On 26 September 2022, Justice Sir Richard Field delivered a definitive judgment in the Technology and Construction Division, ruling that Panther Real Estate Development LLC was legally entitled to terminate its construction contract with Modern Executive Systems Contracting LLC (MESC) for the East 40 Building project. The decision, which followed a four-day trial, effectively ended a protracted dispute over project delays, site abandonment, and the validity of security guarantee encashments. Justice Field’s ruling, which ultimately saw the Claimant awarded significant damages while rejecting the contractor's claims for extensions of time, serves as a stark reminder of the consequences of failing to adhere to strict contractual notice requirements.
For construction practitioners and developers operating within the DIFC, this case provides a masterclass in the application of FIDIC-based conditions under DIFC law. The dispute underscores the judiciary’s intolerance for procedural laxity, particularly regarding the submission of detailed claims within prescribed timeframes. By upholding the developer's right to terminate for abandonment and strictly enforcing the exhaustion of delay damages caps, the Court has reinforced the sanctity of the 'time is of the essence' principle in large-scale infrastructure projects, while simultaneously setting a high bar for contractors seeking to rely on expert delay analysis to excuse performance failures.
How Did the Dispute Between Panther and MESC Arise?
The genesis of the litigation in Panther Real Estate Development LLC v Modern Executive Systems Contracting LLC [2022] DIFC TCD 003 rests on a foundational misalignment of expectations regarding project commencement, which inevitably triggered a catastrophic cascade of delays, liquidated damages, and ultimately, site abandonment. On 11 July 2017, Panther Real Estate Development LLC, acting as the Employer, executed a construction contract with Modern Executive Systems Contracting LLC (MESC), the Main Contractor. The scope of works involved the construction of the East 40 Building, a residential tower building consisting of 112 residential units located in Al Furjan, Dubai. The agreed remuneration for the completion of the project was fixed at AED 40,331,550.
To govern the execution of the works, the parties adopted a standard industry framework, specifically incorporating the FIDIC Conditions of Contract for Construction for Building and Engineering works Designed by the Employer (First Edition, 1999). This was supplemented by bespoke Particular Conditions, with the entire agreement expressly governed by DIFC law and subject to the exclusive jurisdiction of the DIFC Courts. Panther further appointed NAGA Architects, Designers and Planners to act as the Engineer for the project, establishing a conventional tripartite administrative structure for the development.
Despite the clarity of the drafted instruments, the project's critical path was compromised almost immediately by a fundamental disagreement over the Commencement Date. The executed contract explicitly specified a Commencement Date of 11 July 2017. The Time for Completion was set at 16 months, generating an initial Completion Date of 10 November 2018. However, MESC operated under a divergent assumption regarding when the clock actually started ticking. During the proceedings, a witness for the contractor, Mr Alkerdi, advanced the position that the true Commencement Date was 21 September 2017, arguing that this was the day following the receipt of the Demarcation Certificate.
This specific friction point—whether a commencement date is anchored to the execution of the contract or the practical handover of unhindered site access—is a recurring vulnerability in regional construction disputes. Contractors frequently presume that administrative delays in securing municipal demarcation or site possession implicitly toll the commencement of the works. The Technology and Construction Division (TCD), however, applies a strict textualist approach to FIDIC mechanisms. Unless the Employer formally issues an instruction to delay commencement under Sub-Clause 8.1, or the parties execute a formal addendum, the date written in the Appendix to Tender binds the parties. While the parties eventually coalesced around an Approved Baseline Programme Completion Date was 16 December 2018, the initial cognitive dissonance regarding the project timeline set the stage for the severe delays that followed.
By early July 2019, the reality on the ground had drastically diverged from the Approved Baseline Programme. The agreed Completion Date of 16 December 2018 had been overshot by approximately six and a half months. In the highly leveraged environment of Dubai real estate development, such delays trigger immediate and severe financial mechanisms. Under Sub-Clause 8.7 of the Contract, MESC's failure to achieve completion exposed the contractor to delay damages calculated at a daily rate of AED 42,500. Crucially, these liquidated damages were subject to a maximum cap equivalent to 10% of the total contract price, amounting to AED 4,181,153.25.
The exhaustion of a delay damages cap under a FIDIC 1999 contract is not merely a financial milestone; it is a jurisdictional trigger for termination. Once the maximum amount of delay damages is reached, the Employer is generally entitled to terminate the contract under Sub-Clause 15.2(h). Panther exercised this exact right. The spiraling delays had consumed the entirety of the 10% buffer, transforming a delayed project into a terminable one. Justice Sir Richard Field validated this contractual maneuver, confirming the strict operation of the FIDIC termination machinery:
It follows that I find that Panther was entitled: (a) to terminate the Contract without notice pursuant to Sub-Clause 15 (2) (h) as it did on 6 November 2019 on the ground that the maximum amount of delay damages stated in the Appendix to Tender was exhausted; and (b) to liquidated delay damages under Sub-Clause 8.7 of the Contract up to that maximum in the sum of AED 4,181,153.
The financial exposure for MESC was further compounded by the security instruments held by the Employer. Pursuant to Sub-Clause 4.2 and Sub-Clause 14.2 of the Contract, MESC had procured two separate guarantees from Emirates NBD Bank PJSC. The first was a Performance Guarantee, functioning as an unconditional and on-demand guarantee in the amount of AED 4,033,155.00. The second was an Advance Payment Guarantee for an identical sum. The autonomous nature of these on-demand bonds meant that Panther possessed the unilateral leverage to encash them upon forming the view that MESC was in breach, independent of any ongoing dispute resolution regarding extensions of time. The DIFC Courts have consistently protected the cash-equivalent status of on-demand bonds, requiring a high threshold of established fraud to injunct a call—a threshold MESC could not meet as the project languished.
The dispute's escalation from mere delay to outright termination was cemented by the physical reality at the Al Furjan site. As the financial penalties mounted and the relationship between the Employer, the Engineer, and the Main Contractor deteriorated, MESC's presence and progress on the site evaporated. Panther's termination on 6 November 2019 was not solely predicated on the exhaustion of the delay damages cap; it was equally founded on the contractor's complete cessation of productive work. The TCD recognized this physical withdrawal as a repudiatory act, aligning the contractual termination rights with the common law concept of abandonment. Justice Field concluded:
For these reasons I find that by the termination letter Panther lawfully terminated the Contract by reason of MESC’s abandonment of the Works.
This dual-track justification for termination—exhaustion of the LADs cap and physical abandonment—provides a robust template for Employers navigating distressed projects in the DIFC. It mirrors the strict procedural compliance demanded by the TCD in parallel construction disputes, such as TCD 009/2020 Five Real Estate Development Llc v Reem Emirates Aluminium Llc, where the court similarly penalized parties that failed to adhere to the rigid notice and termination provisions of their amended FIDIC contracts.
Interestingly, Panther's legal strategy included a broader, statutory argument that ultimately failed to gain traction with the court. In addition to relying on the specific FIDIC sub-clauses for termination, Panther pleaded that MESC's conduct amounted to an anticipatory breach under the DIFC Contract Law (DIFC Law No. 6 of 2004). The Employer relied specifically on the statutory mechanism governing fundamental non-performance prior to the deadline:
Article 88 (1)
Where prior to the date for performance by one of the parties it is clear that there will be a fundamental non-performance by that party, the other party may terminate the contract.
