What was the total monetary value of the costs claimed by Onslowe in the set aside application against Onorata, Opall, and Opalina?
The dispute arises from the Claimants’ unsuccessful attempt to set aside a final arbitral award rendered in DIAC Arbitration No. XX. Following the dismissal of their application on 7 January 2026, the Defendant, Onslowe, sought to recover the legal costs incurred in defending the challenge. The quantum of these costs was detailed in a formal statement submitted to the Court.
In the Statement of Costs dated 12 January 2026, the Defendant seeks a total of USD 37,700.46 in legal costs. These costs comprise professional fees incurred by a team of fee earners.
The Claimants, Onorata, Opall, and Opalina, faced this application for costs as a direct consequence of the Court's earlier ruling. The underlying litigation is further explored in the sibling order: ONORATA v ONSLOWE [2026] DIFC ARB 026 — The limits of jurisdictional challenges to arbitral awards (07 January 2026).
Which judge presided over the costs assessment in the Arbitration Division of the DIFC Courts on 11 February 2026?
The costs assessment was presided over by H.E. Justice Shamlan Al Sawalehi, sitting in the DIFC Court of First Instance, Arbitration Division. The order was issued on 11 February 2026, following the Defendant’s submission of a Statement of Costs on 12 January 2026.
What specific legal arguments did Onslowe advance regarding their entitlement to costs following the dismissal of the Set Aside Application?
The Defendant’s position was predicated on the principle that the successful party in litigation is generally entitled to recover their legal costs from the unsuccessful party. Onslowe argued that because the Court had already dismissed the Claimants’ Set Aside Application, the Court should exercise its discretion to award costs in their favor.
This cost application is brought by the Defendant seeking a costs award against the Claimants pursuant to paragraph 2 of the Order which dismissed the Claimants’ Set Aside Application.
The Claimants, having failed to set aside the DIAC award, were effectively the unsuccessful parties in the proceeding, triggering the Court's power to shift the burden of legal expenditure.
What was the precise doctrinal issue the Court had to resolve regarding the assessment of costs under RDC 38?
The Court was tasked with determining the appropriate quantum of costs to be awarded to the successful party, Onslowe, while ensuring that such an award remained "reasonable and proportionate." The doctrinal challenge lay in balancing the Defendant's right to recover costs incurred by a team of fee earners against the Court’s duty under the Rules of the DIFC Courts (RDC) to prevent excessive or disproportionate billing. The Court had to decide whether the full amount claimed was justified or if a reduction was necessary to reflect the standard basis of assessment.
How did H.E. Justice Shamlan Al Sawalehi apply the principle of proportionality to the costs claimed by Onslowe?
Justice Al Sawalehi utilized his judicial discretion to scrutinize the Statement of Costs. While acknowledging that the Defendant was the successful party, the Court determined that a blanket award of the full amount was not appropriate. The judge applied the test of proportionality to ensure that the costs were commensurate with the work performed and to guard against any potential excess in the time billed by the legal team.
For the reasons set out in that Order, I found that the Defendant was the successful party in the Set Aside Application and is therefore entitled to costs in principle pursuant to RDC 38.7.
In exercising my discretion under RDC 38.8 and 38.23, and applying the standard basis of assessment, I am satisfied that a reduction is warranted to ensure that the costs awarded are reasonable and proportionate in all circumstances.
Which specific RDC rules and Practice Directions did the Court rely upon to determine the costs award?
The Court’s decision was grounded in Part 38 of the Rules of the DIFC Courts (RDC). Specifically, the Court cited RDC 38.7, which establishes the principle that the successful party is entitled to costs. Furthermore, the Court invoked RDC 38.8 and RDC 38.23 to guide its discretion in assessing costs on the standard basis, ensuring they were reasonable and proportionate. Additionally, the Court referenced RDC 38.40 regarding the timeline for payment and Practice Direction No. 4 of 2017 to set the interest rate for any potential late payment.
How did the Court utilize the standard basis of assessment to adjust the final costs awarded to Onslowe?
The Court used the standard basis of assessment to filter out potential inefficiencies in the Defendant’s legal spending. By applying this standard, the Court did not merely rubber-stamp the USD 37,700.46 requested. Instead, it assessed whether the time spent by the fee earners was necessary and proportionate to the complexity of the Set Aside Application.
I consider that an award of 80% of the total costs claimed appropriately reflects the Defendant’s efforts while addressing proportionality and the need to guard against any excess in time spent.
This reasoning demonstrates a proactive judicial approach to cost management, where the Court actively reduces claims to align with what it deems a reasonable expenditure for the specific legal task at hand.
What was the final disposition of the costs application and the specific timeline for payment?
The Court ordered the Claimants to pay 80% of the total costs claimed by the Defendant. This resulted in a total award of USD 30,160.37. The Court also set a strict deadline for compliance and stipulated the consequences of failing to meet that deadline.
The Claimants shall therefore pay the Defendant the sum of USD 30,160.37, being 80% of the total costs claimed.
The Claimants shall pay the Costs Award within 14 days from the date of this Order pursuant to RDC 38.40.
Should the Claimants fail to pay within the 14-day window, interest will accrue on the unpaid sum at a rate of 9% per annum.
What are the wider implications of this ruling for practitioners dealing with set aside applications in the DIFC?
This ruling serves as a reminder that success in a set aside application does not guarantee the recovery of 100% of legal costs. Practitioners should anticipate that the DIFC Courts will rigorously apply the proportionality test under RDC 38.8 and 38.23, even when a party is clearly successful. Litigants must ensure that their Statements of Costs are meticulously prepared, as the Court is willing to apply significant percentage reductions to guard against perceived excesses in time spent. For a deeper analysis of the underlying jurisdictional issues, see: Onorata v Onslowe [2026] DIFC ARB 026: The Limits of 'Employment' Characterisation in Shareholder Disputes.
Where can I read the full judgment in Onorata v Onslowe [2026] DIFC ARB 026?
The full text of the Order with Reasons can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/arbitration/arb-0262025-1-onorata-2-opall-3-opalina-v-onslowe. A copy is also available on the CDN: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-026-2025_20260211.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)