What was the specific dispute regarding the assessment of costs in the litigation between Abraaj Investment Management Limited and KPMG Lower Gulf?
The litigation concerns a complex dispute involving the liquidation of Abraaj Investment Management Limited and Abraaj Capital Limited against KPMG Lower Gulf Limited and associated entities. The current application, brought by the Claimants, sought an immediate assessment of costs incurred across eight distinct procedural steps, including an application to lift a stay of proceedings and various jurisdictional challenges. The total amount of costs at stake remained a point of contention, with the Claimants pushing for a swift resolution to recover expenditures incurred during these protracted procedural battles.
The Claimants’ request was rooted in a desire to finalize the financial liability of the First Defendant regarding these specific interlocutory stages. As noted in the Court’s reasoning:
In that letter the lawyers reiterated that the Claimants’ request was for immediate assessment of costs in accordance with RDC 38.3(1) by the Judge granting the costs award, or alternatively the Registrar.
The dispute highlighted the tension between the parties regarding whether these costs should be settled immediately or deferred until the conclusion of the substantive proceedings. Further details on the procedural history can be found at the DIFC Courts website.
Which judge presided over the application for costs assessment in CFI 041/2021?
Justice Wayne Martin presided over this application in the Court of First Instance. The order, issued on 15 July 2024, followed a series of submissions and email correspondence between the parties spanning from May to July 2024.
How did the parties frame their arguments regarding the immediate assessment of costs under the RDC?
The Claimants argued that the various costs orders made in their favor were ripe for immediate assessment, citing RDC 38.3 as the appropriate mechanism. Their position was that the Court should exercise its discretion to resolve these costs issues now, rather than waiting for the final determination of the substantive claim. As the Court recorded:
The Claimants contend that the orders for costs made in its favour are orders for immediate assessment within the meaning of RDC 38.3.
Conversely, the First Defendant opposed this approach, arguing against the immediate assessment of the costs claimed. The First Defendant’s resistance was formally communicated to the Court in May 2024. As noted in the judgment:
On 7 May 2024, lawyers representing the First Defendant wrote to the Court opposing the Claimants’ request for immediate assessment of the costs claimed on various grounds.
The Defendants sought to delay the assessment process, potentially to align with the conclusion of the broader litigation.
What was the core legal question regarding the DIFC Court’s jurisdiction to assess costs awarded by the Joint Judicial Committee (JJC)?
The Court had to determine whether it possessed the jurisdictional authority to assess costs that had been ordered by the Joint Judicial Committee (JJC). While the DIFC Court has clear authority over its own costs orders, the question was whether that authority extended to the enforcement or assessment of costs arising from proceedings before a separate, independent tribunal like the JJC. The Court had to distinguish between its inherent power to manage its own procedural costs and the lack of power to interfere with the costs regime of an external body.
How did Justice Wayne Martin apply the doctrine of procedural efficiency to the assessment of costs?
Justice Martin rejected the notion that costs assessment must always wait until the end of a trial. He emphasized that where procedural issues have been definitively resolved, there is no reason to delay the assessment. He reasoned that the substantive merits of the case did not influence the costs of these interlocutory steps.
Having considered those submissions I am firmly of the view that detailed assessment of the costs ordered in favour of the Claimants should be undertaken now, rather than at the conclusion of the proc
The Court further clarified that the reservation of costs in previous orders was merely a placeholder for the outcome of the JJC petition, which had since been resolved.
The substantive merits of the claim had no impact upon those jurisdictional issues. It follows that the only contingency against which the question of costs was reserved was the contingency relating to the outcome of the JJC Petition.
Which specific RDC rules and statutory provisions were applied in this order?
The Court relied heavily on RDC Part 40, which governs the detailed assessment of costs. Specifically, RDC 40.5 was cited regarding the service of a Notice of Commencement and the Bill of Costs. The Court also referenced RDC 38.3, which distinguishes between "immediate assessment" and the more formal "detailed assessment" process. The Court clarified the distinction, noting:
RDC 38.3 makes clear that “immediate assessment” is a procedure by which the Court orders payment of a sum of money.
How did the Court distinguish between the various types of costs orders cited in the proceedings?
The Court utilized the distinction between its own orders and those of the JJC to delineate its authority. It held that while it could order a detailed assessment of the seven costs orders made by the DIFC Court, it lacked the jurisdiction to do the same for the JJC costs. The Court noted that the timing of assessment is a matter of judicial discretion, but that discretion is limited by the nature of the order.
It follows that the Court’s power to determine the time at which costs should be assessed has not yet been exercised.
The Court also noted the standard practice for such assessments:
Usually, such orders will only be made after Statements of Costs have been filed and served by the parties in accordance with Part 38.
What was the final disposition and the specific relief granted by the Court?
The Court granted the application in part. It ordered that the costs of the Application to Lift the Stay of Proceedings, along with six other previous costs orders, be assessed forthwith via detailed assessment pursuant to RDC Part 40. The Claimants were ordered to serve a Notice of Commencement and a Bill of Costs within 21 days. The application regarding the JJC costs was dismissed for lack of jurisdiction. Furthermore, the Court imposed an interest penalty for late payment:
Accordingly, there will be orders that unless the costs are paid within 21 days of assessment, interest will thereafter accrue on all unpaid costs or part thereof outstanding until paid in full at the rate of interest applicable to judgments of the Court.
What are the wider implications of this order for DIFC practitioners?
This order serves as a critical reminder that the DIFC Court will not act as an enforcement or assessment arm for the Joint Judicial Committee. Practitioners must ensure that costs orders from the JJC are handled within the appropriate forum. Additionally, the ruling reinforces that the Court is willing to order detailed assessments of costs before the final conclusion of substantive proceedings, provided that the procedural issues are settled and the delay is no longer justified. Litigants should anticipate that the Court will prioritize efficiency in costs recovery once the underlying procedural disputes are closed.
Where can I read the full judgment in Abraaj Investment Management Limited v KPMG Lower Gulf [2024] DIFC CFI 041?
The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0412021-1-abraaj-investment-management-limited-official-liquidation-2-abraaj-capital-limited-official-liquidation-v-1-l-6 and via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-041-2021_20240715.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No specific external precedents were cited in the text of this order. |
Legislation referenced:
- RDC Part 40 (Detailed Assessment)
- RDC 40.5 (Notice of Commencement)
- RDC 38.3 (Immediate Assessment)
- RDC 23.6(3)
- RDC 38.28
- RDC 40.1