What was the specific monetary dispute regarding the Claimant’s costs in Steven Ivankovich v KJM Marine LLC?
The dispute centered on the Claimant’s application for the recovery of legal costs following a successful anti-suit injunction against the First Defendant, KJM Marine LLC. The Claimant initially sought a total of USD 165,864.78 in costs, which included solicitor fees, Counsel fees, and UAE Counsel fees. The First Defendant contested the reasonableness of these figures, attempting to draw comparisons between the Claimant’s expenditure and its own significantly lower legal costs.
The core of the disagreement involved the categorization of billable hours, particularly the 97.7 hours dedicated to "Work on Documents." The Claimant argued that the complexity of the anti-suit injunction necessitated extensive document preparation, while the First Defendant maintained that the costs were disproportionate. As noted in the court records:
The Claimant’s revised costs schedule divides the Claimant’s total solicitor costs into the following categories, setting out the hours and costs incurred (by fee-earner) in relation to each category: (i) attendances on Claimant (5.1 hrs at USD 4,026.50); (ii) attendances on opponents (4.3 hrs at USD 3,159.50); (iii) attendances on others (46 hrs at USD 35,101.50); (iv) work on documents (97.7 hrs at USD 63,540); attendance at hearing (6 hrs at USD 4,540).
Ultimately, the Court assessed the costs at USD 144,684.78, reflecting a one-third reduction in the "Work on Documents" category, while upholding the remainder of the claim. Further details can be found at the DIFC Courts website.
Which judge presided over the immediate assessment of costs in CFI 068/2024?
H.E. Justice Sapna Jhangiani presided over the assessment of costs in the Court of First Instance. The hearing for the underlying application took place on 17 March 2025, with the subsequent order for the immediate assessment of costs issued on 8 May 2025.
What were the specific legal arguments advanced by the Claimant and the First Defendant regarding the assessment of costs?
The Claimant argued that the Court should exercise its discretion under RDC 38.30(1) to perform an immediate assessment rather than referring the matter to a detailed assessment process. The Claimant emphasized that the hearing lasted less than one day, triggering the general rule for immediate assessment. Regarding the indemnity basis of the costs, the Claimant asserted that the burden of proof rested squarely on the First Defendant to demonstrate that specific items were unreasonable.
As to the applicable principles for indemnity costs, the Claimant submits that under RDC 38.17 and 38.19, where costs are to be ordered on an indemnity basis, costs which were unreasonably incurred or unreasonable in amount will not be recoverable.
Conversely, the First Defendant sought to challenge the Claimant’s costs by comparing them to its own expenditure, arguing that the Claimant’s legal team had incurred excessive hours. The First Defendant highlighted that its own solicitor costs were significantly lower and questioned the derivation of the Claimant’s Counsel fees. The Claimant countered this by noting that the First Defendant’s workload was not comparable, as the First Defendant had produced minimal evidence and lacked the same level of local counsel engagement.
What was the precise doctrinal issue the Court had to resolve regarding the immediate assessment of costs under RDC 38.30?
The Court was tasked with determining whether the circumstances of the case justified an immediate assessment of costs or if the complexity and volume of the bill required a referral to a detailed assessment. The doctrinal challenge lay in balancing the procedural efficiency mandated by RDC 38.30(1)—which favors immediate assessment for hearings lasting less than one day—against the First Defendant’s contention that the costs were too complex to be assessed summarily. The Court had to decide if it possessed sufficient material to resolve the dispute without the need for the more protracted detailed assessment process.
How did H.E. Justice Sapna Jhangiani apply the test for indemnity costs when assessing the Claimant’s schedule?
Justice Jhangiani applied the principles of indemnity costs by shifting the focus away from proportionality and toward the reasonableness of the individual items incurred. Following the guidance in Al Khorafi v Bank Sarasin, the Court held that the burden of proof remained with the paying party to identify specific instances of unreasonable expenditure. The Court reviewed the revised schedule, which had been corrected by the Claimant to remove errors from an earlier submission.
