Following the dismissal of the Defendants' jurisdictional challenge in CFI 066/2020, the DIFC Court of First Instance has ordered the Respondents to pay USD 48,669.48 into the Court’s escrow account as a payment on account of costs.
What was the nature of the dispute between Credit Suisse and the Goel family that led to the order for payment of USD 48,669.48?
The underlying litigation in CFI 066/2020 involves a claim brought by Credit Suisse (Switzerland) Limited against four individual defendants: Ashok Kumar Goel, Sudhir Goyel, Manan Goel, and Prerit Goel. The dispute reached a procedural flashpoint when the Defendants filed Application No. CFI-066-2020/4 on 27 September 2020, seeking a formal declaration that the DIFC Courts lacked the requisite jurisdiction to hear the substantive claim. This jurisdictional challenge was subsequently heard and dismissed by Justice Wayne Martin on 1 October 2020.
Following the dismissal of their application, the Defendants were ordered to pay the Claimant’s costs associated with that specific challenge. The Claimant subsequently filed a Bill of Costs and moved the Court for a payment on account, pursuant to the DIFC Courts’ costs regime. The Registrar’s order of 2 February 2021 quantified this interim payment at USD 48,669.48. As noted in the order:
This amount represents 50% of the total amount claimed by the Claimant in the Bill of Costs.
This figure serves as an interim security measure while the final assessment of the total costs remains pending, ensuring that the Claimant is not unduly prejudiced by the delay inherent in the formal assessment process.
Which judicial officer presided over the costs application in CFI 066/2020 and when was the order issued?
The order for payment on account was issued by Registrar Nour Hineidi. The proceedings took place within the DIFC Court of First Instance. The formal order was issued on 2 February 2021 at 9:00 am, following the procedural history established by the earlier dismissal of the Defendants' jurisdiction application by Justice Wayne Martin on 1 October 2020.
What were the respective positions of Credit Suisse and the Goel defendants regarding the costs of the jurisdiction application?
The Claimant, Credit Suisse (Switzerland) Limited, sought to recover the costs incurred in successfully defending the jurisdiction application filed by the Defendants. Following Justice Wayne Martin’s order of 1 October 2020, which awarded the Claimant its costs of the jurisdiction application to be assessed on the standard basis, the Claimant initiated the assessment process by filing a Notice of Commencement of Assessment of Bill of Costs on 27 December 2020.
The Claimant’s position was that a significant portion of these costs should be paid on account to mitigate the financial burden of the litigation. Conversely, the Defendants, having failed in their attempt to oust the jurisdiction of the DIFC Courts, were subject to the Court’s discretion under Practice Direction No. 5 of 2014. The Registrar, in exercising this discretion, determined that an interim payment was appropriate, effectively compelling the Defendants to satisfy 50% of the claimed costs before the final bill is fully adjudicated.
What was the specific procedural question the Registrar had to determine regarding the payment on account of costs?
The central question before Registrar Nour Hineidi was whether, under the DIFC Courts’ costs regime, the Court should exercise its discretion to order an interim payment of costs before the final assessment of the Bill of Costs had been completed. Specifically, the Registrar had to determine the appropriate quantum of such an interim payment, balancing the Claimant’s entitlement to recover costs following a successful procedural victory against the principle that the final amount remains subject to assessment on the standard basis.
How did Registrar Nour Hineidi apply the test for ordering a payment on account of costs?
Registrar Nour Hineidi’s reasoning was grounded in the procedural framework established by Practice Direction No. 5 of 2014. Having reviewed the Claimant’s Request dated 3 November 2020 and the subsequent filings, the Registrar determined that the Claimant had met the threshold for an interim award. The Registrar’s decision-making process involved evaluating the total amount claimed in the Bill of Costs and applying a standard percentage—in this instance, 50%—to arrive at a figure that is both reasonable and protective of the Claimant’s interests. As stipulated in the order:
The Defendants are ordered to pay a total USD 48,669.48 (the “Amount Payable”) into Court by 15 February 2021.
This reasoning ensures that the Court maintains control over the funds while the final assessment process proceeds, preventing the Defendants from delaying the financial consequences of their unsuccessful jurisdictional challenge.
Which specific DIFC statutes and practice directions governed the Registrar’s decision in CFI 066/2020?
The Registrar’s decision was primarily governed by Practice Direction No. 5 of 2014, which outlines the DIFC Courts’ Costs Regime. This Practice Direction provides the procedural mechanism for the assessment of costs and the Court’s authority to order payments on account. Additionally, the order was informed by the Rules of the DIFC Courts (RDC), which provide the overarching framework for the Court’s case management powers, including the ability to issue directions for the payment of funds into the Court’s escrow account.
How did the Registrar utilize the procedural history of the case to justify the order?
The Registrar relied heavily on the prior determination made by Justice Wayne Martin on 1 October 2020. By establishing that the Defendants’ jurisdiction application was unsuccessful and that the Claimant was entitled to costs, the Court created a clear legal basis for the subsequent costs application. The Registrar used the Claimant’s filing of the Notice of Commencement of Assessment of Bill of Costs on 27 December 2020 as the trigger for the current order, ensuring that the interim payment was aligned with the ongoing assessment process rather than being an arbitrary figure.
What was the final disposition of the costs application and what specific obligations were imposed on the Defendants?
The Registrar granted the Claimant’s request in full. The Defendants were ordered to pay the sum of USD 48,669.48 into the Court’s escrow account. The order imposed a strict deadline for compliance, requiring the payment to be made by 15 February 2021. Furthermore, the Defendants were given a specific procedural instruction to facilitate this transfer:
The Defendants must contact the Court before 7 February 2021 to obtain details for the Courts’ Escrow Account for transfer of the Amount Payable.
Failure to comply with these directions would likely result in further enforcement measures by the Court.
What are the wider implications for practitioners regarding payments on account in the DIFC?
This order reinforces the proactive stance of the DIFC Courts in managing costs. Practitioners should anticipate that where a party has been awarded costs following a successful interlocutory application, the Court will be amenable to ordering a payment on account, typically calculated at 50% of the claimed amount. This serves as a strong deterrent against meritless jurisdictional challenges, as the losing party faces immediate financial liability even before the final bill of costs is assessed. Litigants must be prepared to facilitate payments into the Court’s escrow account within short timeframes, as the Registrar’s order demonstrates a clear expectation of compliance.
Where can I read the full judgment in Credit Suisse (Switzerland) Limited v (1) Ashok Kumar Goel (2) Sudhir Goyel (3) Manan Goel (4) Prerit Goel [2021] DIFC CFI 066?
The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-066-2020-credit-suisse-switzerland-limited-v-1-ashok-kumar-goel-2-sudhir-goyel-3-manan-goel-4-prerit-goel-7
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- Practice Direction No. 5 of 2014 (DIFC Courts’ Costs Regime)
- Rules of the DIFC Courts (RDC)