On 21 November 2023, H.E. Justice Nassir Al Nasser granted the Defendants’ application for permission to appeal an order issued by Assistant Registrar Delvin Sumo just two months prior. The dispute, stemming from a 2021 arbitration claim, centered on the granular accuracy of a Bill of Costs that the Defendants argued failed to distinguish between distinct procedural applications. Justice Al Nasser’s intervention serves as a sharp reminder that even in the final stages of cost recovery, precision remains the bedrock of DIFC procedural integrity.
For arbitration counsel and costs draftsmen, this decision marks a critical inflection point in how the DIFC Courts police the nexus between work performed and costs claimed. What appeared to be a routine assessment of a Bill of Costs evolved into a significant appellate intervention, underscoring that the Court will not tolerate a 'blanket' approach to cost recovery when multiple, distinct applications—such as set-aside, relief, and challenge applications—are bundled without clear, itemized justification. The ruling forces a recalibration of how practitioners must document their time and effort to survive the rigorous proportionality test mandated by RDC 38.18.
How Did the Dispute Over Costs Arise?
The procedural architecture of the Dubai International Financial Centre (DIFC) Courts demands exacting precision, particularly when the substantive dispute has concluded and the parties transition to the often-contentious phase of cost recovery. The underlying arbitration in Murif & Mijul v Mipy & Madli [2023] DIFC ARB 003 reached a critical juncture on 29 July 2021, when the Court disposed of three distinct procedural maneuvers: a Set Aside Application, a Relief Application, and a Challenge Application. The dismissal of these three separate applications set the stage for a complex costs assessment, one that would ultimately expose the severe jurisdictional and financial risks of submitting an inadequately itemized Bill of Costs.
When multiple applications are heard and dismissed concurrently, the resulting costs order rarely applies a blanket recovery mechanism. Instead, the Court typically ring-fences cost liability to reflect the specific merits and conduct associated with each application. In this instance, the Court’s original order mandated that costs for the Relief and Challenge applications be paid on a standard basis. The precise mechanics of this liability were unambiguous, as H.E. Justice Nassir Al Nasser later recounted:
I have reviewed the order dated 29 July 2021 where the Set Aside Application, Relief Application and Challenge Application were dismissed, and the costs thereto were decided as follows:
(1) The Costs of the relief Application and the Challenge Application were payable by the Appellant to the Respondent on a Standard basis to be assessed by the Registrar if not agreed.
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The directive that costs be assessed on a "standard basis" invoked the rigorous scrutiny of Rule 38.18 of the Rules of the DIFC Courts (RDC). Under this framework, the assessing officer—in this case, the Registrar—is strictly bound to Only allow the amount of costs which are proportionate to the matter in issue. Furthermore, RDC 38.18(2) dictates that any doubt regarding whether costs were reasonably incurred, or reasonable and proportionate in amount, must be resolved in favor of the paying party. This statutory presumption against the receiving party places a heavy evidentiary burden on the drafting of the Bill of Costs. The receiving party must surgically isolate the time entries, disbursements, and counsel fees attributable to the specific applications for which they were awarded costs.
The Claimants, however, failed to execute this granular itemization. When they submitted their Bill of Costs for assessment, the document lacked the necessary structural integrity to differentiate between the various procedural streams that had characterized the 2021 hearings. The Defendants immediately challenged the subsequent Bill of Costs, arguing it lacked the necessary granularity to justify the claimed amounts. Specifically, the Defendants contended that the costs granted did not relate to the matters in issue and were fundamentally beyond the scope of the original costs order.
The Defendants' scrutiny revealed a glaring disconnect between the work claimed and the work authorized for recovery. They submitted that the Bill of Costs predominantly highlighted purported work undertaken for the preparation of an injunction—a procedural element that was entirely distinct from the Relief and Challenge applications and, crucially, not the matter in issue for the purposes of the standard basis assessment. The failure to compartmentalize the billing narratives meant that the assessing officer was left to guess which hours corresponded to which application. The Defendants' position was starkly summarized in the appellate record:
The Bill of Costs also did not have any entries whatsoever regarding any work done on the Challenge Application and the Relief Application.
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This total absence of specific entries for the Challenge and Relief applications transformed the Bill of Costs from a tool of recovery into a liability. The danger of failing to itemize costs across distinct procedural applications cannot be overstated in DIFC practice. When a law firm's billing software generates a chronological ledger of time entries, those entries often feature generic narrative descriptions such as "reviewing file," "preparation for hearing," or "drafting submissions." If a costs order only permits recovery for two out of three dismissed applications, these generic entries become fatal to the assessment process. The assessing Registrar cannot lawfully allocate a block-billed time entry to a specific application without violating the proportionality mandate of RDC 38.18.
Despite these structural deficiencies, Assistant Registrar Delvin Sumo issued an Order on 14 September 2023 that seemingly advanced the costs assessment process. The Defendants, recognizing the procedural vulnerability of the Claimants' position, swiftly escalated the matter. They filed an Appeal Notice on 16 October 2023, seeking permission to appeal against the Order of Assistant Registrar Delvin Sumo.
The appellate threshold in the DIFC Courts is intentionally restrictive, designed to prevent the proliferation of satellite litigation over quantum disputes. Under RDC 44.19, permission to appeal is granted only in limited situations: either when there is a real prospect that the appeal would succeed, or where there is another compelling reason why the appeal should be heard. The Defendants advanced six separate grounds of appeal, but the core of their argument rested on Ground 1: that the costs granted were beyond the scope of the original order and entirely disproportionate to the matters actually in issue.
The appellate intervention by H.E. Justice Nassir Al Nasser provides a masterclass in the strict enforcement of cost boundaries. Upon reviewing the Defendants’ Appeal Notice, Justice Al Nasser bypassed the peripheral arguments and focused entirely on the structural integrity of the Bill of Costs. His analysis confirmed the Defendants' primary contention: the document was fundamentally incapable of supporting a standard basis assessment for the specific applications in question. The judge's conclusion was unequivocal:
I have reviewed the Bill of Costs, in my view, it does not provide details of what is the work done in relation to the Relief Application and the Challenge Application.
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By identifying this fatal lack of detail, Justice Al Nasser established that the Defendants' appeal easily cleared the RDC 44.19 threshold. The failure to itemize was not merely a formatting error; it was a substantive breach of the parameters set by the 29 July 2021 order. If a Bill of Costs cannot demonstrate, on its face, exactly what work was performed for the specific applications subject to the costs order, any subsequent assessment risks awarding costs for unrecoverable work—such as the injunction preparation highlighted by the Claimants.
This rigorous approach to cost itemization aligns with the broader trajectory of DIFC jurisprudence, which increasingly penalizes procedural sloppiness. Much like the strict boundaries placed on appellate maneuvers seen in ARB-027-2024: Nalani v Netty, where the Court refused to entertain poorly substantiated challenges, the ruling in Murif v Mipy establishes that the Court will not perform the administrative heavy lifting for a receiving party. The burden of proving proportionality and scope rests entirely on the party seeking recovery. When that party submits a Bill of Costs that conflates distinct procedural streams or omits entries for the actual matters in issue, the Court will not hesitate to grant permission to appeal to rectify the resulting imbalance.
