What was the specific monetary dispute regarding the costs of the PTA application in Ganesan Muthiah v Abdul Rahman Mohammad?
The litigation centers on the assessment of costs following the unsuccessful attempt by the Defendant/Applicant, Abdul Rahman Mohammad, to secure permission to appeal an earlier order. Following the dismissal of the Permission to Appeal (PTA) application on 21 January 2026, the Court turned its attention to the quantum of legal fees incurred by the Claimant/Respondent, Ganesan Muthiah, in successfully opposing the application.
The Respondent submitted a detailed Statement of Costs on 28 January 2026, seeking recovery of professional fees that included the drafting of skeleton arguments and supplemental submissions. The total amount claimed by the Respondent was AED 59,535.00. Ultimately, the Court exercised its discretion to award a reduced sum, determining that 80% of the claimed costs were appropriate.
The Respondent filed a Statement of Costs dated 28 January 2026, claiming a total sum of AED 59,535.00, comprising professional fees incurred in opposing the PTA Application, including the preparation of skeleton arguments, supplemental submissions, and the Statement of Costs.
Which judge presided over the costs assessment in CFI 055/2025 and in which division did the matter proceed?
The matter was heard by H.E. Justice Shamlan Al Sawalehi sitting in the DIFC Court of First Instance. The order regarding the costs assessment was issued on 29 January 2026, following the substantive dismissal of the PTA application by the same judge on 21 January 2026.
JUSTICE SHAMLAN AL SAWALEHI
UPON
the Defendant’s Appeal Notice dated 10 November 2025 seeking Permission to Appeal (the “PTA Application”) against the Order of H.E.
What arguments did the parties advance regarding the recovery of professional fees in Ganesan Muthiah v Abdul Rahman Mohammad?
The Respondent, Ganesan Muthiah, sought full recovery of the professional fees incurred in defending the PTA application, arguing that these costs were reasonably and necessarily incurred to address the Applicant’s challenge. The Respondent’s position was anchored in the fact that they were the successful party in the PTA proceedings and had complied with the Court’s direction to file a Statement of Costs within five working days of the 21 January 2026 order.
Conversely, the Applicant, Abdul Rahman Mohammad, faced the Court’s scrutiny regarding the proportionality of the costs claimed. While the Applicant did not succeed in the underlying PTA application, the Court’s assessment process inherently balanced the Respondent’s right to recover costs against the overarching requirement that such costs remain proportionate to the nature of the application itself.
By that Order, the Applicant was directed to pay the Respondent’s costs of the PTA Application on the standard basis, with a Statement of Costs to be filed within five working days.
What was the precise legal question H.E. Justice Shamlan Al Sawalehi had to answer regarding the assessment of costs?
The primary legal issue before the Court was the determination of "reasonable and proportionate" costs under the standard basis of assessment as prescribed by the Rules of the DIFC Courts (RDC). The Court was tasked with deciding whether the full amount of AED 59,535.00 claimed by the Respondent met the threshold of proportionality required by the RDC, or whether a downward adjustment was necessary to reflect the nature of the PTA application.
The Court had to reconcile the Respondent's status as the successful party with the judicial mandate to prevent excessive cost recovery. This required an exercise of judicial discretion to determine the appropriate percentage of the claimed costs that would satisfy the requirements of RDC 38.7, 38.8, and 38.23.
How did H.E. Justice Shamlan Al Sawalehi apply the doctrine of proportionality to the costs claimed in this case?
In his reasoning, Justice Al Sawalehi emphasized that while the Respondent was successful, the Court maintains a duty to ensure that the costs awarded are not merely reasonable in terms of the work performed, but also proportionate to the specific nature of the PTA application. The judge concluded that a reduction was necessary to align the final award with these principles.
The Court determined that an award of 80% of the total claimed costs was the appropriate figure to satisfy the requirements of proportionality. This decision reflects the Court's proactive role in managing litigation costs, ensuring that even successful parties are subject to a proportionality check when seeking recovery from an opposing party.
While the Respondent was the successful party in the PTA Application, I consider it appropriate, in the exercise of the Court’s discretion, to allow recovery of 80% of the total costs claimed, reflecting the nature of the PTA Application and the need to ensure proportionality.
Which specific RDC rules and practice directions were applied by the Court in assessing the costs?
The Court’s assessment was governed by Part 38 of the Rules of the DIFC Courts (RDC). Specifically, the Court cited RDC 38.7, 38.8, and 38.23 as the foundational rules for assessing costs on the standard basis. These rules mandate that the Court must be satisfied that the costs are both reasonable and proportionate.
Furthermore, the Court invoked RDC 38.40 regarding the timeline for payment and Practice Direction No. 4 of 2017 regarding the accrual of interest on judgments. These authorities provided the procedural framework for the final order, ensuring that the Applicant was given a clear deadline for payment and a clear consequence for default.
How did the Court utilize the standard basis of assessment in Ganesan Muthiah v Abdul Rahman Mohammad?
The Court utilized the standard basis of assessment to filter the Respondent's claim. Under the standard basis, the Court does not automatically grant the full amount requested in a Statement of Costs. Instead, it scrutinizes the items to ensure they were reasonably incurred and that the amount is proportionate.
By applying RDC 38.7 and 38.8, the Court effectively performed a "proportionality check." The judge’s decision to award 80% of the AED 59,535.00 claim demonstrates that the Court viewed the full amount as exceeding the bounds of what was proportionate for a PTA application, even though the underlying work (skeleton arguments and supplemental submissions) was deemed necessary.
What was the final disposition and the specific monetary relief ordered by the Court?
The Court ordered the Applicant to pay the Respondent 80% of the claimed costs, resulting in a total award of AED 47,628.00. This payment is required to be made within 14 days of the date of the order. Failure to comply with this deadline will trigger interest at a rate of 9% per annum, calculated from the date of the order until the date of full payment.
The Applicant shall pay the Respondent 80% of the Respondent’s costs of the PTA Application in the total sum of AED 47,628.00 (the “Costs Award”).
The Applicant shall pay the Costs Award within 14 days of the date of this Order, pursuant to RDC 38.40.
In the event that the Applicant fails to pay the Costs Award within 14 days of the date of this Order, interest shall accrue at the rate of 9% per annum from the date of this Order until payment in full, in accordance with Practice Direction No. 4 of 2017.
What are the wider implications for DIFC practitioners regarding costs assessments in PTA applications?
This case serves as a reminder that the DIFC Courts will rigorously apply the principle of proportionality to costs, regardless of a party's success in an application. Practitioners should anticipate that even when a party is entitled to costs on the standard basis, the Court will not act as a "rubber stamp" for the total amount claimed in a Statement of Costs.
Litigants must ensure that their Statements of Costs are meticulously prepared and that the fees claimed are clearly justifiable in relation to the complexity and nature of the specific application. The 20% reduction applied in this case highlights the Court’s willingness to exercise its discretion to curb costs that it deems disproportionate, reinforcing the importance of cost-consciousness in all stages of DIFC litigation.
Where can I read the full judgment in Ganesan Muthiah v Abdul Rahman Mohammad [2026] DIFC CFI 055?
The full order with reasons can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0552025-ganesan-muthiah-v-abdul-rahman-mohammad-1
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- Rules of the DIFC Courts (RDC): Part 38 (specifically RDC 38.7, 38.8, 38.23, 38.40)
- Practice Direction No. 4 of 2017 (Interest on Judgments)