What was the specific quantum dispute between Oswin and the Second Defendant, Ondray, regarding the costs of the PTA Application in ARB 032/2025?
The dispute arose from a failed Permission to Appeal (PTA) application filed by the Second Defendant, Ondray, against an earlier order dated 16 September 2025. Following the dismissal of that application, the Court ordered Ondray to pay the Claimant’s (Oswin) costs on an indemnity basis. Oswin submitted a statement of costs totaling AED 85,417.50 for the work performed in responding to the application.
The Second Defendant failed to file any written submissions regarding the quantum of these costs by the Court-mandated deadline of 24 November 2025. Consequently, the Court proceeded to a summary assessment based on the Claimant’s filings. As noted in the Court's order:
The Second Defendant shall pay the sum of AED 80,000 to the Claimant within 14 days of this Order.
The final assessment of AED 80,000 represented a slight reduction from the claimed amount, reflecting the Court’s adjustment for perceived duplication of work among the Claimant’s legal team.
Which judge presided over the summary assessment of costs in ARB 032/2025 and in which division of the DIFC Courts was this heard?
The matter was heard by H.E. Justice Sir Jeremy Cooke, sitting in the Arbitration Division of the DIFC Court of First Instance. The order with reasons was issued on 16 December 2025, following the Second Defendant’s failure to engage with the Court’s directions regarding the quantum of costs.
What were the respective positions of Oswin and Ondray regarding the reasonableness of the legal fees claimed?
Oswin, as the Claimant, submitted a detailed statement of costs amounting to AED 85,417.50, arguing that the complexity of the PTA Application—which involved a 14-page application and a 21-page skeleton argument supported by numerous exhibits—necessitated the involvement of four practitioners. The Claimant maintained that the hourly rates charged were reasonable and that the time spent was a direct consequence of the volume of material generated by the Second Defendant.
Conversely, the Second Defendant, Ondray, adopted a position of non-engagement. Despite being ordered by the Court to file written submissions on the quantum of costs by 24 November 2025, Ondray failed to provide any response or challenge to the Claimant’s statement of costs. This silence left the Court to determine the reasonableness of the fees without the benefit of the paying party's specific objections.
What was the precise doctrinal issue the Court had to resolve regarding the application of indemnity costs under the Rules of the DIFC Courts?
The Court was tasked with determining the appropriate quantum of costs to be awarded on an indemnity basis in the absence of any challenge from the paying party. The doctrinal issue centered on the shift in the burden of proof when costs are awarded on an indemnity basis rather than the standard basis. Specifically, the Court had to decide whether the total hours claimed by a team of four practitioners were "reasonably incurred" and how to reconcile the substantial time spent with the requirement to avoid unnecessary duplication of work.
How did H.E. Justice Sir Jeremy Cooke apply the indemnity basis test to the Claimant’s statement of costs?
Justice Cooke applied the principle that indemnity costs remove the requirement for proportionality, focusing exclusively on whether the fees were reasonably incurred. Because the Second Defendant failed to make submissions, the burden of proof remained squarely on them to demonstrate that the costs were not reasonably incurred, a burden they failed to discharge.
The Court acknowledged that the volume of documentation necessitated significant legal input, but scrutinized the efficiency of the team structure. As the Court reasoned:
Costs have been awarded on the indemnity basis so that issues of proportionality do not arise and the only question is whether the fees have reasonably been incurred, with the burden on the Second Defendant to establish that the costs are not so incurred. The Second Defendant made no submissions.
The Court further noted the practical reality of the work performed:
The 14-page PTA Application and the 21-page skeleton argument submitted by the Second Defendant with a large number of exhibits required extensive time which accounts for the large number of hours spent by 4 practitioners.
Which specific Rules of the DIFC Courts (RDC) and legal principles governed the Court’s assessment of the Claimant’s costs?
The assessment was governed by the RDC provisions regarding summary assessment of costs. While the order does not cite specific RDC rule numbers, it relies on the established DIFC practice of summary assessment where the Court evaluates the reasonableness of hourly rates and the total time spent. The Court also relied on the principle that when costs are awarded on an indemnity basis, the paying party bears the burden of proving that the costs were not reasonably incurred. This approach aligns with the Court’s inherent power to manage costs and ensure that the indemnity principle is applied effectively to compensate the successful party for the actual costs of defending a meritless application.
How did the Court utilize the concept of "duplication of work" to adjust the final award from the claimed AED 85,417.50?
The Court utilized the concept of duplication as a mechanism to ensure that the indemnity award remained within the bounds of reasonableness. While the Court accepted that the hourly rates of the four practitioners were reasonable, it identified that the involvement of a four-person team inevitably led to some overlap in tasks.
The Court’s reasoning for the final figure was as follows:
Taking into account all the above factors and reducing the time for an element of duplication of work with a team of four, I conclude that of the total claimed fees of AED 85,417.50, a not unreasonable figure is AED 80,000.
The Court also noted that while 27 hours of work was substantial, the majority of that time was billed by an Associate at the lowest hourly rate, which mitigated the impact of the team size on the total cost.
What was the final disposition of the Court regarding the payment of costs in ARB 032/2025?
The Court assessed the Claimant's costs in the sum of AED 80,000. The Second Defendant, Ondray, was ordered to pay this amount to the Claimant within 14 days of the date of the order (16 December 2025). This order finalized the costs recovery process for the PTA Application, providing the Claimant with a clear, enforceable judgment for the assessed amount.
What are the wider implications of this ruling for practitioners regarding the summary assessment of indemnity costs?
This case serves as a stark reminder of the risks associated with failing to engage with the Court’s directions during the costs assessment phase. By failing to file submissions on quantum, the Second Defendant effectively waived the opportunity to challenge the reasonableness of the Claimant’s bill. Practitioners should note that when an indemnity order is made, the Court will not perform a proportionality check, and the burden of proof shifts entirely to the paying party to show that specific items were not reasonably incurred.
For a deeper analysis of the broader context of this dispute, including the Court's stance on parallel proceedings and the protection of the arbitral seat, see: Oswin v Otila [2025] DIFC ARB 032: The High Cost of Defying the DIFC Supervisory Shield.
Where can I read the full judgment in Oswin v Otila [2025] DIFC ARB 032?
The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/arbitration/arb-0322025-oswin-v-1-otila-2-ondray-1 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-032-2025_20251216.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No external case law was cited in the summary assessment of costs. |
Legislation referenced:
- Rules of the DIFC Courts (RDC) — Provisions regarding summary assessment of costs.