87.
Justice Field, however, rejected the application of Article 88(1) to the facts at hand. The rejection was rooted in the chronological reality of the dispute. Anticipatory breach, by its very definition and statutory construction in the DIFC, requires the manifestation of a fundamental non-performance prior to the date for performance. In the East 40 Building project, the agreed Completion Date of 16 December 2018 had long passed by the time Panther issued its termination notice in November 2019. The breach was not anticipatory; it was actual, ongoing, and fully crystallized. Consequently, the court dismissed this specific statutory ground:
It follows that I find that Panther did not lawfully terminate the Contract for anticipatory breach of contract under Article 88 (1) of the Contract Law.
The failure of the anticipatory breach argument did not save MESC, as the contractual grounds of abandonment and the exhausted delay damages cap were more than sufficient to uphold the termination. However, the court's precise parsing of Article 88(1) serves as a critical doctrinal marker for DIFC practitioners. It reinforces the principle that statutory remedies for anticipatory breach cannot be retrofitted to cure actual breaches that occur after the contractual deadline has expired. The dispute between Panther and MESC thus stands as a definitive textbook example of how initial misalignments regarding commencement dates can silently erode a project's critical path, culminating in a cascade of liquidated damages that ultimately arms the Employer with an unassailable right to terminate and liquidate security guarantees.
How Did the Case Move From Default Judgment to Final Trial?
The procedural trajectory of Panther Real Estate Development LLC v Modern Executive Systems Contracting LLC represents a masterclass in the volatility of construction litigation within the Dubai International Financial Centre. Long before Justice Sir Richard Field delivered his definitive ruling following a four-day trial, the dispute appeared to have reached a premature and entirely one-sided conclusion. The claimant initially bypassed the grueling lifecycle of a Technology and Construction Division (TCD) dispute by securing an early, devastating summary victory. On 12 February 2020, later re-issued on 25 March 2020, Judicial Officer Nasser Al Nassir granted an AMENDED ORDER FOR DEFAULT JUDGMENT against the contractor.
Modern Executive Systems Contracting LLC (MESC) had committed the cardinal sin of commercial litigation: silence. By failing to file an Acknowledgment of Service or a Defence within the statutory timeframes, the contractor left itself entirely exposed to the claimant’s unmitigated quantification of damages. Panther Real Estate Development LLC capitalized on this procedural delinquency with surgical precision. The claimant meticulously navigated the requirements of Part 13 of the Rules of the DIFC Courts (RDC), ensuring that every jurisdictional and procedural prerequisite was satisfied on paper.
The Claimant has submitted evidence, as required by RDC 13.24 that: (i) the claim is one that the DIFC Courts have power to hear and decide; (ii) no other court has exclusive jurisdiction to hear and decide the claim; and (iii) the claim has been properly served (see RDC 13.22 and 13.23).
The resulting default judgment was not a mere administrative slap on the wrist; it was a financial death knell. The Court ordered MESC to pay a staggering AED 28,209,920.40 within 14 days. This sum was not pulled from the ether but was constructed from Panther’s uncontested pleadings, which included AED 4,181,153.25 in delay damages pursuant to clause 8.7 of the FIDIC contract, AED 8,000,000 for the cost of completion and remedying defective works, and over AED 10 million for losses arising out of the delay. The Court accepted the claimant's calculation of interest in the claim without the need for adversarial testing. The punitive weight of the judgment was further compounded by the accrual of statutory interest, which transformed the award into a rapidly expanding liability.
Pursuant to PD 4/2017 the Defendant shall pay interest on the judgment sum to the Claimant from the date of this default judgment, at the rate of 9% annually – quantified at the daily rate of AED 6,955.87, until the date of payment.
Faced with a daily interest accrual approaching AED 7,000 and a multi-million-dirham execution threat, MESC was finally jolted into action. The procedural volatility of the case peaked when the contractor retained counsel and, on 20 February 2020, filed an application notice TCD-003-2019/2 seeking to set aside the default judgment.
Setting aside a default judgment in the DIFC Courts is never a guaranteed endeavor. The RDC requires a defaulting defendant to demonstrate a real prospect of successfully defending the claim or some other compelling reason why the judgment should be set aside and the defendant allowed to defend. The burden rests entirely on the delinquent party to convince the Court that the merits of the dispute warrant reopening a finalized order. The DIFC Courts, however, possess a well-documented philosophical preference for merits-based adjudication, particularly in the Technology and Construction Division where disputes involve complex engineering evidence, granular critical path delay analysis, and intricate interpretations of FIDIC standard forms.
Judicial Officer Maha Al Mehairi reviewed the competing applications and recognized that allowing a AED 28 million construction dispute to be resolved by an administrative default would bypass the rigorous evidentiary testing that the TCD was established to provide. On 4 June 2020, the Court ordered The Default Judgment to be set aside, a decision later formalized in a subsequent order on 8 July 2020. This critical pivot forced the parties out of a summary execution posture and into the crucible of a full trial.
Yet, the Court did not absolve MESC of its initial procedural failures. The transition from default to contested litigation came with an immediate financial penalty. The claimant, having rightfully relied on the rules to secure its initial judgment, sought protection for the costs wasted by the contractor's delayed engagement. Judicial Officer Maha Al Mehairi ensured that the price of reopening the merits was borne by the party responsible for the delay.
The Defendant shall pay the Claimant’s costs of and occasioned by Default Judgment and the First Application, such costs to be assessed if not agreed.
Once the default judgment was vacated, the litigation transformed into a heavy, document-intensive TCD dispute. The initial illusion of a swift resolution evaporated, replaced by the grueling reality of construction arbitration-style litigation. The case required multiple consent orders to manage document production and expert evidence. Construction disputes of this magnitude cannot be litigated on pleadings alone. The parties were forced to engage in extensive disclosure exercises, mapping out the exact timeline of the East 40 Building project, exchanging site diaries, and producing thousands of pages of correspondence to establish whether the termination notices complied with the strict contractual machinery.
Furthermore, the transition necessitated the deployment of independent expert witnesses. Panther’s initial claim for AED 8 million in completion costs and AED 4.1 million in delay damages—figures that were simply accepted at the default stage—now had to survive cross-examination. Experts in forensic delay analysis and quantum were instructed to reconstruct the project's critical path and assess the true financial impact of the site abandonment. The management of this expert evidence required the Court to issue precise procedural timetables, ensuring that the eventual trial would be grounded in tested, empirical data rather than unilateral assertions.
The transition from a default scenario to a contested trial illustrates the DIFC Court's unwavering commitment to merits-based adjudication. The TCD is designed to handle the most complex infrastructure and real estate disputes in the region; its procedural rules are tools to facilitate justice, not traps to secure unearned windfalls. By setting aside the default judgment, the Court signaled that while procedural compliance is mandatory, the ultimate objective is to resolve the substantive rights of the parties based on the actual events that transpired on the construction site.