Justice Al Nasser ultimately found that Ground 1 alone was sufficient enough for the Courts to grant Permission Application. The dispute over costs arose not from a disagreement over hourly rates or the necessity of specific disbursements, but from a fundamental failure of legal drafting. The Claimants treated the Bill of Costs as a generalized invoice for the arbitration, rather than a tailored instrument designed to execute a highly specific, ring-fenced costs order. The resulting appellate intervention serves as a binding directive to practitioners: the granular accuracy of a Bill of Costs is a jurisdictional prerequisite for recovery. Failing to itemize costs across distinct procedural applications does not merely invite a reduction in quantum during assessment; it provides the paying party with a compelling, legally sound basis to derail the entire recovery process at the appellate level.
What Was the Procedural Timeline Leading to the Appeal?
The timeline of Murif v Mipy [2023] DIFC ARB 003 reveals a stark contrast between the slow burn of post-arbitration cost recovery and the rapid, decisive intervention of the appellate bench when procedural boundaries are breached. The trajectory from the initial costs order to the successful permission-to-appeal application underscores a fundamental principle of DIFC litigation: the assessment of costs is not a mere administrative rubber stamp, but a rigorous judicial exercise bound by strict parameters of proportionality. The chronological progression of the dispute demonstrates how quickly the DIFC Courts will escalate and correct a Registrar’s assessment when the underlying arithmetic strays beyond its jurisdictional mandate.
The genesis of the cost dispute traces back to the summer of 2021, long before the final quantum was ever tabulated. On 29 July 2021, the Court issued a foundational order dismissing a triad of procedural maneuvers initiated by the Defendants: a Set Aside Application, a Relief Application, and a Challenge Application. The dismissal of these applications triggered a standard costs liability against the Defendants. When reviewing the appellate record over two years later, H.E. Justice Nassir Al Nasser explicitly recalled the strict parameters of that original liability:
The directive embedded in the 2021 order was unambiguous. The costs were to be assessed on a standard basis, and they were specifically tethered to the Relief and Challenge Applications. Under the Rules of the DIFC Courts (RDC), a standard basis assessment carries specific statutory baggage that heavily favors the paying party when ambiguities arise. RDC 38.18 dictates that the Court will only allow costs that are proportionate to the matters in issue, resolving any doubt regarding reasonableness or proportionality in favor of the paying party. This standard places a heavy evidentiary burden on the receiving party to meticulously itemize their Bill of Costs, ensuring that every dirham claimed maps directly onto the specific applications for which costs were awarded.
Despite the clarity of the July 2021 mandate, the actual assessment process languished, reflecting the often-protracted nature of post-award financial reconciliation. It was not until the autumn of 2023 that the financial liability was formally quantified. On 14 September 2023, Assistant Registrar Delvin Sumo issued the contested order assessing the costs payable by the Defendants. The issuance of this order acted as the immediate catalyst for the rapid procedural escalation that followed.
Upon receiving the Registrar's assessment, the Defendants scrutinized the underlying Bill of Costs and discovered a glaring disconnect between the legal work claimed and the narrow scope of the 29 July 2021 order. The Defendants argued that the Claimants' Bill of Costs was fundamentally flawed in its construction. Instead of detailing the legal heavy lifting required to defeat the Relief and Challenge Applications, the bill predominantly highlighted work undertaken for the preparation of an injunction—a matter entirely distinct from the issues adjudicated in the July 2021 order. The Defendants' grievance was not merely a quibble over hourly rates or the quantum of time spent; it was a fundamental challenge to the jurisdictional scope of the assessment itself. They contended that the Registrar had effectively sanctioned the recovery of costs for work that fell entirely outside the four corners of the original costs order.
Acting with notable alacrity to prevent the crystallization of an improper debt, the Defendants filed their Appeal Notice on 16 October 2023. This filing initiated the Permission Application, seeking to overturn Assistant Registrar Sumo's assessment. The Defendants advanced six distinct grounds of appeal, but the crux of their argument rested squarely on Ground 1: that the costs granted did not relate to the matters in issue and were beyond the scope of the set-aside order.
The speed with which the Defendants mobilized their appellate challenge—filing the notice barely a month after the Registrar's order—reflects a sophisticated understanding of DIFC procedural mechanics. In cases like ARB-027-2024: ARB 027/2024 Nalani v Netty, the DIFC Courts have demonstrated a low tolerance for procedural obstruction disguised as appellate review, often penalizing parties who use the appeals process merely to delay enforcement. However, Murif v Mipy distinguishes itself by presenting a surgically precise challenge to the mechanics of cost recovery. The Defendants were not attempting to relitigate the merits of the 2021 dismissal; they were demanding strict adherence to the arithmetic of proportionality and the specific boundaries of the authorizing order.
The matter rapidly ascended to H.E. Justice Nassir Al Nasser, culminating in the 21 November 2023 decision. The timeline here is critical: barely a month elapsed between the filing of the Appeal Notice and the issuance of the appellate order granting permission. This swift turnaround signals the Court's recognition of the gravity of the procedural error at play. When a Bill of Costs strays so far from its authorizing order that it encompasses entirely unrelated applications, the integrity of the assessment process is compromised, necessitating immediate judicial correction before enforcement mechanisms are improperly engaged.
Justice Al Nasser's review of the file confirmed the Defendants' suspicions regarding the structural defects in the Claimants' submissions. The granular accuracy required for a standard basis assessment under RDC 38.18 was entirely absent. The judge noted the stark evidentiary void in the Bill of Costs, pointing out exactly what was missing from the ledger:
This observation strikes at the heart of the appellate intervention and explains the rapid success of the Defendants' application. A Bill of Costs cannot function as a generalized invoice for legal services rendered throughout the lifespan of an arbitration. It must be a bespoke accounting document, forensically linked to the specific procedural victories that generated the costs award. By failing to provide entries regarding the Challenge and Relief Applications—the very applications that formed the basis of the July 2021 costs order—the Claimants effectively asked the Registrar to assess costs in a vacuum. Assessing costs for an injunction when the authorizing order only permitted costs for a Challenge Application is a practice fundamentally incompatible with the DIFC's strict proportionality doctrines.
The legal test governing the Defendants' application was RDC 44.19, which permits an appeal only where there is a real prospect of success or another compelling reason for the appeal to be heard. The threshold is intentionally high, designed to filter out frivolous challenges and preserve the finality of Registrar assessments. Yet, the disconnect between the 2021 order and the 2023 Bill of Costs was so pronounced that it easily cleared this hurdle. Justice Al Nasser concluded the rapid appellate review by affirming the validity of the Defendants' core grievance:
The timeline of Murif v Mipy serves as a potent procedural lesson for practitioners navigating the DIFC Courts. The two-year gap between the substantive dismissal in July 2021 and the flawed assessment in September 2023 illustrates the dangers of institutional memory loss in protracted litigation. When drafting a Bill of Costs years after the authorizing order, the temptation to aggregate time entries or blur the lines between distinct procedural applications is high. However, the rapid escalation from the September 2023 assessment to the November 2023 appellate intervention proves that the DIFC Courts will not hesitate to dismantle a costs order that fails the test of proportionality.
