay is granted.
Regarding the interest component, the judge found the evidence from Al Sharif Law compelling, noting that KSA courts would likely treat interest payments as unenforceable. Consequently, he concluded that the risk of the Defendant being unable to claw back these funds justified a stay for that specific portion of the order:
The evidence of Al Sharif Law supports the proposition that an order for payment (or repayment) of interest would be unlikely to be enforced by the KSA courts. Paragraph 2 of the 14 July Order (which has been quantified in the amount of USD 1,017,485.98) is a plain order for interest. I consider that in respect of this paragraph, there are special circumstances which justify a stay.
Which DIFC statutes and RDC rules were central to the court’s decision?
The primary procedural rule invoked was RDC 48.53, which governs the stay of execution of judgments or orders. The court also relied on the established jurisprudence regarding the exercise of its discretion to grant stays, specifically citing Rohan v Daman Real Estate [2012] CFI 025 as the leading authority for balancing the risk of injustice between the parties. The court also referenced the specific financial figures quantified in the 14 July Order to determine the scope of the stay.
How did the court distinguish between the interest component and the remainder of the judgment?
The court rejected the Defendant’s attempt to stay the entire order, distinguishing the interest component from the principal sums. Justice Stewart KC reasoned that the risk of non-recoverability in the KSA was specific to interest, which is often treated differently under Shariah-influenced legal systems. He noted that the principal sums did not carry the same risk of non-enforcement. Furthermore, he emphasized that the Defendant, having marketed a Shariah-compliant fund, should have been aware of the risks associated with KSA enforcement regarding interest. He dismissed the argument that potential interest accrual on the principal justified a broader stay, noting:
This relatively small sum does not justify keeping the Claimant out of its money;
(ii) Secondly this case arises out of the marketing of a Shariah compliant investment fund to the Claimant by the Defendant.
What was the final disposition and the specific conditions imposed by the court?
The court granted a partial stay of execution. Paragraph 2 of the 14 July Order, which concerned the interest component quantified at USD 1,017,485.98, was stayed until the Court of Appeal determines the renewed application for permission to appeal. This stay was strictly conditional:
Further any risk to the Claimant is avoided by requiring, as a condition of the stay, the payment into court of the sum.
The Defendant was ordered to pay the sum of USD 1,017,485.98 into the DIFC Court by 7 October 2025. If the Defendant fails to meet this condition, the stay will not take effect, and the Claimant may proceed with enforcement.
What are the wider implications for DIFC practitioners regarding stay applications involving KSA-based claimants?
This order serves as a critical reminder that the DIFC Court will look closely at the specific nature of the debt and the enforceability of that debt in the respondent’s home jurisdiction when considering stay applications. Practitioners should anticipate that "special circumstances" under RDC 48.53 are more likely to be found where there is credible expert evidence that a foreign court (such as in the KSA) would refuse to enforce a repayment order. However, the court remains protective of the successful claimant; by requiring payment into court, Justice Stewart KC ensured that the Defendant’s risk of non-recoverability was mitigated without depriving the Claimant of the ultimate security of the judgment sum. Litigants should be prepared to provide granular evidence regarding foreign enforcement risks rather than relying on general assertions, as the court explicitly rejected broad claims of enforcement difficulty.
Where can I read the full judgment in Alawwal Capital JSC v Rasmala Investment Bank Limited [2025] DIFC CFI 038?
The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0382023-alawwal-capital-jsc-v-rasmala-investment-bank-limited-8
CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-038-2023_20250925.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Rohan v Daman Real Estate | [2012] CFI 025 | Cited as the leading authority for balancing the relative risk of injustice on the grant or refusal of a stay. |
Legislation referenced:
- RDC 48.53 (Stay of execution)