This approach mirrors the procedural rigors observed in TCD 009/2020 Five Real Estate Development Llc v Reem Emirates Aluminium Llc, where the TCD heavily scrutinized evidentiary burdens and procedural posturing. In both instances, the Court demonstrated a willingness to look past early procedural skirmishes to ensure that the final judgment was anchored in a comprehensive review of the contractual matrix and the expert testimony.
For practitioners, the procedural arc of Panther v MESC serves as a vital strategic lesson. Ignoring a DIFC Court Claim Form is a catastrophic risk that will result in swift, financially devastating default judgments, complete with punitive daily rate of AED 6,955.87 interest accruals. The claimant's ability to swiftly file a Certificate of Service in accordance with RDC 9.43 and immediately move for judgment demonstrates the efficiency of the Court's summary procedures. However, the subsequent setting aside of that judgment reveals the Court's deeper jurisprudential priority: a multi-million-dirham liability must ultimately be tested against the evidence. The defaulting party will bear the heavy cost of their initial silence, but the DIFC Courts will not allow procedural defaults to permanently substitute for the rigorous, merits-based adjudication that defines the Technology and Construction Division.
What Is the Doctrinal Threshold for Lawful Termination Under FIDIC?
The termination of a major construction contract is rarely a clean fracture. In the Technology and Construction Division (TCD) of the DIFC Courts, the threshold for lawful termination under the FIDIC suite of contracts requires strict adherence to bargained-for contractual mechanisms rather than broad appeals to statutory contract law. Justice Sir Richard Field’s judgment in Panther Real Estate Development LLC v Modern Executive Systems Contracting LLC provides a definitive framework for how the Court evaluates the competing grounds for termination, specifically distinguishing between the objective exhaustion of delay damages, the factual reality of site abandonment, and the often-misapplied doctrine of anticipatory breach.
The dispute centered on the construction of the East 40 Building in Al Furjan, Dubai. The commercial stakes were established early, with the agreed price payable to MESC for completion of the works was AED 40,331,550. When the project timeline began to slip, the contractual architecture of the FIDIC Red Book (1999 Edition) came under immediate stress. By July 2019, the delays in achieving completion of the Works were such that the agreed Completion Date of 16 December had been overshot by more than six months.
For Panther Real Estate Development LLC, the primary and most unassailable ground for termination lay in the mathematical certainty of Sub-Clause 8.7. The contract stipulated a cap on the liquidated sum equal to the value of 10% of the contract price, amounting to AED 4,181,153.25. Once the daily delay damages of AED 42,500 exhausted this cap, Panther’s right to terminate under Sub-Clause 15.2(h) crystallized. Justice Field affirmed this objective trigger without hesitation:
It follows that I find that Panther was entitled: (a) to terminate the Contract without notice pursuant to Sub-Clause 15 (2) (h) as it did on 6 November 2019 on the ground that the maximum amount of delay damages stated in the Appendix to Tender was exhausted; and (b) to liquidated delay damages under Sub-Clause 8.7 of the Contract up to that maximum in the sum of AED 4,181,153.
74.
This finding is critical for DIFC practitioners. It confirms that the exhaustion of a delay damages cap is not merely a limitation on financial liability for the contractor; it operates as a hard, objective threshold that empowers the employer to sever the contract without the procedural friction of proving a subjective "fundamental" breach. The Court accepted the precise calculation of this liability:
I accept Mr Allan’s calculation of the sum due under this head in the amount of AED 4,181,153.25 confirmed in his slide no. 24 marked shown in the course of his prepared presentation.
However, Panther did not rely solely on the exhaustion of delay damages. The Claimant also advanced an argument rooted in statutory contract law, specifically pleading anticipatory breach under the DIFC Contract Law. The relevant statutory provision sets a high bar for such a claim:
Article 88 (1)
Where prior to the date for performance by one of the parties it is clear that there will be a fundamental non-performance by that party, the other party may terminate the contract.
87.
Justice Field’s treatment of this argument delineates the boundary between bespoke contractual mechanisms and general statutory remedies. The Court scrutinized whether the facts supported a finding that MESC had demonstrated a clear intention to commit a fundamental non-performance prior to the date of performance. Given that the Completion Date had already passed and the delays were actively accruing, the doctrinal fit for anticipatory breach was fundamentally flawed. The Court firmly rejected the application of Article 88(1) to these facts:
It follows that I find that Panther did not lawfully terminate the Contract for anticipatory breach of contract under Article 88 (1) of the Contract Law.
By rejecting the anticipatory breach argument, the TCD reinforced the primacy of the FIDIC contractual code. When a contract provides specific, bargained-for remedies for delay and non-performance—such as the exhaustion of a damages cap or termination for abandonment—the Court will not readily allow a party to bypass those mechanisms in favor of a broader statutory claim that does not neatly align with the chronological reality of the dispute.
Instead of anticipatory breach, the Court found that the true alternative ground for lawful termination was MESC’s physical and operational abandonment of the site. Abandonment under FIDIC is a distinct and powerful remedy. It requires a factual determination that the contractor has ceased work without a valid contractual excuse, effectively repudiating their obligation to complete the project. Justice Field concluded:
For these reasons I find that by the termination letter Panther lawfully terminated the Contract by reason of MESC’s abandonment of the Works.
The Anticipatory/Renunciatory Breach of specific Sub-Clauses ground
82.
The dual findings—lawful termination for exhaustion of the delay damages cap and lawful termination for abandonment—provided Panther with a robust legal foundation to justify its subsequent actions, including the encashment of the project's security instruments. Panther had secured its position through an unconditional and on-demand guarantee in the amount of AED 4,033,155.00 for performance, alongside a parallel advance payment guarantee of equal value. The lawful termination validated the Employer's right to liquidate these guarantees to offset the substantial losses incurred by the Contractor's failure.
Once the termination was deemed lawful, the Court faced the complex task of valuing the works and materials left behind. The TCD's approach to quantum in the aftermath of an abandonment termination is highly pragmatic, relying heavily on expert evidence while acknowledging the chaotic reality of a demobilized construction site. Regarding Materials On Site (MOS), the Court evaluated the competing claims and expert assessments:
First, I accept the AED 80,000 proposed by Mr Allan in respect of Materials On Site (MOS) which he described as “an
ex gratia
payment”.
The valuation was complicated by MESC's own actions in mitigating their losses or liquidating assets upon leaving the site. The Court noted the factual evidence regarding the disposal of these assets:
Further, it was Mr Rezk’s evidence (which I accept) that MESC’s materials were sold for AED 50,000 and the scaffolding for AED 30,000.
Faced with imperfect documentation but credible expert testimony, Justice Field adopted a commercially sensible resolution to the MOS valuation:
In my judgment, in the circumstances of this case, in the absence of such evidence, there are no sustainable grounds for disallowing the AED 80,000 proposed by Mr Allan.
273.
The meticulous accounting extended to other facets of the final account. The Court approved specific adjustments to prime cost rates, demonstrating the level of granular financial scrutiny applied post-termination:
Fourth, I accept Mr Allan’s adjustment on prime cost rates in the sum of AED 155,300 which appears to be agreed by Mr Singhal.
276.