Furthermore, the decision aligns with the broader jurisprudential current seen in cases like ARB-004-2022: Muzama v Mihanti [2022] DIFC ARB 004, where the Courts have consistently policed the boundaries of procedural claims to prevent overreach. In Murif, the overreach was financial rather than substantive, but the judicial response was equally decisive. The granting of the Permission Application on 21 November 2023 was a reaffirmation of the principle that in the DIFC, the right to recover costs is inextricably bound to the obligation to prove them with exacting, application-specific precision. The timeline proves that while the assessment of costs may be delayed, appellate scrutiny of those costs, once assessed, is swift and unforgiving.
What Is the 'Real Prospect of Success' Threshold Under RDC 44.19?
The appellate gateway in the Dubai International Financial Centre (DIFC) Courts is deliberately narrow. Under Part 44 of the Rules of the DIFC Courts (RDC), a dissatisfied litigant cannot simply demand a second hearing as of right. The requirement to obtain permission to appeal serves as a critical filtering mechanism, designed to balance the right to correct judicial errors against the imperative of finality in commercial litigation. In Murif v Mipy [2023] DIFC ARB 003, H.E. Justice Nassir Al Nasser was tasked with applying this rigorous threshold to an appeal against a costs assessment order issued by Assistant Registrar Delvin sumo. The analytical framework governing such applications is codified in RDC 44.19, which establishes a strict, dual-limbed test for appellate intervention.
In accordance with Rule 44.19 of the Rules of the DIFC Courts (the “RDC”)., permission to appeal may be granted in limited situations, being when there is a real prospect that the appeal would succeed, or where there is another compelling reason why the appeal should be heard.
The "real prospect of success" standard is well-trodden ground in cross-border commercial litigation, closely mirroring the English Civil Procedure Rules. It requires significantly more than a merely arguable case; the appellant must demonstrate a substantive, evidence-backed likelihood that the impugned decision is flawed in law or fact. In the specific context of a costs assessment—a domain where assessing officers exercise broad, granular discretion—appellate courts are traditionally reluctant to intervene. Overturning a registrar's line-by-line evaluation of a bill of costs demands a clear showing that the registrar stepped outside the bounds of reasonable discretion or fundamentally misapplied the governing principles of proportionality. The Defendants in Murif v Mipy faced this exact, elevated burden when challenging the dated 14 September 2023 order.
To satisfy the high bar set by RDC 44.19, the Defendants advanced six distinct grounds of appeal. However, Justice Al Nasser’s analysis zeroed in entirely on the first ground, which attacked the fundamental nexus between the costs awarded and the substantive matters actually adjudicated. The underlying dispute traced back to an order dated 29 July 2021, which dismissed the Defendants' Set Aside Application, Relief Application, and Challenge Application. The costs for the Relief and Challenge Applications were ordered to be paid by the Defendants on a standard basis, subject to assessment by the Registrar if not agreed between the parties.
Ground 1 is that the costs granted do not relate to the matters in issue and are beyond the scope of the set aside order.
The crux of the Defendants' argument was a forensic mismatch between the Claimants' submitted Bill of Costs and the specific procedural vehicles for which costs were actually awarded. According to the Defendants, the Bill of Costs predominantly highlighted the purported work undertaken for the preparation of an injunction—a matter entirely distinct from the Relief and Challenge Applications that formed the basis of the costs liability. By claiming costs for work outside the strict scope of the 29 July 2021 order, the Claimants had allegedly inflated the assessment. Justice Al Nasser's review of the record confirmed this structural discrepancy. He noted that the Bill of Costs failed to provide adequate details regarding the work actually performed in relation to the specific applications that triggered the costs order.
This factual finding was the linchpin for satisfying the "real prospect of success" limb. RDC 38.18 mandates that when costs are assessed on a standard basis, the Court will only allow amounts that are proportionate to the matters in issue, explicitly resolving any doubts in favor of the paying party. By identifying a structural flaw in the Bill of Costs—namely, the inclusion of unrelated injunction work and the omission of specific entries for the relevant applications—the Defendants successfully transformed a routine grievance over the quantum of costs into a substantive legal challenge regarding the jurisdictional scope of the assessment. The Court recognized that if the Assistant Registrar had indeed assessed costs based on an improperly scoped bill, the resulting order would be fundamentally flawed from its inception.
The strict interpretation applied by Justice Al Nasser ensures that only meritorious appeals proceed, preventing the appellate process from being weaponized as a tool for tactical delay. In complex arbitration-related litigation, post-award costs battles often devolve into protracted satellite litigation. The DIFC Courts have consistently sought to curtail such procedural obstruction, a theme explored extensively in ARB-027-2024: ARB 027/2024 Nalani v Netty. By demanding precise adherence to the scope of the underlying costs order, Justice Al Nasser reinforced the principle that cost recovery is not a blank check. The paying party is entitled to granular transparency, and the assessing officer must strictly police the boundaries of the awarded costs to maintain the integrity of the standard basis of assessment.
Beyond the "real prospect of success," RDC 44.19 offers an alternative, albeit equally stringent, pathway to permission: "another compelling reason why the appeal should be heard." While a strong prospect of success often renders the secondary limb moot in practice, Justice Al Nasser explicitly found that the Defendants' application satisfied both criteria simultaneously. The compelling reason in this context stems from the systemic importance of maintaining absolute confidence in the DIFC's costs assessment machinery. When a Bill of Costs is alleged to be fundamentally misaligned with the authorizing judicial order, allowing the assessment to stand without appellate scrutiny risks undermining the foundational integrity of the Court's procedural rules.
Therefore, in light of the Defendants’ submission, I am of the view that the appeal does have a prospect of success and I also find a compelling reason for the appeal to be heard, and therefore the Permission Application does satisfy the requirements of RDC 44.19.
The dual satisfaction of RDC 44.19's limbs in Murif v Mipy illustrates the Court's rigorous approach to appellate gatekeeping. Justice Al Nasser did not require the Defendants to prove their case conclusively at the permission stage; rather, he required them to establish a credible, evidence-backed narrative that the assessment process had derailed at a structural level. The finding that ground 1 is sufficient enough to grant the application underscores the potency of a well-targeted scoping challenge. The Defendants did not need to rely on all six of their proposed grounds; a single, fatal flaw in the nexus between the Bill of Costs and the underlying order was enough to unlock the appellate door.
