What was the specific monetary dispute regarding the Claimant’s costs in Mirifa v Mahur [2023] DIFC ARB 009?
The dispute centered on the assessment of legal costs incurred by the Claimant, Mirifa, following the successful application for a Worldwide Freezing Order (WWFO) against the Defendants, including the Third Defendant, Mepur. After the Court granted the WWFO on 12 May 2023, the parties were unable to reach a consensus on the quantum of legal fees to be reimbursed. The Claimant sought a significant recovery for the work performed by two separate law firms, while the Third Defendant contested the reasonableness of these figures.
Ultimately, Justice Sir Jeremy Cooke intervened to resolve the impasse, determining that the claimed amounts were excessive due to inefficiencies in the legal team's structure. The Court’s final determination was as follows:
The Claimant is entitled to recover their reasonable costs of the Application, which are assessed in the sum of USD 250,000.
This assessment served as the final adjudication on the costs of the WWFO application, effectively capping the liability of the Third Defendant. Further details on the broader context of this enforcement action can be found at: Mirifa v Mahur [2023] DIFC ARB 009: The High Cost of Asset Concealment and the Limits of Procedural Duplication.
Which judge presided over the assessment of costs in the DIFC Arbitration Division for Mirifa v Mahur?
The assessment of costs was presided over by Justice Sir Jeremy Cooke, sitting in the DIFC Court of First Instance, Arbitration Division. The order was issued on 24 October 2023, following the Claimant’s application for a paper-based assessment filed on 28 August 2023.
What were the specific arguments advanced by the parties regarding the duplication of legal services in Mirifa v Mahur?
The Claimant argued that the complexity of the enforcement and the necessity of the WWFO justified the engagement of two separate law firms, asserting that the hourly rates and time spent were commensurate with the magnitude of the case. They maintained that the work was essential to secure the assets against the Third Defendant.
Conversely, the Third Defendant challenged the quantum of the costs, arguing that the involvement of two firms—particularly one not involved in the original arbitration—led to unnecessary costs and inefficiencies. The Court agreed with the Third Defendant’s assessment of the inefficiency, noting:
There will inevitably have been a measure of duplication in the engagement of two firms of lawyers for the WWFO and the engagement of lawyers not involved in the Arbitration will have meant additional work in getting up to speed on the background facts leading to the Award and the need for a WWFO.
Did Justice Sir Jeremy Cooke have the authority to determine the costs of the WWFO application on paper without a hearing?
The legal question before the Court was whether a physical hearing was required to assess costs or if the Court could exercise its discretion to determine the matter on paper. The Court had to balance the Defendants' desire for a hearing against the principles of judicial economy and the specific provisions of the Rules of the DIFC Courts (RDC).
The Court held that it possessed the inherent power and procedural authority to assess costs on paper, provided the parties had been given a fair opportunity to submit their arguments in writing. Justice Sir Jeremy Cooke concluded that a physical hearing was unnecessary, as the written submissions and witness evidence were sufficient to allow the Court to reach a reasoned decision.
How did Justice Sir Jeremy Cooke apply the test of proportionality to the costs claimed in Mirifa v Mahur?
In determining the final award, Justice Sir Jeremy Cooke applied a test of reasonableness and proportionality. While acknowledging that the WWFO was a matter of major importance, he scrutinized the time entries submitted by the two firms. He found that the time spent on document review was disproportionate to the task, especially given the overlap in work.
The judge noted that while the DIFC Courts often allow for higher cost recovery than other jurisdictions, the specific circumstances of this case—a relatively straightforward enforcement of an award—warranted a stricter reduction. The reasoning for this reduction was articulated as follows:
Although a higher figure is the norm in the DIFC, for the reasons given above, I consider that a greater reduction is appropriate here for what was ultimately a relatively straightforward application in relation to enforcement of an Award which spoke for itself as to the fraud of the individual defendant.
Which RDC rules and legal principles governed the Court’s decision to assess costs on paper?
The Court relied on RDC 23.69(3) and RDC 23.76 to justify the paper-based assessment. These rules provide the framework for the Court to manage costs and determine applications efficiently. Furthermore, the Court cited the English Court of Appeal decision in Isah, R v Secretary of State for the Home Department [2023] EWCA Civ 268 (at paragraphs 37-44) to support the principle that the judge who made the underlying order is best positioned to assess the associated costs.
How did the Court utilize the precedent of Isah v Secretary of State for the Home Department in this arbitration matter?
The Court utilized Isah to reinforce the procedural efficiency of having the same judge who granted the WWFO conduct the costs assessment. By citing Isah, Justice Sir Jeremy Cooke established that the assessment of costs is most economically and efficiently determined by the judge who made the original order, thereby avoiding the need for a separate, time-consuming physical hearing.
What was the final disposition and the specific timeline for payment ordered by the Court?
The Court ordered the Third Defendant to pay the assessed costs within a strict timeframe. The disposition was clear:
The Third Defendant shall, within 14 days of this Order, pay the Claimant the said sum of USD 250,000.
This order finalized the costs recovery process for the WWFO application, bringing the specific procedural dispute to a close.
What are the wider implications for practitioners regarding cost recovery in DIFC enforcement proceedings?
Practitioners must anticipate that the DIFC Court will apply a rigorous standard of proportionality when assessing costs, even in high-stakes enforcement matters. The decision serves as a warning against the "duplication" of legal services. Engaging multiple firms or bringing in new counsel who are unfamiliar with the underlying arbitration background is likely to result in significant cost reductions during assessment.
This case is part of a broader series of orders in this case family. For further reading on the Court’s stance on asset disclosure and procedural delays, see:
- MIRIFA v MAHUR [2024] DIFC ARB 009 — The Court’s zero-tolerance stance on delayed asset disclosure
- MIRIFA v MAHUR [2025] DIFC ARB 009 — The High Cost of Asset Concealment and the Limits of Procedural Duplication
Where can I read the full judgment in Mirifa v Mahur [2023] DIFC ARB 009?
The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/arbitration/arb-0092023-mirifa-v-1-mahur-2-meison-3-mepur or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-009-2023_20231024.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Isah, R v Secretary of State for the Home Department | [2023] EWCA Civ 268 | To establish that the judge who made the underlying order is best positioned to assess costs on paper. |
Legislation referenced:
- Rules of the DIFC Courts (RDC) 23.69(3)
- Rules of the DIFC Courts (RDC) 23.76