On 26 October 2022, Justice Sir Richard Field delivered a comprehensive judgment in TCD 001/2020, dismissing a multi-million dollar claim brought by Gate Mena DMCC and Huobi Mena FZE against Tabarak Investment Capital Limited and Christian Thurner. The dispute centered on the loss of 300 Bitcoin during a transaction that went awry, with the Claimants alleging that the Defendants acted as negligent custodians and breached their fiduciary duties. Justice Field’s ruling, which followed an exhaustive 8-day trial, underscored the court's skepticism toward unverified claims of agency and the high evidentiary bar required to establish liability in complex digital asset arrangements.
For cross-border litigators and DIFC practitioners, this case serves as a stark warning regarding the intersection of traditional financial regulation and the volatile world of cryptocurrency. The decision clarifies that the DIFC Courts will not stretch the definitions of fiduciary duty or agency to cover losses arising from insecure transaction mechanisms—specifically those involving user-error in wallet setup—unless a clear, binding contract and a demonstrable breach of duty are proven. As digital asset disputes increasingly migrate to the DIFC, this judgment provides a vital roadmap for how the Court of First Instance will scrutinize the reliability of witness testimony and the technical realities of blockchain transactions.
How Did the Dispute Between Gate Mena and Tabarak Arise?
The genesis of the multi-million dollar litigation in Gate Mena v Tabarak Investment Capital lies in a catastrophic misalignment of expectations between sophisticated commercial actors operating at the frontier of digital asset trading. The dispute originated from a fundamental misunderstanding of the roles and responsibilities in a high-value cryptocurrency transaction, exacerbated by a conspicuous lack of formal contractual clarity. When parties engage in the transfer of highly liquid, bearer-like digital assets without meticulously defined legal frameworks, the resulting fallout inevitably tests the boundaries of established legal doctrines regarding agency, custody, and fiduciary duty.
The factual matrix crystallized on a specific date. On 3 February 2020 there was a meeting at the offices of Tabarak Investment Capital Limited, a firm authorised by the Dubai Financial Services Authority (DFSA) to provide various financial services. The gathering brought together representatives from Gate Mena DMCC and Huobi Mena FZE (the Claimants), including Mr Sultan Bin Kharsham Al Ali and Mr Shantu Saxena, alongside Mr Christian Thurner of Tabarak. Also present were Mr Evgeniy Morozov and Mr Alekseij Socin, representing Navarcon s.r.o., the intended purchaser of the digital assets.
The purpose of the meeting was to carry out a pre-arranged transaction involving the sale of 300 Bitcoin (BTC) by Huobi to Navarcon. The Claimants operated under the assumption that Tabarak, by hosting the meeting and facilitating the introduction, was acting as an escrow agent and custodian for the transaction. This assumption, however, was built on a foundation of informal communications rather than a documented retainer. The Claimants sought damages for the subsequent loss of the 300 BTC, alleging that the Defendants breached their duties by advising on and overseeing an insecure transaction mechanism.
The core of the failure was a technical error during the setup of a Trezor hardware wallet, a device designed to secure cryptocurrency private keys. The transaction protocol required the BTC to be transferred into a newly initialized Trezor wallet. During the initialization process, the device generates a 12-word recovery seed phrase, which grants absolute control over the assets stored within. The misappropriation occurred because the Navarcon representatives obtained the 12 seed words by scrolling up or making incorrect selections during the wallet setup process, effectively capturing the keys before the physical device was handed over. Once the 300 BTC were transferred into the wallet, the buyers utilized the compromised seed phrase to siphon the assets to external addresses, leaving the Claimants empty-handed.
The legal battle that ensued required the Technology and Construction Division to untangle the web of alleged duties owed by Tabarak to the Claimants. Justice Sir Richard Field’s analysis focused acutely on the absence of a formalized agreement. The Claimants attempted to construct a binding contractual relationship from the surrounding circumstances and oral discussions, arguing that Tabarak had assumed the mantle of a fiduciary custodian. The Court, however, applied a rigorous standard to the formation of commercial contracts, particularly those involving substantial financial exposure.
The Court found that the agreement between Huobi and Tabarak never became a binding contract (DIFC_TCD-001-2020, para 10). The Court's refusal to imply a binding contract in the absence of clear, mutual assent on essential terms serves as a stark warning to digital asset practitioners. The mere presence of a regulated entity in a transaction does not automatically impose custodial or escrow obligations upon it. The relationship must be defined by explicit contractual parameters. Justice Field further clarified that this was not a case where the relationship was akin to a contract, where but for the lack of consideration, there would have been a contract (DIFC_TCD-001-2020, para 12).
Having dismantled the contractual claim, the Court turned to the allegations of negligence and breach of fiduciary duty. The Claimants asserted that Tabarak owed a duty of care to ensure the transaction was conducted securely, relying on the firm's regulatory status and Mr Thurner's purported expertise. The Court systematically rejected these assertions, finding that the Defendants did not assume responsibility for the technical execution of the Trezor wallet setup, nor did they act as fiduciaries in the context of the 3 February meeting. The Court found that Tabarak was not liable in negligence for the loss of the 300 BTC, and therefore was not in breach of the standard set out in Schedule 3, paragraph 5 of the Law of Obligations, which defines a fiduciary's duty to exercise care, skill, and diligence (DIFC_TCD-001-2020, para 4).
The evidentiary burden in establishing such duties without a written contract is exceptionally high. The Court expressed significant reservations regarding the reliability of the Claimants' key witnesses, whose testimonies were crucial to the narrative of an implied escrow arrangement. The judicial scrutiny applied to oral evidence in complex commercial disputes is unforgiving, particularly when the stakes involve hundreds of millions of dollars in untraceable digital assets. The Court noted that Mr Al Ali’s evidence needed to be very carefully scrutinised before being accepted as accurate and reliable (DIFC_TCD-001-2020, para 6). Similarly, Mr Saxena’s evidence had to be treated cautiously due to admitted mistakes in his witness statements (DIFC_TCD-001-2020, para 7).
The failure to establish a duty of care inevitably doomed the regulatory claims as well. The Claimants had argued that Tabarak breached various provisions of the DFSA Rulebook (GEN module), which impose high standards of conduct on authorised firms. However, regulatory obligations do not exist in a vacuum; they must be tethered to a specific client relationship or a defined scope of services. The Court found that Tabarak was not liable in negligence for the loss of the 300 BTC, and thus was not in negligent breach of GEN 4.2.2, GEN 4.2.3, or GEN 4.2.6, and therefore not liable in damages under Article 194 of the Regulatory Law (DIFC_TCD-001-2020, para 2).
The Court's comprehensive dismissal of the claims extended across all pleaded heads of liability. Tabarak is not liable in damages under the other heads of claim pleaded in the Re-Re-Amended Particulars of Claim, reinforcing the principle that a claimant cannot reverse-engineer liability simply because a loss occurred on a defendant's premises. After a painstaking consideration of the facts, the Court concluded that the proximate cause of the loss was the technical compromise of the Trezor wallet—a process over which the Claimants themselves exercised insufficient oversight.
Even if a duty of care had been established, the Court indicated that the Claimants' own actions would have severely mitigated any potential damages. The Law of Obligations provides that a defendant’s liability under Article 17(1) shall be reduced by the extent to which the claimant’s negligent acts or omissions contributed to their loss (DIFC_TCD-001-2020, para 3).
A foundational element of the Court's analysis, which has broader implications for DIFC jurisprudence, was the formal recognition of the legal status of the assets in question. To sustain claims for breach of trust or conversion, the underlying subject matter must be recognized as property under the law. Justice Field accepted the Claimants’ contention that Bitcoin are property, aligning with the reasoning in AA v Unknown Persons [2019] EWHC 3556 (Comm) (DIFC_TCD-001-2020, para 11).