This ruling serves as a vital practice point for practitioners drafting bills of costs in the DIFC. The temptation to aggregate time entries or blur the lines between distinct procedural phases must be fiercely resisted. When an order awards costs for specific, isolated applications—such as the Relief Application and the Challenge Application—the receiving party bears the absolute burden of isolating the costs attributable solely to those applications. Failure to do so not only jeopardizes the assessment itself but also exposes the receiving party to successful appeals, further delaying recovery and inflating the overall costs of the litigation. The strict application of RDC 44.19 in this instance protects paying parties from overreach while enforcing a standard of rigorous precision upon receiving parties.
The intersection of RDC 44.19 and RDC 38.18 creates a robust framework for cost proportionality that cannot be bypassed through vague drafting. RDC 38.18 explicitly directs the Court to resolve any doubt regarding the reasonableness or proportionality of costs in favor of the paying party. When an assessing officer is presented with a Bill of Costs that lacks the necessary granularity to distinguish between compensable and non-compensable work, that very ambiguity should theoretically trigger the presumption in favor of the paying party. By granting permission to appeal, Justice Al Nasser signaled that a failure to properly apply this presumption at the assessment stage constitutes a reviewable error of law. The appellate intervention here is not merely about correcting a mathematical miscalculation; it is about enforcing the doctrinal safeguards built into the standard basis of assessment.
Furthermore, the decision to grant permission based on a single, structural ground reflects a highly pragmatic approach to appellate case management. Rather than entertaining a sprawling review of every disputed line item, the Court identified a threshold issue that could potentially vitiate the entire assessment. If the foundational premise of the Bill of Costs is flawed—because it encompasses work outside the scope of the authorizing order—the subsequent granular assessment of those costs is inherently tainted. This approach aligns seamlessly with the DIFC Courts' broader objective of dealing with cases justly and at proportionate cost, ensuring that appellate resources are focused on resolving fundamental errors rather than re-litigating discretionary micro-decisions. The ruling in Murif v Mipy thus fortifies the boundaries of RDC 44.19, confirming that while the appellate gateway is narrow, it remains firmly open to litigants who can demonstrate a genuine, structural failure in the application of the Court's procedural rules.
How Did the Court Evaluate the Proportionality of the Bill of Costs?
The procedural trajectory of Murif v Mipy [2023] DIFC ARB 003 exposes a critical vulnerability in post-award cost recovery: the perilous disconnect between a judicial mandate awarding costs and the subsequent drafting of the Bill of Costs. When the Defendants sought permission to appeal the Order of Assistant Registrar Delvin Sumo dated 14 September 2023, they did not challenge the Claimants’ fundamental entitlement to costs. Instead, they attacked the granular architecture of the assessment, arguing that the Claimants had fundamentally failed to link the work performed to the specific procedural issues for which costs were awarded. H.E. Justice Nassir Al Nasser’s evaluation of this appeal serves as a definitive doctrinal statement: in the Dubai International Financial Centre (DIFC) Courts, a Bill of Costs is not a general ledger of arbitral grievances, but a strict, itemised accounting bound by the precise parameters of the underlying order.
The analytical core of the Court’s evaluation rests on the strict application of Rule 38.18 of the Rules of the DIFC Courts (RDC). This rule governs the assessment of costs on a standard basis, imposing a dual requirement of reasonableness and proportionality. Crucially, RDC 38.18(1) dictates that the Court will only allow costs that are proportionate to the matter in issue. This phrase—"the matter in issue"—acts as a jurisdictional boundary for the assessing officer. It prevents a receiving party from using a narrow costs order as a Trojan horse to recover broad, unrelated litigation expenses.
The Defendants’ primary avenue of attack, framed as Ground 1 of their Permission Application, zeroed in on this exact boundary. They argued that the Assistant Registrar had permitted the recovery of costs that floated entirely outside the scope of the authorizing order.
Ground 1 is that the costs granted do not relate to the matters in issue and are beyond the scope of the set aside order.
To understand the potency of this ground, one must look back to the foundational order dated 29 July 2021. In that earlier ruling, the Court dismissed three distinct applications: the Set Aside Application, the Relief Application, and the Challenge Application. The costs order flowing from that dismissal was highly specific. It directed that the costs of the Relief Application and the Challenge Application were payable by the Appellants (the Defendants) to the Respondents (the Claimants) on a standard basis, to be assessed by the Registrar if not agreed. The mandate was clear: the Claimants were entitled to recover the reasonable and proportionate costs incurred specifically in defending those two distinct applications.
However, the Bill of Costs submitted by the Claimants presented a radically different narrative. Rather than meticulously detailing the hours spent drafting responses to the Relief and Challenge Applications, the Claimants submitted a bill heavily weighted toward work performed on an entirely different procedural mechanism: an injunction.
The Defendants submit that the bill of costs filed by the Claimants (the “Bill of Costs”) only highlighted the purported work undertaken for the preparation of the injunction which are not the matter in issue.
This inclusion of injunction-related work represents a fatal conflation of procedural tracks. In complex arbitration enforcement proceedings, it is common for parties to litigate multiple interim applications simultaneously—freezing orders, security for costs, jurisdictional challenges, and set-aside applications often run in parallel. However, the DIFC Courts demand that the costs associated with these parallel tracks remain strictly siloed. By attempting to recover the costs of preparing an injunction under the guise of an order awarding costs for the Relief and Challenge Applications, the Claimants violated the core tenet of RDC 38.18. The injunction was simply not the "matter in issue" for the purposes of that specific assessment.
H.E. Justice Nassir Al Nasser’s review of the file confirmed the Defendants’ critique. The Court’s evaluation did not merely identify the improper inclusion of injunction costs; it highlighted the glaring absence of the very costs the Claimants were actually entitled to claim.
I have reviewed the Bill of Costs, in my view, it does not provide details of what is the work done in relation to the Relief Application and the Challenge Application.
This observation strikes at the heart of the burden of proof in standard basis cost assessments. Under RDC 38.18(2), the Court is obligated to resolve any doubt regarding whether costs were reasonably incurred or proportionate in favour of the paying party. When a receiving party submits a Bill of Costs that fails to explicitly delineate the work performed on the specific applications authorized by the underlying order, they create an evidentiary void. The assessing officer cannot simply guess which line items correspond to the Relief Application and which correspond to the Challenge Application.
The Court noted the absolute failure of the Claimants to provide this necessary mapping:
The Bill of Costs also did not have any entries whatsoever regarding any work done on the Challenge Application and the Relief Application.
The complete absence of relevant entries transformed the Assistant Registrar’s assessment from a mathematical exercise into a jurisdictional error. If the Bill of Costs contained no entries for the authorized applications, any costs awarded by the Assistant Registrar were, by definition, awarded for unauthorized work. This realization made the granting of the permission to appeal inevitable.
Under RDC 44.19, permission to appeal is heavily guarded, requiring an applicant to demonstrate a real prospect that the appeal would succeed or another compelling reason for the matter to be heard. The threshold is designed to prevent the appellate courts from being bogged down in endless relitigation of discretionary case management and cost decisions. Yet, the structural failure of the Claimants’ Bill of Costs was so profound that H.E. Justice Nassir Al Nasser found that ground 1 is sufficient enough on its own to justify the appeal, bypassing the need to evaluate the Defendants' five other grounds.
