The DIFC Court of First Instance has issued a formal stay of proceedings in the ongoing dispute between Ajial National Education Company and The Securities House Company, effectively pausing the resolution of a contentious costs application to facilitate private settlement negotiations between the parties.
What is the nature of the dispute between Ajial National Education Company and The Securities House Company in CFI 105/2021 regarding the pending Costs Application?
The litigation, registered under CFI 105/2021, follows a substantive judgment delivered by Justice Lord Angus Glennie in September 2023. While the primary merits of the case have been determined, the parties remain embroiled in a secondary phase concerning the recovery of legal expenses. The Claimants, Ajial National Education Company K.S.C.C and Talal Khalifa Talal Al Jeri, filed Application No. CFI-105-2021/4 on 13 May 2024, seeking an order for the Defendants—The Securities House Company, Stellar Educational Service Co., and First Kuwaiti For Education Holding Company W.L.L—to pay costs on a standard basis, alongside a request for a payment on account.
The current procedural posture is defined by the parties' attempt to resolve these financial claims without further judicial intervention. The court record indicates that the Defendants filed evidence in answer to the Costs Application on 28 June 2024, followed by the Claimants' reply evidence on 19 July 2024. Additionally, the Defendants had previously sought an extension of time to file their evidence via Application No. CFI-105-2021/5. To manage these competing filings, the court formalised a stay:
All further steps in the proceedings to be stayed until 14 October 2024 when this stay shall be automatically lifted.
Which judge presided over the underlying judgment in CFI 105/2021 that preceded the current stay of proceedings?
The underlying merits of this dispute were adjudicated by Justice Lord Angus Glennie. His initial judgment was handed down on 7 September 2023, with a subsequent Amended Judgment issued on 28 September 2023. The current Consent Order, issued by Assistant Registrar Delvin Sumo on 13 August 2024, serves to pause the enforcement and assessment phase of the litigation to allow the parties to negotiate the quantum of costs following Justice Glennie’s substantive ruling.
What legal arguments were advanced by the parties regarding the Costs Application in CFI 105/2021?
The Claimants, Ajial National Education Company and Talal Khalifa Talal Al Jeri, have maintained that they are entitled to the recovery of their legal costs on a standard basis, arguing that the outcome of the substantive proceedings warrants a full indemnity for their legal expenditure. They have supported this position through detailed evidence filed in July 2024, which serves as the basis for their claim against the three named Defendants.
Conversely, the Defendants, led by The Securities House Company, have contested the scope and quantum of the costs sought. Their position was articulated in their evidence filed on 28 June 2024. The Defendants also found it necessary to file an Extension of Time (EOT) application (CFI-105-2021/5) to ensure their response to the Costs Application was adequately prepared. Rather than proceeding to a contested hearing on these points, both sides have opted to utilize their "best endeavours" to reach a settlement, effectively suspending the adversarial process to avoid the costs of a formal assessment hearing.
What is the precise doctrinal issue the DIFC Court had to address in the Consent Order of 13 August 2024?
The court was not required to determine the merits of the costs claim, but rather to exercise its case management powers under the Rules of the DIFC Courts (RDC) to facilitate a settlement. The doctrinal issue at hand was the court’s discretion to stay proceedings by consent to encourage alternative dispute resolution (ADR) or private settlement, thereby preserving judicial resources. The court had to balance the need for finality in the litigation against the parties' mutual desire to negotiate the costs quantum outside of the courtroom.
How did the DIFC Court apply its case management discretion to pause the litigation in CFI 105/2021?
The Court exercised its inherent jurisdiction to manage the court calendar and facilitate the parties' stated intent to reach a settlement. By issuing a Consent Order, the Court effectively removed the pressure of upcoming deadlines for the Costs Application, allowing the parties a window of approximately two months to reach an agreement. The reasoning is rooted in the principle that parties should be encouraged to resolve ancillary disputes, such as costs, through negotiation rather than litigation. The order provides a clear mechanism for the parties to return to the court should negotiations fail or if they require further time:
Parties shall have liberty to apply to lift this stay at any time by letter to the Court explaining the status of the parties’ settlement endeavours.
Which specific Rules of the DIFC Courts (RDC) govern the court's power to issue a stay of proceedings in this context?
While the order is a Consent Order, it operates within the framework of the RDC, specifically those rules governing the court’s general case management powers. The Court’s authority to stay proceedings is generally derived from the RDC Part 4, which grants the Court broad discretion to manage cases, including the power to adjourn or stay hearings to facilitate settlement. The order also references the specific applications filed by the parties (CFI-105-2021/4 and CFI-105-2021/5), which are the procedural vehicles through which the costs dispute is being managed.
How does the Consent Order in CFI 105/2021 interact with the precedent of Justice Lord Angus Glennie’s 2023 judgment?
The Consent Order does not disturb the findings of Justice Lord Angus Glennie’s 2023 judgment; rather, it is a procedural consequence of it. In the DIFC, once a substantive judgment is delivered, the prevailing party is typically entitled to costs. The current dispute is a "costs-only" litigation phase. The Court’s role here is to ensure that the assessment of those costs—which is a judicial function—is handled efficiently. By staying the proceedings, the Court acknowledges that the parties are best placed to quantify the "standard basis" costs awarded by Justice Glennie without the need for a formal taxation hearing.
What is the final disposition and the specific financial order made by the Court regarding the costs of the Consent Order?
The Court ordered a stay of all further steps in the proceedings until 14 October 2024. Upon this date, the stay is set to be automatically lifted unless the parties apply for an extension. Regarding the financial burden of the current application, the Court ordered that the costs of the Consent Order itself are to be treated as "costs in the Costs Application." This means that the party who ultimately succeeds in the main Costs Application will likely be entitled to recover the costs associated with negotiating this specific stay.
What are the practical implications for DIFC practitioners regarding the use of consent stays in post-judgment costs disputes?
This case highlights the standard practice in the DIFC of utilizing consent orders to "park" litigation when parties are nearing a settlement. For practitioners, the key takeaway is the utility of the "liberty to apply" clause. By including a provision that allows parties to return to the Court via a simple letter, the Court maintains oversight while minimizing the administrative burden. Practitioners should note that the DIFC Court is highly receptive to requests for stays when they are supported by evidence that the parties are actively negotiating, as this aligns with the Court’s objective of promoting efficient dispute resolution.
Where can I read the full judgment in Ajial National Education Company v The Securities House Company [2024] DIFC CFI 105?
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-1052021-1-ajial-national-education-company-kscc-2-talal-khalifa-talal-al-jeri-v-1-securities-house-company-2-stellar-educati-6. The document is also available via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-105-2021_20240813.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Ajial National Education Company v The Securities House Company | [2023] DIFC CFI 105 | Substantive judgment on merits |
Legislation referenced:
- Rules of the DIFC Courts (RDC)
- Judicial Authority Law (DIFC Law No. 12 of 2004)