This consent order marks the definitive conclusion of the litigation between Rim Khiat and the Al Khair Capital entities, formalizing a settlement that resolves outstanding adverse costs and terminates pending appellate applications.
What was the underlying dispute in Rim Khiat v Al Khair Capital Dubai that led to the AED 60,000 costs assessment?
The litigation, registered as CFI 070/2020, involved a claim brought by Rim Khiat against Al Khair Capital Dubai, Al Khair Capital Saudi Arabia, and Khalid Al Mulhim. The proceedings were primarily defined by a successful strike-out application filed by the defendants, which resulted in the dismissal of the claimant’s case. Following the Registrar’s decision to strike out the proceedings, the court issued an order requiring the claimant to pay the defendants’ costs associated with that application.
The financial stakes were crystallized in an order dated 1 April 2022, which assessed those adverse costs at AED 60,000. This amount became the subject of subsequent procedural friction, as the claimant sought to stay the enforcement of these costs while simultaneously attempting to challenge the underlying dismissal of her claim. The dispute effectively transitioned from a substantive claim into a procedural battle over the finality of the strike-out order and the recovery of legal expenses incurred by the defendants.
Which judge presided over the final consent order in CFI 070/2020?
Registrar Nour Hineidi presided over the Court of First Instance for the issuance of this consent order on 27 July 2022. The order was issued at 1:00 PM, finalizing the procedural status of the case after the dismissal of the claimant’s previous application to set aside the judgment.
What were the specific procedural positions of Rim Khiat and Al Khair Capital regarding the pending applications and costs?
The claimant, Rim Khiat, had initiated Application CFI-070-2020/3, which sought two primary forms of relief: an extension of time to appeal the Registrar’s March 2022 judgment and an absolute stay of the adverse costs order. This followed an earlier, unsuccessful attempt by the claimant in Application CFI-070-2020/4 to have the original strike-out order set aside, which Registrar Hineidi had dismissed in its entirety on 7 July 2022.
Conversely, the respondents (Al Khair Capital Dubai, Al Khair Capital Saudi Arabia, and Khalid Al Mulhim) held a position of finality. Having secured a strike-out of the claim and a specific costs award of AED 60,000, the respondents were positioned to enforce these sums. The parties ultimately reached a negotiated settlement to avoid further litigation, agreeing that the claimant would withdraw her pending appeal application and that the respondents would waive their right to pursue further costs under the liberty to apply provision previously granted by the court.
What legal question did the court address regarding the enforceability of the Adverse Costs Orders?
The court was tasked with determining whether to formalize a settlement agreement that effectively nullified the enforceability of the previously assessed costs. The central doctrinal issue was the court’s power to grant an "absolute stay" on a costs order that had already been assessed and issued. By consenting to this order, the parties invited the court to exercise its case management powers to bring the litigation to a close, thereby preventing any further enforcement action regarding the AED 60,000 debt.
The court had to ensure that the withdrawal of Application CFI-070-2020/3 and the waiver of further costs claims under paragraph 5 of the March 2022 order were consistent with the RDC rules governing the finality of judgments. The legal question was not whether the costs were originally justified, but whether the court should sanction a mutual agreement to abandon those costs in exchange for the cessation of all appellate activity.
How did Registrar Nour Hineidi apply the court’s authority to finalize the settlement between the parties?
Registrar Hineidi exercised the court’s inherent jurisdiction to record the terms of the settlement as a binding consent order. By doing so, the court ensured that the litigation reached a state of repose, preventing the claimant from pursuing further appeals and preventing the defendants from seeking additional costs that might have been claimed under the "liberty to apply" provision. The reasoning focused on the parties' mutual agreement to waive their respective rights to continue the dispute.
The order explicitly addressed the status of the costs previously assessed. As stated in the order:
The costs order contained in paragraph 3 of the Order of the Registrar dated 2 March 2022 reissued on 22 March 2022 is hereby stayed absolutely.
This step effectively removed the financial burden from the claimant while simultaneously securing the defendants against any further procedural challenges from the claimant regarding the strike-out of the original claim.
Which specific DIFC Rules of Court and procedural authorities were relevant to the Registrar’s order?
The order was grounded in the procedural history of the case, specifically referencing the Registrar’s Order of 2 March 2022 (reissued 22 March 2022) which struck out the proceedings. The assessment of costs was governed by the court’s standard powers to award costs following a successful strike-out application. Furthermore, the order invoked the "liberty to apply" provision contained in paragraph 5 of the original March 2022 order, which had originally allowed parties to return to court to seek costs for matters outside the scope of the strike-out application. By issuing this consent order, the Registrar utilized the court's authority to close those avenues of litigation permanently.
How did the court treat the previous orders in the context of the final settlement?
The court treated the previous orders as the baseline for the settlement. The Registrar’s order of 7 July 2022, which dismissed the claimant’s attempt to set aside the judgment, served as the catalyst for the final settlement, as it narrowed the claimant’s options to either appealing or settling. The court used the current consent order to supersede the enforcement mechanisms of the earlier costs orders, specifically by staying the AED 60,000 award "absolutely." This ensured that the previous orders, while remaining part of the record, were rendered unenforceable by the parties' own agreement.
What was the final disposition and the specific relief granted in this consent order?
The court ordered that the costs order for AED 60,000 be stayed absolutely, meaning the defendants could no longer enforce the payment of these costs against the claimant. Additionally, the court ordered that Application CFI-070-2020/3 be withdrawn and dismissed, with no order as to costs regarding that specific application. Finally, the court confirmed that there would be no further orders as to costs under the liberty to apply provision, effectively barring any future claims for legal expenses arising from the case.
What are the practical implications for practitioners regarding the use of consent orders to resolve costs disputes?
This case illustrates the utility of consent orders in achieving finality after a strike-out. Practitioners should note that even after a costs order is assessed and issued, parties retain the autonomy to negotiate a stay of enforcement as part of a broader settlement to end appellate proceedings. The case demonstrates that "liberty to apply" clauses, while useful for managing unresolved costs, can be effectively waived through a consent order to prevent "costs on costs" litigation. Litigants must anticipate that once a consent order is issued in these terms, the court will consider the matter closed, and no further applications for costs or appeals will be entertained.
Where can I read the full judgment in Rim Khiat v Al Khair Capital Dubai [2022] DIFC CFI 070?
The full text of the consent order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0702020-rim-khiat-v-1-al-khair-capital-dubai-2-al-khair-capital-saudi-arabia-3-khalid-al-mulhim-1
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- Rules of the DIFC Courts (RDC)
- Judicial Authority Law (DIFC Law No. 12 of 2004)