This classification of Bitcoin as property is a critical doctrinal stepping stone. It ensures that digital assets are subject to the full spectrum of proprietary remedies, a principle that has been further tested and expanded in subsequent DIFC litigation, such as the complex freezing orders seen in DEC-001-2025: DEC 001/2025 Techteryx Ltd v (1) Aria Commodities DMCC (2) Mashreq Bank PSC (3) Emirates Nbd Bank PJ. The recognition of digital assets as property provides the necessary jurisdictional hook for the courts to intervene, much like the foundational procedural mechanisms established in early cases like CFI-026-2009 CFI 026/2009 - Order.
Ultimately, the dispute between Gate Mena and Tabarak serves as a definitive textbook example of the perils of informal transacting in the digital asset space. The loss of 300 BTC was not merely a technical failure; it was the direct result of a commercial environment where assumptions replaced contracts, and proximity was mistaken for fiduciary responsibility. The DIFC Courts have made it unequivocally clear that they will not construct legal safety nets for sophisticated parties who fail to document their commercial relationships with precision.
How Did the Case Move From Ex Parte Application to Final Hearing?
The procedural trajectory of Huobi OTC DMCC v Tabarak Investment Capital Limited & Christian Thurner provides a masterclass in the intensive case management required when digital asset disputes intersect with traditional agency and tort claims. Long before the substantive trial commenced, the Dubai International Financial Centre (DIFC) Courts were forced to actively police the perimeter of the litigation, managing a complex web of jurisdictional transfers, contested joinder applications, and multi-directional document production disputes. The procedural history reveals a judiciary highly attuned to the risks of allowing technically complex cryptocurrency claims to devolve into unwieldy, multi-party fishing expeditions.
The litigation formally commenced with a claim form filed on 4 March 2020. However, the first significant procedural pivot occurred on 28 July 2020, when Justice Sir Richard Field ordered that the proceedings be transferred to the Technology and Construction Division (TCD) pursuant to Rule 56.12 of the Rules of the DIFC Courts (RDC). The Claimant’s application to move the matter to the TCD signaled an early recognition that the dispute was not merely a standard breach of contract claim, but one requiring specialized judicial scrutiny of the underlying digital architecture. The TCD, traditionally the venue for complex engineering and IT infrastructure disputes, has increasingly become the forum of choice for cryptocurrency litigation where the mechanics of digital wallets, blockchain transfers, and cryptographic escrow mechanisms form the factual core of the dispute.
To understand the ferocity of the procedural battles that followed, one must examine the precise nature of the Claimant’s allegations. The dispute centered on a catastrophic failure in a digital asset transaction mechanism. As Justice Field summarized the core grievance, the Claimant alleged that "instead of ensuring the price had been paid before transferring the BTC, the mechanism adopted for the BTC transaction resulted in the BTC being transferred to the Buyer without the price being paid following which the buyer failed to pay the price, leaving the Claimant with a loss of USD 2,865,873.57, alternatively USD 2,899,372.00" (DIFC_TCD-001-2020_20200728.txt).
Faced with a multi-million dollar loss, the Claimant pursued both the corporate entity, Tabarak Investment Capital Limited (D1), and its Investment Manager, Mr. Christian Thurner (D2). The dual-track nature of the liability theory was explicitly pleaded: the Claimant’s claim against D1 was "brought in both contract and for breach of a duty of care in tort" (DIFC_TCD-001-2020_20200728.txt).
The Defendants’ responses immediately fractured the factual matrix, setting the stage for extensive pre-trial skirmishing. D1 advanced a primary defense that the Claimant had negotiated the terms of the Bitcoin transaction entirely on its own behalf. Crucially, D1 also deployed a vicarious liability defense, pleading that Mr. Thurner, in devising the transfer mechanism, did not act in the course of his employment. Mr. Thurner, in turn, denied advising or assisting any of the parties on his own behalf and wholly rejected the existence of a duty of care owed to the Claimant.
This fragmented defense strategy directly precipitated the most contentious pre-trial application: the battle over joinder. On 24 March 2021, Mr. Thurner filed an application seeking permission under RDC Part 20 to join Evgeniy Morozov (the ultimate buyer of the Bitcoin) and Navarcon s.r.o. as the Third and Fourth Defendants. The tactical logic was apparent: by bringing the allegedly defaulting buyer into the proceedings, D2 sought to shift the court’s focus from the negligent design of the transfer mechanism to the ultimate misappropriation of the assets by third parties.
Justice Field, however, firmly rejected this attempt to expand the litigation's scope. On 3 June 2021, the Court ordered that The Permission Application is dismissed. The ruling exposed a critical doctrinal distinction in DIFC procedural law regarding the purpose of joining non-parties. The Court held that there was no substantive issue involving Mr. Morozov or Navarcon that required their formal joinder as defendants to resolve the existing claims between the Claimant, D1, and D2. If the Defendants merely required the third parties' testimony to establish the factual sequence of the Bitcoin transfer, the proper procedural vehicle was to secure their evidence via subpoena, not to drag them into the suit as co-defendants.
Furthermore, Justice Field highlighted a fatal flaw in D2's procedural strategy. If the true intent was to seek an indemnity or contribution from the buyer for any damages D2 might ultimately be ordered to pay, the application should have been framed differently, as "Each of D1 and D2 could have joined in both Mr Morozov and Navarcon under RDC Part 21 seeking a contribution to such compensation that either might be ordered to pay the Claimant but neither has chosen to do so" (DIFC_TCD-001-2020_20210603.txt).
The dismissal of the joinder application carried immediate financial consequences, though the Court exercised restraint regarding the severity of the costs order. While the Claimant sought immediate assessment and indemnity costs, arguing that D2's conduct constituted an attempt to mislead the Court, Justice Field declined to apply the punitive standard, stating "I also reject the Claimant’s contention made in paragraphs 24.2 – 25 that the costs should be assessed on the indemnity basis. I do not consider that D2’s conduct related in paragraphs 8 and 9 of the Claimant’s submissions constituted an attempt to mislead" (DIFC_TCD-001-2020_20210603.txt).
Instead, the Court ordered that D2 pay the Claimant's costs on the standard basis, to be assessed after the conclusion of the main proceedings. This approach to costs—reserving the final financial reckoning while immediately penalizing the unsuccessful applicant on a standard basis—reflects the DIFC Courts' broader philosophy of maintaining procedural discipline without prematurely punishing parties for aggressive, albeit flawed, pre-trial tactics. Similar judicial restraint in the face of complex procedural maneuvering can be observed in earlier foundational cases such as CFI-026-2009 CFI 026/2009 - Order, where the Court similarly balanced the need for robust case management against the realities of evolving commercial claims.
With the boundaries of the litigation firmly restricted to the original three parties, the case descended into a grueling phase of document production. By late July and early August 2021, the docket was flooded with competing disclosure requests. The Claimant sought documents from both D1 and D2; D1 demanded documents from the Claimant and D2; and D2 filed requests against the Claimant. The sheer volume of cross-requests and subsequent objections threatened to derail the Case Management Order timeline.
On 12 September 2021, H.E. Justice Maha Al Mheiri intervened with a highly surgical disclosure order that cut through the parties' expansive demands. The Court's approach was meticulous, granting specific requests while outright denying broad, fishing-expedition-style demands. For instance, regarding the First Defendant's requests to the Claimant, the Court ordered the Claimant to produce Request No. 4a, but may provide this document in redacted form to the extent it covered sensitive discussions about the "deal structure."
