The DIFC Court of First Instance clarifies the threshold for material non-disclosure in ex parte applications, dismissing attempts to challenge alternative service orders that have become moot.
Why did the Defendants in CFI 065/2020 argue that the Claimants committed material non-disclosure regarding the Alternative Service Order?
The Defendants, a group of entities led by Advanced Facilities Management, sought to set aside an ex parte order for alternative service granted on 18 November 2020. Their primary contention was that the Claimants, a consortium of eight banks including Emirates NBD Bank, had failed to inform the Court of critical developments before the order was issued. Specifically, the Defendants pointed to an email received from their legal representatives, Al Mahrous Advocates, shortly before the Court issued the order, as well as the alleged departure of specific individuals designated for notice under the relevant Commercial Terms Agreement (CTA).
The Defendants argued that these omissions constituted a breach of the duty of full and frank disclosure required in ex parte applications. However, Justice Sir Jeremy Cooke found these arguments to be without merit, noting that the timing of the email and the nature of the notice requirements did not impact the validity of the initial application. As the Court observed:
It cannot be said that there was, in any real sense, any material non-disclosure, even if the email came to the attention of the relevant personnel prior to notification of the issue of the Ex Parte order.
The Court further dismissed the argument regarding the departure of the named individuals, noting that the underlying purpose of the service requirements had been met regardless of the personnel changes.
Which judge presided over the application to set aside the Alternative Service Order in CFI 065/2020?
Justice Sir Jeremy Cooke presided over this matter in the DIFC Court of First Instance. The order, which addressed the Defendants' application notice dated 11 February 2021, was issued on 17 March 2021.
What were the specific legal positions of the Claimants and Defendants regarding the utility of the Alternative Service Order?
The Claimants, represented by a consortium of banks, maintained that the ex parte application for alternative service was a necessary procedural step necessitated by the Defendants' prior refusal to accept service through their appointed DIFC-based lawyers. Once the Defendants agreed to accept service in Abu Dhabi, the Claimants viewed the Alternative Service Order as effectively superseded and were prepared to have it set aside by consent.
Conversely, the Defendants pursued a formal application to set aside the order, alleging procedural failures and non-disclosure. The Defendants sought to frame the Claimants' conduct as a breach of duty, while the Claimants argued that the Defendants' application was tactical and contrived, serving no practical purpose since service had already been successfully effected in Abu Dhabi. The Claimants highlighted their willingness to resolve the matter via a consent order, a path the Defendants rejected in favor of a contested hearing.
What was the core doctrinal issue the Court had to address regarding the Defendants' application to set aside the order?
The Court was tasked with determining whether the Defendants’ application to set aside the Alternative Service Order was grounded in genuine procedural prejudice or if it was a tactical maneuver based on "contrived grounds." The central doctrinal question was whether a party can successfully challenge an ex parte order on the basis of material non-disclosure when the order in question has already been rendered moot by the subsequent conduct of the parties—specifically, the Defendants' agreement to accept service in an alternative jurisdiction. The Court had to weigh the strict requirements of disclosure against the practical reality that the order no longer served a functional purpose in the litigation.
How did Justice Sir Jeremy Cooke apply the test for material non-disclosure to the facts of this case?
Justice Sir Jeremy Cooke applied a pragmatic test, evaluating whether the alleged non-disclosures were "material" to the Court’s decision-making process at the time the ex parte order was granted. He concluded that the Defendants' complaints were essentially an attempt to re-litigate a procedural step that had been overtaken by events. The judge characterized the Defendants' arguments as "absurd," emphasizing that the application for service was necessitated by the Defendants' own previous conduct.
The Court’s reasoning focused on the lack of prejudice suffered by the Defendants. Because the Claimants had successfully served the proceedings in Abu Dhabi, the original alternative service order became redundant. The Court noted:
That is absurd in relation to a papers application made on 15 November 2020 which had been necessitated by the Defendants’ refusal to accept service through its appointed lawyers in the DIFC.
By focusing on the lack of prejudice and the "contrived" nature of the application, the Court effectively signaled that it would not tolerate the use of procedural challenges as a means to distract from the substantive merits of the banking dispute.
Which specific DIFC Rules of Court (RDC) were central to the Court's analysis of the service dispute?
The primary rule cited was RDC 23.93. This rule governs the requirements for serving an application notice, evidence in support, and the resulting order on the respondents. While the Court acknowledged that the Claimants had failed to provide these documents to the Defendants as strictly required by RDC 23.93, it found that this failure did not warrant setting aside the order on the grounds of non-disclosure, as the Defendants suffered no prejudice and the order had already been superseded by the agreement to accept service in Abu Dhabi.
How did the Court treat the arguments regarding the departure of individuals named in the CTA?
The Court rejected the argument that the Claimants were required to disclose the departure of specific individuals named in the Commercial Terms Agreement (CTA) for service purposes. The Court held that the identity of the specific individuals was secondary to the fact that the notices were sent to the correct corporate entities. As the Court reasoned:
Any failure to disclose that fact was not material to the application as the faxes were sent to the Defendants.
The Court emphasized that the procedural objective of the CTA was to ensure notice reached the Defendants, and the Claimants' actions were sufficient to satisfy this requirement, rendering the Defendants' focus on the specific personnel "nothing to the point."
What was the final disposition of the application and the Court's order regarding costs?
The Court ordered that the Alternative Service Order be set aside, as it no longer served a useful purpose. Regarding costs, the Court ordered that there be no general order as to costs, with two specific exceptions:
- The Defendants (excluding the Eighth Defendant) were ordered to pay the costs incurred by the Plaintiffs in respect of the 3rd Witness Statement of Jonathan Richard Brooks of 25 February 2021.
- The Claimants’ costs of the original ex parte application of 15 November 2020 were ordered to be "costs in the case."
The Court’s decision to award costs against the Defendants for the witness statement reflected the Court's disapproval of the "contrived grounds" upon which the Defendants based their application.
What are the wider implications of this ruling for practitioners dealing with service of process in the DIFC?
This ruling serves as a warning to litigants that the DIFC Court will not entertain applications to set aside orders that have become moot, particularly when such applications appear to be tactical or intended to delay proceedings. Practitioners should note that the Court prioritizes the substance of service over technical, non-prejudicial failures. The judgment reinforces that the duty of full and frank disclosure in ex parte applications is not a license for respondents to engage in "spurious" challenges based on minor procedural discrepancies that do not affect the outcome of the service. Litigants are encouraged to seek consent orders for moot issues rather than forcing the Court to adjudicate on matters that no longer impact the litigation's progress.
Where can I read the full judgment in Emirates NBD Bank v Advanced Facilities Management [2021] DIFC CFI 065?
The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-065-2020-1-emirates-nbd-bank-pjsc-2-al-khaliji-france-s-3-hsbc-bank-middle-east-limited-4-united-arab-bank-pjsc-5-united-ban-10 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-065-2020_20210317.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No external case law cited in the provided order. |
Legislation referenced:
- Rules of the DIFC Courts (RDC) 23.93