AES MIDDLE EAST INSURANCE BROKER v GSB CAPITAL [2025] DIFC CFI 060 — Costs assessment and interim payment orders (28 August 2025)

What were the primary causes of action and the specific financial stakes in the dispute between AES Middle East Insurance Broker and GSB Capital?

The litigation involved a high-stakes commercial dispute where the Claimants—AES Middle East Insurance Broker LLC, AES Financial Services (DIFC) Limited, and AES Financial Services Limited—sought damages against GSB Capital Ltd. The Claimants alleged that GSB orchestrated a coordinated poaching of key employees, which resulted in the transfer of clients and assets under management to the Defendant. The core of the complaint rested on allegations of breaches of confidence, unlawful conspiracy, and the inducement of breaches of legal rights under The Law of Obligations 2005.

The financial stakes were significant, with the Defendant’s total costs claim reaching nearly USD 1.7 million. The Claimants’ substantive claims were ultimately dismissed by the Court, which found that while some individual breaches of non-solicitation covenants occurred, the Claimants failed to prove that GSB had induced these breaches or misused confidential information. Following the dismissal, the Court turned its attention to the Defendant’s application for costs, which serves as the subject of this order.

Which judge presided over the costs assessment in AES Middle East Insurance Broker v GSB Capital and in which division was the order issued?

The order was issued by H.E. Justice Rene Le Miere, sitting in the DIFC Court of First Instance. The decision regarding the costs liability and the interim payment was delivered on 28 August 2025, following the Court’s substantive judgment issued on 9 July 2025.

What were the specific legal arguments advanced by GSB Capital and the AES entities regarding the basis and procedure for costs assessment?

The Defendant, GSB Capital, argued that the costs should be assessed on an indemnity basis, contending that the Claimants’ conduct throughout the proceedings was dishonest and abusive. Furthermore, GSB sought an immediate assessment of costs by the trial judge, arguing that the Court’s familiarity with the two-week trial made this the most efficient path. GSB requested an interim payment of 80% of their claimed costs, totaling USD 1,356,500.

Conversely, the Claimants argued that the standard basis for costs assessment was appropriate, asserting that their conduct did not meet the high threshold required for an indemnity award. Regarding the procedure, the Claimants relied on RDC 38.30(1), arguing that immediate assessment is reserved for hearings lasting one day or less. Given the length and complexity of the trial, they maintained that a detailed assessment by the Registrar was the only procedurally sound route.

What was the precise doctrinal issue the Court had to resolve regarding the application of RDC 38.30(1) to the Defendant’s request for immediate assessment?

The Court was tasked with determining whether the complexity and duration of the trial precluded the use of immediate assessment under the Rules of the DIFC Courts (RDC). Specifically, the Court had to decide if the trial judge’s familiarity with the case outweighed the procedural limitations set out in RDC 38.30(1), which generally restricts immediate assessment to shorter hearings. The doctrinal issue centered on whether the Court should exercise its discretion to bypass the standard detailed assessment process in favor of an immediate determination, despite the high value of the costs claim and the multi-day nature of the proceedings.

How did Justice Rene Le Miere apply the test for indemnity costs and the criteria for interim payments in this dispute?

Justice Le Miere rejected the Defendant’s request for indemnity costs, finding that the Claimants’ conduct did not reach the level of impropriety or unreasonableness required to depart from the standard basis. The Court emphasized that the Claimants’ pursuit of the claim, while unsuccessful, did not constitute an abuse of process that would justify the punitive nature of indemnity costs. Regarding the interim payment, the Court balanced the Defendant’s right to recover costs against the principle that an interim payment should not exceed what would likely be obtained upon a full assessment.

I consider the appropriate amount to order to be paid on account of the Defendant’s costs is USD 1,000,000, which is approximately 60% of the costs claimed by the Defendant.

The Court concluded that while the Defendant was entitled to a substantial interim payment, the full 80% requested was excessive given the potential for reduction during a detailed assessment.

Which specific DIFC statutes and RDC rules governed the Court’s decision on costs liability and assessment?

The Court’s decision was primarily governed by the Rules of the DIFC Courts (RDC). Specifically, RDC 38.7(1) was applied to confirm the general rule that the unsuccessful party must pay the costs of the successful party. RDC Part 40 provided the framework for the detailed assessment process, which the Court ordered to be conducted by the Registrar. Furthermore, the Court referenced RDC 38.30(1) to address the limitations on immediate assessment. The substantive claims were rooted in The Law of Obligations 2005, which provided the legal basis for the allegations of conspiracy and breach of confidence that were ultimately dismissed.

How did the Court utilize the cited precedents, such as Rafed Al Khorafi v Bank Sarasin and Limsa v Lordon, in determining the interim payment?

The Court utilized established DIFC jurisprudence to guide its discretion in ordering an interim payment. In Rafed Al Khorafi v Bank Sarasin [2009] DIFC CFI 26 and Hussain Saleh-Farid Al-Awlaqi v Tabarak Partners [2009] DIFC CFI 023, the Court established that interim payments should be limited to amounts not exceeding what would be obtained on a final assessment. Justice Le Miere applied this principle to ensure that the interim payment of USD 1,000,000 remained a conservative estimate of the final recoverable costs. Additionally, the Court referenced Limsa v Lordon [2020] DIFC ARB 008 to reinforce the Court’s discretionary power to determine a fair and proportionate interim award, ensuring that the order balanced the Defendant's immediate financial recovery with the procedural fairness owed to the Claimants during the upcoming detailed assessment.

What was the final disposition of the costs application and the specific monetary orders made by the Court?

The Court dismissed the Claimants' request for a standard basis assessment and instead ordered that the Claimants pay the Defendant’s costs, subject to detailed assessment. The Court explicitly rejected the application for indemnity costs.

The Claimants shall pay the Defendant the sum of USD 1,000,000 on account of costs, such payment to be made within 14 days of the date of this Order.

The Court further ordered that the costs be assessed by the Registrar pursuant to RDC Part 40, and that the interim payment of USD 1,000,000 be satisfied within 14 days of the order.

What are the practical implications of this ruling for litigants involved in complex commercial litigation in the DIFC?

This ruling reinforces the strict procedural boundaries of the DIFC Courts regarding costs. Practitioners should note that the Court remains highly resistant to immediate assessment for trials exceeding one day, regardless of the trial judge's familiarity with the case. Furthermore, the decision clarifies that the threshold for indemnity costs remains high; unsuccessful litigation, even when involving complex allegations of conspiracy or breach of confidence, will not automatically trigger indemnity costs unless the conduct is shown to be truly exceptional or improper. Litigants should anticipate that interim payments will typically be set at a conservative percentage of the total claim—often around 60%—to account for potential reductions during the detailed assessment process.

Where can I read the full judgment in AES Middle East Insurance Broker v GSB Capital [2025] DIFC CFI 060?

The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0602023-1-aes-middle-east-insurance-broker-llc-2-aes-financial-services-difc-limited-3-aes-financial-services-limited-v-gsb-1 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-060-2023_20250828.txt.

Cases referred to in this judgment:

Legislation referenced:

• The Law of Obligations 2005
• RDC Part 40 (Detailed Assessment)
• RDC 38.7(1) (General rule on costs)
• RDC 38.30(1) (Limitations on immediate assessment)
• RDC Part 25 (Interim remedies)