This order marks the culmination of a protracted enforcement effort by IDBI Bank Limited against the Delma group of companies, resulting in a significant monetary judgment following the Third Defendant’s persistent failure to comply with court-mandated disclosure obligations.
What was the nature of the debt claim brought by IDBI Bank Limited against Delma Engineering Projects Company in CFI 070/2018?
The lawsuit concerns a substantial claim in debt initiated by IDBI Bank Limited against a series of corporate and individual defendants, including the Third Defendant, Delma Engineering Projects Company LLC. The dispute centers on the recovery of outstanding financial obligations owed to the Claimant. The litigation reached a critical juncture when the Third Defendant failed to adhere to the Court’s previous directives regarding the filing and service of affidavits, which were essential for the progression of the case.
The stakes involved a multi-million dollar recovery effort. Following the Third Defendant’s failure to comply with the 7 July Order and their subsequent absence from the hearing on 24 August 2022, the Court exercised its power to strike out the defence. Consequently, the Court entered judgment for the Claimant, noting:
Judgment is hereby entered for the Claimant against the Third Defendant in the sum of: USD 5,633,240.37 in respect of the Claimant’s claim in debt under paragraph A of the Prayer to the Particulars of Claim; and a.
The total judgment sum awarded against the Third Defendant amounted to USD 9,372,270.49, inclusive of contractual interest.
Which judge presided over the 25 August 2022 hearing in the DIFC Court of First Instance regarding the IDBI Bank Limited matter?
The matter was heard before Justice Lord Angus Glennie in the DIFC Court of First Instance. The order was issued on 25 August 2022, following a hearing held on 24 August 2022, during which the Court reviewed the procedural history of the case, specifically the Third Defendant's non-compliance with the 7 July Order and their failure to appear at the scheduled hearing.
What arguments did Mr. Shivji QC advance on behalf of IDBI Bank Limited regarding the Third Defendant’s non-compliance?
Mr. Shivji QC, representing the Claimant, IDBI Bank Limited, appeared at the hearing on 24 August 2022 to address the Court on the Third Defendant’s failure to comply with the 7 July Order. The Claimant’s position was that the Third Defendant had been given ample opportunity to rectify their procedural defaults, including the filing of necessary affidavits as required by the Court’s earlier order of 28 October 2021.
Despite the judicial guardian of the Third Defendant, Mr. Hussein Al Hashemi, indicating an intention to seek an extension of time, no such formal application was ever filed. Mr. Shivji QC argued that the continued disregard for the Court’s directions necessitated the striking out of the defence and the entry of judgment. The Third Defendant’s failure to appear at the hearing further underscored their lack of engagement with the proceedings, leaving the Court with little alternative but to grant the relief sought by the Claimant.
What was the precise procedural question the Court had to resolve regarding the Unless Order Application?
The Court was tasked with determining whether the Third Defendant’s failure to comply with the 7 July Order—which followed an earlier "Unless Order Application" filed by the Claimant on 23 December 2021—warranted the ultimate sanction of striking out the defence. The doctrinal issue centered on the Court’s case management powers to enforce compliance with its own orders. Specifically, the Court had to decide if the conditions precedent for the automatic entry of judgment had been met, given that the Third Defendant had failed to file and serve the required affidavits and had subsequently failed to attend the hearing.
How did Justice Lord Angus Glennie apply the test for striking out a defence due to non-compliance?
Justice Lord Angus Glennie’s reasoning was predicated on the Third Defendant’s clear and documented failure to adhere to the Court’s directives. The Court reviewed the file and noted that the Third Defendant had failed to comply with paragraphs 1, 2, 3, and 4 of the 7 July Order. Furthermore, the Court acknowledged the communication from the Third Defendant’s judicial guardian, Mr. Al Hashemi, who had explicitly stated he did not intend to attend the hearing.
The Court’s decision to strike out the defence was a direct consequence of this persistent non-compliance. By failing to provide the required documentation and failing to appear, the Third Defendant effectively abandoned their defence. The Court’s reasoning focused on the necessity of maintaining the integrity of the Court’s orders and the Rules of the DIFC Courts (RDC). As noted in the order:
Interest shall accrue on the Judgment Sum at the rate of 9% per annum from the date of this Order in accordance with paragraph 3 of Practice Direction No. 4 of 17. 5.
Which specific Rules of the DIFC Courts (RDC) and Practice Directions were applied in this judgment?
The Court relied upon its inherent case management powers and the Rules of the DIFC Courts (RDC) to issue the order. Specifically, the Court invoked RDC 40.1 regarding the assessment of costs. Additionally, the Court applied Practice Direction No. 4 of 2017 to determine the applicable interest rate on the judgment sum. The order was also framed by the requirements of the 7 July Order and the 28 October 2021 Order, which established the procedural obligations the Third Defendant failed to meet.
How did the Court address the assessment of costs under RDC 40.1?
The Court ordered that the Third Defendant pay the Claimant’s costs on an indemnity basis, reflecting the procedural history of the claim. Regarding the assessment of these costs, the Court provided clear instructions:
The Claimant shall have permission to apply for such assessment immediately pursuant to RDC 40.1.
This ensures that the Claimant can recover the costs incurred due to the Third Defendant’s non-compliance without further unnecessary delay, should the parties fail to reach an agreement on the quantum of those costs.
What was the final disposition and the specific monetary relief granted to IDBI Bank Limited?
The Court ordered that the defence of the Third Defendant be struck out and entered judgment for the Claimant. The total judgment sum was calculated based on the principal debt and contractual interest accrued up to 24 August 2022. The Court also addressed the remaining claims against the Third Defendant:
The remainder of the Claimant’s claims against the Third Defendant are adjourned with liberty to restore. 6.
Additionally, the Court ordered the Third Defendant to pay the Claimant’s costs of the Unless Order Application, assessed at AED 114,615.86, and further costs of the claim on an indemnity basis from 1 August 2020.
What are the wider implications of this ruling for DIFC practitioners regarding "Unless Orders"?
This case serves as a stark reminder of the consequences of failing to comply with "Unless Orders" in the DIFC. Practitioners must anticipate that the Court will strictly enforce its deadlines, particularly when a party has been given multiple opportunities to rectify procedural defaults. The decision highlights that the Court will not hesitate to strike out a defence and enter judgment where a party demonstrates a pattern of non-compliance and fails to engage with the hearing process. Litigants should be aware that the Court’s patience is finite, and failure to adhere to specific disclosure or filing orders will likely result in the loss of the right to defend the claim.
Where can I read the full judgment in IDBI Bank Limited v Mabani Delma General Contracting Co LLC [2022] DIFC CFI 070?
The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-070-2018-idbi-bank-limited-v-1-mabani-delma-general-contracting-co-llc-2-not-used-3-delma-engineering-projects-company-llc-4
CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-070-2018_20220825.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- Rules of the DIFC Courts (RDC) 40.1
- Practice Direction No. 4 of 2017