Similarly, the valuation of variations—a perennial battleground in construction disputes—was fixed by the Court based on the established evidentiary record:
I therefore abide by my earlier finding that the figure for variations in the calculation of the value of the works done should be AED 1,000,000.
281.
MESC’s attempts to counter the termination and claim extensions of time were ultimately defeated by their own procedural failures. The FIDIC Red Book imposes draconian notice requirements, specifically under Sub-Clause 20.1, which mandates the submission of a fully detailed claim within 42 days. The DIFC Courts have consistently enforced these time bars as condition precedents to relief, a principle echoed in parallel TCD jurisprudence such as TCD-009-2020: TCD 009/2020 Five Real Estate Development Llc v Reem Emirates Aluminium Llc. In the present dispute, MESC’s failure to adhere to this strict procedural timeline was fatal to their defense:
It follows that MESC were in breach of the requirement imposed by Sub-Clause 20.1 to submit a fully detailed claim within the prescribed 42 days.
DE-7 to DE-13.
The doctrinal threshold for lawful termination under FIDIC in the DIFC is thus defined by a strict adherence to the contract's objective triggers and procedural mandates. Employers seeking to terminate must rely on quantifiable metrics—such as the exhaustion of delay damages—or undeniable factual realities like abandonment, rather than stretching statutory concepts of anticipatory breach to fit retrospective delays. Conversely, contractors attempting to defend against termination or claim extensions of time must execute their procedural obligations under Sub-Clause 20.1 flawlessly. Justice Field’s ruling cements the TCD’s reputation as a forum that enforces the precise allocation of risk negotiated by commercial parties, offering little refuge for those who abandon their works or ignore their contractual notice periods.
How Did Justice Field Evaluate the Expert Evidence on Delay?
The adjudication of construction disputes frequently devolves into a battle of retrospective expert delay analyses, where highly credentialed specialists construct elaborate critical path models to explain away months of project overruns. In Panther Real Estate Development LLC v Modern Executive Systems Contracting LLC [2019] DIFC TCD 003, Justice Sir Richard Field confronted exactly this dynamic. The Defendant contractor, Modern Executive Systems Contracting LLC (MESC), sought to rely on post-hoc expert evidence to justify severe delays that had pushed the project far beyond its contractual boundaries. However, the Technology and Construction Division (TCD) took a decisively strict approach, prioritizing the express procedural machinery of the FIDIC contract over the reconstructive efforts of delay experts.
The factual matrix of the delay was stark. The parties had agreed to a baseline programme that established a Completion Date of 16 December 2018 for the East 40 Building in Al Furjan. By the summer of the following year, the project was in deep distress. As Justice Field observed, by early July 2019, the agreed Completion Date of 16 December had been overshot by about six and a half months. MESC attempted to secure Extensions of Time (EOTs) to shield itself from the mounting liquidated damages, but its administrative execution proved fatally flawed.
Under the FIDIC Conditions of Contract (First Edition, 1999), Sub-Clause 20.1 operates as a strict condition precedent. A contractor seeking an extension of time or additional payment must give notice of the claim within 28 days of becoming aware of the event, and crucially, must submit a fully detailed claim within 42 days. The purpose of this machinery is commercial certainty: it allows the Employer and the Engineer to assess the impact of a delay contemporaneously, investigate the facts while they are fresh, and potentially instruct variations to mitigate the delay. MESC failed to adhere to this strict timeline.
Rather than accepting the contractor's subsequent expert analysis as a cure for these administrative failures, Justice Field enforced the contractual bargain. The Court ruled that the failure to submit the detailed claims within the 42-day window extinguished the contractor's entitlement to the EOTs.
It follows that MESC were in breach of the requirement imposed by Sub-Clause 20.1 to submit a fully detailed claim within the prescribed 42 days.
This strict enforcement of condition precedents reflects a broader jurisprudential trend within the TCD, echoing the procedural rigor demanded in cases like TCD 009/2020 Five Real Estate Development Llc v Reem Emirates Aluminium Llc. The Court will not permit a contractor to bypass the contractual notice provisions by deploying sophisticated delay experts at trial. Expert evidence, no matter how compellingly presented, cannot retrospectively manufacture compliance with Sub-Clause 20.1.
The primacy of the contractual text over post-hoc analysis was further cemented during the finalization of the judgment itself. In a rare and highly instructive procedural maneuver, Justice Field issued a specific Note to the parties on 7 September 2022, addressing errors identified in the draft judgment. The circulation of draft judgments allows parties to identify typographical or obvious errors before formal hand-down, a process that prevents unnecessary appellate litigation of the type seen in ARB 027/2024 Nalani v Netty.
In this instance, the review process uncovered a substantive contradiction regarding the financial consequences of the delay. Justice Field acknowledged that the Court was grateful for the parties’ lists of proposed corrections to the Draft Judgment and the identification of what are claimed to be “fundamental errors” within that judgment.
Justice Field acknowledged that the draft judgment had inadvertently awarded prolongation costs to MESC, an outcome that directly conflicted with his primary finding that MESC was barred from recovery due to its breach of Sub-Clause 20.1. The Court swiftly corrected the record, confirming that the award of prolongation costs to the Defendant appears to be erroneously at variance with the exclusion clause contained in the contract.
Crucially, Justice Field clarified the exact role the expert delay evidence played in his judicial reasoning. He explained that his detailed evaluation of the expert evidence on delay was being undertaken not only in case my construction of the liquidated damages clause was found to be erroneous on appeal, but also as a fallback in the event his strict application of the condition precedents was overturned. The expert analysis was thus relegated to a secondary, contingent status. It was an alternative finding, not the primary basis for determining liability.
Because MESC's EOT claims were invalid due to procedural non-compliance, the contractor was entirely exposed to the contractual delay damages. Under Sub-Clause 8.7, the penalty for failing to meet the Time for Completion was severe. The contract stipulated a daily rate of AED 42,500, with a cap on the liquidated sum equal to the value of 10% of the contract price. Given that the agreed price payable to MESC for completion of the works was AED 40,331,550, the maximum exposure was AED 4,181,153.25.
The exhaustion of this maximum cap provided Panther Real Estate Development LLC with a direct, unassailable route to termination. Justice Field mapped the precise mechanics of this termination right, linking the failure of the EOT claims directly to the exhaustion of the damages cap, and subsequently to the Employer's right to eject the contractor from the site.
It follows that I find that Panther was entitled: (a) to terminate the Contract without notice pursuant to Sub-Clause 15 (2) (h) as it did on 6 November 2019 on the ground that the maximum amount of delay damages stated in the Appendix to Tender was exhausted; and (b) to liquidated delay damages under Sub-Clause 8.7 of the Contract up to that maximum in the sum of AED 4,181,153.
Beyond the mere exhaustion of the delay damages cap, the Court also scrutinized the physical reality of the construction site. The documentary record and witness testimony painted a picture of a contractor that had effectively ceased meaningful operations. The failure to progress the works, combined with the mounting delays, constituted a fundamental breach of the contractor's core obligations. Justice Field did not hesitate to classify this conduct as abandonment, providing an independent and equally fatal ground for termination.
