This order formalizes the final assessment of legal costs following the underlying litigation in CFI 070/2020, establishing the quantum payable by the Claimant to the Defendants and providing a structured mechanism for payment.
What was the specific dispute between Rim Khiat and Al Khair Capital that necessitated the assessment of AED 60,000 in costs?
The litigation, registered as CFI 070/2020, involved a claim brought by Rim Khiat against three named defendants: Al Khair Capital Dubai, Al Khair Capital Saudi Arabia, and Khalid Al Mulhim. While the substantive merits of the underlying dispute were addressed in prior proceedings, this specific order focused on the quantification of the Defendants' legal costs. The Registrar was tasked with reviewing the Statement of Costs submitted by the Defendants on 1 August 2021, which served as the basis for the subsequent assessment.
The dispute over costs arose following the conclusion of the substantive matter, where the Court determined that the Claimant was liable for the Defendants' legal expenses. The process involved a detailed review of the Defendants' Statement of Costs, the Claimant’s objections submitted via email on 18 March 2022, and the Defendants' subsequent response on 21 March 2022. The Registrar ultimately determined that the appropriate sum to be reimbursed by the Claimant to the Defendants was AED 60,000.
How did Registrar Nour Hineidi exercise her authority in the DIFC Court of First Instance to finalize the costs order on 1 April 2022?
Registrar Nour Hineidi presided over this matter within the DIFC Court of First Instance. Her authority to issue this order was derived from the prior Order with Reasons dated 2 March 2022, which established the liability for costs. The Registrar’s role in this instance was to act as the taxing officer, reviewing the competing submissions from the parties to arrive at a fair and reasonable assessment of the costs incurred by the Defendants. The order was issued on 1 April 2022, following a comprehensive review of the Court’s file and the specific email correspondence exchanged between the parties and the Registry in March 2022.
What arguments did Rim Khiat and the Al Khair Capital entities advance regarding the reasonableness of the legal costs?
The Claimant, Rim Khiat, contested the quantum of costs claimed by the Defendants, submitting her objections to the Registry on 18 March 2022. These objections typically challenge the proportionality and reasonableness of the legal fees incurred by the Defendants during the course of the litigation. Conversely, the Defendants, represented by their legal team, defended their Statement of Costs, providing a response to the Claimant’s objections on 21 March 2022.
The Registrar’s role was to balance these competing positions. By reviewing the Statement of Costs dated 1 August 2021 alongside the parties' subsequent email submissions, the Registrar sought to ensure that the final amount of AED 60,000 reflected the actual, necessary, and reasonable costs incurred by the Defendants in defending the action brought by Ms. Khiat. The process highlights the Court's commitment to ensuring that cost assessments are not merely rubber-stamped but are subject to a rigorous review of the parties' specific contentions.
What was the precise procedural question the Registrar had to answer regarding the Claimant’s ability to satisfy the costs order?
The primary procedural question before the Registrar was how to balance the Defendants' right to recover their assessed costs with the potential financial constraints of the Claimant. Having determined the quantum at AED 60,000, the Registrar had to decide whether to mandate a lump-sum payment or to provide a structured alternative.
The Registrar addressed this by balancing the immediate enforcement of the judgment debt with the principles of procedural fairness. The Court had to determine if the Claimant could demonstrate an inability to pay the full amount within the standard 14-day window. Consequently, the legal question became: what evidentiary threshold must a party meet to justify a departure from a standard lump-sum costs order, and what parameters should govern an installment plan if such an inability is proven?
How did Registrar Nour Hineidi apply the principles of cost assessment to reach the final figure of AED 60,000?
The Registrar’s reasoning involved a systematic review of the documentation provided by both sides. By evaluating the Statement of Costs against the objections raised by the Claimant, the Registrar performed a summary assessment. This process is designed to avoid the disproportionate expense of a full detailed assessment while ensuring the final figure remains grounded in the reality of the legal work performed.