More significantly, Justice Al Mheiri heavily utilized the mechanism of requiring formal attestations where documents were contested or allegedly non-existent. Across multiple schedules, the Court ordered the parties to provide a Statement of Truth in relation to specific disclosure requests. This procedural tool is particularly potent in digital asset litigation, where the existence of offline wallets, encrypted communications, and informal messaging app negotiations (such as Telegram or WhatsApp) often blur the lines of standard corporate record-keeping. By forcing principals to sign Statements of Truth regarding the limits of their disclosure, the Court locked the parties into definitive evidentiary positions well ahead of trial, severely limiting their ability to introduce surprise documentation later in the proceedings.
The rigorous case management displayed throughout 2020 and 2021 in Huobi OTC DMCC mirrors the DIFC Courts' evolving approach to complex digital economy disputes. As seen in recent high-stakes crypto litigation, such as the sweeping injunctions granted in DEC-001-2025: DEC 001/2025 Techteryx Ltd v (1) Aria Commodities DMCC (2) Mashreq Bank PSC (3) Emirates Nbd Bank PJ, the Court recognizes that digital asset cases possess a unique propensity to spiral out of control. The underlying assets are borderless, the transaction mechanisms are opaque, and the chain of intermediaries is often poorly documented.
By strictly enforcing the rules of joinder under RDC Part 20 and Part 21, and by applying a scalpel rather than a sledgehammer to document production requests, the TCD ensured that the ultimate trial would remain focused on the core legal questions: the existence of a duty of care, the scope of employment, and the mechanics of the specific Bitcoin transfer mechanism devised by the Defendants. The procedural history of TCD 001/2020 thus stands as a vital precedent for practitioners navigating the DIFC Courts, illustrating that while the technology underlying the dispute may be novel, the Court's demand for procedural rigor and precise pleading remains absolute.
What Is the 'Realistic Prospect of Success' Standard for Appeals in the DIFC?
Following the exhaustive 8-day trial in the matter of Gate Mena DMCC (Formerly Houbi OTC DMCC) and Huobi Mena FZE against Tabarak Investment Capital Limited and Christian Thurner, the Claimants sought to unravel Justice Sir Richard Field’s comprehensive dismissal of their multi-million dollar cryptocurrency custody claim. The appellate gateway in the Dubai International Financial Centre (DIFC) Courts is fiercely guarded by Rule 44.19 of the Rules of the DIFC Courts (RDC), which demands that an applicant demonstrate a "real prospect of success" or some other compelling reason to proceed. Unsurprisingly, the successful parties at trial mounted a robust defense against this appellate maneuver, seeking to shut down the challenge before it could reach the Court of Appeal. As Justice Field noted, the First Defendant and the Second Defendant opposed the Application in its entirety on the grounds that the proposed grounds of appeal had no real prospect of success as required by RDC 44.19 [DIFC_TCD-001-2020_20230207.txt, para 2].
The threshold under RDC 44.19(a) is far from a mere procedural formality; it is a substantive filter designed to protect appellate resources and preserve the finality of trial judgments. Justice Field’s Order with Reasons reiterates the entrenched DIFC jurisprudence that a "real prospect" must be "realistic," as opposed to merely "fanciful." This doctrinal distinction traces its lineage through foundational DIFC appellate decisions, notably CFI-026-2009 CFI 026/2009 - Order (Khorafi et al v Bank Sarasin-Alpen), DNB Bank ASA v Gulf Eyadah Corporation, and Vannin Capital PCC Plc v Mr Rafed Abdel Mohsen. By anchoring his analysis in these precedents, Justice Field signaled that the Court of First Instance would not serve as a rubber stamp for dissatisfied litigants seeking a second bite at the apple, particularly when the underlying dispute involves complex digital asset arrangements and voluminous evidentiary records.
The Claimants’ Grounds of Appeal, dated 5 December 2022, presented a broad attack, challenging both the legal architecture of the judgment and the granular factual findings derived from the trial. Justice Field’s task was to sift the arguable points of law from the impermissible attempts to re-litigate the facts. He systematically bifurcated the application, granting permission only where the Claimants identified genuine controversies regarding fiduciary duties and legal interpretation. The specific grounds that survived this rigorous filtering process involved the claim for breach of confidence and the claim for negligence, specifically concerning the "Breach of Duty" pleaded in paragraphs 6 through 11 of the appeal notice. Furthermore, Justice Field permitted two distinct appeals on points of law.
The court's willingness to entertain these specific grounds reflects a recognition that the contours of custodian liability and breach of confidence in the context of cryptocurrency transactions remain relatively nascent in DIFC jurisprudence. Where the trial judge's application of legal principles to novel digital asset custody models is contested, the Court of Appeal is the appropriate forum to provide definitive appellate guidance. The Claimants' alternative legal theories regarding individual liability also found traction, demonstrating that the court will allow appeals to proceed where statutory interpretation is genuinely debatable. Justice Field concluded that the Claimants’ alternative case based on Articles 13 and 15 presently constituted an arguable legal basis for obtaining judgment against the Second Defendant if the appeal succeeded against the First Defendant [DIFC_TCD-001-2020_20230207.txt, para 2].
However, the judicial axe fell swiftly on the remainder of the Claimants' application. The grounds styled as Issues 2, 3, 4, and 5 were summarily rejected because they constituted thinly veiled attempts to overturn the trial judge's findings of fact. The reluctance of appellate courts to interfere with factual determinations made after a lengthy trial is a cornerstone of common law appellate procedure, deeply embedded in the DIFC Courts' ethos. Justice Field explicitly referenced the findings of fact made after an 8 day trial as a primary reason for his absolute deference to the original factual matrix.
To fortify this refusal, the court invoked the UK Supreme Court’s decision in McGraddie v McGraddie [2013] UKSC 58, alongside the DIFC Court of Appeal’s own pronouncements in Hormodi Bankmed (SAL) (CA006/2019). Chief Justice Zaki Azmi’s declarations in Hormodi established that an appellate court will only interfere with a finding of fact if it is "plainly wrong." This high evidentiary bar ensures that the trial judge, who has the unique advantage of observing witness demeanor, testing expert testimony, and absorbing the totality of the evidence over several days, remains the primary arbiter of factual disputes. Consequently, Justice Field determined that, in light of the cited authorities, the grounds of appeal styled Issue 2, Issue 3, Issue 4 and Issue 5, all of which challenged findings of fact, did not have a realistic prospect of success, and he declined to grant permission for them to be argued on appeal [DIFC_TCD-001-2020_20230207.txt, para 7].
This strict demarcation between arguable law and settled fact serves a vital gatekeeping function. It prevents the Court of Appeal from being inundated with fact-heavy appeals that merely rehash trial arguments in the hope of securing a different subjective evaluation of the evidence. The approach mirrors the DIFC's broader intolerance for procedural obstruction and endless re-litigation, a theme similarly explored in the arbitration context in ARB 027/2024 Nalani v Netty, where the courts have consistently penalized parties for attempting to bypass stringent appellate thresholds. By refusing permission on the factual grounds, Justice Field insulated the core narrative of the failed 300 Bitcoin transaction from appellate revision, leaving only the legal consequences of that established narrative open for debate.
The financial consequences of this partial victory were immediately quantified in the court's costs order. Because the Defendants successfully defended against a significant portion of the application—specifically the fact-based grounds—Justice Field exercised his discretion to apportion the costs of the permission stage rather than simply rolling them entirely into the substantive appeal. He ordered that the Claimants must pay 35% of the costs incurred by the First Defendant and the Second Defendant in opposing the Application [DIFC_TCD-001-2020_20230207.txt, para 4].
