On December 24, 2024, Justice Rene Le Miere delivered a definitive blow to the Claimant’s efforts to hold Najam in contempt, dismissing all applications for committal and sequestration. The ruling, which followed a series of contentious filings, centered on the failure of Naqid to prove beyond a reasonable doubt that the Defendant had breached a worldwide freezing order issued in May 2024. With over Cr 385 million and USD 3.1 million in dispute, the Court’s decision underscores the rigorous standard of proof required when a party seeks to invoke the Court’s coercive powers against a corporate entity and its officers.
For cross-border litigators and arbitration counsel, this decision serves as a critical reminder that the DIFC Courts will not permit the weaponization of contempt proceedings to bypass the standard rigors of evidence. By insisting on strict particularity in application notices and rejecting the reliance on supporting affidavits to substitute for substantive allegations, Justice Le Miere has reinforced the principle that the Court’s supervisory jurisdiction over arbitral awards is not a shortcut for asset recovery. The case highlights the tension between the need for effective interim relief and the procedural safeguards necessary to protect defendants from overreaching enforcement tactics.
How Did the Dispute Between Naqid and Najam Arise?
The sprawling litigation between Naqid and Najam did not begin in the Dubai International Financial Centre, but rather emerged from a high-value commercial arbitration seated in India. The underlying commercial relationship involved complex offshore operations, with the parties operating across multiple jurisdictions. The Claimant, Naqid, is incorporated under the Indian Companies Act and provides extensive project management, procurement, and commissioning services within the oil and gas sector. Conversely, the Defendant, Najam, is a Liberian-incorporated entity executing offshore oil and gas projects in the Arabian Gulf and the Indian subcontinent. When their commercial relationship fractured, the resulting arbitration culminated in a decisive victory for the Indian contractor.
The arbitral tribunal issued a massive financial directive against the Liberian entity, setting the stage for a multi-jurisdictional enforcement battle. The sheer quantum of the liability guaranteed that the prevailing party would need to aggressively hunt for assets across borders. Justice Rene Le Miere outlined the precise financial burden imposed by the tribunal:
Judgment is entered against the Defendant to pay the Claimant Cr 38,58,54,542 and US$ 3,156,658 with 18% annual interest from 11 May 2022 until payment, plus arbitration costs of Cr 27,76,200 and legal costs of Cr 78,53,116, totaling Cr 1,06,53,116.
Armed with this substantial Indian arbitral award, Naqid initiated a strategic enforcement campaign. Rather than pursuing assets solely in Liberia or India, the Claimant turned to the DIFC Courts, leveraging the jurisdiction's well-established reputation as a robust conduit for the recognition and execution of foreign arbitral awards. This strategy closely mirrors the doctrinal pathways solidified in ARB-003-2013: Banyan Tree Corporate PTE Ltd v Meydan Group LLC, where the DIFC Court confirmed its jurisdiction to recognize awards even in the absence of assets physically located within the financial centre at the time of filing.
Naqid filed a without notice application under the DIFC Arbitration Law on March 11, 2024. The objective was twofold: to transform the foreign award into an enforceable DIFC judgment and to immediately lock down Najam’s global asset portfolio before any dissipation could occur. The ex parte strategy proved initially successful. On May 3, 2024, H.E. Justice Shamlan Al Sawalehi granted both an Enforcement Order and a sweeping Worldwide Freezing Order (WFO). The WFO was designed to paralyze the Defendant's financial maneuverability, imposing strict limits on asset disposal. The specific mechanics of the restraint were tied directly to the quantum of the arbitral debt:
The issuance of the WFO fundamentally altered the posture of the dispute. A freezing order is only as effective as the asset disclosure that accompanies it, and the May 3 order compelled Najam to provide a sworn affidavit detailing the value and location of its global assets. It was at this juncture that procedural compliance began to break down, triggering a cascade of satellite litigation. Naqid quickly grew dissatisfied with Najam's level of disclosure, alleging that the Defendant failed to provide a properly sworn affidavit from a corporate employee, thereby frustrating the Claimant's ability to monitor the frozen assets.
Faced with the draconian restrictions of the WFO, Najam did not simply submit to the DIFC Court's jurisdiction. Instead, the Defendant launched a multi-front counter-offensive. Within the DIFC, Najam filed applications to set aside the Enforcement Order and discharge the Freezing Order, arguing that it had not received proper notice of the arbitrator's appointment in the underlying Indian proceedings. Because the award originated in India, the challenge to the Enforcement Order was not governed solely by the DIFC Arbitration Law, but rather by the specific bilateral treaty between the two nations. Justice Le Miere noted that the procedural rule requires a party seeking to set aside an award under the India – UAE Judicial Cooperation Agreement to strictly specify the treaty grounds upon which they rely, narrowing the avenues available for Najam to resist enforcement.