The Claimant’s revised costs schedule of 7 April 2025 excludes costs which had been erroneously included in the costs schedule submitted on 14 March 2025, prior to the hearing of the Application.
While the Court accepted the majority of the Claimant’s hours, it exercised its discretion to reduce the "Work on Documents" category by one-third, finding that the time spent was not entirely justified on an indemnity basis. The Court concluded that the available material was sufficient to make a final determination, thereby avoiding the delay of a detailed assessment.
The Claimant submits that, pursuant to Rule 38.30(1) of the Rules of the DIFC Courts (“RDC”), the Court should immediately assess the costs of the Application (rather than order payment on account of detailed assessment).
Which specific DIFC statutes and RDC rules governed the Court’s decision on interest and costs?
The Court relied on several key provisions to finalize the costs order. Regarding the assessment procedure, the Court cited RDC 38.30(1), which establishes the general rule for immediate assessment following hearings of less than one day. The principles governing indemnity costs were drawn from RDC 38.17 and 38.19.
For the calculation of interest, the Court applied Article 9(C) of DIFC Law No. 2 of 2025, which governs judgment interest on debts. Additionally, the Court referenced RDC 36.31 to confirm that interest runs from the date of the original costs order (26 March 2025). The rate of 9% per annum was applied in accordance with Practice Direction 4 of 2017.
How did the Court utilize the precedent of Al Khorafi v Bank Sarasin in this assessment?
The Court utilized Al Khorafi v Bank Sarasin to reinforce the evidentiary burden placed upon the First Defendant. By citing this authority, Justice Jhangiani affirmed that when costs are awarded on an indemnity basis, the paying party cannot simply assert that the total amount is high; they must specifically prove that individual items were unreasonably incurred or unreasonable in amount. This precedent served as the primary mechanism for the Court to reject the First Defendant’s attempt to compare its own lower costs to the Claimant’s, as the First Defendant failed to meet the burden of proving that the Claimant’s specific billable hours were excessive.
What was the final disposition and the specific relief granted to the Claimant?
The Court ordered the First Defendant to pay the Claimant’s costs in the total sum of USD 144,684.78. This amount was to be paid within 14 days of the order. Furthermore, the Court mandated that judgment interest at a rate of 9% per annum would accrue on this sum, calculated from 26 March 2025 until the date of actual payment.
For the reasons set out above, the Claimant’s costs of the Application are immediately assessed in the amount of USD 144,684.78.
What are the wider implications of this ruling for DIFC practitioners regarding costs assessments?
This ruling reinforces the DIFC Court’s strong preference for procedural efficiency. Practitioners should anticipate that the Court will favor immediate assessment of costs whenever the hearing duration allows, even in cases involving significant sums or complex legal issues. The decision highlights that the Court will not be deterred by the volume of a costs schedule if the material provided is sufficient to allow for a reasoned assessment. Furthermore, the case serves as a reminder that when indemnity costs are awarded, the burden of proof is strictly on the paying party to challenge specific line items, rather than relying on broad arguments regarding proportionality or comparisons with their own legal spend.
Where can I read the full judgment in Steven Ivankovich v KJM Marine [2025] DIFC CFI 068?
The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0682024-steven-ivankovich-v-1-kjm-marine-llc-2-mohammad-saleh-moosa-hassan-aj-jasmi-3-kji-marina-boats-manufacturing-llc-and or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-068-2024_20250508.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Al Khorafi v Bank Sarasin | [2012] DIFC CA 003 | Burden of proof on the paying party to show items are unreasonable. |
Legislation referenced:
- DIFC Law No. 2 of 2025, Article 9(C)
- RDC 36.31
- RDC 38.17
- RDC 38.19
- RDC 38.30(1)
- Practice Direction 4 of 2017 (Interest on Judgments)