This 35% costs liability serves as a tangible deterrent against drafting overly broad appeal notices. Litigants in the DIFC must carefully weigh the costs incurred by the First Defendant and other responding parties when deciding whether to include speculative factual challenges alongside legitimate legal grievances. The court's willingness to sever the costs reflects a sophisticated approach to case management, penalizing the Claimants for the unsuccessful portions of their application while preserving the financial stakes for the grounds that genuinely merit appellate review.
For the remaining financial burden associated with the application, Justice Field deferred the final reckoning to the conclusion of the appellate process, ordering that the balance should be costs in the appeal. This ensures that the ultimate victor on the substantive legal questions will recover their proportionate expenses for the permission stage.
Ultimately, the ruling in Gate Mena v Tabarak provides a masterclass in the application of RDC 44.19. It delineates the precise boundaries of appellate intervention in the DIFC, confirming that while the courts are receptive to clarifying complex legal duties—such as those owed by cryptocurrency custodians and the parameters of breach of confidence in digital asset transfers—they remain resolutely opposed to re-trying the facts. For practitioners advising clients on the aftermath of a complex commercial trial, the decision underscores the absolute necessity of framing appeals strictly around errors of law, rather than mere dissatisfaction with the trial judge's interpretation of the evidence. The "realistic prospect of success" standard is not an invitation to debate the trial record; it is a strict demand for arguable legal error.
How Did Justice Field Reach the Decision on Liability?
The adjudication of liability in Gate Mena DMCC v Tabarak Investment Capital Limited required the Technology and Construction Division to untangle a web of informal communications, uncodified expectations, and catastrophic technical failures. Justice Sir Richard Field’s reasoning was anchored in a rigorous scrutiny of witness credibility and a strict interpretation of the contractual and regulatory obligations of the Defendants. Rather than allowing the novel context of a cryptocurrency Over-The-Counter (OTC) transaction to dilute established legal standards, the court applied orthodox principles of contract formation, tortious causation, and evidentiary reliability to dismantle the Claimants’ multi-million dollar claim.
The factual matrix centered on a critical gathering at Tabarak’s offices. As the record establishes, On 3 February 2020 there was a meeting which brought together key personnel from both sides. The explicit purpose of the meeting was to carry out a pre-arranged transaction involving the sale of 300 Bitcoin to a corporate vehicle named Navarcon. The genesis of this relationship was informal; the evidence showed that Tabarak first became of interest to Mr Al Ali through a mutual contact who suggested the firm could facilitate banking services for a cryptocurrency-related entity.
Because the arrangements leading up to the transaction were largely undocumented, the Claimants’ case rested heavily on the oral testimony of their executives, specifically Mr Sultan Bin Kharsham Al Ali and Mr Shantu Saxena (“Mr Saxena”) who was the General Manager of HMena. Justice Field approached this testimony with marked skepticism. In high-stakes commercial litigation within the DIFC, oral assertions that are unsupported by contemporaneous documentary evidence face a steep uphill battle. The court found significant inconsistencies in the Claimants’ narrative regarding what was actually promised by Tabarak’s representatives. Addressing the reliability of the First Claimant’s General Manager, Justice Field stated:
In my judgment, for the following reasons, Mr Al Ali’s evidence needed to be very carefully scrutinised before accepting that it was accurate and reliable.
This critical posture extended to other key witnesses. The court noted that Mr Saxena’s testimony also required cautious treatment due to admitted mistakes in his initial witness statement. By systematically devaluing the uncorroborated oral evidence of the Claimants’ primary actors, the court effectively neutralized the foundation of their argument that Tabarak had explicitly agreed to act as a fiduciary custodian or guarantor of the transaction's security.
With the oral evidence heavily discounted, the court turned to the objective legal requirements for contract formation under the DIFC Contract Law (Law No. 6 of 2004). The Claimants advanced a theory that the communications between the parties had crystallized into a binding agreement, effectively a retainer, under which Tabarak assumed strict custodial duties over the digital assets. Justice Field rejected this characterization entirely. The court found that while there may have been preliminary understandings or an agreement in principle regarding the mechanics of the trade, these interactions lacked the necessary certainty of terms and consideration to constitute a legally enforceable contract.
Addressing the Claimants' attempt to frame the relationship as an ongoing commercial mandate, the court was unequivocal:
Accordingly, I reject Huobi’s contention that the agreement was in the nature of some sort of retainer that would apply without further ado to other sales of BTC to Navarcon by Huobi, save for the quantity of the coins involved.
The failure to establish a finalized contractual framework was fatal to the primary head of claim. Justice Field concluded that the preliminary consensus reached by the parties was legally inchoate. The judgment articulated this finding with absolute clarity:
It follows that I find the agreement I have held to have been concluded between Huobi and Tabarak never became a binding contract.
Furthermore, the court dismissed any equitable or quasi-contractual fallback positions, noting that the structural deficiencies in the parties' dealings went beyond mere technicalities. The ruling clarified that the relationship lacked the fundamental hallmarks of a commercial bargain, stating:
It follows that this is not a case where the relationship was akin to contract where but for the lack of consideration there would have been a contract.
Having dismantled the contractual claims, Justice Field directed his analysis toward the alternative allegations of negligence and breach of regulatory duties. The Claimants argued that Tabarak, acting through its director of investments, breached a duty of care by advising the use of a Trezor hardware wallet—a mechanism they alleged was inherently insecure for this specific type of escrow transaction. The loss of the 300 BTC occurred when the buyer's representatives, including Mr Evgeniy Morozov (“Mr Morozov”), a Russian citizen, managed to misappropriate the assets.
The court’s approach to the negligence claim hinged on a rigorous application of causation principles. Justice Field examined the precise technical sequence that led to the loss. The misappropriation did not occur because the Trezor wallet was fundamentally defective or because Tabarak had designed a flawed escrow architecture. Rather, the court found that the loss was directly caused by the Claimants' own operational failures during the wallet setup process. Specifically, the buyer's representatives were able to obtain the critical 12-word recovery seed phrase because the Claimants' personnel either scrolled up on the interface or made incorrect selections while configuring the device in the presence of the buyers.
By pinpointing the Claimants' technical errors as the proximate cause of the loss, Justice Field severed the chain of causation between any alleged advice given by Tabarak and the ultimate misappropriation. The court held that Tabarak could not be held liable in tort for a vulnerability introduced entirely by the Claimants' mishandling of the cryptographic security protocols. Consequently, the negligence claim collapsed.
This finding on causation had a domino effect on the Claimants' regulatory and fiduciary arguments. The Claimants had attempted to leverage the Dubai Financial Services Authority (DFSA) Rulebook, specifically alleging breaches of the General Module (GEN) rules 4.2.2, 4.2.3, and 4.2.6, to establish a private right of action for damages under Article 194 of the Regulatory Law. They further alleged breaches of fiduciary duties under Schedule 3 of the Law of Obligations. Justice Field systematically dismissed these derivative claims, tethering their failure directly to the collapse of the underlying negligence argument:
For the reasons given above for the finding that Tabarak was not liable in negligence for the loss of the 300 BTC, I find that Tabarak was not in negligent breach of GEN 4.2.2; GEN 4.2.3; or GEN 4.2.6 and therefore is not liable in damages under Article 194 of the Regulatory Law.
The court applied identical logic to the fiduciary duty claims, confirming that without a foundational breach of care or a causative link to the loss, the equitable claims could not survive:
For the reasons given above for the finding that Tabarak was not liable in negligence for the loss of the 300 BTC, it follows that Tabarak was not in breach of the standard set out in Sch 3, para 5 of the Law of Obligations (“a fiduciary owes the principal a duty to exercise care, skill, and diligence, in the same circumstance by a “reasonable person.”