The Registrar’s approach was structured to provide finality while maintaining flexibility. The order explicitly states: "In the event the Claimant is unable to pay the Amount in one lump sum, the Claimant is to email the Registry by 4pm on Friday, 8 April 2022 with: (a) an affidavit setting out why she is unable to pay the Amount by the due date; and (b) a proposal on a payment plan for payment of the Amount in instalments within 12 months from the date of this order." This reasoning ensures that the Court’s order is enforceable while acknowledging the Claimant's potential financial circumstances.
Which specific DIFC Rules of Court and procedural standards govern the assessment of costs in CFI 070/2020?
The assessment of costs in the DIFC Courts is governed by Part 38 of the Rules of the DIFC Courts (RDC), which deals with the general rules about costs. Specifically, the Registrar’s power to assess costs is derived from the court’s inherent jurisdiction to manage litigation and the specific provisions regarding the assessment of costs after a judgment has been handed down.
While the order does not cite specific RDC rule numbers in the text, the procedure followed—reviewing a Statement of Costs, inviting objections, and issuing an order for payment—is the standard practice under RDC Part 38. The Registrar’s authority to demand an affidavit regarding financial status is also consistent with the Court’s broad case management powers under RDC Part 4, which allows the Court to make orders to ensure the efficient and fair resolution of disputes, including the enforcement of cost orders.
How does the Registrar’s order in this case reflect the DIFC Court’s approach to the proportionality of legal costs?
The Registrar’s assessment reflects the DIFC Court’s focus on proportionality, a core principle in the RDC. By assessing the costs at AED 60,000, the Court implicitly determined that this amount was a reasonable reflection of the work done by the Defendants in the context of the litigation. The Court’s willingness to entertain an installment plan suggests that while the Court is firm on the obligation to pay, it is also pragmatic regarding the enforcement of such orders.
This approach ensures that the prevailing party is compensated for their legal expenses without the costs becoming an instrument of oppression. The Registrar’s requirement for an affidavit to justify an installment plan serves as a safeguard, ensuring that the privilege of paying in installments is reserved for those who can genuinely demonstrate financial hardship, thereby maintaining the integrity of the Court’s cost orders.
What are the specific terms of the order regarding the payment of the AED 60,000 and the consequences of non-compliance?
The order is highly prescriptive regarding the timeline and method of payment. The Claimant is required to pay the AED 60,000 within 14 days of the order, specifically by 4pm on Friday, 15 April 2022. The Defendants were also ordered to provide their account details to the Claimant and the Registry by 4pm on Monday, 4 April 2022, to facilitate this payment.
If the Claimant cannot meet the lump-sum requirement, she must provide an affidavit and a proposed payment plan by 8 April 2022. This plan must account for the full amount to be paid within 12 months, including any statutory interest that may accrue. Failure to comply with these directions would likely expose the Claimant to further enforcement proceedings, potentially including applications for execution or other sanctions available under the RDC for non-compliance with a court order.
What does this order signify for future litigants regarding the assessment of costs in the DIFC?
This case serves as a practical reminder that the DIFC Court maintains a rigorous process for the assessment of costs. Litigants should anticipate that any Statement of Costs submitted will be subject to scrutiny if challenged, and that the Court expects parties to engage in a transparent exchange of information regarding these costs.
Furthermore, the order demonstrates that the Court is willing to accommodate parties who face genuine financial difficulties in satisfying a costs order, provided they follow the correct procedural steps—namely, the submission of a formal affidavit and a structured, time-bound payment proposal. Practitioners should advise clients that a failure to provide evidence of financial inability will likely result in the Court enforcing the full amount as a lump sum, potentially leading to immediate enforcement action.
Where can I read the full judgment in Rim Khiat v Al Khair Capital Dubai [2022] DIFC CFI 070?
The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-070-2020-rim-khiat-v-1-al-khair-capital-dubai-2-al-khair-capital-saudi-arabia-3-khalid-al-mulhim-3
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 (Costs)
- Rules of the DIFC Courts (RDC), Part 4 (Case Management)