For these reasons I find that by the termination letter Panther lawfully terminated the Contract by reason of MESC’s abandonment of the Works.
Even in the context of a lawful termination for abandonment, the Court was required to conduct a final accounting of the works actually performed by MESC prior to termination. Here again, the Court favored pragmatic, well-documented assessments over theoretical or unsupported claims. When evaluating the value of materials left on site, Justice Field adopted the figures proposed by Panther's expert, Mr. Allan, demonstrating a judicial preference for clear, contemporaneous valuation over the contractor's disputed assertions.
First, I accept the AED 80,000 proposed by Mr Allan in respect of Materials On Site (MOS) which he described as “an
ex gratia
payment”.
The TCD's handling of the expert evidence in Panther v MESC establishes a clear hierarchy of evidence in DIFC construction disputes. Contemporaneous compliance with contractual notice provisions sits at the absolute apex. If a contractor fails to submit detailed claims within the strict timeframes mandated by clauses like FIDIC Sub-Clause 20.1, no amount of retrospective expert delay analysis will save them. The Court will evaluate such expert evidence, but only to bulletproof its judgment against potential appeals, not to rewrite the commercial bargain struck by the parties. By holding MESC strictly to the 42-day rule, correcting its own draft judgment to ensure doctrinal consistency, and enforcing the maximum delay damages cap, Justice Field delivered a masterclass in the rigorous application of construction law principles within the DIFC.
What Are the Limits of Document Production in Construction Disputes?
The intersection of expert evidence and documentary disclosure frequently generates intense procedural friction in complex construction disputes. In the Technology and Construction Division (TCD), parties often attempt to streamline their disclosure obligations by pointing to forthcoming expert reports, arguing that the raw data underlying a delay or quantum claim need not be produced if an independent expert is scheduled to synthesize it. Justice Sir Richard Field’s handling of the disclosure applications in Panther Real Estate Development LLC v Modern Executive Systems Contracting LLC [2022] DIFC TCD 003 decisively dismantles this tactic, establishing a robust boundary between expert opinion and the foundational documents required for a fair trial.
The dispute over document production crystallized in May 2021, when Panther Real Estate Development LLC sought specific categories of documents relating to Modern Executive Systems Contracting LLC’s (MESC) counterclaim. MESC had alleged a 292-day delay and claimed substantial associated losses. In its Request to Produce, Panther sought the underlying project records, including documents evidencing requests made under Sub-Clause 8.13 of the FIDIC contract, which mandates specific time impact analysis elements. MESC resisted standard production, adopting the position that the requested documents were unnecessary because the pleaded losses and delay events would be comprehensively addressed in a forthcoming Delay Analysis Report.
Justice Field rejected this premise entirely. In his 23 May 2021 Order, he mandated the production of the requested documents, grounding the decision firmly in the principles of proportionality and the necessity of the documents for the fair determination of the counterclaim. The Court’s directive was unequivocal regarding the insufficiency of relying on future expert synthesis to bypass present disclosure obligations:
It is not sufficient for the Defendant to assert that its pleaded losses will be the subject of a Delay Analysis Report.
By ordering production, the Court reinforced a fundamental tenet of TCD procedure: an expert report is not a black box that immunizes a party from disclosing the raw, contemporaneous project data. Opposing counsel must have access to the minimum time impact analysis elements to test the assumptions and methodologies the expert will eventually deploy. Without the baseline schedules, daily logs, and contemporaneous correspondence, cross-examination of a delay expert becomes an exercise in shadowboxing. Justice Field’s order ensured that Panther would not be deprived of the evidentiary tools necessary to challenge MESC’s 292-day delay narrative.
Despite the clarity of the May 23 Order, MESC failed to execute the required searches by the stipulated deadline. The justification provided in MESC’s Disclosure Statement, signed by Mr. Abdul Aziz Ebrahi Al Kerdi, revealed a profound misunderstanding of the relationship between expert admissibility and documentary relevance. Because the Court had previously issued a direction noting that MESC’s Delay Analysis Report was inadmissible as expert evidence, MESC unilaterally concluded that it was absolved from searching for the documents underlying that report.
This erroneous legal premise triggered a swift and severe response from the TCD. On 24 June 2021, Justice Field issued a subsequent order compelling MESC to conduct the omitted searches and penalizing the contractor with the costs of the application. The Court’s reasoning exposed the logical fallacy in MESC’s position: the inadmissibility of an expert’s opinion does not retroactively erase the relevance of the factual documents upon which the opinion was based. The underlying project records maintain their independent evidentiary value. Justice Field articulated this distinction with precision:
This is an unsupportable position for the Defendant to take since the requests do not go to the Report but to documents containing the minimum time impact analysis elements stipulated in Sub-Clause 8.13 (a) to 8.13.
The Court further noted that MESC’s stance fundamentally confuses the opinion of its expert with the factual matrix required to adjudicate the dispute. An expert report is a derivative document; its exclusion from the evidentiary record due to procedural or substantive defects does not render the primary source material irrelevant. If a contractor claims a 292-day extension of time, the contemporaneous records proving or disproving the critical path delay must be disclosed, regardless of whether the contractor’s chosen expert is permitted to testify.
The June 24 Order also addressed a secondary, equally problematic disclosure tactic: the curation of one-sided document productions. Panther’s Request 5 sought documents relating to the due payment of sub-contractors, a critical issue given the broader allegations of project abandonment and financial distress. MESC produced documents in response, but Panther rightly objected that the production was wholly one-sided. The disclosed cache consisted entirely of outbound correspondence from MESC, conspicuously omitting any incoming communications from sub-contractors, including complaints regarding non-payment.
Justice Field did not tolerate this selective filtering. He ordered MESC to conduct a renewed search specifically targeting documents received from sub-contractors, expressly including complaints of non-payment. This directive underscores the TCD’s commitment to the principle that disclosure must provide a balanced and complete picture of the requested categories, not a sanitized narrative constructed by the producing party. The Court’s intervention here aligns with the broader judicial intolerance for procedural gamesmanship in the DIFC, a theme similarly explored in Five Real Estate Development v Reem Emirates Aluminium, where the TCD heavily penalized attempts to manipulate the evidentiary record through selective compliance.
Furthermore, the Court strictly enforced the procedural mechanics of disclosure. When challenged on its failure to search, MESC attempted to cure the defect informally by sending a letter to the Registry on 22 June 2021, offering a specified link through which the documents could supposedly be accessed. Justice Field rejected this informal data dump as a substitute for proper procedural compliance. He mandated that MESC not only conduct the specific searches but also file a formal Supplemental Document Production Statement.
The insistence on a sworn Document Production Statement is not mere administrative pedantry. It forces the producing party to formally attest to the adequacy of its searches, thereby attaching professional and legal accountability to the disclosure process. By requiring a Supplemental Document Production Statement, the Court ensured that MESC could not simply provide a link to a data room and wash its hands of the obligation to verify that all responsive documents—including adverse sub-contractor complaints and the costs of repatriation of staff—had been identified and produced.