The rigorous approach taken by H.E. Justice Nassir Al Nasser aligns with a broader jurisprudential trend within the DIFC Courts regarding procedural discipline. As seen in cases like ARB-027-2024: ARB 027/2024 Nalani v Netty, the Court is increasingly intolerant of parties who attempt to stretch the boundaries of procedural mechanisms to achieve collateral advantages. In the context of cost assessments, this means that the drafting of the Bill of Costs must be treated with the same level of precision and strategic foresight as the drafting of the substantive pleadings.
Practitioners operating within the DIFC must recognize that the "matter in issue" test under RDC 38.18 is applied with surgical precision. A broad-brush approach to time recording—where fee earners log hours to a general "Arbitration Proceedings" file without specifying the exact interim application being worked on—will inevitably lead to recovery failures at the assessment stage. The assessing Registrar is not empowered to act as an investigative auditor, piecing together a narrative of proportionality from vague time narratives. The burden lies entirely on the receiving party to present a Bill of Costs that perfectly mirrors the authorizing order.
By granting the Defendants’ application for permission to appeal, the Court reinforced the principle that proportionality is not merely a question of the total quantum claimed, but a question of strict relevance. A claim for $100,000 might be perfectly reasonable for preparing an injunction, but it is entirely disproportionate—and indeed, unrecoverable—if the "matter in issue" for which costs were awarded was a Challenge Application. The Murif v Mipy decision serves as a stark warning: the failure to link work done to specific procedural issues will not just result in a reduction of the costs awarded; it provides the paying party with a clear, compelling ground to unravel the assessment entirely on appeal.
Why Was Ground 1 Sufficient to Grant Permission?
When the Defendants approached the appellate gateway of the Dubai International Financial Centre (DIFC) Courts, they mounted a comprehensive attack against the lower assessment, advancing 6 grounds on which its appeal is based. In complex commercial arbitration disputes, it is customary for appellants to deploy a scattergun strategy, hoping that at least one procedural or substantive grievance will catch the reviewing judge’s attention. However, H.E. Justice Nassir Al Nasser adopted a highly targeted judicial approach, bypassing the peripheral arguments to focus entirely on the most substantive jurisdictional defect.
However, I find that ground 1 is sufficient enough for the Courts to grant Permission Application.
By isolating the first ground as entirely dispositive, the Court effectively streamlined the judicial process. This was not merely an exercise in judicial economy; it was a deliberate doctrinal choice to prioritize the fundamental boundaries of cost awards over secondary procedural squabbles. Ground 1 did not merely quibble with the arithmetic of the Assistant Registrar’s quantum determination; it attacked the foundational scope of the assessment itself.
Ground 1 is that the costs granted do not relate to the matters in issue and are beyond the scope of the set aside order.
To understand why this ground carried such dispositive weight, one must trace the dispute back to its originating mandate. The underlying cost liability crystallized in an order dated 29 July 2021, which dismissed a triad of applications: the Set Aside Application, the Relief Application, and the Challenge Application. The costs for the latter two were explicitly ring-fenced, ordered to be payable by the Appellant to the Respondent on a standard basis, subject to assessment by the Registrar if not agreed.
The crux of the appellate dispute lay in the Claimants’ execution of that specific cost order via their submitted Bill of Costs. A Bill of Costs is not a blank cheque for general litigation expenses; it is a strict accounting mechanism that must map directly onto the specific judicial mandate that authorized it. The Defendants argued that the bill was fundamentally misaligned with the matters actually in issue, effectively smuggling in unrelated legal work under the guise of the authorized applications.
The Defendants submit that the bill of costs filed by the Claimants (the “Bill of Costs”) only highlighted the purported work undertaken for the preparation of the injunction which are not the matter in issue.
This discrepancy strikes at the heart of the DIFC’s cost assessment regime. Under Rule 38.18 of the Rules of the DIFC Courts (RDC), when costs are assessed on a standard basis, the Court is strictly mandated to only allow amounts that are proportionate to the matter in issue. Furthermore, any doubt regarding whether costs were reasonably incurred or proportionate must be resolved in favour of the paying party. When a receiving party submits a bill heavily weighted toward injunction preparation—work that falls entirely outside the scope of the specific order dismissing the Relief and Challenge Applications—the assessing Registrar’s jurisdiction to award those costs is inherently compromised.
Justice Al Nasser scrutinized the evidentiary gap between the 2021 order and the 2023 Bill of Costs, finding a glaring omission regarding the specific applications that were supposed to be the subject of the cost recovery. The burden of categorizing and justifying work done rests entirely on the drafting party. If the bill fails to delineate the authorized work, the assessing officer cannot arbitrarily allocate global fees to specific applications.
I have reviewed the Bill of Costs, in my view, it does not provide details of what is the work done in relation to the Relief Application and the Challenge Application.
The failure to apportion costs properly in a Bill of Costs is not merely a mathematical error; it is a jurisdictional one. The Registrar only possesses the authority to assess costs within the strict confines of the underlying order. By highlighting that the bill did not have any entries whatsoever regarding the actual applications in question, the Defendants successfully demonstrated that the Assistant Registrar had arguably assessed and awarded costs for matters over which no cost order had been made.
This brings the analysis to the strict appellate gateway governed by RDC 44.19. The DIFC Courts maintain a notoriously high threshold for permission to appeal, requiring either a real prospect that the appeal would succeed or another compelling reason why the appeal should be heard. Ground 1 satisfied both prongs simultaneously.
Therefore, in light of the Defendants’ submission, I am of the view that the appeal does have a prospect of success and I also find a compelling reason for the appeal to be heard, and therefore the Permission Application does satisfy the requirements of RDC 44.19.
The "compelling reason" threshold is particularly relevant here. The integrity of the DIFC’s cost assessment regime relies on precise adherence to originating orders. If a Bill of Costs can successfully absorb fees for unrelated injunction work without granular justification, the predictability of standard basis assessments collapses. The Court’s intervention serves as a necessary corrective measure to ensure that assessing officers do not inadvertently expand the scope of cost liability beyond what the original judge intended.
This targeted approach to appellate review resonates with broader trends in DIFC jurisprudence, where judges increasingly refuse to entertain peripheral grounds when a core jurisdictional or scoping defect exists. For instance, in ARB 027/2024 Nalani v Netty, the Court demonstrated a low tolerance for scattergun appellate tactics, emphasizing that appeals must target substantive errors rather than procedural minutiae. Similarly, the strict policing of boundaries seen in Muzama v Mihanti [2022] DIFC ARB 004 reinforces the principle that parties cannot use secondary procedural mechanisms to expand the scope of their original claims or entitlements.
Justice Al Nasser’s surgical focus on Ground 1 mirrors this philosophy. If a single ground exposes a fatal flaw in the lower decision’s scope—namely, that the costs awarded were fundamentally disconnected from the matters in issue—the remaining five grounds become academically redundant for the purposes of granting permission. Entertaining them at the permission stage would only dilute the core legal issue and expend unnecessary judicial resources.