Even if a residual duty of care had been found, the court signaled that the Claimants' recovery would have been severely compromised by their own actions. Justice Field referenced the statutory framework for contributory negligence, noting the application of the Law of Obligations:
(2) The defendant’s liability provided in Article 17(1) shall be reduced by the extent to which the claimant’s negligent acts or omissions contributed to his loss.
The judgment also disposed of peripheral claims with equal efficiency. The Claimants' assertion of a breach of confidence under Article 37 of the Law of Obligations was rejected, with the court stating plainly that Tabarak was not liable in damages under this head of claim, nor under other heads of claim pleaded in the RRAPOC. [https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/technology-and-construction-division/DIFC_TCD-001-2020_20221026.txt]
Despite the comprehensive dismissal of the liability claims against Tabarak, Justice Field made a vital doctrinal contribution regarding the legal status of the underlying assets. To establish that a legally cognizable loss had occurred—even if the Defendants were not liable for it—the court had to classify the nature of the 300 Bitcoin. Aligning the DIFC with progressive common law jurisdictions, Justice Field explicitly recognized digital assets as property, adopting the reasoning of the English Commercial Court, stating that he accepted the Claimants’ contention that Bitcoin are property as was held in a carefully reasoned judgment by Bryan J sitting in the London Commercial Court in AA v Unknown Persons [2019] EWHC 3556 (Comm) at [56] – [59]. [https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/technology-and-construction-division/DIFC_TCD-001-2020_20221026.txt] This classification is highly significant for DIFC jurisprudence. It ensures that while the court will demand strict proof of contract formation and causation in digital asset disputes, it will not deny relief simply because the subject matter is cryptographic in nature. This approach mirrors the rigorous procedural standards seen in cases like CFI-026-2009 CFI 026/2009 - Order, where the DIFC Courts have historically required precise evidentiary foundations before granting substantive relief. The demand for exactitude in pleading and proof is a recurring theme in the jurisdiction's handling of complex financial instruments, a trend further evidenced by recent Digital Economy Court decisions such as DEC-001-2025: DEC 001/2025 Techteryx Ltd v (1) Aria Commodities DMCC (2) Mashreq Bank PSC (3) Emirates Nbd Bank PJ, which similarly grappled with the intersection of digital asset custody and strict legal liability.
Ultimately, Justice Field’s decision on liability serves as a definitive statement on the allocation of risk in digital asset transactions. By refusing to imply broad fiduciary or contractual duties from informal meetings and uncorroborated oral testimony, the court placed the burden of operational security squarely on the parties executing the trade. The ruling dictates that sophisticated commercial entities operating in the DIFC cannot rely on post facto allegations of regulatory breach or implied custody to salvage losses caused by their own technical negligence. The judgment demands that those engaging in high-value cryptocurrency transactions must ensure their contractual arrangements are explicitly documented and their operational protocols flawlessly executed, as the court will not bridge evidentiary gaps with equitable assumptions.
How Does the DIFC Approach Compare to English Commercial Court Precedents?
The Dubai International Financial Centre (DIFC) Courts have consistently leveraged English common law to navigate the complexities of digital asset litigation. In Gate Mena DMCC and Huobi Mena FZE v Tabarak Investment Capital Limited and Christian Thurner [2022] DIFC TCD 001, Justice Sir Richard Field reinforced this doctrinal alignment. The judgment provides a masterclass in applying orthodox English commercial principles to the frontier of cryptocurrency custody. By anchoring the DIFC's approach in established English precedent, the Technology and Construction Division ensures that international litigants face a predictable legal landscape, even when dealing with novel asset classes like Bitcoin.
A central threshold question in the litigation was the legal status of the 300 BTC lost during the botched transaction with Navarcon s.r.o. Rather than forging a novel, DIFC-specific taxonomy for digital assets, Justice Field explicitly adopted the reasoning of the English Commercial Court. The classification of cryptocurrency as property is foundational for claims in conversion, breach of trust, and tracing. The court's reliance on English jurisprudence was unequivocal: the court explicitly accepted the Claimants’ contention that Bitcoin are property, adopting the reasoning of Bryan J in AA v Unknown Persons [2019] EWHC 3556 (Comm) at [56] – [59], a carefully reasoned judgment from the London Commercial Court (Gate Mena DMCC and Huobi Mena FZE v Tabarak Investment Capital Limited and Christian Thurner [2022] DIFC TCD 001, at [56]).
This adoption of AA v Unknown Persons mirrors the broader trend within the DIFC to harmonize its digital asset jurisprudence with London. Much like the recent digital asset freezing orders seen in DEC-001-2025: DEC 001/2025 Techteryx Ltd v (1) Aria Commodities DMCC (2) Mashreq Bank PSC (3) Emirates Nbd Bank PJ, recognizing Bitcoin as property unlocks the full arsenal of common law remedies. It confirms that the DIFC will not treat cryptocurrencies as mere information or unassignable choses in action, but as property capable of being held in custody, misappropriated, and recovered. The reliance on established common law principles provides predictability for international parties litigating in the DIFC, assuring them that digital assets will be treated with the same proprietary respect as traditional securities or fiat currency.
The Claimants, Gate Mena DMCC and Huobi Mena FZE, attempted to construct a fiduciary relationship and a duty of care out of the informal arrangements surrounding the meeting On 3 February 2020 at Tabarak’s offices. They argued that Tabarak Investment Capital Limited and its director of investments, Mr Christian Thurner, acted as custodians or escrow agents, thereby assuming stringent duties to safeguard the transaction mechanism involving the Trezor wallet. Justice Field applied standard English contractual and tortious tests to dismantle this assertion. The court demanded clear evidence of a binding retainer or an assumption of responsibility, rejecting the notion that a duty of care existed in the absence of a clear retainer. The court accordingly rejected Huobi’s contention that the agreement constituted a retainer that would automatically apply to other sales of BTC to Navarcon by Huobi, regardless of the quantity of coins involved (Gate Mena DMCC and Huobi Mena FZE v Tabarak Investment Capital Limited and Christian Thurner [2022] DIFC TCD 001, at [79]).
The refusal to imply a sweeping retainer from ad hoc commercial interactions aligns perfectly with the English Commercial Court's reluctance to impose fiduciary duties on commercial parties operating at arm's length. The DIFC Court requires a crystallized agreement before it will impose the heavy burden of fiduciary obligations. The preliminary discussions between the parties failed to meet this standard. Justice Field concluded that the agreement he had found to have been concluded between Huobi and Tabarak never became a binding contract (Gate Mena DMCC and Huobi Mena FZE v Tabarak Investment Capital Limited and Christian Thurner [2022] DIFC TCD 001, at [84]).
Building on the absence of a formal retainer, the court addressed the alleged breach of fiduciary duties. The Claimants argued that Tabarak owed a duty to exercise care, skill, and diligence under the DIFC Law of Obligations. Justice Field systematically dismantled the negligence claim, finding that the misappropriation occurred because Mr Evgeniy Morozov and Mr Alekseij Socin obtained the 12 seed words by scrolling up or making incorrect selections during the wallet setup, not due to Tabarak's advice or actions. For the reasons given for finding Tabarak not liable in negligence for the loss of the 300 BTC, it followed that Tabarak was not in breach of the standard set out in Schedule 3, paragraph 5 of the Law of Obligations, which stipulates that "a fiduciary owes the principal a duty to exercise care, skill, and diligence, in the same circumstance by a 'reasonable person.'" (Gate Mena DMCC and Huobi Mena FZE v Tabarak Investment Capital Limited and Christian Thurner [2022] DIFC TCD 001, at [115]).
