SANDRA HOLDING v FAWZI MUSAED AL SALEH [2025] DIFC CFI 092 — Enforcement of cross-undertakings in damages following set-aside of WWFOs (22 July 2025)

This order confirms the DIFC Court’s jurisdiction to enforce cross-undertakings in damages against claimants who obtained Worldwide Freezing Orders (WWFOs), even where the underlying substantive jurisdiction is subsequently challenged or set aside.

How did the DIFC Court determine its jurisdiction to award damages under a cross-undertaking after the underlying WWFOs were set aside in Sandra Holding v Fawzi Musaed Al Saleh?

The court addressed the jurisdictional challenge by affirming that the act of providing a cross-undertaking to the DIFC Court constitutes a submission to the court's authority regarding the consequences of that undertaking. Even though the Court of Appeal had previously set aside the WWFOs on the basis that the DIFC Courts lacked jurisdiction over the underlying dispute, Justice Lord Angus Glennie held that the procedural requirement of the undertaking remained enforceable.

The court emphasized that the undertaking is a condition precedent to the grant of the freezing order, and the claimant, by seeking the court's assistance, accepts the court's power to assess damages if the order is later found to have been wrongly granted. As noted in the judgment:

It follows that the DIFC Courts have jurisdiction to hear applications under the undertaking in damages, that being an application required by the DIFC Regulations: see Article 14(A)(7) of Dubai Law No. 2 of 2025.

Which judge presided over the inquiry into damages in Sandra Holding v Fawzi Musaed Al Saleh and in which division was the order issued?

The matter was heard and determined by H.E. Justice Lord Angus Glennie, sitting in the DIFC Court of First Instance. The final order with reasons was issued on 22 July 2025, following an application hearing held on 11 July 2025.

What were the respective positions of Sandra Holding and the Al Saleh family regarding the enforcement of the cross-undertaking?

The Defendants (the Al Saleh family) argued that the WWFOs, which were later set aside by the Court of Appeal, caused them significant financial loss due to the necessity of defending enforcement actions in foreign jurisdictions, specifically France and the United States. They sought an inquiry into damages to recover these irrecoverable legal costs, relying on the cross-undertaking provided by the Claimants (Sandra Holding and Nuri Musaed Al Saleh) at the time the freezing orders were granted.

The Claimants, conversely, failed to appear at the hearing on 11 July 2025. Their position, as inferred from the procedural history, had previously challenged the court's jurisdiction to entertain the inquiry, arguing that the setting aside of the WWFOs and the lack of underlying jurisdiction over the substantive dispute precluded the court from exercising authority over the cross-undertaking. The court rejected this, noting that the Claimants had personally submitted to the jurisdiction of the DIFC Courts by providing the undertaking as a prerequisite for the WWFOs.

What was the precise legal question the court had to answer regarding the enforceability of the cross-undertaking in CFI 092/2021?

The court was required to determine whether it possessed the residual jurisdiction to enforce a cross-undertaking in damages given by a claimant to the DIFC Court, notwithstanding that the Court of Appeal had already ruled that the DIFC Courts lacked jurisdiction over the substantive dispute between the parties. The doctrinal issue centered on whether the cross-undertaking functions as a standalone obligation to the court, independent of the court's jurisdiction over the merits of the underlying claim.

What reasoning did Justice Lord Angus Glennie apply to conclude that the Claimants were liable for the Defendants' foreign legal costs?

Justice Glennie applied the principle that a party obtaining an injunction must compensate the respondent for losses directly resulting from that injunction if it is later found to have been wrongly granted. The court examined the specific language of the WWFOs, which explicitly permitted enforcement in foreign jurisdictions.

Paragraph (8) of Schedule B to the WWFOs provided that the Applicant (i.e. the Claimants) have permission to enforce the Order in a number of jurisdictions, including Kuwait, France and the USA.

The court reasoned that the costs incurred by the Defendants in France and Massachusetts were a direct and foreseeable consequence of the Claimants' decision to enforce the WWFOs globally. By invoking the court's power to freeze assets worldwide, the Claimants accepted the risk that they would be liable for the costs of the Defendants' necessary legal defense in those specific jurisdictions.

Which specific DIFC statutes and RDC rules were cited by the court to establish its authority to award damages?

The court relied on Article 14(A)(7) of Dubai Law No. 2 of 2025, which provides the statutory basis for the court to hear applications required by DIFC Regulations. Additionally, the court referenced RDC 25.25(1), which mandates the provision of a cross-undertaking in damages as a standard condition for the grant of a freezing order. The court also noted Article 5(B)(1)(a) of Law No. 12 of 2004 regarding the general jurisdiction of the DIFC Courts.

How did the court utilize English and DIFC precedents to justify the recovery of foreign legal costs as damages?

The court drew upon established jurisprudence to define the scope of recoverable damages under a cross-undertaking. It cited F Hoffman La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 291 and Smith v Day (1882) 21 Ch D 421 to confirm the principle that the undertaking is a price paid for the privilege of obtaining an injunction. Furthermore, the court applied Abbey Forwarding Ltd v Hone (No 3) [2015] Ch 309 and SCF Tankers Ltd v Privalov [2018] 1 WLR 5623 to support the recovery of legal costs incurred in foreign proceedings. The court also referenced the DIFC Court of Appeal decision in [2022] DIFC CA 014, which established that irrecoverable costs in foreign jurisdictions are indeed recoverable as damages under a cross-undertaking.

What was the final disposition and the specific monetary relief awarded to the Defendants?

The court granted the application for an inquiry into damages and ordered the Claimants to compensate the Defendants for losses incurred. The court declared:

It is declared that the WWFOs dated 10 and 30 November 2021 have caused loss to the Defendants in the amounts of EUR 46,071.96 and USD 574,401.25 for which the Defendants should be compensated.

Additionally, the court ordered the Claimants to pay the reserved costs of the initial application (CFI-092-2021/9) in the sum of AED 712,044.08 and the costs of the current application (CFI-092-2021/11) in the sum of AED 306,316.95.

How does this ruling change the practice for litigants seeking or defending against Worldwide Freezing Orders in the DIFC?

This case serves as a stark reminder that the cross-undertaking in damages is a robust, enforceable obligation that survives the dismissal of the main action. Practitioners must advise clients that seeking a WWFO carries a significant financial risk, particularly if the order is enforced in multiple foreign jurisdictions. Litigants must anticipate that even if they successfully challenge the court's jurisdiction over the substantive dispute, they remain liable for the costs of defending against the freezing order globally.

Where can I read the full judgment in Sandra Holding v Fawzi Musaed Al Saleh [2025] DIFC CFI 092?

The full judgment is available on 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-9

Cases referred to in this judgment:

Legislation referenced:

• Law No. 12 of 2004, Article 5(B)(1)(a)
• Dubai Law No. 2 of 2025, Article 14(A)(7)
• RDC 25.25(1)