Ultimately, the decision to grant permission based solely on Ground 1 serves as a doctrinal warning to receiving parties in DIFC arbitral enforcement proceedings. The preparation of a Bill of Costs must be an exercise in exactitude, directly mirroring the specific applications and orders that generated the cost entitlement. By prioritizing the most substantive ground of appeal, the Court not only streamlined the immediate judicial process but also reinforced a vital substantive legal principle: cost awards are strictly bounded by the four corners of the order granting them, and any deviation from those boundaries provides a compelling, standalone justification for appellate intervention.
How Does the DIFC Approach to Costs Compare to English High Court Standards?
The assessment of costs in commercial arbitration frequently becomes a secondary battleground, testing the limits of a jurisdiction's procedural rigor long after the substantive dispute has concluded. In the Dubai International Financial Centre (DIFC), the framework governing cost recovery is heavily influenced by the English Civil Procedure Rules (CPR). Specifically, the DIFC’s reliance on Rule 38.18 of the Rules of the DIFC Courts (RDC) mirrors the English CPR’s emphasis on proportionality and reasonableness. However, as H.E. Justice Nassir Al Nasser’s intervention in Murif v Mipy [2023] DIFC ARB 003 reveals, the DIFC maintains a distinct focus on local procedural autonomy, refusing to treat cost assessments as mere administrative rubber stamps. The Court’s willingness to scrutinize the granular details of a Bill of Costs reflects a deep-seated commitment to preventing the inflation of legal fees, ensuring that the jurisdiction remains a sophisticated, cost-conscious forum for international dispute resolution.
The dispute in Murif v Mipy centered on an appeal against an Order of Assistant Registrar Delvin sumo dated 14 September 2023. The Defendants, Mipy and Madli, sought permission to appeal the costs awarded to the Claimants, Murif and Mijul, arguing that the costs granted were fundamentally disconnected from the actual matters in issue. The legal test governing this assessment is found in RDC 38.18, which dictates that when costs are assessed on a standard basis, the Court will only allow amounts that are proportionate to the matter in issue, resolving any doubt in favor of the paying party. This standard is a direct descendant of the English CPR Part 44, which similarly demands that costs bear a reasonable relationship to the value and complexity of the litigation. Yet, the DIFC Courts apply this standard with a localized stringency, demanding absolute precision in how legal work is categorized and billed by practitioners operating within the seat.
The Defendants' primary contention, categorized as Ground 1 in their appeal, struck at the heart of this proportionality requirement. They argued that the Claimants' Bill of Costs was improperly inflated by including work that fell outside the narrow scope of the relevant costs order. H.E. Justice Nassir Al Nasser noted the Defendants' position regarding the misallocation of billed hours:
The Defendants submit that the bill of costs filed by the Claimants (the “Bill of Costs”) only highlighted the purported work undertaken for the preparation of the injunction which are not the matter in issue.
The inclusion of injunction-related work in a Bill of Costs meant to cover specific, distinct applications represents a classic example of cost inflation—whether intentional or the result of sloppy record-keeping by the receiving party's legal representatives. In the English High Court, such discrepancies often lead to a broad-brush percentage reduction during detailed assessment, with costs judges applying a rough metric to carve out unrelated work. In the DIFC, however, the Court demands a strict, line-item correlation between the specific procedural application and the costs claimed. The underlying order from 29 July 2021 had explicitly dismissed a Set Aside Application, a Relief Application, and a Challenge Application, directing that the costs for the Relief and Challenge Applications were payable by the Appellant to the Respondent on a Standard basis to be assessed by the Registrar if not agreed. The Claimants' failure to map their billed hours to these specific applications proved fatal to their cost recovery efforts at this stage.
H.E. Justice Nassir Al Nasser’s review of the documentation revealed a stark absence of the required detail. The Court found that the Bill of Costs also did not have any entries whatsoever regarding the actual work performed on the Challenge Application and the Relief Application. This omission is not merely a technical defect; it is a substantive failure to meet the burden of proof required for standard basis cost recovery. Under the standard basis, the receiving party bears the burden of proving that the costs were reasonably incurred and reasonable in amount. By failing to provide entries for the specific applications in issue, the Claimants failed to discharge this fundamental burden. The Court articulated this deficiency clearly:
I have reviewed the Bill of Costs, in my view, it does not provide details of what is the work done in relation to the Relief Application and the Challenge Application.
By demanding granular accuracy, the DIFC Courts align with international best practices requiring strict proportionality in cost assessments. The paying party cannot be expected to foot the bill for generalized legal labor that cannot be directly tied to the specific procedural victories of the receiving party. This approach echoes the rigorous scrutiny seen in other DIFC arbitration-related disputes, such as ARB-027-2024: ARB 027/2024 Nalani v Netty, where the Court similarly penalized procedural imprecision and obstruction. The message from the bench is unequivocal: the DIFC is not a jurisdiction where successful litigants can use a favorable costs order as a blank check to recover unrelated legal expenses incurred throughout the wider lifecycle of an arbitration.
The procedural mechanism for challenging the Assistant Registrar's assessment is governed by RDC 44.19, which sets a high bar for permission to appeal. The rule stipulates that permission may only be granted if there is a real prospect of success or another compelling reason for the appeal to be heard. This threshold is designed to prevent endless satellite litigation over costs, a problem that has historically plagued the English commercial courts. Overturning a Registrar's costs assessment is notoriously difficult because it involves challenging an exercise of discretion; an appellate judge will typically only intervene if there has been a clear error of principle. However, when a Bill of Costs exhibits fundamental structural flaws—such as billing for an unrelated injunction while omitting entries for the actual applications in issue—the error of principle is manifest, and the threshold is comfortably met. H.E. Justice Nassir Al Nasser confirmed that the Defendants' challenge satisfied these stringent requirements:
Therefore, in light of the Defendants’ submission, I am of the view that the appeal does have a prospect of success and I also find a compelling reason for the appeal to be heard, and therefore the Permission Application does satisfy the requirements of RDC 44.19.
The decision to grant permission to appeal based solely on Ground 1 underscores the primacy of proportionality in the DIFC's procedural architecture. The Defendants had submitted six separate grounds for appeal, but the Court found that ground 1 is sufficient enough to justify the intervention. This judicial economy—focusing on the most glaring defect rather than entertaining every peripheral argument—further distinguishes the DIFC's approach. It provides clear guidance to practitioners: when challenging a cost assessment, a laser focus on the disconnect between the costs claimed and the matters actually in issue is far more effective than a scattergun approach attacking every minor disbursement.
The procedural rigor applied in Murif v Mipy is consistent with the DIFC’s broader reputation as a sophisticated, cost-conscious jurisdiction. Since the foundational rulings that established the DIFC as a premier arbitration hub—such as ARB-003-2013: Banyan Tree Corporate PTE Ltd v Meydan Group LLC—the Court has consistently sought to balance robust enforcement mechanisms with strict procedural safeguards. The requirement that costs be proportionate to the matter in issue is not merely a suggestion; it is a mandatory directive that binds both the assessing Registrar and the reviewing Judge.