The court's approach to the Law of Obligations mirrors the English common law's treatment of negligence and fiduciary standards. The DIFC Court frequently looks to English judges for guidance on the existence of a duty of care. Indeed, Justice Field referenced English precedent directly when evaluating the threshold for actionable negligence, citing the rigorous standards applied in London.
After a painstaking consideration of the facts, Fraser J held that no actionable duty of care had been owed by RNP to the Claimant.
By citing Fraser J, the DIFC Court signals to practitioners that the boundaries of tortious liability in the DIFC are co-extensive with those in London. A claimant cannot bypass the rigorous English tests for assumption of responsibility simply by pleading a breach of the DIFC Regulatory Law or the Law of Obligations. The Claimants also sought damages under Article 194 of the Regulatory Law, alleging breaches of the Dubai Financial Services Authority's General Rules (GEN). Justice Field maintained the strict causal link required by English law between the alleged breach and the loss suffered. Justice Field found that for the same reasons Tabarak was not liable in negligence for the loss of the 300 BTC, it was also not in negligent breach
Which Earlier DIFC Cases Frame This Decision?
The substantive dismissal of the multi-million dollar digital asset claim brought by Gate Mena DMCC and Huobi Mena FZE against Tabarak Investment Capital Limited and Christian Thurner does not exist in a jurisprudential vacuum. Rather, the trajectory of the litigation—and particularly its contentious procedural aftermath—sits squarely within a broader body of Dubai International Financial Centre (DIFC) case law that enforces a strictly high burden of proof in professional negligence claims. When parties allege complex breaches of fiduciary duty and negligent custody of volatile assets like Bitcoin, the Technology and Construction Division (TCD) demands exacting standards of pleading, disclosure, and evidentiary rigor. When those standards are not met, the resulting failure cascades directly into the court’s severe approach to costs and post-judgment applications.
The procedural history following the trial illustrates the court’s refusal to allow poorly evidenced claims to indefinitely prejudice successful defendants. After the Defendants succeeded after an 8-day trial in defeating the massive damages claim, they immediately sought to recover their substantial legal expenditures. The First Defendant (D1) estimated its costs to be well in excess of AED 3.7 million, while the Second Defendant (D2) sought an immediate summary assessment of over AED 3.2 million on the indemnity basis. The Claimants’ response was to attempt to halt the financial consequences of their substantive defeat by applying under RDC 4.2 (6) for a stay of all costs matters, including any orders consequential to the Judgment, pending final determination of their application for permission to appeal, and, if granted, pending the appeal itself (DIFC TCD-001-2020, 13 February 2023, para 11).
Justice Sir Richard Field’s handling of this stay application reinforces a foundational principle of DIFC procedural law: an appeal does not operate as an automatic stay of execution. The successful litigant is presumptively entitled to the fruits of their victory. To displace this presumption, the applicant bears a heavy burden to prove that enforcing the judgment would cause irremediable harm or that the appeal would be stifled. The court’s approach here mirrors the strict evidentiary requirements seen in earlier foundational disputes, such as the rigorous procedural boundaries established in CFI-026-2009 CFI 026/2009 - Order, where the court similarly required concrete proof rather than speculative assertions to justify departing from standard procedural consequences.
The core of the Claimants’ argument for a stay rested on the doctrine of 'stifling'—the assertion that if they were forced to pay the adverse costs orders immediately, they would be financially ruined and unable to pursue their appeal. Justice Field’s analysis of this defense required a deep dive into the evidentiary backing provided by the Claimants. Drawing on established common law principles often cited in the DIFC, the court examined the historical context of the stifling argument, noting cases such as Agrichem, where the appellants (“Agrichem”) sought a stay pending their appeal against the decision of the trial judge who had very substantially upheld the respondent solicitors’ claim for unpaid bills. Agrichem was a privately owned BVI company owned by a discretionary trust, the beneficiaries of which were members of one family, and the company was not required to produce accounts. At the heart of Agrichem’s application was the contention that, but for a stay, its appeal would be stifled (DIFC TCD-001-2020, 13 February 2023, para 8, citing Agrichem International Holdings Ltd v BCLP LLP [2019] EWCA Civ 1585).
To succeed on a stifling argument, the DIFC Courts require full, frank, and clear evidence of the applicant’s financial hardship. The Claimants in Gate Mena failed to meet this high evidentiary bar. Instead of providing audited accounts, comprehensive bank statements, or professional valuations of assets, the Claimants relied heavily on self-estimated property values provided by their controllers, Mr. Al Ali and Mr. Davar. The court viewed this lack of formal financial disclosure with the same skepticism it applied to the unverified claims of agency during the substantive trial. The failure to produce robust documentary evidence is a recurring theme in unsuccessful DIFC applications, echoing the strict disclosure standards that govern the TCD.
When the initial stay application was dismissed, the procedural battle shifted to the timeline for providing security for the costs of the appeal. The court had ordered the Claimants to pay over AED 1.5 million into court. The Claimants subsequently filed an application for an extension of the time by which they must provide security, seeking to delay the payment until October 2023. Their justification hinged on anticipated funds from a separate, ongoing arbitration in Hong Kong.
Justice Field’s adjudication of this extension request further solidifies the court’s stance on procedural delays and the necessity of timely evidence. The Claimants attempted to introduce new financial evidence regarding the Hong Kong arbitration settlement late in the process. The court firmly rejected this piecemeal approach to litigation. Justice Field noted that a stifling case requires full and frank evidence as to the applicant’s financial position, and that the evidence supplied by Al Ali regarding the Claimants’ financial position and the state of play in the settlement negotiations in the Hong Kong arbitration proceedings should have been served at the outset of the application (DIFC TCD-001-2020, 15 June 2023, para 6).
The court’s refusal to entertain late-filed evidence without severe scrutiny aligns with the broader DIFC mandate to ensure efficient and fair dispute resolution. Parties cannot hold back crucial financial data and deploy it only when facing an imminent deadline. The strategic use of parallel proceedings—such as relying on a pending settlement to delay obligations in the DIFC—is frequently met with judicial resistance unless backed by ironclad guarantees. This dynamic is similarly explored in ARB-004-2022: Muzama v Mihanti [2022] DIFC ARB 004, where the limits of leveraging external claims to offset immediate liabilities were strictly defined.
Furthermore, Justice Field acutely recognized the commercial reality facing the successful Defendants. Granting a lengthy extension based on the speculative timeline of a foreign arbitration settlement would unfairly shift the financial risk back onto the parties who had already won at trial. The Defendants had cited the unavailability of counsel during the Autumn as a factor complicating the appeal schedule, but the primary concern remained the unsecured financial exposure they faced while preparing their defense for the appellate stage. Justice Field rejected the Claimants’ submission that the proposed extension of time for payment of the security would not prejudice the Defendants, stating that the Defendants would be significantly prejudiced by the uncertainty as to whether the costs already incurred in the appeal and those to be incurred prior to 15 October 2023 would be covered by the security ordered (DIFC TCD-001-2020, 15 June 2023, para 1).
Consequently, the court granted only a brief extension to 10 July 2023, balancing the Claimants' logistical difficulties against the Defendants' right to secure their position. This pragmatic yet firm approach underscores the court's consistent application of the Rules of the DIFC Courts (RDC) regarding costs and case management.
The mechanics of how the court handled the quantum of costs also reflect a deep adherence to established RDC provisions. While D2 aggressively pursued an immediate summary assessment on the indemnity basis, arguing that the Claimants' conduct warranted punitive cost measures, and sought an interim payment on account of costs in the sum of AED 1,628,249.99 (DIFC TCD-001-2020, 13 February 2023, para 3), the court maintained its methodical standard.