The rigorous approach to document production in Panther v MESC serves as a definitive guide for practitioners navigating the TCD. Proportionality remains the governing standard, but proportionality is not a shield against the production of highly relevant, adverse documents. When a party pleads specific losses—whether they be losses attributable to increases in the premiums payable on guarantees, or complex delay claims requiring time impact analysis—the opposing party is entitled to the underlying data.
Justice Field’s rulings in May and June 2021 dismantle the notion that a party can outsource its disclosure obligations to its experts or use the inadmissibility of an expert report to suppress the factual record. The TCD requires transparency, completeness, and strict adherence to the procedural mechanisms of the Document Production Statement. For contractors and developers litigating in the DIFC, the message is unambiguous: the raw data must be produced, the searches must be balanced, and attempts to hide behind the veil of expert analysis will be met with adverse costs orders and mandatory injunctions to search again.
How Does the DIFC Approach Compare to Other Jurisdictions?
The DIFC Courts have cultivated a reputation for rigorous textualism, particularly in construction disputes governed by the FIDIC suite of contracts. In Panther Real Estate Development LLC v Modern Executive Systems Contracting LLC [2019] DIFC TCD 003, Justice Sir Richard Field’s approach to contractual termination and quantum assessment provides a sharp contrast to the more flexible, sometimes equitable, interventions seen in other common law jurisdictions. While courts in Australia or certain civil law jurisdictions might occasionally read down strict notice provisions or imply terms to prevent an employer from benefiting from its own delays, the Technology and Construction Division (TCD) of the DIFC Courts maintains a high degree of fidelity to the express terms negotiated by sophisticated commercial parties.
This fidelity is most evident in the Court's treatment of the contractor's claims for extensions of time and the application of the prevention principle. Under Sub-Clause 20.1 of the FIDIC Red Book (1999), a contractor must submit a fully detailed claim within 42 days. Modern Executive Systems Contracting LLC (MESC) failed to meet this strict temporal gateway. In some jurisdictions, tribunals might entertain arguments that the employer suffered no prejudice from the late notice, or that the employer's actual knowledge of the delay cures the formal defect. A classic comparative example arises in Australian jurisprudence, specifically the controversial decision in Gaymark Investments Pty Ltd v Walter Construction Group Ltd, where a contractor's failure to comply with notice provisions did not automatically entitle the employer to liquidated damages if the employer actually caused the delay. Justice Field explicitly engaged with this comparative jurisprudence during the trial, noting the Australian court's reasoning:
Despite acknowledging this alternative approach, the DIFC Court declined to import such equitable workarounds into the strict FIDIC machinery. Justice Field entertained no such flexibility for MESC, enforcing the time bar with absolute precision and rejecting the contractor's attempts to bypass the contractual notice requirements. The ruling leaves no room for doubt regarding the TCD's stance on procedural compliance:
It follows that MESC were in breach of the requirement imposed by Sub-Clause 20.1 to submit a fully detailed claim within the prescribed 42 days.
The strictness extends to the mechanics of termination and the financial consequences of delay. The underlying contract stipulated that the agreed price payable to MESC for completion of the works was AED 40,331,550. When delays mounted, the contractual machinery dictated that delay damages would be calculated at a daily rate of AED 42,500, capped at 10% of the contract price. Panther Real Estate Development LLC sought to justify its termination of the contract on multiple grounds, including anticipatory breach under the DIFC Contract Law. Justice Field carefully bifurcated the contractual rights from the statutory overlay. He found that Panther was entitled to terminate without notice under Sub-Clause 15.2(h) because the maximum amount of delay damages had been exhausted.
It follows that I find that Panther was entitled: (a) to terminate the Contract without notice pursuant to Sub-Clause 15 (2) (h) as it did on 6 November 2019 on the ground that the maximum amount of delay damages stated in the Appendix to Tender was exhausted; and (b) to liquidated delay damages under Sub-Clause 8.7 of the Contract up to that maximum in the sum of AED 4,181,153.
However, the Court refused to allow the developer to simultaneously rely on a broader, less defined statutory right of anticipatory breach where the specific contractual mechanisms were already engaged and sufficient. Justice Field explicitly ruled out the application of Article 88(1) of the Contract Law for anticipatory breach in this context.
It follows that I find that Panther did not lawfully terminate the Contract for anticipatory breach of contract under Article 88 (1) of the Contract Law.
This bifurcated approach—upholding the express FIDIC termination triggers while rejecting the statutory anticipatory breach claim—signals to practitioners that the DIFC Courts will not allow general contract law principles to override or unnecessarily supplement the highly calibrated risk allocation of a FIDIC contract. This contrasts with jurisdictions where courts might blend contractual and common law termination rights, sometimes creating confusion over the exact date and legal basis of the contract's end. Here, the termination was firmly rooted in the contractor's abandonment and the exhaustion of the delay damages cap, triggering Panther's right to encash the unconditional and on-demand guarantee in the amount of AED 4,033,155.00.
Yet, this strict textualism does not equate to a lack of commercial pragmatism, particularly when assessing quantum. The Court's handling of the damages assessment reveals a highly practical approach to evidentiary burdens. During the quantification of the value of works done, a dispute arose over an AED 80,000 allowance for Materials On Site (MOS). The claimant's quantum expert, Mr Allan, had proposed this sum, describing it as an "ex gratia" payment. MESC sought to have this disallowed, presumably on the basis that an ex gratia payment lacks a strict contractual entitlement. The Court's refusal to allow 'ex gratia' payments to be disallowed without evidence shows a pragmatic approach to quantum. Justice Field recognized that in complex construction final accounts, experts often make commercial allowances to reach a sensible valuation. If a party wishes to challenge such an allowance, it must adduce specific evidence to rebut it, rather than relying on mere legal categorization.
In my judgment, in the circumstances of this case, in the absence of such evidence, there are no sustainable grounds for disallowing the AED 80,000 proposed by Mr Allan.
This pragmatism ensures that the TCD does not become bogged down in theoretical disputes over minor valuation items when the broader commercial reality supports the expert's assessment. It places the burden firmly on the challenging party to prove why a commercially sensible concession made by an independent expert should be unpicked.
This balance of strict contractual interpretation and evidentiary pragmatism is further illustrated by the subsequent ruling on 9 November 2022, which dealt with a dispute over the cost of completion. Following the main judgment, Panther attempted to introduce new evidence regarding 5 payments (excluding VAT) of AED 16,800 each made by Panther to a security firm called Excellerate Services. The Court had previously directed that the final payment be excluded because it appeared to relate to services rendered after the project was completed by the replacement Contractor on 1 May 2020. Panther sought to prove post-trial that the June 2020 payment actually related to pre-completion services rendered in March 2020.
In many jurisdictions, a court might allow a minor post-trial correction to ensure the damages calculation is perfectly accurate, especially if documentary evidence like an invoice is readily available. The DIFC TCD, however, prioritizes procedural finality and the integrity of the trial process. Justice Field noted that the issue had been raised squarely during the cross-examination of the claimant's expert, and Panther had failed to address it in re-examination or in its closing submissions.
No further evidence was called by Panther in answer to this point made in the cross-examination of Mr Allan and nothing was said in Panther’s first round of Closing Submissions to refute the point put to Mr Allan.