Furthermore, the application of RDC 38.18 in this context serves as a vital check against the creeping inflation of arbitration-related litigation costs. In complex cross-border disputes, the proliferation of interim applications—set aside motions, relief applications, and challenges to jurisdiction—can generate massive legal bills. If courts do not strictly enforce the boundaries of cost orders, the financial risk of engaging in arbitration in the DIFC could become prohibitive for commercial actors. By ensuring that any doubt which it may have regarding the reasonableness or proportionality of costs is resolved firmly in favor of the paying party, the DIFC Courts actively protect the economic viability of the forum.
Ultimately, the comparison between the DIFC approach and English High Court standards reveals a shared philosophical foundation but a distinct operational reality. While both jurisdictions abhor disproportionate costs, the DIFC Courts, operating in a highly specialized commercial environment, appear increasingly willing to intervene at the appellate level when a Bill of Costs fails to meet basic standards of granular accuracy. The ruling by H.E. Justice Nassir Al Nasser is a definitive statement that the procedural autonomy of the DIFC includes the right—and the obligation—to police the financial conduct of litigants with exacting precision. Practitioners drafting Bills of Costs in the DIFC must recognize that vague entries and misallocated hours will not survive judicial scrutiny, and that the principles of proportionality will be enforced with uncompromising rigor.
Which Earlier DIFC Cases Frame This Decision?
The DIFC Courts have increasingly scrutinized the granular mechanics of cost recovery, particularly where complex arbitral challenges spawn multiple, overlapping satellite applications. H.E. Justice Nassir Al Nasser’s intervention in Murif v Mipy [2023] DIFC ARB 003 is not an isolated procedural correction; rather, it forms part of a deliberate judicial strategy to police the boundaries of arbitral challenges and the subsequent financial reckoning. The decision to grant permission to appeal an Assistant Registrar’s cost assessment signals a low judicial tolerance for aggregated, opaque billing practices that fail to map directly onto specific costs orders.
The threshold for appellate intervention in the DIFC is notoriously stringent, designed to prevent the endless relitigation of procedural and administrative decisions. To disturb an order of the Assistant Registrar, an appellant must satisfy the strict criteria laid out in the Rules of the DIFC Courts. The burden rests entirely on the applicant to demonstrate that the lower decision was not merely unfavorable, but fundamentally flawed in its application of the rules or its assessment of the facts.
In accordance with Rule 44.19 of the Rules of the DIFC Courts (the “RDC”)., permission to appeal may be granted in limited situations, being when there is a real prospect that the appeal would succeed, or where there is another compelling reason why the appeal should be heard.
In Murif v Mipy, the Defendants (Appellants) successfully navigated this narrow gateway by attacking the foundational integrity of the Claimants’ Bill of Costs. The core of the Defendants’ argument rested on the assertion that the costs granted by the Assistant Registrar did not relate to the specific matters in issue and exceeded the scope of the underlying costs order. This is a critical distinction in DIFC practice. When a court awards costs on a standard basis, it does not issue a blank cheque for the entirety of the prevailing party's legal spend during a specific chronological period. Instead, it demands a precise correlation between the work claimed and the specific application for which costs were awarded.
The governing rule, RDC 38.18, mandates that the Court will only allow costs that are proportionate to the matter in issue, resolving any doubt regarding reasonableness or proportionality firmly in favour of the paying party. The Defendants leveraged this presumption, arguing that the Claimants had fundamentally conflated distinct procedural workstreams. Specifically, they contended that the Bill of Costs was heavily weighted toward the preparation of an injunction—a matter not covered by the relevant costs order—while entirely omitting the necessary detail regarding the applications that were actually in issue.
The Defendants submit that the bill of costs filed by the Claimants (the “Bill of Costs”) only highlighted the purported work undertaken for the preparation of the injunction which are not the matter in issue.
This strict approach to procedural integrity and the demand for precise cost attribution echoes the principles established in recent DIFC jurisprudence, notably ARB-009-2023: ARB 009/2023 Mirifa v (1) Mahur (2) Meison (3) Mepur. In Mirifa, the Court demonstrated a profound skepticism toward procedural duplication and the obfuscation of costs, penalizing parties who attempted to use the complexity of arbitral enforcement to mask aggressive or unmeritorious tactics. Murif v Mipy extends this logic directly into the assessment phase. It confirms that the Court will not rubber-stamp aggregated bills that fail to disaggregate work done on ancillary matters (like an injunction) from the specific applications (like a Set Aside or Challenge Application) for which costs were explicitly awarded.
The factual matrix of Murif required Justice Al Nasser to look backward to the foundational order dated 29 July 2021, which had dismissed the Set Aside Application, Relief Application, and Challenge Application. That 2021 order was highly specific: it directed that the costs of the Relief Application and the Challenge Application were payable by the Appellant to the Respondent on a standard basis, to be assessed by the Registrar if not agreed. The mandate was clear, yet the execution by the Claimants in their Bill of Costs was found wanting.
I have reviewed the Bill of Costs, in my view, it does not provide details of what is the work done in relation to the Relief Application and the Challenge Application.
The failure to provide these granular details is fatal in a standard basis assessment. When a receiving party submits a Bill of Costs that highlights work undertaken for an injunction but lacks entries for the specific applications governed by the costs order, they strip the assessing officer of the ability to conduct a meaningful proportionality review. The assessing officer cannot simply guess which hours billed by a partner or associate were dedicated to the Challenge Application versus the injunction. By failing to separate these workstreams, the Claimants effectively forced the Court's hand, creating a scenario where the Defendants had a highly credible argument that the assessment was fundamentally flawed.
Practitioners must view this case as part of a broader trend toward stricter enforcement of procedural compliance within the DIFC. The era of the "blunderbuss" Bill of Costs—where a receiving party submits a generalized ledger of all time spent during a specific phase of litigation, hoping the assessing officer will simply apply a percentage discount—is rapidly closing. The DIFC Courts are signaling that the burden of proof remains firmly on the receiving party to justify every line item against the specific parameters of the underlying order.
The Defendants in Murif advanced six distinct grounds of appeal against the Assistant Registrar's order. However, the structural failure of the Bill of Costs was so profound that Justice Al Nasser did not need to entertain the entirety of the Defendants' appellate arsenal. The primary ground—the mismatch between the costs granted and the matters actually in issue—was sufficient to cross the high threshold required for appellate intervention.
However, I find that ground 1 is sufficient enough for the Courts to grant Permission Application.
This surgical approach by the Court underscores a vital tactical reality for litigators: a single, fundamental defect in the categorization of costs can render an entire assessment vulnerable to appeal. By finding that the appeal had a real prospect that the appeal would succeed, Justice Al Nasser validated the Defendants' strategy of attacking the root methodology of the Bill of Costs rather than merely quibbling over hourly rates or specific time entries.