Justice Field ordered that the costs of each of the Defendants be the subject of a detailed assessment by the Registrar on the standard basis. By refusing to bypass the detailed assessment process, the court ensured that even victorious parties must rigorously justify their legal expenditures. The parties later agreed via a consent order that the detailed assessment of the first instance proceedings would be stayed until 14 days after the outcome of the appeal was known, demonstrating that while the court will not grant blanket stays on liability, it permits sensible, agreed-upon case management regarding the quantification of those liabilities.
Ultimately, the procedural decisions in Gate Mena v Tabarak serve as a stark warning to litigants in the DIFC. The high burden of proof required to establish professional negligence in complex digital asset transactions is mirrored by the high evidentiary bar required to obtain procedural relief post-judgment. The court will not entertain stifling arguments built on self-serving estimates, nor will it allow the speculative proceeds of foreign arbitrations to indefinitely delay the enforcement of its orders. Litigants must approach the TCD with clear pleadings, robust documentary evidence, and a realistic understanding that failure on the merits will result in swift, rigorously assessed financial consequences.
What Does This Mean for Practitioners and Future Claimants?
Litigating digital asset disputes in the Dubai International Financial Centre (DIFC) requires far more than a sophisticated understanding of blockchain mechanics; it demands an uncompromising adherence to procedural rigor and evidentiary preservation. The protracted procedural skirmishes in Gate Mena DMCC v Tabarak Investment Capital Limited (TCD 001/2020) serve as a definitive masterclass in how tactical missteps, the spoliation of evidence, and inadequately particularized pleadings can systematically dismantle a litigant’s position, even long after the substantive trial has concluded. For practitioners advising digital asset custodians, exchanges, or investors, the rulings delivered by Justice Sir Richard Field establish a formidable baseline: the Technology and Construction Division (TCD) will aggressively penalize procedural obstruction and demands pristine financial transparency from any party seeking equitable relief from costs orders.
The first critical lesson emerges from the Court’s handling of the Second Defendant’s (Mr. Christian Thurner) costs applications in November 2021. While Mr. Thurner technically succeeded in securing an order for security for costs against the Claimants, his broader litigation conduct severely compromised his ability to immediately recover the financial fruits of that victory. The Court took a remarkably dim view of his approach to documentary evidence and procedural strategy. Specifically, Justice Field penalized Mr. Thurner for mounting a misconceived joinder application and for the wholly unjustified discarding of the laptops that had been returned to him by the police. In digital asset litigation, where hardware wallets, laptops, and physical storage devices often constitute the sole repository of cryptographic keys and transaction logs, the destruction or discarding of such hardware is viewed not merely as careless, but as fundamentally hostile to the judicial process.
To enforce its displeasure, the Court deployed its discretionary costs powers to defer Mr. Thurner’s recovery, stating:
With these considerations in mind, I direct that the above awards of costs in D2’s favour shall only become payable once all questions of costs as between the Claimant and D2 have been determined following the trial of the action and that in addition the Claimant will be entitled to set off against these costs awards, awards of costs that have been made in its favour against D2.
This deferral mechanism illustrates a vital tactical reality for DIFC practitioners: winning an interlocutory application does not guarantee an immediate cash flow if the prevailing party’s hands are unclean. The Court will actively balance the ledger, utilizing set-offs and deferred payment dates to punish aggressive and unreasonable stances over document production and redactions. Furthermore, the Court heavily scrutinized the proportionality of legal spend. When Mr. Thurner sought costs for resisting the Claimants' proposed amendment to plead lost opportunity damages, Justice Field slashed the recoverable amount to AED 17,000, noting that the amendment was only "on the stocks for eight days" and that deploying two advocates for a standard Pre-Trial Review (PTR) was wholly unnecessary.
The necessity of pleading specific heads of loss early in the proceedings is equally paramount. Cryptocurrency markets are notoriously volatile, making "lost opportunity" a highly lucrative, yet highly speculative, head of damages. Claimants who fail to articulate these alternative damages pleas at the outset invite fierce, costly resistance from defendants. While the Court ultimately permitted the Claimants' reformulated alternative damages plea, the resulting costs dispute underscores the premium placed on contractual and pleading certainty from the moment the claim form is filed.
Following the dismissal of their substantive multi-million dollar claim after an exhaustive eight-day trial, the Claimants faced catastrophic costs liabilities. The First Defendant estimated its costs at over AED 3.7 million, while Mr. Thurner sought an immediate summary assessment of AED 3.2 million on an indemnity basis. Attempting to halt the enforcement of these ruinous figures, the Claimants applied under Rules of the DIFC Courts (RDC) 4.2(6) for a stay of all costs matters pending their application for permission to appeal. They relied heavily on the "stifling" doctrine—arguing that forcing them to pay these costs immediately would bankrupt them and stifle their statutory right to appeal.
Justice Field’s February 2023 dismissal of this stay application reinforces the exceptionally high evidentiary bar required to prove stifling. An appeal does not operate as an automatic stay of execution in the DIFC. The burden rests entirely on the applicant to provide full, frank, and clear evidence of their financial destitution. The Claimants failed spectacularly in this regard. Instead of providing audited accounts, bank statements, or independent valuations of their assets, the controllers of the Claimants merely offered self-serving estimates of real estate properties. The Court’s rejection of this approach was absolute, noting that no accounts or other financial statements and bank records were exhibited, and there were no professional valuations of the seven properties, just the self-estimated values asserted by Mr Al Ali and Mr Davar totalling AED 5.8 million. [https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/technology-and-construction-division/DIFC_TCD-001-2020_20230213.txt#:~:text=no%20accounts%20or%20other%20financial%20statements]
For practitioners, the directive is unambiguous: if a corporate client intends to argue that an adverse costs order will stifle an appeal, the application must be front-loaded with forensic accounting evidence. The Court will not accept no accounts or other financial statements as a basis for equitable relief. This strict approach to financial disclosure and the rejection of procedural delay tactics closely mirrors the DIFC Courts' broader intolerance for obstructionism, a theme recently explored in ARB 027/2024 Nalani v Netty, where the Court similarly penalized parties attempting to use appellate mechanisms to evade immediate financial liabilities.
The Claimants’ evidentiary deficiencies persisted into the summer of 2023. Having been ordered to pay AED 1.55 million into Court as security for the costs of their appeal, the Claimants filed an Extension of Time Application (EOTA), seeking to delay payment until October 2023. They argued that they were awaiting a massive USD 11 million payout from a settlement of the Hong Kong arbitration involving Huobi Mena. While Justice Field acknowledged that the scheduling of the appeal hearing for January 2024 provided a jurisdictional foundation to grant a brief extension, he severely criticized the Claimants for ambushing the Court and the Defendants with late evidence regarding their financial position and the Hong Kong settlement.
The Court’s frustration with the piecemeal disclosure of financial evidence culminated in a stark warning to future litigants regarding the timing of evidence in stifling and security applications, indicating that a stifling case requires full and frank evidence as to the applicant’s financial position, and that the evidence supplied by Al Ali as to the financial position of the Claimants and the state of play in the settlement negotiations in the Hong Kong arbitration proceedings should have been served at the outset of the application. [https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/technology-and-construction-division/DIFC_TCD-001-2020_20230615.txt]
Justice Field ultimately granted a much shorter extension (until 10 July 2023), explicitly recognizing that the Defendants would be significantly prejudiced by having the uncertainty of whether their appellate costs would be secured. An undertaking from a corporate controller to pay "within 3 days of receipt of sufficient funds" from a foreign arbitration is entirely insufficient to assuage the prejudice suffered by respondents who are actively incurring legal fees to defend an appeal.
