The DIFC Court of First Instance has issued a significant default judgment in a commercial dispute involving unpaid sports media fees, underscoring the Court's strict enforcement of procedural timelines and the consequences of failing to file a defence.
What was the nature of the dispute between Innovative Production Group and Innovation Factory Royal Investment Group regarding the USD 2,883,406.63 claim?
The litigation arose from a commercial disagreement concerning two separate term sheets related to sports media rights and associated financial obligations. Innovative Production Group FZE (the Claimant) initiated proceedings against Innovation Factory Royal Investment Group LLC (the Defendant) to recover substantial outstanding balances. The claim comprised USD 339,202.00 under "Term Sheet 1" (Season 4), USD 1,600,000.00 in unpaid fees under "Term Sheet 2" (Season 5), USD 849,364.18 for payments made to Sri Lanka Cricket on the Defendant's behalf, and USD 94,840.45 in outstanding surcharges.
The procedural history of the case was marked by the Claimant’s attempts to secure both costs from a failed jurisdiction challenge and a final judgment on the merits. As noted in the Court’s order:
There are currently two outstanding applications by the Claimant: the first in time is dated 26 December 2025 seeking an unless order in respect of the costs ordered to be paid by the Defendant in the sum of AED 272,593.39 under a failed jurisdiction challenge; the second is dated 13 January 2026, seeking judgment in default of defence under Rule 13.7 of the Rules of the DIFC Courts (“RDC”).
The total amount claimed and subsequently awarded by the Court was USD 2,883,406.63, reflecting the aggregate of these contractual and surcharge-related debts.
Which judge presided over the default judgment application in CFI 054/2025 and when was the order issued?
H.E. Justice Michael Black presided over the application for default judgment in the Court of First Instance. The order, which finalized the proceedings in favor of the Claimant, was issued on 17 March 2026.
What were the respective procedural positions of Innovative Production Group and Innovation Factory Royal Investment Group leading up to the default judgment?
The Claimant, Innovative Production Group, consistently sought to advance the litigation, first by successfully defending against the Defendant's jurisdictional challenge and subsequently by filing a Request for Default Judgment after the Defendant failed to meet the deadline for its defence. The Claimant’s position was that the Defendant had been served with the Particulars of Claim on 4 December 2025, and having failed to file a defence by the extended deadline of 2 January 2026, the Claimant was entitled to judgment under the RDC.
The Defendant, Innovation Factory Royal Investment Group, initially contested the jurisdiction of the DIFC Courts. As the Court recorded:
On 22 July 2025 the Defendant belatedly filed an AOS indicating its intention to contest the jurisdiction of the DIFC Courts. Following the failure of the jurisdiction challenge (filed on 6 August 2025), the Defendant filed an amended AOS on 3 November 2025 indicating its intention to defend all of the claim.
Despite this stated intention to defend the claim, the Defendant failed to file a defence by the prescribed date of 2 January 2026, nor did it seek any further extension of time from the Court, leading to the Claimant's successful application for default judgment.
What was the precise legal question the Court had to answer regarding the criteria for granting a default judgment under RDC 13.5?
The Court was required to determine whether the Claimant had satisfied the strict procedural prerequisites for obtaining a default judgment under the Rules of the DIFC Courts (RDC). Specifically, the Court had to assess whether the Defendant had failed to file a defence within the time limits set by RDC 16.9, and whether the Claimant had complied with the service requirements mandated by RDC 13.6 and RDC 9.43. The doctrinal issue centered on whether the Court could grant the request despite potential technical irregularities in the filing of the Certificate of Service (COS), provided that no prejudice was caused to the Defendant.
How did H.E. Justice Michael Black apply the RDC 4.2(1) power to cure procedural defects in the service of the claim form?
Justice Black exercised his discretion to ensure that procedural technicalities did not obstruct the administration of justice. While the Court noted that the strict timeline for filing a Certificate of Service under RDC 9.43 had not been perfectly observed, the judge determined that the Defendant had clearly received the claim form and suffered no prejudice. Consequently, the Court utilized its powers under RDC 4.2(1) to extend the time for compliance.
As Justice Black reasoned:
Insofar as the strict terms of RDC 9.43 may not have been observed, I can see no prejudice to the Defendant and I extend the time for compliance with RDC 9.43 to 18 August 2025 under RDC 4.2(1).
This reasoning allowed the Court to proceed to the merits of the default judgment request, confirming that the criteria under RDC 13.5 were satisfied and that no exclusionary circumstances under RDC 13.6 applied.
Which specific DIFC statutes and RDC rules were applied to justify the judgment and the interest calculation?
The Court relied on several key provisions of the DIFC legal framework. Regarding the substantive claim for interest, the Court referenced Article 118 of the Contract Law 2004 and Article 17 of the Law of Damages and Remedies 2005. Procedurally, the Court applied RDC 13.5, 13.6, and 13.7 to grant the default judgment, and RDC 16.9 to establish the deadline for the defence. Furthermore, RDC 17.18(1)(b) was cited regarding the requirements for claiming interest in the Particulars of Claim.
How did the Court utilize Practice Direction 4 of 2017 in determining the interest rate awarded to the Claimant?
The Court used Practice Direction 4 of 2017 to justify the 9% per annum interest rate applied to the judgment debt. The Claimant had requested interest under the relevant Contract Law and Damages and Remedies articles, and the Court found that the 9% rate was appropriate as it aligned with the standard rate for judgments under the Practice Direction.
As noted in the judgment:
The Claimant has claimed simple interest at the rate of 9% which is equivalent to the rate on judgments under Practice Direction 4 of 2017 – Interest on Judgments.
What was the final disposition of the Court, including the monetary relief and costs awarded to Innovative Production Group?
The Court granted the Claimant’s Request for Default Judgment in full. The Defendant was ordered to pay the principal sum of USD 2,883,406.63. Additionally, the Court awarded interest in the sum of USD 699,193.94 (calculated up to 9 January 2026), with continuing interest at a simple rate of 9% per annum until full payment. Finally, the Court assessed costs in favor of the Claimant in the amount of AED 1,020,048.41.
What are the wider implications of this judgment for practitioners regarding the filing of defences and the use of RDC 4.2(1)?
This case serves as a stern reminder that the DIFC Courts maintain a strict adherence to procedural timelines. Practitioners must ensure that a defence is filed within the 14-day or 28-day windows prescribed by RDC 16.9. While the Court may exercise its power under RDC 4.2(1) to cure minor procedural defects where no prejudice is shown, this should not be viewed as a safety net for failing to meet substantive deadlines. Litigants who ignore these timelines risk the immediate entry of a default judgment, which can be difficult to set aside once granted.
Where can I read the full judgment in Innovative Production Group FZE v Innovation Factory Royal Investment Group LLC [2026] DIFC CFI 054?
The full judgment can be accessed via the official DIFC Courts website at: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0542025-innovative-production-group-fze-v-innovation-factory-royal-investment-group-llc-1
The CDN link for the document is: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-054-2025_20260317.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No external case law cited in the order. |
Legislation referenced:
- Contract Law 2004, Article 118
- Law of Damages and Remedies 2005, Article 17
- Rules of the DIFC Courts (RDC): 4.2(1), 9.43, 13.5, 13.6, 13.7, 13.14, 16.9, 17.18(1)(b), 36.32
- Practice Direction 4 of 2017 – Interest on Judgments