This order clarifies the DIFC Court’s rigorous approach to cost recovery following unsuccessful applications to set aside default judgments, emphasizing that legal fees must be strictly proportionate to the complexity of the procedural steps involved.
What was the specific monetary dispute regarding legal costs in Edouard Mandelkern v Sami Bennani?
The dispute centered on the Claimant’s application for the recovery of legal costs incurred while successfully defending against the Defendant’s attempt to set aside a previously issued default judgment. Following the Court’s rejection of the Defendant’s application to vacate the judgment, the Claimant submitted a Statement of Costs seeking reimbursement for professional fees totaling AED 40,000.
The Court was tasked with determining whether this sum was reasonable and proportionate under the Rules of the DIFC Courts (RDC). The Claimant’s request was met with scrutiny regarding the alignment of the billed hourly rates with market expectations and the overall volume of work performed relative to the procedural history of the case. As noted in the Court's reasoning:
In the Statement of Costs dated 15 September 2025, the Claimant claims a total of AED 40,000, comprising professional fees.
Which judge presided over the costs assessment in CFI 067/2024 and when was the order issued?
The matter was heard by H.E. Justice Nassir Al Nasser, sitting in the DIFC Court of First Instance. The order regarding the assessment of costs was formally issued on 25 September 2025, following the Court’s earlier determination on 11 September 2025, which had dismissed the Defendant’s application to set aside the default judgment.
What were the parties' respective positions regarding the reasonableness of the AED 40,000 costs claim?
The Claimant, Edouard Mandelkern, sought full recovery of the AED 40,000 in professional fees, arguing that these costs were necessary to address the Defendant’s challenge to the default judgment. The Claimant’s position relied on the premise that the legal work performed was essential to uphold the integrity of the Court’s prior ruling.
Conversely, the Defendant, Sami Bennani, faced the Court’s assessment of whether the costs were proportionate. While the specific arguments of the Defendant’s counsel are not detailed in the final order, the Court’s reasoning indicates that the Defendant’s unsuccessful attempt to set aside the default judgment was the catalyst for the costs application. The Court ultimately sided with the view that the Claimant’s requested amount failed to reflect the actual complexity of the procedural steps taken, as evidenced by the Court's finding that the Defendant had failed to demonstrate a real prospect of successfully defending the claim.
What was the precise legal question H.E. Justice Nassir Al Nasser had to answer regarding the assessment of costs?
The Court was required to determine the appropriate quantum of costs to be awarded to the Claimant under the standard basis of assessment. The core legal issue was whether the claimed AED 40,000 met the threshold of "reasonableness" and "proportionality" required by the RDC. Specifically, the Court had to decide if the hourly rates charged by the Claimant’s legal representatives were consistent with market expectations and if the time spent on the application to set aside the default judgment was commensurate with the complexity of the matter.
How did H.E. Justice Nassir Al Nasser apply the test of proportionality to the Claimant’s costs?
Justice Al Nasser exercised his judicial discretion to scrutinize the Statement of Costs, concluding that the requested amount was excessive. The judge applied a test of proportionality, weighing the professional fees against the actual volume and complexity of the work performed. The Court found that the Claimant’s submission did not satisfy the requirements for a full recovery of the claimed amount.
The judge’s reasoning was explicit regarding the failure of the Claimant to justify the high costs:
I am not satisfied that the hourly rates fall within the reasonable range of market expectations. In addition, the time claimed does not appear proportionate to complexity, and volume of the steps undertaken.
Consequently, the Court determined that a significant reduction was necessary to ensure the award remained fair and consistent with the principles of judicial economy.
Which specific RDC rules and practice directions were applied by the Court in this assessment?
The Court relied upon Part 38 of the Rules of the DIFC Courts (RDC), which governs the assessment of costs. Specifically, the Court exercised its discretion under RDC 38.8 and RDC 38.23 to determine the appropriate amount to be awarded on the standard basis. Furthermore, the Court applied Practice Direction No. 4 of 2017 regarding the accrual of interest on judgments, ensuring that the costs award included a mechanism for interest should the Defendant fail to make payment within the stipulated 14-day period.
How did the Court utilize its discretion under RDC 38.8 and 38.23 to reach its final decision?
The Court utilized RDC 38.8 and 38.23 as the primary legal vehicles to adjust the Claimant’s request. These rules grant the Court the power to assess costs on a standard basis, where the Court will only allow costs which are proportionate to the matters in issue. By invoking these rules, Justice Al Nasser was able to depart from the Claimant’s requested figure of AED 40,000 and impose a reduction that he deemed reflective of the actual work performed.
As the Court stated in its reasoning:
Therefore, in the exercise of my discretion under RDC 38.8 and 38.23, and applying the standard basis of assessment, I consider that a reduction is appropriate.
What was the final disposition and the specific monetary relief ordered by the Court?
The Court ordered the Defendant to pay the Claimant the sum of AED 20,000, which represented exactly 50% of the original amount claimed. This payment was ordered to be made within 14 days of the date of the order. Additionally, the Court mandated that if the Defendant failed to satisfy the payment within this timeframe, interest would accrue at a rate of 9% per annum until the full amount is paid.
The final order was clear:
The Defendant shall pay the Claimant the amount of AED 20,000 (the “Costs Award”), representing around 50% of the Claimed Amount in the Statement of Costs.
What are the wider implications of this ruling for practitioners appearing before the DIFC Courts?
This case serves as a stern reminder to practitioners that the DIFC Courts will not rubber-stamp Statements of Costs, even when a party has been successful in a procedural application. Litigants must ensure that their hourly rates are defensible within the context of the DIFC market and that the time recorded for specific tasks is strictly proportionate to the complexity of the work. Practitioners should anticipate that the Court will proactively exercise its discretion under RDC 38 to reduce claims that appear inflated or disproportionate, thereby reinforcing the principle that legal costs must remain reasonable and aligned with the actual effort required to resolve the dispute.
Where can I read the full judgment in Edouard Mandelkern v Sami Bennani [2025] DIFC CFI 067?
The full judgment can be accessed via the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0672024-edouard-mandelkern-v-sami-bennani
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No external case law cited in the order. |
Legislation referenced:
- Rules of the DIFC Courts (RDC): Part 38, RDC 38.8, RDC 38.23, RDC 38.40
- Practice Direction No. 4 of 2017 (Interest on Judgments)