What was the nature of the dispute between the Abraaj liquidators and the KPMG entities regarding the DPO Application in CFI 041/2021?
The dispute concerned a contested application for document production filed by the Claimants, Abraaj Investment Management Limited and Abraaj Capital Limited (both in official liquidation), against the Defendants, KPMG Lower Gulf Limited, KPMG (a firm), and KPMG LLP. The Claimants sought an order for the production of documents under RDC 28.36, which the Defendants initially resisted. The litigation, which has been described as "heavy," involved significant procedural friction regarding the scope and necessity of document disclosure.
The Claimants ultimately succeeded in their application, either through the Defendants’ late concessions or by direct court order. Following this success, the parties were unable to agree on the appropriate costs, leading to a summary assessment hearing. The Claimants sought costs totaling USD 458,101.65, arguing that the Defendants’ prolonged and uninformative resistance to production necessitated extensive legal work that could have been avoided had the Defendants engaged constructively at an earlier stage.
The Defendants long-maintained objections to production of documents (lately abandoned); and the exaggerated grounds, and uninformative presentation of their objections; and their lack of constructive engagement until a late stage before and at the hearing, would have generated a need for substantial work and labour in the Claimant’s legal team, that could have been avoided.
Which judge presided over the costs assessment in CFI 041/2021 and in which division of the DIFC Courts was the order issued?
The order was issued by H.E. Justice Andrew Moran KC, sitting in the DIFC Court of First Instance. The decision, dated 29 January 2026, followed the earlier Document Production Order (the “DP Order”) granted by the same judge on 7 November 2025.
How did the parties differ in their arguments regarding the allocation of costs for the DPO Application?
The Claimants argued that as the successful party, they were entitled to their costs under RDC 38.7(1), emphasizing that the Defendants’ conduct—specifically their late-stage concessions and initial obstruction—warranted a full recovery of costs. They submitted a Statement of Costs totaling USD 458,101.65, maintaining that the expenditure was reasonable and proportionate given the complexity of the document production exercise.
Conversely, the Defendants contended that costs should either be "in the case" (meaning the ultimate winner of the main litigation would bear them) or, at the very least, reduced by 50%. The Defendants argued that the Claimants’ costs were "excessive" and that the application process should be viewed as a standard part of the litigation lifecycle rather than a punitive event. They served their own Statement of Costs in the amount of AED 1,400,003.64 (approximately USD 385,250.00).
The Defendants served a Statement of Costs in relation to the DPO Application on 28.10.25 in the amount of AED 1,400,003.64 (or USD 385,250.00).
What was the precise doctrinal issue the Court had to resolve regarding the application of RDC 38.8 to the Defendants' conduct?
The Court was tasked with determining whether the Defendants’ late-stage cooperation and eventual concessions were sufficient to mitigate the cost consequences of their earlier resistance. The doctrinal issue centered on the application of RDC 38.8, which mandates that the Court consider the conduct of the parties when exercising its discretion on costs. Specifically, the Court had to decide if the Defendants' "late-coming co-operation" justified a departure from the general rule that the losing party pays the costs of the application, or if the Defendants' initial obstructive behavior—characterized by "exaggerated grounds" and "uninformative presentation"—required a full or near-full award of costs to the Claimants.
How did Justice Andrew Moran KC apply the principle of proportionality when assessing the Claimants' costs?
Justice Moran KC utilized a broad and fair assessment of the circumstances, rejecting the Defendants' request for a 50% discount. While acknowledging that the Defendants eventually behaved reasonably, the Court found that this late compliance did not excuse the significant costs incurred by the Claimants in forcing that compliance. The judge emphasized that the Court must encourage earlier cooperation in heavy litigation.
The Court accepts that the Defendants did, eventually, but very late in the day, behave reasonably; had they done so earlier, significant costs could and would have been avoided.
The Court further noted that the Claimants' costs were higher due to the specific nature of the resistance encountered. Justice Moran KC explicitly validated the itemized expenditure presented by the Claimants, finding that the work performed was a direct consequence of the Defendants' procedural choices.
I find the itemised and explained expenditure, under the various headings at § 25 of the CCS A- D, to be justified; and reflect costs reasonably and proportionately incurred, which were reasonable and proportionate in amount.
Which specific RDC rules and procedural standards guided the Court’s decision on costs?
The Court’s decision was primarily governed by RDC 38.7(1), which provides the general rule that the successful party is entitled to costs, and RDC 38.8, which requires the Court to consider the conduct of the parties in determining the amount and allocation of those costs. Additionally, the Court relied on RDC 38.40, which mandates that costs awarded in a summary assessment must be paid within 14 days of the order. The Court also referenced the Defendants’ submissions (DCS) and the Claimants’ submissions (CCS) to weigh the reasonableness of the amounts claimed against the actual work necessitated by the DPO Application.
How did the Court treat the Defendants' submission that costs should be "in the case"?
The Court rejected the Defendants' submission that costs should be "in the case" as "untenable" and "divorced from the reality" of the litigation. Justice Moran KC noted that the Defendants' argument failed to recognize that the application was a distinct procedural battle necessitated by the Defendants' own conduct. The Court also addressed the Defendants' claim that the Claimants' costs were excessive, noting that while some minor adjustments were considered, the Defendants' arguments for a 50% discount were entirely unjustified.
I have taken this excess into account in the discounting process, but it comes nowhere close to justifying an order for costs in the case, or a discounting of any award by 50%.
What was the final disposition and the specific monetary relief ordered by the Court?
The Court ordered the Defendants to pay the Claimants’ costs of the DPO Application in the total amount of USD 400,000.00. This amount was to be paid within fourteen days of the date of the order, 29 January 2026. The Court rejected the Defendants’ attempt to characterize the application as a routine procedural step, instead holding them accountable for the substantial legal work generated by their late-stage concessions.
Unfortunately, it has turned out not to be attainable but that does not in my judgment justify the Defendants’ failure to do sooner that which it eventually did; after a large amount of costs had been incurred by the Claimants in getting it to do so.
What are the wider implications of this ruling for practitioners involved in document production disputes in the DIFC?
This ruling serves as a stern warning to parties who adopt a strategy of "late-stage" cooperation in document production. The Court has signaled that it will not hesitate to award substantial costs against parties who maintain obstructive or uninformative objections until the eve of a hearing. Practitioners must anticipate that the DIFC Courts will prioritize the efficient progress of litigation and will penalize parties who force the Court and the opposing side to expend resources on applications that could have been avoided through earlier, constructive engagement.
The Court rejects in all respects the Defendants’ conclusive submission at §4.7 DCS and the arguments on which it is based.
Where can I read the full judgment in Abraaj Investment Management Limited v KPMG Lower Gulf [2026] DIFC CFI 041?
The full order with reasons can be accessed via the official 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-kpmg-l-15 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-041-2021_20260129.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 this order. |
Legislation referenced:
- Rules of the DIFC Courts (RDC) 28.36
- Rules of the DIFC Courts (RDC) 38.7(1)
- Rules of the DIFC Courts (RDC) 38.8
- Rules of the DIFC Courts (RDC) 38.40