ANASTASIIA DENISOVA v ALEKSEI GALTCEV [2025] DIFC CFI 041 — Refusal of permission to appeal regarding share payment preliminary issue (15 August 2025)

This order confirms the finality of a preliminary issue trial concerning share ownership, reinforcing the high threshold for appellate intervention in the DIFC Courts and the court's discretion in summary costs assessments.

Did the preliminary issue trial in CFI 041/2024 definitively resolve the dispute over the USD 1,000 share payment between Anastasiia Denisova and Aleksei Galtcev?

The litigation centers on a dispute regarding the ownership of 10,000 shares in Realiste Holding Ltd. The Claimant, Anastasiia Denisova, asserted that she had fully paid for these shares and was entitled to their registration and subsequent sale. Conversely, the Defendants, Aleksei Galtcev and Realiste Holding Ltd, contended that no payment was ever made, thereby negating the Claimant’s entitlement to the shares. To streamline the proceedings, the Court ordered a trial on a preliminary issue to determine whether the Claimant had indeed paid the USD 1,000 required for the shares.

Following a one-day trial, the Court ruled in favor of the Claimant. Subsequently, the Court addressed the financial consequences of this finding, specifically regarding the legal costs incurred by the Claimant. As noted in the record:

The Defendant was ordered to pay the Claimant’s costs of the preliminary issue, to be immediately assessed on a standard basis, and the parties were invited to file costs submissions. The Claimant claimed costs relating to the preliminary issue of USD 76,591.50, including disbursements of USD 1,200. By way of the Costs Order, the Claimant’s costs relating to the preliminary were immediately assessed on a standard basis at USD 50,000.

The Defendants sought to challenge both the substantive finding and the costs award through an Application for Permission to Appeal.

Which judge presided over the application for permission to appeal in CFI 041/2024 and when was the order issued?

The application for permission to appeal was heard and determined by H.E. Justice Sapna Jhangiani, sitting in the Court of First Instance. The Order with Reasons, which formally refused the Defendants' application, was issued on 15 August 2025.

What specific legal arguments did the Defendants advance in their attempt to overturn the preliminary issue findings?

The Defendants raised five substantive grounds of appeal against the initial Order and four additional grounds concerning the Costs Order. Regarding the merits, the Defendants argued that the Court’s finding of payment was against the weight of evidence, citing an alleged lack of direct or corroborative documentation. They further challenged the Court’s assessment of the Claimant’s credibility, asserting that the Court failed to account for inconsistencies in her statements. Additionally, the Defendants claimed procedural unfairness due to the exclusion of witness testimony from Mr. Maksim Kuchin and alleged that the Court committed an error of law by reversing the burden of proof.

In response, the Claimant challenged the procedural validity of the Defendants' application. As documented in the proceedings:

The Claimant contends that: (a) No formal application for permission to appeal has been made pursuant to RDC 44, and the Defendant’s Notice of Appeal fails to comply with RDC 44.30-44.34.

The Defendants maintained that their filing was compliant, stating:

The Defendants deny the Claimant’s allegations, and in particular, contend that: (a) The Claimant’s allegation that the Application was filed late, or in breach of the RDC, is misconceived.

What was the precise doctrinal issue the Court had to address regarding the Defendants' Application for Permission to Appeal?

The Court was tasked with determining whether the Defendants’ grounds of appeal met the threshold of having a "real prospect of success." This required the Court to evaluate whether the trial judge’s findings of fact—specifically regarding the payment of USD 1,000—were susceptible to appellate interference under the established standards for reviewing evidentiary weight, witness credibility, and procedural fairness. The Court also had to determine whether the summary assessment of costs, which resulted in a USD 50,000 award, was disproportionate or legally flawed under the RDC.

How did H.E. Justice Sapna Jhangiani apply the "real prospect of success" test to the Defendants' grounds of appeal?

Justice Jhangiani conducted a thorough review of the Defendants' nine grounds of appeal. The Court concluded that the Defendants failed to demonstrate any legal or factual error that would warrant an appeal. The judge emphasized that the trial had been conducted fairly and that the evidentiary findings were within the Court's discretion. The Court found that the Defendants' arguments regarding the weight of evidence and witness credibility were essentially attempts to re-litigate factual findings that had already been determined at trial.

