This order clarifies the DIFC Court’s approach to cost recovery when a defendant unsuccessfully attempts to delay jurisdictional challenges, emphasizing the court's mandate to ensure proportionality in legal fees.
What was the specific dispute regarding the AED 24,800 cost claim in Agro Resource Tarim Gida IC VE DIS Ticaret A.S. v Promising International Trading CO. DMCC?
The dispute arose from the Claimant’s attempt to recover legal costs incurred while successfully opposing the Defendant’s application to extend the deadline for filing a contest of jurisdiction. Following the Court’s rejection of the Defendant’s request to push the filing deadline to 30 November 2025, the Claimant submitted a Statement of Costs totaling AED 24,800.
In the Statement of Costs dated 18 September 2025, the Claimant claims a total of AED 24,800, comprising professional fees.
The core of the dispute was not the validity of the legal work performed, but rather the quantum of the fees relative to the procedural simplicity of the application. The Court had to determine whether the full amount claimed was reasonable and proportionate to the specific task of opposing a time-extension application.
Which judge presided over the cost assessment in CFI 071/2025 and in which division was the order issued?
The matter was presided over by H.E. Justice Nassir Al Nasser, sitting in the DIFC Court of First Instance. The order was issued on 25 September 2025, following the Court’s earlier decision on 18 September 2025 to reject the Defendant’s application for an extension of time.
What were the respective positions of Agro Resource Tarim Gida IC VE DIS Ticaret A.S. and Promising International Trading CO. DMCC regarding the costs of the failed jurisdictional extension?
The Claimant sought full recovery of its professional fees, arguing that the costs were incurred as a direct result of the Defendant’s unsuccessful attempt to delay the proceedings. The Claimant’s position was anchored in the fact that the Defendant’s application, which sought to extend the time for filing a contest of jurisdiction to 30 November 2025, was deemed unreasonable by the Court.
Conversely, the Defendant’s position, while not detailed in the final order, necessitated the Court’s intervention to assess the proportionality of the Claimant’s Statement of Costs. The Court had to balance the Claimant’s right to be compensated for legal work against the principle that costs must be proportionate to the complexity of the procedural steps taken.
What was the precise legal question H.E. Justice Nassir Al Nasser had to answer regarding the Claimant’s Statement of Costs?
The Court was tasked with determining the appropriate quantum of costs to award under the standard basis of assessment, specifically whether the time spent by the Claimant’s legal representatives was proportionate to the complexity and volume of the work required to oppose the Defendant’s extension application.
This is an application made by the Claimant seeking costs pursuant to paragraph 3 of the Order dated 18 September 2025, which rejected the Defendant’s Application No. CFI-071-2025/1 seeking to extend the time of filing a contest of jurisdiction Application to 30 November 2025.
The legal question was not whether the Claimant was entitled to costs—that was established by the previous order—but rather how to exercise judicial discretion to ensure the final award met the threshold of reasonableness and judicial economy.
How did H.E. Justice Nassir Al Nasser apply the test of proportionality to the Claimant’s professional fees?
Justice Al Nasser conducted a two-part review of the Statement of Costs. First, he evaluated the hourly rates charged by the Claimant’s counsel and found them to be within the reasonable range of market expectations. Second, he scrutinized the time spent on the application, concluding that the effort expended was excessive relative to the nature of the procedural dispute.
I am satisfied that the hourly rates fall within the reasonable range of market expectations. However, the time claimed does not appear proportionate to complexity, and volume of the steps undertaken.
By identifying this discrepancy, the Court exercised its discretion to reduce the total claim. The judge concluded that a blanket award of the full amount would fail the test of proportionality, leading to the decision to award 80% of the claimed sum.
In the circumstances, I consider that an award of 80% of the Claimant’s claimed costs reflects a fair and proportionate outcome, consistent with the principles of reasonableness and judicial economy.
Which specific RDC rules and Practice Directions did the Court rely upon to assess the costs in CFI 071/2025?
The Court relied on Part 38 of the Rules of the DIFC Courts (RDC), specifically RDC 38.8 and 38.23, which grant the Court broad discretion in the assessment of costs. These rules allow the Court to determine the basis of assessment and the amount to be awarded to ensure fairness.
Furthermore, the Court invoked Practice Direction No. 4 of 2017 regarding interest on judgments. This provided the framework for the Court to impose a 9% per annum interest rate on the Costs Award in the event that the Defendant failed to make payment within the stipulated 14-day period.
How did the Court exercise its discretion under RDC 38.8 and 38.23 to modify the Claimant’s cost recovery?
The Court utilized its discretionary powers to move away from the full amount claimed, opting instead for a reduction that better reflected the standard basis of assessment. This approach is designed to prevent the over-litigation of procedural matters.
However, 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.
By applying this reduction, the Court signaled that even when a party is the successful applicant in a procedural motion, they are not entitled to recover costs for time that the Court deems excessive or disproportionate to the task at hand.
What was the final disposition and the specific monetary relief ordered by the Court?
The Court ordered the Defendant to pay the Claimant a total of AED 19,940. This figure represents exactly 80% of the original AED 24,800 claimed by the Claimant in its Statement of Costs.
The Defendant shall pay the Claimant the amount of AED 19,940 (the “Costs Award”), representing 80% of the Claimed Amount in the Statement of Costs.
The Court further mandated that this amount be paid within 14 days. Should the Defendant fail to comply, the Court ordered that interest shall accrue at a rate of 9% per annum from the date of the order until the date of full payment.
In the event the Defendant fails to pay the Costs Award within 14 days of this Order, interest shall accrue at the rate of 9% per annum from the date of this Order until full payment is made, in accordance with Practice Direction No. 4 of 2017.
What are the wider implications for DIFC practitioners regarding cost assessments for procedural applications?
This case serves as a reminder that the DIFC Courts will actively police the proportionality of costs, even in straightforward procedural applications. Practitioners should anticipate that the Court will scrutinize not just the hourly rates, but the total time spent on specific tasks.
Accordingly, I award the Claimant costs in that amount, payable within 14 days, with interest accruing thereafter in accordance with the DIFC Courts’ standard practice.
Litigants must ensure that their Statements of Costs are meticulously prepared and that the time recorded is strictly commensurate with the complexity of the motion. Over-preparing or over-billing for procedural disputes risks a significant reduction in recoverable costs, as the Court remains committed to the principles of judicial economy.
Where can I read the full judgment in Agro Resource Tarim Gida IC VE DIS Ticaret A.S. v Promising International Trading CO. DMCC [2025] DIFC CFI 071?
The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0712025-agro-resource-tarim-gida-ic-ve-dis-ticaret-s-v-promising-international-trading-co-dmcc-1 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-071-2025_20250925.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): Part 38, RDC 38.8, RDC 38.23, RDC 38.40
- Practice Direction No. 4 of 2017 (Interest on Judgments)