Furthermore, the Court's determination that there was a compelling reason for the appeal to be heard elevates the significance of this ruling beyond the immediate parties. It suggests that the proper application of RDC 38.18 and the necessity for granular, application-specific billing are matters of systemic importance to the DIFC's procedural ecosystem. The Court is actively policing the boundaries of arbitral challenges, ensuring that the financial consequences of multi-front litigation are assessed with surgical precision.
When parties engage in complex enforcement battles, deploying set-aside applications alongside relief and challenge applications, the subsequent cost recovery process cannot be treated as a generalized accounting exercise. It requires rigorous timekeeping and billing practices that align perfectly with the procedural history of the case. The failure to maintain this alignment, as seen in the Claimants' approach in Murif, invites appellate scrutiny and jeopardizes the recovery of legitimately incurred costs. The decision serves as a stark reminder that in the DIFC, procedural integrity must be maintained through to the very last line item of the final costs assessment.
What Does This Mean for Future Enforcement and Costs Applications?
The appellate intervention by H.E. Justice Nassir Al Nasser in Murif v Mipy [2023] DIFC ARB 003 signals a strict adherence to procedural exactitude during the often-overlooked phase of cost recovery. For practitioners navigating the Dubai International Financial Centre (DIFC) Courts, the granting of the Defendants’ Permission Application acts as a severe warning: the failure to maintain and present meticulous, application-specific billing records invites costly appellate delays. The dispute over Assistant Registrar Delvin Sumo’s 14 September 2023 order exposes the vulnerabilities inherent in drafting a Bill of Costs that lacks granular precision. When a receiving party treats cost assessment as a mere administrative afterthought, they jeopardize the very financial recovery they secured on the merits.
At the heart of the appellate challenge was the scope of the costs awarded versus the costs actually authorized by the underlying judicial order. The Defendants successfully argued that the costs granted did not relate to the matters in issue. Specifically, the foundational order dated 29 July 2021 had dismissed a Set Aside Application, a Relief Application, and a Challenge Application, directing that the costs for the latter two be payable by the Appellant on a standard basis. Justice Al Nasser anchored his review on this precise historical directive:
Despite this clear directive, the Claimants submitted a Bill of Costs that fundamentally failed to segregate the work performed. The Defendants contended that the submissions only highlighted the purported work undertaken for an injunction—a matter entirely outside the scope of the costs order. Bills of Costs must be itemized with extreme precision to avoid challenges based on scope. When a party conflates distinct procedural applications, they violate the core tenet of standard basis assessment under Rule 38.18 of the Rules of the DIFC Courts (RDC), which mandates that the Court will only allow the amount of costs which are proportionate to the matter in issue.
Counsel must ensure that costs claimed are strictly linked to the specific applications authorized by the Court. The failure to do so in Murif v Mipy provided the Defendants with a compelling ground for appeal. The conflation of an injunction preparation with the defense of a Challenge Application is not a minor clerical error; it is a substantive defect that prevents the Registrar from conducting a lawful proportionality analysis. Justice Al Nasser noted the glaring omissions in the Claimants' submissions, pointing directly to the lack of relevant data:
This evidentiary vacuum forced the Court's hand. Without detailed entries specifying the time and resources expended explicitly on the Relief and Challenge Applications, the Assistant Registrar's assessment rested on unstable ground. Justice Al Nasser concluded that the Bill of Costs does not provide details of what is the work done, thereby satisfying the threshold for appellate review. The decision encourages a more transparent and evidence-based approach to cost recovery in the DIFC, demanding that practitioners move away from block-billing or generalized narratives when seeking standard basis costs.
The strategic implications for enforcement and cost applications are profound. By granting permission to appeal under Rule 44.19 of the Rules of the DIFC Courts, the Court has effectively paused the Claimants' recovery efforts, subjecting them to further litigation, delay, and expense. The Defendants advanced six grounds of appeal, but the Court found that ground 1 is sufficient enough to warrant the appellate hearing. Ground 1 specifically attacked the disconnect between the costs granted and the matters actually in issue, proving that a single, well-founded jurisdictional or scope-based objection can unravel an entire cost assessment.
This dynamic mirrors broader trends in DIFC jurisprudence where procedural exactitude acts as a gatekeeper against overreach. For instance, in ARB-027-2024: ARB 027/2024 Nalani v Netty, the limits of arbitration appeals were tested against the backdrop of procedural obstruction, revealing the Court's low tolerance for tactical delays. Similarly, much like the jurisdictional boundaries explored in ARB-004-2022: Muzama v Mihanti [2022] DIFC ARB 004, Murif v Mipy demonstrates that the appellate mechanism will be readily deployed to correct assessments that stray beyond their authorized procedural boundaries. When a paying party can point to a lack of proportionality or a failure to segregate costs, the DIFC Courts will not hesitate to intervene, resolving any doubt in favour of the paying party as required by RDC 38.18(2).
To avoid such costly appellate delays, law firms operating within the DIFC must implement rigorous time-recording protocols from the inception of a mandate. Fee earners cannot rely on post-hoc rationalizations to allocate time across multiple concurrent applications. If a lawyer is drafting a response to a Challenge Application while simultaneously preparing an injunction, the time entries must explicitly delineate the minutes spent on each distinct task. The Murif decision confirms that the Registrar cannot—and will not—be expected to untangle a web of generalized billing entries to divine which costs apply to which application. The burden of clarity rests entirely on the receiving party.
Furthermore, the ruling reinforces the strict criteria for granting permission to appeal. Under RDC 44.19, an applicant must demonstrate a real prospect that the appeal would succeed, or another compelling reason for the hearing. By finding that the Defendants met this burden based solely on the inadequacy of the Bill of Costs, Justice Al Nasser has lowered the perceived barrier for challenging Registrar assessments, provided the challenge is rooted in documented scope discrepancies. The Court's reasoning leaves no room for ambiguity regarding the appellate threshold:
Ultimately, the burden of proof in cost assessments remains squarely on the receiving party. The Claimants in Murif secured a favorable costs order in July 2021, yet more than two years later, their failure to properly itemize those costs has left them defending an appeal in late 2023. This temporal gap illustrates the severe practical consequences of administrative complacency. Corporate clients and third-party funders expect swift financial recovery following a favorable ruling on the merits; a two-year delay caused by inadequate billing records is a failure of legal project management. The DIFC Courts demand that the final stages of litigation be conducted with the same analytical rigor as the substantive hearings. Practitioners must view the drafting of a Bill of Costs not as a mere clerical exercise, but as a critical legal submission that must withstand intense adversarial and judicial scrutiny.
Looking ahead, the Murif precedent will likely feature prominently in future cost disputes, serving as a primary weapon for paying parties seeking to strike out vague or overly broad cost claims. It establishes a clear doctrinal baseline: where a costs order is limited to specific applications, the corresponding Bill of Costs must be a mirror image of that limitation, devoid of extraneous entries and supported by unambiguous, application-specific data. For the DIFC arbitration bar, the message is unequivocal—precision in billing is no longer just best practice; it is a strict prerequisite for enforcement.