The Court’s reasoning for the refusal was definitive:

The Application for Permission to Appeal is refused on the basis that none of the grounds of appeal has a real prospect of success, and there is no other compelling reason why the appeal should be heard.

Furthermore, the Court noted the Defendants’ failure to adhere to previous orders, including the payment of the assessed costs, which underscored the lack of merit in their procedural challenges.

Which DIFC statutes and RDC rules were central to the Court’s assessment of the costs award?

The Court’s assessment of costs was governed by RDC Part 38, specifically RDC 38.2 and 38.23, which mandate that costs must be proportionate and reasonable. The Defendants argued that the USD 50,000 award was disproportionate to the USD 1,000 value of the shares in dispute. However, the Court relied on RDC 38.34 regarding the submission of costs schedules. The Court also clarified the scope of recoverable costs:

The Costs Order also found that the costs of the Claimant’s application for default judgment were not recoverable by the Claimant as part of her costs of the preliminary issue, since that application had predated the Court’s Case Management Order dated 29 January 2025 ordering that the Claimant’s Claim would proceed by way of the determination of a preliminary issue.

How did the Court utilize English and DIFC precedents to evaluate the Defendants' evidentiary and procedural claims?

The Court utilized a robust framework of precedents to reject the Defendants' claims. Regarding the weight of evidence, the Court referenced IGPL v Standard Chartered Bank [2015] DIFC CA 004 and Re B (Children) [2008] UKHL 35. To address the challenge to witness credibility, the Court relied on Al Khorafi v Bank Sarasin-Alpen [2018] DIFC CA 003 and Gestmin SGPS S.A. v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm).

On the issue of procedural fairness and witness exclusion, the Court looked to National Bank of Kuwait v Edris [2021] DIFC CA 005 and Regina v Chief Constable of West Midlands Police ex parte Wiley [1995] 1 AC 274. Finally, regarding the burden of proof, the Court applied the principles from Barclays Bank plc v Alshaya [2016] DIFC CA 001 and Miller v Minister of Pensions [1947] 2 All ER 372. These authorities collectively supported the Court’s position that the trial judge’s findings were sound and that the Defendants' procedural complaints lacked merit.

What was the final disposition of the application and the specific orders made regarding costs?

The Court refused the Application for Permission to Appeal in its entirety. Regarding the costs of the appeal application itself, the Court ruled in favor of the Claimant. The order specified:

The Claimant shall be entitled to her costs of responding to the Defendants’ Application for Permission to Appeal in any event, such costs to be determined at the conclusion of the case.

This followed the earlier assessment of costs for the preliminary issue, where the Defendants were ordered to pay USD 50,000. The Court noted with concern that:

The Defendants have not complied with a number of deadlines, and have failed to pay the Costs Order for USD 50,000 in favour of the Claimant.

What are the practical implications for litigants seeking to appeal preliminary issue findings in the DIFC?

This decision serves as a stark reminder of the high threshold required to obtain permission to appeal in the DIFC Courts. Litigants must recognize that the Court of First Instance’s factual findings, particularly those based on witness credibility and the weight of evidence, are highly resistant to challenge unless a clear error of law or a significant procedural irregularity is demonstrated.

Furthermore, the case highlights the importance of strict compliance with RDC Part 38 regarding costs submissions. Parties should be aware that the Court will rigorously apply the principles of proportionality and reasonableness, and that failure to comply with costs orders can negatively impact the Court’s perception of a party’s procedural good faith. Future litigants must ensure that any appeal notice is fully compliant with RDC 44 to avoid immediate dismissal on procedural grounds.

Where can I read the full judgment in Anastasiia Denisova v Aleksei Galtcev [2025] DIFC CFI 041?

The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0412024-anastasiia-denisova-v-1-aleksei-galtcev-2-realiste-holding-ltd-2

Cases referred to in this judgment:

Legislation referenced:

• RDC 2.10
• RDC 4.2
• RDC 29.20, 29.39, 29.41, 29.42
• RDC 38.2, 38.7, 38.9, 38.23, 38.34
• RDC 44.30-44.34