What was the specific dispute regarding the AED 50,000 cost award in SIG Middle East v Perfect Building Materials?
The dispute centered on the assessment of legal costs incurred by the Claimant, SIG Middle East LLC, following the unsuccessful attempt by the Defendant, Perfect Building Materials LLC, to challenge a previous court order. After the Court dismissed the Defendant’s Permission to Appeal (PTA) application on 6 August 2025, the Claimant sought recovery of its legal fees and disbursements. The total sum claimed amounted to AED 50,000, which the Defendant was required to pay following the Court's assessment of the reasonableness and proportionality of the legal work performed.
The Court’s determination was necessitated by the failure of the parties to reach a private agreement on the quantum of costs. Consequently, the Claimant submitted a detailed Statement of Costs to the Court for formal assessment. As noted in the judgment:
This is the Court’s judgment on the Claimant’s application for costs following the Order made dismissing the Defendant’s Permission to Appeal (PTA) Application on 6 August 2025.
The Court scrutinized the breakdown of these costs, which included AED 47,852 in legal fees and AED 2,148 in disbursements, ultimately finding them to be fully justified under the prevailing procedural rules.
Which judge presided over the costs assessment in CFI 057/2024 and when was the order issued?
H.E. Justice Rene Le Miere presided over the matter in the DIFC Court of First Instance. The order regarding the assessment of costs was issued on 8 September 2025, following the substantive dismissal of the Defendant's appeal notice on 6 August 2025.
How did the parties approach the recovery of costs following the dismissal of the PTA application?
The Claimant, SIG Middle East, adopted a structured approach to cost recovery by filing a comprehensive Statement of Costs supported by Annex A. This filing was specifically aligned with the requirements of Registrar’s Direction 1 of 2023 (RD 1/2023). The Claimant argued that the costs were a direct result of the necessary legal work required to defend the PTA application, including the preparation of the response, procedural compliance, and strategic engagement.
Conversely, the Defendant, Perfect Building Materials, having failed in its attempt to secure permission to appeal the Order dated 29 May 2025, was held liable for the costs of the PTA application. The Court noted the procedural history:
Justice Rene Le Miere dated 6 August 2025 dismissing the Defendant’s Appeal Notice dated 19 June 2025 (the “PTA Application”) seeking permission to appeal the Order (the “Order dated 6 August 2025”) IT IS HEREBY ORDERED THAT the Defendant shall pay the Claimant’s costs of the PTA Application in the sum of AED 50,000.
The Claimant’s position was that the costs were not only reasonable in quantum but also proportionate to the complexity of the issues raised during the PTA stage.
What was the precise legal question the Court had to answer regarding the assessment of costs?
The Court was tasked with determining whether the Claimant’s claimed costs of AED 50,000 met the standard of reasonableness and proportionality required under the Rules of the DIFC Courts (RDC) and Registrar’s Direction 1 of 2023. Specifically, the Court had to decide if the breakdown of hours worked and the tasks performed by the Claimant’s legal representatives justified the total amount sought, given that the underlying application—the PTA—had been dismissed.
How did Justice Rene Le Miere apply the test for reasonableness and proportionality to the Claimant’s costs?
Justice Le Miere employed a three-part test to evaluate the costs, examining whether they were reasonable in quantum and scope, proportionate to the complexity of the PTA application, and properly documented. The Court reviewed the specific tasks undertaken, which included the drafting of the response and defence to the PTA, as well as the coordination of procedural requirements.
The Court emphasized that the documentation provided by the Claimant was sufficient to verify the work performed. As stated in the judgment:
The Court is satisfied that the costs claimed are: (a) Reasonable in quantum and scope; (b) Proportionate to the nature and complexity of the PTA Application; and (c) Properly documented and supported by a breakdown of hours worked and tasks performed by each level of legal professional.
Furthermore, the Court verified that the fees were consistent with the actual fee arrangement between the Claimant and its counsel, ensuring that the costs were not arbitrary or inflated.
Which specific statutes and Registrar’s Directions were applied in the assessment of costs?
The Court relied heavily on the Rules of the DIFC Courts (RDC) regarding the assessment of costs on the standard basis. Central to the assessment was Registrar’s Direction 1 of 2023 (RD 1/2023), which provides the framework for Indicative Hourly Charges. The Court utilized this direction to benchmark the reasonableness of the legal fees charged by the Claimant’s representatives.
How did the Court utilize the procedural history and previous orders in determining the final costs?
The Court referenced the Order dated 6 August 2025, which had already established the principle that the Defendant was liable for the Claimant's costs of the PTA application. The Court utilized this earlier order as the jurisdictional basis for the current assessment.
By Order dated 6 August 2025, the Court ordered that the Defendant shall pay the Claimant’s costs of the PTA Application, to be assessed on the standard basis if not agreed.
By citing this, the Court confirmed that the scope of the assessment was strictly limited to the costs associated with the PTA application, rather than the underlying merits of the Part 8 Claim filed on 15 August 2024.
What was the final disposition and the specific monetary relief ordered by the Court?
The Court ordered the Defendant, Perfect Building Materials LLC, to pay the Claimant, SIG Middle East LLC, the full sum of AED 50,000. This amount covered both the legal fees (AED 47,852) and the additional expenses/disbursements (AED 2,148).
Accordingly, the Court orders that the Defendant shall pay the Claimant’s costs of the PTA Application in the sum of AED 50,000.
The order was issued by the Assistant Registrar on 8 September 2025, finalizing the cost recovery process for this specific procedural stage.
What are the practical implications for practitioners regarding cost submissions in the DIFC?
Practitioners must ensure that all cost applications are meticulously documented in accordance with RD 1/2023. The Court’s reliance on a detailed breakdown of hours and tasks indicates that generic or lump-sum cost claims are unlikely to succeed. Furthermore, the decision highlights that the Court will rigorously apply the test of proportionality, even for interlocutory applications like PTA requests. Litigants should anticipate that if they fail to agree on costs privately, the Court will perform a granular review of the Statement of Costs, and any lack of transparency in the fee arrangement or documentation will likely lead to a reduction in the recoverable amount.
Where can I read the full judgment in SIG Middle East v Perfect Building Materials [2025] DIFC CFI 057?
The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0572024-sig-middle-east-llc-v-perfect-building-materials-llc-4
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| SIG Middle East v Perfect Building Materials | [2025] DIFC CFI 057 | Primary matter |
Legislation referenced:
- Rules of the DIFC Courts (RDC)
- Registrar’s Direction 1 of 2023 – Indicative Hourly Charges (RD 1/2023)