MUZOON HOLDING v ARIF NAQVI [2022] DIFC CFI 080 — Consent order finalizing costs liability (18 October 2022)

This consent order marks the final resolution of costs disputes between Muzoon Holding and Arif Naqvi, following a series of significant jurisdictional and procedural challenges in the DIFC Court of First Instance.

What specific costs dispute did the Consent Order in CFI 080/2018 resolve between Muzoon Holding and Arif Naqvi?

The litigation between Muzoon Holding and Arif Naqvi involved complex procedural history, including applications to set aside default judgments and various jurisdictional challenges. Following the substantive judgment delivered by Justice Sir Jeremy Cooke on 5 October 2022, the parties were directed to reach an agreement regarding the quantum of costs associated with these proceedings. The resulting Consent Order serves to crystallize the financial obligations of the Claimant toward the Defendant, effectively closing the door on further litigation regarding these specific costs.

The scope of this settlement is comprehensive, covering the costs arising from three distinct judicial milestones in the case. By entering into this agreement, the parties avoided the need for a formal costs assessment hearing before the Registrar. As stipulated in the order:

The Claimant shall pay the Defendant a sum of AED 525,000 in full settlement of the Defendant’s costs in this case.

Which judicial officer issued the Consent Order in CFI 080/2018 on 18 October 2022?

The Consent Order was issued by Assistant Registrar Delvin Sumo on 18 October 2022 at 2:00 PM. This order was the procedural culmination of the costs-related directions previously set out by Justice Sir Jeremy Cooke in his judgment dated 5 October 2022. The issuance by the Assistant Registrar confirms that the parties successfully utilized the period of extended negotiation, granted by the prior order of 13 October 2022, to reach a mutually acceptable figure for the settlement of legal expenses.

How did the parties in CFI 080/2018 reach an agreement on the AED 525,000 costs settlement?

The parties, Muzoon Holding and Arif Naqvi, engaged in a structured negotiation process following the directives of Justice Sir Jeremy Cooke. The court had initially set a timeline for costs submissions within the 5 October 2022 judgment. Recognizing the benefits of avoiding protracted costs assessment proceedings, the parties sought and were granted an extension of time until 17 October 2022 to finalize their negotiations.

The agreement reflects a compromise reached by the parties, which was then presented to the DIFC Court for formal endorsement. By consenting to the order, both parties waived their rights to further contest the quantum of costs related to the specific judgments of Justice Roger Giles and Justice Sir Jeremy Cooke, thereby providing finality to the financial aspects of the litigation.

What was the precise doctrinal issue regarding costs that the court had to address in CFI 080/2018?

The court was tasked with determining the appropriate quantum of costs to be awarded to the Defendant following his successful defense against various applications and jurisdictional challenges. The doctrinal issue centered on the application of the "costs follow the event" principle, as modified by the specific procedural history of the case. The court had to ensure that the costs awarded reflected the work performed across three distinct stages: the application to set aside the default judgment, the jurisdictional challenges, and the final judgment of 5 October 2022. The challenge for the parties was to quantify these legal services in a manner that satisfied the court's requirements for reasonableness and proportionality under the Rules of the DIFC Courts (RDC).

How did the DIFC Court exercise its discretion to finalize the costs settlement in CFI 080/2018?

The court exercised its supervisory role by formalizing the agreement reached by the parties, ensuring that the settlement was recorded as a binding order. By adopting the parties' consent, the court avoided the necessity of a detailed assessment process. The reasoning behind the order is rooted in the principle of party autonomy in settling disputes, provided the settlement aligns with the procedural history of the case. The order explicitly links the settlement amount to the specific judicial decisions that necessitated the costs:

The Claimant shall pay the Defendant a sum of AED 525,000 in full settlement of the Defendant’s costs in this case. Specifically, this full settlement shall include the following orders and judgments: a) The Order of Justice Roger Giles on the Defendant’s Application to Set Aside Default Judgment, dated 1 July 2021; b) The Judgment of Justice Roger Giles on Jurisdictional Challenges raised by the Defendant, dated 28 October 2021; and c) The Judgment of Justice Sir Jeremy Cooke, issued on 5 October 2022.

Which specific RDC rules and judicial authorities governed the costs settlement in CFI 080/2018?

The settlement was governed by the general powers of the DIFC Court to manage costs under the Rules of the DIFC Courts (RDC). While the order itself is a product of consent, it operates within the framework of RDC Part 38, which deals with the court's power to award costs and the assessment of those costs. The order also references the specific judgments of Justice Roger Giles (1 July 2021 and 28 October 2021) and Justice Sir Jeremy Cooke (5 October 2022), which served as the legal basis for the entitlement to costs.

How did the previous rulings of Justice Roger Giles and Justice Sir Jeremy Cooke influence the final costs order?

The previous rulings were the foundational triggers for the costs liability. Justice Roger Giles’s order regarding the setting aside of the default judgment and his subsequent judgment on jurisdictional challenges established the Defendant’s success on critical procedural hurdles. Justice Sir Jeremy Cooke’s judgment of 5 October 2022 provided the final impetus for the costs determination. The Consent Order effectively aggregated the costs incurred across these three distinct judicial events, preventing the need for separate assessments for each ruling and streamlining the enforcement of the payment obligation.

What was the final disposition and the deadline for the payment of the AED 525,000 in CFI 080/2018?

The court ordered the Claimant, Muzoon Holding, to pay the Defendant, Arif Naqvi, the sum of AED 525,000. This payment was mandated to be completed on or before 30 October 2022. The order also included a standard provision stating that there shall be no further order as to costs, effectively barring any subsequent claims for additional legal expenses related to the matters covered by the settlement.

What are the practical implications of the CFI 080/2018 Consent Order for future DIFC litigants?

This case highlights the efficacy of utilizing consent orders to resolve costs disputes following complex multi-stage litigation. For future litigants, the case demonstrates that even after significant jurisdictional and procedural battles, the court encourages parties to reach a commercial settlement on costs. Practitioners should note that by clearly itemizing the specific orders and judgments covered by a settlement, parties can achieve total finality and avoid the high costs and uncertainty associated with a formal costs assessment before the Registrar.

Where can I read the full judgment in CFI 080/2018 Muzoon Holding v Arif Naqvi?

The full text of the Consent Order can be accessed via the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0802018-muzoon-holding-llc-v-arif-naqvi-1

Cases referred to in this judgment:

Legislation referenced:

• Rules of the DIFC Courts (RDC) Part 38 (Costs)