The Registrar of the DIFC Courts clarifies the strict procedural requirements for obtaining a Default Costs Certificate, emphasizing that ineffective service of the Notice of Commencement of Assessment (NOC) and Bill of Costs (BOC) serves as an absolute bar to recovery under RDC 40.17.
Why did Johnson Arabia LLC fail to secure a Default Costs Certificate against BIC Contracting LLC in CFI 075/2020?
The dispute centers on the Claimant’s attempt to recover costs following the underlying proceedings in CFI 075/2020. Johnson Arabia LLC sought to utilize the summary mechanism provided by the Rules of the DIFC Courts (RDC) to obtain a Default Costs Certificate after BIC Contracting LLC (formerly HLG Contracting LLC) allegedly failed to respond to the assessment process. The Claimant filed its request on 11 November 2021, relying on the NOC filed on 13 October 2021 and an updated BOC dated 20 December 2021.
However, the Registrar determined that the procedural foundation for the request was defective. Despite the Claimant’s efforts to initiate the costs assessment, the court found that the documents required to trigger the default mechanism had not reached the Defendant in a manner consistent with the RDC. Consequently, the court refused to grant the certificate, effectively stalling the Claimant's recovery efforts until proper service is perfected.
The Request is dismissed on the basis that service of the NOC and BOC were not carried out effectively.
The dismissal highlights the court's insistence on strict adherence to procedural formalities when a party seeks to bypass the standard inter partes assessment process. The full order can be reviewed at https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-075-2020-johnson-arabia-llc-v-bic-contracting-lcc-formerly-hlg-contracting-llc-2.
How did Registrar Nour Hineidi exercise her authority in the Court of First Instance on 17 January 2022?
Registrar Nour Hineidi presided over the matter in the Court of First Instance. On 17 January 2022, she reviewed the procedural history of the costs application, specifically examining the filings made by Johnson Arabia LLC in November and December 2021. Exercising her supervisory role over the eRegistry and the assessment of costs, the Registrar identified the failure in service and issued a corrective order mandating specific service protocols to ensure the Defendant was properly notified of the ongoing costs assessment.
What were the respective positions of Johnson Arabia LLC and BIC Contracting LLC regarding the costs assessment process?
Johnson Arabia LLC, as the Claimant, argued that it had fulfilled the requirements under RDC 40.17 to obtain a Default Costs Certificate. By filing the NOC and the subsequent updated BOC, the Claimant asserted that it had taken the necessary steps to compel the assessment of costs in its favor, presumably due to the Defendant’s failure to engage with the process or file points of dispute within the prescribed timelines.
BIC Contracting LLC, while not explicitly detailed in the Registrar’s order as having filed a substantive defense to the costs application, benefited from the court’s scrutiny of the service process. The Registrar’s finding implies that the Claimant’s service attempts were insufficient to trigger the Defendant’s obligation to respond. The court effectively protected the Defendant’s right to be properly served with the costs documentation before any default judgment or certificate could be issued against it.
What was the precise jurisdictional and procedural question the Registrar had to answer regarding RDC 40.17?
The core question before the Registrar was whether the Claimant had satisfied the mandatory service requirements under the RDC to entitle it to a Default Costs Certificate. Specifically, the court had to determine if the NOC and the BOC had been served in a manner that legally obligated the Defendant to respond. The Registrar had to decide if the "Request" for a Default Costs Certificate could be granted in the absence of proof that the underlying costs documents had reached the Defendant at its correct address. This required an interpretation of whether the court’s power under RDC 40.17 is conditional upon the absolute effectiveness of service, rather than merely the filing of the request itself.
How did the Registrar apply the test for effective service to the Claimant’s request?
The Registrar’s reasoning was grounded in the principle that a party cannot be held in default if they have not been properly served with the documents forming the basis of the claim. By reviewing the case documents, the Registrar concluded that the previous attempts at service were ineffective. Rather than granting the request, the Registrar utilized her case management powers to direct the Claimant to perform service via a specific method (courier) to a specific, verified address.
The Request is dismissed on the basis that service of the NOC and BOC were not carried out effectively.
The Registrar’s approach ensures that the integrity of the costs assessment process is maintained. By mandating that the Claimant serve the documents to the Mazda Showroom building on Sheikh Zayed Road, the Registrar removed any ambiguity regarding the Defendant's notice of the proceedings. This step-by-step correction ensures that any future application for a Default Costs Certificate will be based on a verified and indisputable record of service.
Which specific RDC rules and procedural authorities were applied by the Registrar?
The primary authority cited in the order is RDC 40.17, which governs the procedure for obtaining a Default Costs Certificate. This rule allows a receiving party to apply for a certificate if the paying party fails to serve points of dispute within the time permitted by the rules. The Registrar also relied on her inherent powers under the RDC to manage the court’s registry and ensure that all parties are afforded procedural fairness. The order specifically invoked the Registrar’s authority to direct the method of service, requiring the Claimant to use courier delivery to a precise address to rectify the prior failure.
What is the significance of the Registrar’s order for future litigants regarding the service of costs documents?
The order serves as a reminder that the DIFC Courts will not grant default relief in costs matters where service is deficient. Litigants must ensure that the NOC and BOC are served at an address that is demonstrably linked to the respondent. The requirement to file a certificate of service within two working days of the courier delivery, as stipulated in paragraph 3 of the order, underscores the court's focus on transparency and accountability.
A certificate of service demonstrating compliance with paragraph 2 of this Order is to be filed on the eRegistry system no later than 2 working days following service.
Future litigants must anticipate that the Registrar will scrutinize service records with the same rigor applied to the merits of the costs claim itself. Failure to provide proof of service will result in the summary dismissal of the request, forcing the claimant to restart the process and bear the associated costs of the failed application.
What was the final disposition and the specific orders made by the Registrar?
The Registrar dismissed the Claimant’s request for a Default Costs Certificate. The order contained the following specific directives:
1. The Request for a Default Costs Certificate was dismissed due to ineffective service.
2. The Claimant was ordered to serve the NOC and BOC (including all annexures) via courier to the BIC Contracting LLC office located at the Mazda Showroom, 1st Floor, Near Oasis Centre, Sheikh Zayed Road, Dubai.
3. The Claimant was required to file a certificate of service on the eRegistry within two working days of completing the courier service.
4. The Claimant was ordered to bear its own costs for the failed Request.
Where can I read the full judgment in Johnson Arabia LLC v BIC Contracting LLC [2022] DIFC CFI 075?
The full order can be accessed via the DIFC Courts website at the following link: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-075-2020-johnson-arabia-llc-v-bic-contracting-lcc-formerly-hlg-contracting-llc-2. The document is also available via the CDN at https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-075-2020_20220117.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), r. 40.17