Ultimately, the Gate Mena litigation reinforces a foundational tenet of DIFC practice that dates back to early procedural frameworks established in cases like CFI-026-2009 CFI 026/2009 - Order: the Court possesses broad, inherent jurisdiction to manage costs and will aggressively deploy that jurisdiction to punish evidentiary spoliation, late pleadings, and inadequate financial disclosure. For claimants entering the DIFC to litigate complex digital asset custody failures, the substantive merits of the blockchain transaction are only half the battle. The preservation of physical hardware, the early and precise pleading of volatile damages, and the immediate, transparent disclosure of corporate finances when seeking procedural relief are non-negotiable prerequisites for success. Failure to prioritize these elements will inevitably result in deferred costs recoveries, dismissed stay applications, and the rapid depletion of litigation capital.
What Issues Remain Unresolved?
While the trial judgment provided clarity on the specific facts of the Gate Mena dispute, the pending appeal leaves open questions regarding the scope of regulatory obligations in crypto-asset custody. The dismissal of the multi-million dollar claim brought by Gate Mena DMCC and Huobi Mena FZE against Tabarak Investment Capital Limited and Christian Thurner resolved the immediate liability question at first instance, but it simultaneously ignited a protracted procedural war over costs and set the stage for a critical appellate review. The Court of Appeal will need to determine if the trial judge erred in his interpretation of the breach of confidence and negligence claims, a decision that will inevitably shape the DIFC’s approach to digital asset fiduciary duties.
The immediate aftermath of Justice Sir Richard Field’s 26 October 2022 judgment has been dominated by fierce battles over the financial fallout of the litigation. The ongoing enforcement of costs orders against the Claimants remains a point of contention, particularly given the Claimants' reliance on future settlement funds to satisfy their liabilities. Following an exhaustive 8-day trial, the Defendants sought immediate and substantial cost recoveries. The First Defendant estimated its costs to be substantially in excess of AED 3,729,891.27, while the Second Defendant sought an immediate summary assessment of AED 3,256,499.97 on an indemnity basis. Faced with these aggressive recovery efforts, the Claimants applied for a stay of all costs matters pending the final determination of their application for permission to appeal.
The Claimants’ primary argument for the stay rested on the doctrine of stifling—the assertion that enforcing the massive costs orders would bankrupt them and effectively prevent them from pursuing their appeal. However, the DIFC Courts have consistently maintained a high evidentiary bar for such claims, requiring full, frank, and clear evidence of financial hardship. Justice Field’s 13 February 2023 order rigorously applied this standard, dismissing the stay application because the Claimants failed to provide the necessary financial transparency. The court noted the glaring absence of audited accounts or independent valuations to support the Claimants' assertions of impecuniosity:
Thus, no accounts or other financial statements and bank records are exhibited and there are no professional valuations of the seven properties, just the self-estimated values asserted by Mr Al Ali and Mr Davar totalling AED 5.8 million.
By rejecting the self-serving estimates, the court reinforced the principle that successful litigants are entitled to the fruits of their victory, and that an appeal does not automatically operate as a shield against enforcement. The ruling mandated that the Claimants pay the Defendants' costs, subject to a detailed assessment by the Registrar on the standard basis. This strict approach to cost stays echoes the procedural rigor seen in earlier foundational disputes, such as CFI-026-2009 CFI 026/2009 - Order, where the court similarly demanded concrete financial evidence before disrupting the ordinary course of post-judgment enforcement.
The procedural skirmishing did not end with the dismissal of the stay. After Chief Justice Zaki Azmi granted permission to appeal the Judgment in April 2023, the focus shifted to the security for the costs of the appeal itself. The Claimants, still struggling with liquidity, filed an application for an extension of the time by which they must provide security, requesting a delay until October 2023. To justify this extension, they introduced a new cross-border element: an anticipated settlement from an arbitration in Hong Kong.
The Claimants argued that a substantial payout from the Hong Kong International Arbitration Centre (HKIAC) proceedings would soon provide the necessary liquidity to cover the DIFC appellate security. Mr. Al Ali, representing the Claimants, provided evidence regarding the status of these foreign proceedings:
I nevertheless confirm that the settlement amount, due to be paid in those proceedings is approximately USD 11 million, from which the costs of those legal proceedings and other obligations will need to be met.
Despite the promise of an impending USD 11 million influx, Justice Field remained skeptical of the timeline and the potential prejudice to the Defendants. The court recognized that while the Claimants might eventually secure the funds, the Defendants were being forced to incur ongoing legal fees to prepare for a January 2024 appeal without any guarantee that those costs were secured. The court firmly rejected the notion that a delay in posting security was a victimless procedural adjustment:
I reject the Claimants’ submission that the proposed extension of time for payment of the security does not give rise to any prejudice to the Defendants. In my Judgment, the Defendants will be significantly prejudiced by having the uncertainty as to whether the costs already incurred in the appeal and the costs that will be incurred in preparing for the appeal prior to 15 October 2023 will be covered by the security ordered to be paid by the SFCA Order.
Consequently, the court granted only a brief extension to 10 July 2023, balancing the Claimants' right to access the appellate court against the Defendants' right to financial security. Eventually, the sheer complexity of running parallel cost assessments and appellate preparations led the parties to a pragmatic truce. On 18 May 2023, the court issued a consent order directing that the period for the Defendants to commence detailed cost assessment proceedings be stayed until after the Court of Appeal delivers its verdict:
The period for the First and Second Defendant to commence detailed cost assessment proceedings be stayed, pending the outcome of the Appeal.
While these procedural battles over costs and security dictate the immediate tactical landscape, they are ultimately secondary to the substantive doctrinal questions awaiting the Court of Appeal. The case leaves open the question of how the DIFC Courts will handle future claims where the 'custodial' relationship is more clearly defined by contract. At trial, the Claimants failed largely because they could not establish a formal agency or fiduciary relationship that would impose strict liability on the Defendants for the lost 300 Bitcoin. The trial judge viewed the arrangement through the lens of traditional commercial interaction, refusing to imply heavy regulatory or fiduciary burdens onto an ad-hoc digital asset transaction.
The Court of Appeal’s impending review of the breach of confidence and negligence claims will test the durability of this strict contractual approach. If the appellate bench upholds Justice Field’s reasoning, it will send a clear signal to the digital asset market: the DIFC Courts will not rescue parties from poorly documented crypto transactions by implying fiduciary duties after the fact. Market participants will be forced to rely on explicit, meticulously drafted custodial agreements to protect their digital assets. Conversely, if the Court of Appeal finds that the trial judge construed the negligence and confidence claims too narrowly, it could open the door to broader liability for intermediaries handling cryptocurrency, aligning the DIFC more closely with jurisdictions that impose heavy equitable duties on digital asset custodians regardless of the underlying contractual framework.
This doctrinal tension is not occurring in a vacuum. The DIFC is rapidly positioning itself as a premier forum for complex digital asset litigation, as evidenced by recent high-stakes interventions like DEC-001-2025: DEC 001/2025 Techteryx Ltd v (1) Aria Commodities DMCC (2) Mashreq Bank PSC (3) Emirates Nbd Bank PJ, where the Digital Economy Court demonstrated its willingness to assert aggressive jurisdiction over stablecoin freezes. The Gate Mena appeal will serve as a crucial companion piece to these developments, defining the outer limits of liability when digital asset transfers go wrong. Until the Court of Appeal delivers its judgment, practitioners advising on crypto-custody in the DIFC must navigate a landscape where the evidentiary bar for proving negligence remains dauntingly high, and the financial penalties for failing to meet that bar—as the ongoing multi-million dirham costs dispute vividly illustrates—are severe.