Consequently, the Court maintained the deduction, refusing to admit the late evidence. This strict procedural stance reinforces the DIFC's role as a sophisticated forum for complex construction litigation. Parties are expected to present their entire case, including all necessary evidentiary rebuttals, during the trial. The TCD will not act as an open-ended forum for post-judgment accounting adjustments. This approach aligns with the TCD's broader mandate to provide efficient, final, and commercially certain dispute resolution, a theme echoed in other major TCD decisions such as Five Real Estate Development v Reem Emirates Aluminium, where procedural rigor similarly dictated the boundaries of permissible claims.
Ultimately, the Panther v MESC litigation serves as a definitive guide to the DIFC's judicial philosophy in construction disputes. By strictly enforcing FIDIC notice provisions and termination triggers, the Court provides the certainty that international contractors and developers require to price risk accurately. Simultaneously, by demanding rigorous evidentiary standards for quantum challenges and strictly policing post-trial procedural boundaries, the TCD ensures that litigation remains disciplined and commercially grounded. For practitioners accustomed to the more forgiving environments of certain domestic courts, the DIFC's approach requires a recalibration of strategy: strict compliance with contractual machinery and exhaustive trial preparation are not merely best practices, but absolute prerequisites for success in the TCD.
What Does This Mean for Practitioners and Future Enforcement?
The judgment in Panther Real Estate Development LLC v Modern Executive Systems Contracting LLC [2019] DIFC TCD 003 delivers a severe doctrinal warning to construction practitioners operating within the Dubai International Financial Centre. Justice Sir Richard Field’s ruling reinforces the Technology and Construction Division’s strict adherence to the procedural mechanics of the FIDIC standard forms, particularly regarding condition precedent notices and the evidentiary thresholds required to justify contract termination. For developers and contractors alike, the decision maps the precise boundaries of lawful termination and exposes the financial perils of sloppy contract administration.
At the core of the dispute was the construction of a residential tower building consisting of 112 residential units, a project that suffered catastrophic delays. Modern Executive Systems Contracting LLC (MESC) attempted to defend its delayed performance by advancing claims for extensions of time (EOT). However, the court’s treatment of these claims underscores a fundamental reality of DIFC construction litigation: practitioners must ensure that all claims are submitted within the contractually mandated timeframes. The FIDIC 1999 Red Book, which governed the relationship, contains notorious time bars under Sub-Clause 20.1. A contractor must give notice of a claim within 28 days and submit a fully detailed claim within 42 days. Justice Field applied these provisions with mechanical precision, stripping MESC of its defensive EOT arguments due to procedural failures.
It follows that MESC were in breach of the requirement imposed by Sub-Clause 20.1 to submit a fully detailed claim within the prescribed 42 days.
This strict enforcement of Sub-Clause 20.1 aligns with the broader jurisprudential trend in the DIFC, where courts refuse to rewrite commercial bargains to save parties from their own administrative negligence. Similar to the procedural rigidity observed in Five Real Estate Development Llc v Reem Emirates Aluminium Llc, the Panther decision confirms that equitable arguments regarding the employer's actual knowledge of delays will rarely overcome a hard contractual time bar. For practitioners advising contractors, the directive is absolute: project management teams must be audited to ensure strict compliance with notice provisions, as failure to do so will fatally compromise both affirmative claims and defensive positions against liquidated damages.
The judgment also provides critical guidance on the mechanics of termination. Panther Real Estate Development LLC invoked multiple grounds to terminate the contract, which carried an agreed price payable to MESC for completion of the works was AED 40,331,550. The court ultimately validated the termination on the basis of abandonment, a finding that carries immense strategic weight.
For these reasons I find that by the termination letter Panther lawfully terminated the Contract by reason of MESC’s abandonment of the Works.
However, the court’s refusal to accept Panther’s alternative argument regarding anticipatory breach is equally instructive. Panther argued that MESC’s slow progress amounted to a fundamental non-performance under Article 88(1) of the DIFC Contract Law. Justice Field rejected this theory.
It follows that I find that Panther did not lawfully terminate the Contract for anticipatory breach of contract under Article 88 (1) of the Contract Law.
This dichotomy serves as a warning that 'abandonment' is a high-stakes ground for termination that requires clear evidence. Abandonment is not merely severe delay or poor resourcing; it requires a demonstrable cessation of work coupled with an intention not to return or complete the obligations. By succeeding on abandonment but failing on anticipatory breach, the ruling illustrates the heavy evidentiary burden placed on employers seeking to eject a contractor. Practitioners drafting termination notices must carefully segregate their grounds, ensuring that allegations of abandonment are supported by contemporaneous site records, security logs, and unheeded notices to correct, rather than relying on generalized assertions of prospective failure.
The financial fallout of the termination further highlights the aggressive tools available to employers under DIFC law. Upon termination, Panther moved swiftly to encash the unconditional and on-demand guarantee in the amount of AED 4,033,155.00. The court upheld this encashment, reinforcing the autonomous nature of on-demand bonds in the DIFC. For contractors, the immediate liquidity crisis triggered by a lawful termination and subsequent bond call is often fatal, emphasizing the need to aggressively manage EOT claims long before the relationship deteriorates to the point of site abandonment.
In quantifying the financial liabilities, the court relied heavily on expert testimony, specifically the delay and quantum reports prepared by Panther’s expert, Mr Allan. The court accepted his calculations regarding the maximum liquidated damages and the valuation of works. However, the litigation strategy surrounding expert evidence requires careful calibration. Parties should not rely on expert reports to avoid disclosure obligations. An expert’s calculation is only as robust as the primary documentation—timesheets, payment certificates, and site diaries—upon which it is built. While Justice Field accepted Mr Allan’s figures, the underlying data was subjected to rigorous cross-examination. Practitioners must ensure that their experts are not utilized to construct hypothetical models that lack grounding in the disclosed project records. If the primary evidence of delay or cost is absent, an expert report will not cure the evidentiary defect.
The strategic complexities of the Panther litigation culminated in the subsequent costs judgment delivered by Justice Wayne Martin in November 2023. Despite Panther successfully proving lawful termination and securing damages for the additional cost of completing the project over and above what it would have cost, the court declined to award Panther its full costs. Justice Martin conducted a granular review of the issues pleaded versus the issues won, concluding that each party had successes and failures in roughly equal measure. Consequently, Justice Martin ordered that there be no order as to the costs of the proceedings at first instance, leaving the parties to bear their own substantial legal fees, save for a specific carve-out regarding the costs of Panther's expert. This costs ruling is a vital lesson in litigation economics. Over-pleading a case by advancing alternative legal theories that ultimately fail—even if the primary claim succeeds—can severely dilute costs recovery. Practitioners must ruthlessly evaluate the utility of secondary arguments. If an argument for anticipatory breach requires extensive factual inquiry but offers no greater financial remedy than a straightforward claim for abandonment, it may be strategically wiser to abandon the weaker theory to protect the ultimate costs position.
Ultimately, the Panther saga cements the DIFC Technology and Construction Division’s reputation as a forum that demands exactitude. From the strict enforcement of 42-day notice periods to the high evidentiary bar for proving abandonment, the court requires parties to operate strictly within the four corners of their contract. For practitioners, the mandate is clear: success in DIFC construction disputes is dictated not by broad appeals to fairness, but by meticulous record-keeping, timely notices, and highly focused pleadings that do not overreach.
