This order provides a definitive assessment of recoverable costs following a failed application for permission to appeal, emphasizing the court's discretionary power to adjust claims based on the principle of proportionality.
What was the specific monetary dispute between Ohtli and Onora regarding the costs of the PTA Application?
The dispute centered on the quantum of legal fees recoverable by the Defendant, Onora, following the Claimant’s unsuccessful attempt to appeal a previous ruling. After the Court directed the Claimant to pay the costs associated with the Permission to Appeal (PTA) Application, the Defendant submitted a Statement of Costs seeking reimbursement for professional fees incurred during the proceedings.
The Defendant filed a Statement of Costs dated 2 March 2026, claiming a total sum of USD 17,600, comprising professional fees incurred in responding to the Claimant’s PTA Application and related stay application.
The Claimant, Ohtli, faced a liability for these costs, but the final amount remained subject to the Court’s assessment of whether the claimed USD 17,600 was reasonable and proportionate to the issues at stake in the PTA Application. For further context on the procedural history of this dispute, see the related orders: OHTLI v ONORA [2025] DIFC ARB 034 — The High Cost of Procedural Overreach in Anti-Suit Injunctions and OHTLI v ONORA [2026] DIFC ARB 034 — The High Cost of Procedural Overreach in Anti-Suit Injunctions.
Which judge presided over the assessment of costs in Ohtli v Onora [2026] DIFC ARB 034?
H.E. Justice Shamlan Al Sawalehi presided over this matter in the Arbitration Division of the DIFC Court of First Instance. The order was issued on 24 March 2026, following the Court's previous determination on 27 February 2026 that the Claimant was liable for the costs of the PTA Application.
What were the procedural steps leading to the costs assessment in Ohtli v Onora?
The procedural path to this assessment began with the Claimant’s filing of an application for permission to appeal limited to costs on 12 January 2026. Following the Court’s rejection of that application and the subsequent order for costs, the parties were required to finalize the quantum.
By the Order dated 27 February 2026, the Claimant was directed to pay the Defendant’s costs of the PTA Application, with the Respondent to submit a Statement of Costs within five days.
The Defendant complied by submitting its Statement of Costs on 2 March 2026. The Court then moved to assess these figures, ensuring that the recovery sought by the Defendant aligned with the standards set out in the Rules of the DIFC Courts (RDC).
What was the precise legal question H.E. Justice Shamlan Al Sawalehi had to answer regarding the Defendant's costs?
The Court was tasked with determining the appropriate quantum of costs to be awarded to the Defendant on a standard basis. The core legal issue was not merely the mathematical verification of the fees incurred, but the application of the proportionality test to the specific context of a PTA Application. The Court had to decide whether the full amount of USD 17,600 was justifiable or whether, in the exercise of judicial discretion, a reduction was necessary to satisfy the requirements of the RDC.
How did the Court apply the proportionality test to the costs claimed by Onora?
In reaching the final figure, the Court utilized its discretionary powers to balance the Defendant's right to recover costs against the requirement that such costs remain proportionate to the nature of the application.
In assessing those costs, I have had regard to RDC 38.7, 38.8 and 38.23, and to the requirement that costs allowed on the standard basis be both reasonable and proportionate.
The Court concluded that while the Defendant was the successful party, the full amount claimed did not fully satisfy the proportionality requirement. Consequently, the Court applied a 20% reduction to the total claim.
While the Defendant was the successful party in the PTA Application, I consider it appropriate, in the exercise of my discretion, to allow recovery of 80% of the total costs claimed, reflecting the nature of the application and the need to ensure proportionality in the costs awarded.
Which specific RDC rules and practice directions governed the Court's assessment?
The Court’s assessment was strictly guided by Part 38 of the Rules of the DIFC Courts. Specifically, the Court cited RDC 38.7, 38.8, and 38.23 as the primary framework for determining whether costs are reasonable and proportionate. Furthermore, the Court relied on RDC 38.40 to mandate the timeline for payment and Practice Direction No. 4 of 2017 to establish the interest rate applicable in the event of non-payment.
How did the Court utilize its discretion under RDC 38 to finalize the costs award?
The Court used its discretion to bridge the gap between the "reasonable" fees incurred by the Defendant and the "proportionate" amount that the Claimant should be required to pay. By awarding 80% of the claimed USD 17,600, the Court signaled that the complexity and significance of the PTA Application did not warrant the full recovery of the professional fees submitted. This approach ensures that the costs regime in the DIFC remains a tool for fair compensation rather than a mechanism for excessive recovery.
What was the final disposition and the specific payment order made by the Court?
The Court ordered the Claimant to pay a total of USD 14,080. This amount was calculated as 80% of the original claim of USD 17,600.
The Claimant shall therefore pay the Defendant the sum of USD 14,080, as set out in the Order above.
The Court also set strict timelines for this payment and established the consequences for default.
The Claimant shall pay the Costs Award within 14 days of the date of this Order, pursuant to RDC 38.40.
In the event that the Claimant fails to pay the Costs Award within 14 days of the date of this Order, interest shall accrue at the rate of 9% per annum from the date of this Order until payment in full, in accordance with Practice Direction No. 4 of 2017.
What are the wider implications for practitioners regarding costs assessments in the DIFC?
This order serves as a reminder that the DIFC Courts will rigorously apply the proportionality test even when a party is successful in an application. Practitioners must ensure that their Statements of Costs are not only supported by evidence of work performed but are also defensible in terms of their proportionality to the specific application at hand. Over-claiming, even when fees are technically incurred, risks a discretionary reduction by the Court. The deep editorial analysis of this case is at: Ohtli v Onora [2026] DIFC ARB 034: The High Cost of Procedural Overreach in Anti-Suit Injunctions.
Where can I read the full judgment in OHTLI v ONORA [2026] DIFC ARB 034?
The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/arbitration/arb-0342025-ohtli-v-onora-3 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-034-2025_20260324.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- Rules of the DIFC Courts (RDC): Part 38, RDC 38.7, RDC 38.8, RDC 38.23, RDC 38.40
- Practice Direction No. 4 of 2017 (Interest on Judgments)