This order addresses the limits of procedural delay in the DIFC, confirming that the filing of an appeal does not automatically stay the detailed assessment of costs following the enforcement of an arbitral award.
Did the Court err in treating the Partial Award and Enforcement Order as final relief for the purposes of RDC 40?
The dispute centers on the Defendant’s (Netty) attempt to halt the detailed assessment of costs following the successful enforcement of a Partial Award against it by the Claimant (Nalani). The Defendant argued that because it had filed a jurisdictional challenge and an appeal, the underlying proceedings were not "concluded," thereby rendering the costs assessment premature under the Rules of the DIFC Courts (RDC). The Court rejected this, emphasizing that the enforcement of the Partial Award constituted a final determination of the rights in question.
The central thrust of the Applicant’s challenge is that the Court erred in treating the Partial Award and the ensuing Enforcement Order as constituting final relief sufficient to trigger detailed assessment under Rule 40 of the Rules of the DIFC Courts (the "RDC").
The Claimant maintained that the enforcement of the award was a distinct and final stage of the proceedings. The Court agreed, noting that the Defendant’s attempt to characterize the enforcement as "interim" was a tactical maneuver to avoid the immediate financial consequences of the costs order. The litigation remains focused on the finality of the enforcement process, with the Court signaling that procedural challenges cannot be used to indefinitely suspend the recovery of costs. Further analysis of this case can be found at: Nalani v Netty [2025] DIFC ARB 027: The High Cost of Procedural Obstruction in Enforcement Proceedings.
Which judge presided over the PTA and Stay Applications in Nalani v Netty [2025] DIFC ARB 027?
H.E. Justice Shamlan Al Sawalehi presided over the Arbitration Division proceedings. The order, issued on 22 September 2025, followed previous rulings by the same judge on 15 May 2025 and 27 May 2025, which had already established the validity of the enforcement and the subsequent costs liability.
What were the specific legal arguments advanced by Nalani and Netty regarding the stay of costs assessment?
The Applicant (Netty) argued that a stay of the detailed assessment was necessary to prevent "irreparable harm" and to avoid the futility of assessing costs if the underlying enforcement order were overturned on appeal. Drawing an analogy to Erinford-type injunctions, the Applicant contended that the balance of convenience favored a pause in the process. Conversely, the Respondent (Nalani) argued that the Applicant failed to meet the threshold for permission to appeal under RDC 44.19 and that the assessment process was already well-advanced, with the Applicant having already filed Points of Dispute.
The Applicant further argues that the 27 May 2025 Order erred in its conclusion that the Enforcement Order reflected only the operative terms of the Partial Award.
The Respondent further asserted that the Applicant’s jurisdictional challenges were merely a continuation of procedural obstruction, noting that the enforcement order had been binding since December 2024.
What was the doctrinal question regarding the finality of Partial Awards under Article 42 of the DIFC Arbitration Law?
The Court had to determine whether a Partial Award, once enforced, possesses the requisite finality to trigger the RDC 40 cost assessment regime, even when the respondent maintains an ongoing jurisdictional challenge. The legal issue was whether the "finality" required for enforcement and subsequent costs recovery is contingent upon the total conclusion of all arbitral proceedings or merely the finality of the specific relief granted in the award.
The Award did not comprise merely interim or procedural directions but imposed definitive obligations which were binding on the parties. As the Respondent correctly notes, Article 42 of the DIFC Arbitration Law does not require the Award to be the final award in the arbitration as a whole; it suffices that it contains relief that is final in nature.
How did H.E. Justice Shamlan Al Sawalehi apply the test for procedural stays in the context of RDC 40?
Justice Al Sawalehi applied a strict interpretation of the RDC, finding that the mere filing of an appeal does not create an automatic stay. The Court reasoned that the enforcement order was a standalone, binding instrument. By failing to demonstrate that the assessment would cause prejudice that could not be remedied, the Applicant failed to meet the threshold for a stay.
The fact that a jurisdiction challenge had been filed did not, in the Respondent’s submission, negate the finality of the Order for enforcement purposes.
The Court further noted that the procedural requirements under RDC 40.10(1) had been satisfied, and the Applicant’s attempt to re-litigate the scope of the enforcement order was an abuse of the court's time.
Which specific DIFC statutes and RDC rules were central to the Court’s decision?
The Court relied heavily on Article 42 and 43 of the DIFC Arbitration Law to define the nature of the Partial Award. Regarding the procedural aspects of the costs assessment, the Court cited RDC 40.1, 40.2, and 40.10, which govern the commencement and conduct of detailed assessments. The application for permission to appeal was governed by RDC 44.19, while the stay application invoked RDC 4.2(6) and 40.2.
How did the Court distinguish the Applicant’s reliance on procedural rules from the established finality of the Enforcement Order?
The Court utilized the Respondent’s arguments to clarify that the Enforcement Order of 24 December 2024 was the operative trigger for the costs assessment. The Court rejected the Applicant's attempt to use RDC 40.10 as a shield against enforcement, clarifying that the rule does not require the total cessation of all potential legal challenges before costs can be assessed.
As to the 27 May 2025 Order, the Respondent maintains that it accurately restated the operative terms of the Partial Award and did not exceed its scope.
The Court also affirmed its previous findings regarding the validity of the Notice of Commencement, noting that the Applicant had already engaged with the process by filing Points of Dispute, thereby undermining its own argument that the process was premature.
I held that the Notice of Commencement filed by the Respondent on 21 March 2025 was valid and properly served, and that the procedural requirements under RDC 40.10(1) were satisfied.
What was the final disposition of the PTA and Stay Applications in Nalani v Netty?
The Court dismissed both the Permission to Appeal (PTA) Application and the Stay Application in their entirety, finding them to be meritless and repetitive. The Applicant was ordered to pay the Respondent’s costs for the applications.
The Applicant shall pay the Respondent’s costs of the Applications. The Respondent shall file and serve a Statement of Costs, not exceeding three pages in length, within five days of the date of this Order.
What are the wider implications for practitioners regarding procedural obstruction in the DIFC?
This decision serves as a stern warning that the DIFC Courts will not tolerate the use of repetitive applications to delay the enforcement of arbitral awards or the subsequent assessment of costs. Practitioners must anticipate that once an enforcement order is granted, the Court will view the enforcement as final, regardless of pending jurisdictional challenges. The ruling reinforces the principle that the filing of an appeal is not a "get out of jail free" card for staying costs assessments. For further context on this case family, see the sibling orders: NALANI v NETTY [2025] DIFC ARB 027 — The High Cost of Procedural Obstruction in Enforcement Proceedings (26 February 2025), 15 May 2025, and 2 October 2025.
Where can I read the full judgment in Nalani v Netty [2025] DIFC ARB 027?
The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/arbitration/arb-0272024-nalani-v-netty-2 or via the CDN: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-027-2024_20250922.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- DIFC Arbitration Law: Articles 42, 43
- RDC: 1.6, 4.2(6), 40.1, 40.2, 40.10, 44.19