The Registrar’s issuance of a Default Costs Certificate in this matter highlights the procedural consequences of failing to engage with the DIFC Court’s cost assessment process, resulting in a summary liability of AED 137,528.81.
What was the specific monetary liability imposed on BIC Contracting in the Default Costs Certificate issued in CFI 075/2020?
The dispute concerns the recovery of legal costs incurred by Johnson Arabia LLC following the underlying proceedings against BIC Contracting LCC (formerly HLG Contracting LLC). After the Claimant initiated the assessment process, the Defendant failed to respond, leading to the Registrar’s intervention to quantify the outstanding costs. The court ultimately determined that the Claimant was entitled to the full amount requested, formalizing the debt through a Default Costs Certificate.
The Defendant is ordered to pay the Claimant a total of AED 137,528.81 (the “Amount”) within 21 days from the date of this Order.
This order serves as a final determination of the costs payable, effectively bypassing the need for a detailed hearing on the merits of the individual cost items due to the Defendant’s procedural default. The amount represents the total sum the Claimant sought to recover, which the court found appropriate to award in the absence of any opposing submissions.
Which DIFC Court official presided over the issuance of the Default Costs Certificate in CFI 075/2020 on 8 March 2022?
The Default Costs Certificate was issued by Registrar Nour Hineidi, sitting in the DIFC Court of First Instance. The order was finalized on 8 March 2022, following a review of the Claimant’s second request for the certificate and the supporting affidavit of service filed on 25 February 2022.
Why did BIC Contracting fail to prevent the entry of a Default Costs Certificate after Johnson Arabia filed its Notice of Commencement of Assessment?
The procedural failure in this case stemmed from the Defendant’s omission to file Points of Dispute. Under the Rules of the DIFC Courts (RDC), once a Notice of Commencement of Assessment (NOC) is served, the respondent is required to articulate its objections to the claimed costs within a strict timeframe. BIC Contracting failed to comply with this requirement, leaving the Registrar with no alternative but to proceed with the assessment based solely on the Claimant’s submissions.
The Claimant, Johnson Arabia, had previously seen an initial request for a Default Costs Certificate dismissed by Registrar Nour Hineidi on 17 January 2022. However, upon filing a second request on 16 February 2022, the Claimant successfully demonstrated that the procedural requirements had been met, including the proper service of the NOC, which the Defendant ignored.
What was the jurisdictional and procedural question the Registrar had to resolve regarding the Claimant’s second request for a Default Costs Certificate?
The primary question before the Registrar was whether the Claimant had satisfied the procedural prerequisites under the RDC to obtain a Default Costs Certificate following the Defendant’s failure to file Points of Dispute. Specifically, the court had to determine if the service of the Notice of Commencement of Assessment was valid and if the statutory period for the Defendant to respond had expired without any action.
The Registrar had to weigh the Claimant’s right to recover costs against the Defendant’s right to contest the quantum. By failing to file Points of Dispute, the Defendant effectively waived its right to challenge the reasonableness or necessity of the costs claimed by Johnson Arabia. The Registrar’s task was to ensure that the procedural mechanism of RDC r. 40.17 was applied correctly to finalize the assessment without further delay.
How did Registrar Nour Hineidi apply the RDC framework to grant the Claimant’s second request for a Default Costs Certificate?
The Registrar’s reasoning was grounded in the strict application of the RDC regarding cost assessments. Having reviewed the history of the file—including the dismissal of the first request—the Registrar verified that the Claimant had complied with all necessary steps, including the filing of an affidavit of service. The decision was a direct consequence of the Defendant’s failure to engage with the court’s timeline.
In the event the Defendant does not pay the Amount within 21 days from the date of this Order, interest, pursuant to Practice Direction No. 4 of 2017 (Interest on Judgments) will accrue on the Amount from 29 March 2022 until the date of full payment.
By granting the request, the Registrar affirmed that the court’s cost assessment process is not optional. The failure to file Points of Dispute within the 21-day window prescribed by the RDC triggered the automatic entitlement of the Claimant to the requested certificate, thereby concluding the assessment phase of the litigation.
Which specific RDC rules and Practice Directions governed the Registrar’s decision in CFI 075/2020?
The Registrar’s order was explicitly predicated on RDC r. 40.17, which provides the mechanism for obtaining a Default Costs Certificate when a party fails to respond to a Notice of Commencement of Assessment. Furthermore, the Registrar relied on RDC r. 40.15, which outlines the obligation of the party receiving the NOC to file Points of Dispute within 21 days of service.
Regarding the enforcement of the monetary award, the Registrar invoked Practice Direction No. 4 of 2017 (Interest on Judgments). This instrument provides the legal basis for the accrual of interest on the unpaid costs, ensuring that the Claimant is compensated for the delay in payment beyond the 21-day grace period provided in the order.
How did the court utilize the RDC rules to address the Defendant’s procedural non-compliance?
The court utilized RDC r. 40.15 as the benchmark for the Defendant’s conduct. By failing to file Points of Dispute within the 21-day period following the service of the NOC, the Defendant triggered the default provisions. The Registrar treated the Claimant’s second request as a valid application under RDC r. 40.17, which allows the court to issue a certificate when the respondent has failed to serve Points of Dispute.
The Registrar’s review of the affidavit of service dated 25 February 2022 was the final step in confirming that the Defendant had been properly notified of the proceedings. This verification process ensured that the issuance of the certificate was procedurally sound and immune to challenges based on lack of notice.
What was the final disposition and the specific relief granted to Johnson Arabia in the Registrar’s order?
The Registrar granted the Claimant’s second request in its entirety. The order mandated that BIC Contracting pay the sum of AED 137,528.81 to Johnson Arabia. The order also established a clear timeline for payment, stipulating that the amount must be settled within 21 days of the order date.
Furthermore, the order included a protective provision for the Claimant: should the Defendant fail to satisfy the debt within the 21-day window, interest would begin to accrue on the total amount starting from 29 March 2022. This ensures that the Claimant is protected against the time value of money lost due to the Defendant’s non-payment.
What are the practical implications for DIFC litigants regarding the filing of Points of Dispute?
This case serves as a stark reminder that the DIFC Court’s cost assessment process is strictly enforced. Litigants who fail to file Points of Dispute within the 21-day period prescribed by RDC r. 40.15 risk the entry of a Default Costs Certificate for the full amount claimed. The Registrar’s willingness to grant the certificate on the second attempt underscores that procedural defaults will not be tolerated indefinitely.
Practitioners must ensure that they monitor the service of a Notice of Commencement of Assessment closely. Once served, the clock begins to tick, and any failure to respond will result in the loss of the opportunity to challenge the quantum of costs. The inclusion of interest under Practice Direction No. 4 of 2017 further incentivizes prompt payment, making it financially disadvantageous for a respondent to ignore a costs assessment.
Where can I read the full judgment in Johnson Arabia LLC v BIC Contracting LCC [2022] DIFC CFI 075?
The full text of the Default Costs Certificate can be accessed via the official DIFC Courts website: 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-3
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No external case law cited in this order. |
Legislation referenced:
- Rules of the DIFC Courts (RDC) r. 40.15
- Rules of the DIFC Courts (RDC) r. 40.17
- Practice Direction No. 4 of 2017 (Interest on Judgments)