What Issues Remain Unresolved After the Final Settlement?
The culmination of Panther Real Estate Development LLC v Modern Executive Systems Contracting LLC arrived not with a dramatic judicial decree, but through the pragmatic mechanics of a TOMLIN ORDER issued on 7 July 2024. The parties agreed to a final settlement sum of AED 2,632,642.71, payable by Panther to MESC. This figure represented the final netting out of damages, unpaid work valuations, and the heavily contested costs of both the first instance trial and the subsequent Court of Appeal proceedings. While the consent order provides absolute commercial closure for the East 40 Building project dispute, the procedural journey to that final figure exposes significant fault lines in how the Technology and Construction Division (TCD) handles cost allocation in mixed-success construction disputes.
The traditional English litigation rule—imported into the DIFC Courts via the Rules of the DIFC Courts (RDC)—dictates that "costs follow the event," meaning the loser pays the winner's legal fees. However, that binary rule becomes notoriously difficult to apply in complex construction litigation. In this dispute, Panther successfully proved lawful termination of the FIDIC contract due to the contractor's abandonment of the site. Yet, MESC successfully defended the valuation of its unpaid work performed prior to the 6 November 2019 termination date. When the final mathematical netting out resulted in a payment to the contractor, MESC aggressively pushed for a traditional costs order, arguing that it was the ultimate successful party because it was receiving a cheque at the end of the litigation.
This exact tension fell to Justice Wayne Martin to resolve in his ORDER WITH REASONS OF JUSTICE WAYNE MARTIN dated 27 November 2023. Following the retirement of the original trial judge, Justice Sir Richard Field, Justice Martin was tasked with untangling the costs of the first instance proceedings based on the written record. He firmly rejected MESC's binary approach to success. Instead, the Court looked at the substantive issues that consumed the trial's time and resources. Panther had succeeded on the critical, headline issue of termination liability, while MESC had succeeded on the granular quantum valuation of the final account. Justice Martin concluded that, when analysed in this way, it was clear that each party had had successes and failures in roughly equal measure (DIFC TCD-003-2019, Order with Reasons of Justice Wayne Martin, 27 November 2023).
Consequently, the Court ordered that there be no order as to the costs of the proceedings at first instance. The costs were to lie where they fell. This approach reflects a growing doctrinal trend within the DIFC Courts to penalize parties who pursue maximalist claims that ultimately fail, even if they succeed on the core liability question. It echoes the procedural warnings seen in TCD-009-2020: Five Real Estate Development Llc v Reem Emirates Aluminium Llc, where the TCD similarly scrutinized the proportionality of legal spend against the actual success achieved on discrete project issues. When a developer wins on termination but loses on substantial delay and quantum counterclaims, the TCD will not allow the developer to recover the entirety of its costs simply because it won the primary liability argument.
The procedural wrangling over these costs also highlighted the tactical maneuvering that often follows a complex judgment. MESC attempted to weaponize Panther's timeline for filing costs submissions, arguing that the developer was careless and not genuinely pursuing a costs claim. MESC pointed out that Panther did not state its intention to pursue costs until August 2023, long after the September 2022 trial judgment was handed down.
Justice Martin dismissed this procedural attack, noting the practical reality of parallel appellate litigation. Both parties had appealed the first instance judgment, and those appeals were not dismissed by the Court of Appeal until 24 May 2023. Engaging in a protracted, highly expensive costs assessment battle while the underlying judgment is at risk of being overturned is precisely the kind of disproportionate litigation conduct the DIFC Courts seek to discourage. Justice Martin explained that the fact that Panther did not raise its claim for costs until August 2023 was easily explained by the fact that until the appeal proceedings were determined, any discussion with respect to costs would have been premature (DIFC TCD-003-2019, Order with Reasons of Justice Wayne Martin, 27 November 2023).
This ruling provides vital guidance for DIFC practitioners: when a first instance judgment is subject to cross-appeals, the TCD will not penalize a party for deferring the granular process of costs assessment until the appellate court has finalized the substantive liabilities. The Court recognizes that the final sum owed by the Claimant cannot be accurately contextualized for costs purposes until all avenues of appeal are exhausted.
Yet, one specific exception in Justice Martin's costs order leaves a lingering question for future TCD litigants regarding the treatment of expert evidence. While the general costs lay where they fell, the Court preserved a specific, targeted order made by the trial judge: MESC was required to pay the costs incurred by Panther in respect of Mr Allan’s reports on delay. These costs were to be assessed by the Registrar in default of agreement.
This carve-out for expert evidence costs is highly significant. Delay analysis in construction disputes is notoriously expensive, often requiring critical path analysis, the review of thousands of site records, and extensive modeling. By ordering MESC to pay for these specific reports despite the general "no order as to costs" outcome, the Court signaled that it will surgically allocate the costs of specific expert evidence if one party's conduct or failure on a specific technical issue necessitated that evidence. The strict stance on expert evidence indicates that the TCD expects parties to narrow their technical disputes early. If a contractor forces a developer to adduce extensive, costly expert delay analysis only to lose entirely on those specific delay points, the contractor will bear that specific cost, regardless of the overall financial outcome of the final account.
The final resolution of these competing cost liabilities was ultimately subsumed into the July 2024 Tomlin Order. By agreeing to the AED 2.6 million figure, the parties bypassed the need for the Registrar to conduct a detailed assessment of Mr Allan's expert costs and offset them against the general damages and unpaid work valuations. The use of a Tomlin Order—a mechanism where the court stays the proceedings on agreed terms rather than dismissing them outright—allowed the parties to enforce the payment schedule without needing to initiate a new claim if a default occurred. However, once the payment was made, the order provided absolute finality to the dispute, stating that upon payment of the Settlement Sum, the proceedings in TCD-003-2019 would be deemed terminated and closed (DIFC TCD-003-2019, Tomlin Order, 7 July 2024).
The closure of TCD-003-2019 marks the end of a protracted saga, but the jurisprudence it leaves behind is complex. The case confirms that the DIFC Courts will enforce strict contractual notice provisions for termination, but it also demonstrates the severe financial attrition that accompanies such disputes. Even when a developer lawfully terminates a contract due to contractor abandonment, the failure to cleanly win on all quantum and delay issues will likely result in a "no order as to costs" outcome.
For construction practitioners in the region, the Panther v MESC litigation serves as a cautionary tale regarding the limits of a liability victory. The legal triumph of proving lawful termination does not guarantee a commercial victory in costs recovery. The TCD's willingness to dissect the litigation into discrete issues of success and failure means that parties must constantly evaluate the proportionality of their claims. Pursuing every minor variation or delay claim, even with a strong primary case for termination, risks diluting the overall success of the litigation, leaving the prevailing party to absorb millions of dirhams in unrecoverable legal fees. The final settlement, while bringing the matter to a close, cements the reality that in complex construction litigation before the DIFC Courts, a mixed result on the merits almost inevitably leads to a mutually painful result on costs.