How did the dispute between Sandra Holding and the Al Saleh family lead to a claim for damages arising from a Worldwide Freezing Order?
The litigation originated from an ex parte application filed by the Claimants, Sandra Holding Ltd and Nuri Musaed Al Saleh, against the Defendants, Fawzi Musaed Al Saleh, Ahmed Fawzi Al Saleh, Yasmine Fawzi Al Saleh, and Farah El Merabi. The Claimants successfully obtained a Worldwide Freezing Order (WFO) in November 2021, which was subsequently continued by the court. The dispute centered on the Claimants' attempt to restrain the assets of the Defendants, a move that the Defendants vehemently contested.
The situation escalated when the Claimants sought to enforce the WFO in foreign jurisdictions, specifically France and Massachusetts, USA. These enforcement efforts were ultimately unsuccessful but resulted in significant legal expenses for the Defendants. Following the Court of Appeal’s ruling that the DIFC Courts lacked jurisdiction over the underlying action, the Defendants sought to recover their losses. As noted in the court's reasons:
On 10 November 2021 the Claimants (who are the Respondents to this application and are hereafter referred to as the “Claimants/Respondents”) obtained from the Court, on an ex parte application, a Worldwide Freezing Order (the “WFO”) over the assets of the Respondents (i.e. the Defendants/Applicants).
The core of the current application is the enforcement of the cross-undertaking in damages provided by the Claimants at the time the WFO was granted. The Defendants argue that the WFO was the direct cause of their financial loss, necessitating a formal inquiry into the quantum of those damages.
Which judge presided over the inquiry into damages application in CFI 092/2021?
The application for an inquiry into damages was heard by H.E. Justice Lord Angus Glennie in the DIFC Court of First Instance. The hearing took place on 26 February 2025, with the resulting Order with Reasons issued on 5 March 2025.
What were the positions of the parties regarding the cross-undertaking in damages following the Court of Appeal's decision in CA-003-2023?
The Defendants/Applicants argued that they were entitled to compensation for the costs incurred defending against the WFO, particularly the failed enforcement actions in France and Massachusetts. They relied on the cross-undertaking provided by the Claimants, which was a condition of the original WFO. The Claimants/Respondents, however, failed to appear at the hearing on 26 February 2025, despite being notified by the Court Registry. Their absence left the Defendants’ arguments largely uncontested before the Court of First Instance.
The Defendants’ position was bolstered by the specific language of the WFO, which included a standard cross-undertaking. As the court recorded:
The WFO contained within it in Schedule B (“Undertakings Given To The court By The Applicant”) a Cross-Undertaking in Damages in familiar terms. It read as follows: “If the Court later finds that this Order has caused loss to the Respondent [i.e. the Defendants/Applicants], and decides that the Respondent [i.e. the Defendants/Applicants] should be compensated for that loss, the Applicant [i.e. the Claimants/Respondents] will comply with any order the Court may make.” 3.
What was the precise jurisdictional and doctrinal question the Court of First Instance had to answer regarding the inquiry into damages?
The court had to determine whether, in light of the Court of Appeal’s finding that the DIFC Courts lacked jurisdiction over the subject matter of the action, it remained appropriate to order an inquiry into damages under the cross-undertaking. The doctrinal issue was whether the lack of original jurisdiction precluded the court from enforcing the ancillary obligations—specifically the cross-undertaking—that were attached to the WFO. The court had to decide if the Defendants had established a prima facie case of loss sufficient to trigger the court's discretion to order an inquiry.
How did Justice Lord Angus Glennie apply the test for ordering an inquiry into damages?
Justice Lord Angus Glennie applied the principle that the court retains discretion to order an inquiry into damages when an injunction is set aside, particularly when the court determines that it lacked jurisdiction to grant the order initially. The judge emphasized that the absence of jurisdiction makes it highly probable that an inquiry will be granted if evidence of loss is presented. The reasoning followed the established approach in Yukong Line Limited v Rendsburg Investments Corporation.
The court’s reasoning process is summarized as follows:
Where the injunction was wrongly granted, even without fault on the part of the party seeking it, the court will ordinarily order an inquiry as to damages if it appears that loss may have been caused as a result of the order.
Justice Lord Angus Glennie concluded that the Defendants had met the threshold for such an inquiry. He stated:
I am satisfied that the Defendants/Applicants have shown that an inquiry as to damages is justified and appropriate.
Which authorities and statutes were cited to support the order for an inquiry?
The court relied on Part 23 of the Rules of the DIFC Courts (RDC) as the procedural basis for the application. Furthermore, the court referenced the previous decision of the Court of Appeal in CA-003-2023, which set aside the WFOs and explicitly directed that any application for an inquiry into damages be filed before the Court of First Instance.
How did the court utilize the precedent of Yukong Line Limited v Rendsburg Investments Corporation?
The court utilized Yukong Line Limited v Rendsburg Investments Corporation [2000] EWCA Civ 358 to define the scope of the court's discretion. The judge highlighted that while the decision to order an inquiry is discretionary, the fact that the court lacked jurisdiction to grant the WFO in the first place creates a strong presumption in favor of the applicant. The court noted:
It is important to emphasise that ultimately the decision by the court whether to order an inquiry as to damages or not is one for the discretion of the court.
By applying the Yukong test, the court determined that the Defendants’ evidence of loss—stemming from the failed enforcement actions in France and Massachusetts—was sufficient to warrant a full inquiry.
What was the final disposition and the specific orders made by the court on 5 March 2025?
The court granted the application for an inquiry into damages. The specific orders included:
1. An inquiry into damages sustained by the Defendants as a result of the WFOs.
2. The Defendants must file a detailed claim setting out damages and supporting evidence by 4pm on 26 March 2025.
3. The claim must be served on the Claimants via personal service (for Sandra Holding Ltd) and email through the Courts of Kuwait (for Nuri Musaed Al Saleh).
4. The Claimants have 28 days from deemed service to file and serve evidence in reply.
5. Costs of the application were reserved.
What are the wider implications for DIFC practitioners regarding cross-undertakings in damages?
This order serves as a critical reminder that the DIFC Courts will rigorously enforce cross-undertakings in damages, even when the court ultimately determines it lacked jurisdiction over the underlying dispute. Practitioners must anticipate that if a freezing order is set aside, the court will likely facilitate an inquiry into damages if the respondent can demonstrate a prima facie case of loss. The ruling highlights that the lack of jurisdiction does not shield a claimant from the consequences of having obtained an injunction that caused financial harm to the respondent.
Where can I read the full judgment in Sandra Holding v Fawzi Musaed Al Saleh [2025] DIFC CFI 092?
The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0922021-1-sandra-holding-ltd-2-nuri-musaed-al-saleh-v-1-fawzi-musaed-al-saleh-2-ahmed-fawzi-al-saleh-3-yasmine-fawzi-al-sale-8 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-092-2021_20250305.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| CA-003-2023 | N/A | Set aside the WFOs and directed the inquiry to the CFI |
| Yukong Line Limited v Rendsburg Investments Corporation | [2000] EWCA Civ 358 | Established the test for ordering an inquiry into damages |
Legislation referenced:
- Part 23 of the Rules of the DIFC Courts (RDC)