Simultaneously, Najam initiated a collateral attack outside the financial centre. Najam commenced an appeal before the Dubai Court of Appeal on May 30, 2024, seeking to annul the Indian arbitral award entirely and requesting a ruling that the DIFC Courts lacked jurisdiction to hear the claim. This maneuver created a severe jurisdictional clash between the offshore common law courts of the DIFC and the onshore civil law courts of Dubai. By asking the onshore courts to invalidate a foreign award that the DIFC Court had already moved to enforce, Najam threatened to undermine the entire enforcement architecture that Naqid had constructed.
The onshore litigation prompted an immediate and aggressive response from the Claimant. Recognizing the risk of conflicting judgments and the potential derailment of its enforcement efforts, Naqid returned to Justice Le Miere to seek an injunction halting the onshore proceedings:
Naqid has applied to this Court for an anti-suit injunction to prevent Najam from continuing the Annulment Proceedings in the onshore Dubai Courts (the “Anti-suit Injunction Application”).
8.
The application for an anti-suit injunction to prevent Najam from continuing the Annulment Proceedings forced the DIFC Court to confront the delicate constitutional balance between the Emirate's parallel judicial systems. While the DIFC Courts possess the statutory authority to issue anti-suit injunctions to protect their own jurisdiction and processes, they historically exercise extreme caution when asked to enjoin proceedings in the onshore Dubai Courts, preferring to rely on the Joint Judicial Committee to resolve direct conflicts of jurisdiction.
While the jurisdictional battle raged between the onshore and offshore courts, the situation on the ground regarding the frozen assets deteriorated rapidly. Naqid accused Najam of flagrantly violating the terms of the May 3 Freezing Order. The Claimant alleged that the Defendant was actively negotiating the commercial sale of a vessel, the Niya, in direct contravention of the asset disposal prohibitions. Furthermore, Naqid claimed that Najam was funneling excessive legal fees to its counsel, Mayer Brown, through a third-party entity named Nesbit, allegedly breaching the strict monetary caps placed on ordinary business and legal expenses by the WFO.
These alleged breaches transformed a standard enforcement action into a high-stakes quasi-criminal proceeding. Believing that the Defendant was intentionally dissipating assets and mocking the Court's authority, Naqid filed severe punitive applications. The Claimant sought a writ of sequestration to seize Najam's corporate assets and, most drastically, applied to commit the Defendant's corporate officers to prison for contempt of court.
By the summer of 2024, the dispute had metastasized into a procedural labyrinth. The docket was choked with over a dozen competing applications: Naqid pushing for committal, sequestration, and anti-suit injunctions; Najam fighting to strike out the contempt charges, discharge the freezing order, set aside the enforcement, and introduce new expert evidence regarding the Indian arbitration proceedings. The sheer volume and hostility of the filings rendered piecemeal adjudication impossible. To untangle the procedural web, Justice Le Miere ordered a consolidated five-day in-person hearing for October 2024, setting the stage for a definitive ruling on the limits of the DIFC Court's coercive powers and the rigorous evidentiary standards required to imprison corporate officers for civil contempt.
How Did the Case Move From Ex Parte Application to Final Hearing?
The transformation of the litigation between Naqid and Najam from a straightforward recognition of an arbitral award into a sprawling procedural quagmire provides a masterclass in the tactical deployment of Part 43 and Part 52 of the Rules of the DIFC Courts (RDC). What began as an ex parte application for a worldwide freezing order rapidly escalated into a multi-front war of attrition, forcing the Court to navigate a labyrinth of retaliatory filings. The trajectory of the dispute illustrates how aggressive enforcement strategies, when met with equally aggressive defensive maneuvering, can paralyze the standard execution process and necessitate robust judicial intervention.
The genesis of the procedural battle traces back to a substantial arbitral award rendered on 1 November 2023. The underlying tribunal found overwhelmingly in favor of the Claimant, setting the stage for what Naqid likely hoped would be a swift enforcement action within the jurisdiction of the Dubai International Financial Centre. The financial stakes were unequivocally defined by the Court:
Judgment is entered against the Defendant to pay the Claimant Cr 38,58,54,542 and US$ 3,156,658 with 18% annual interest from 11 May 2022 until payment, plus arbitration costs of Cr 27,76,200 and legal costs of Cr 78,53,116, totaling Cr 1,06,53,116.
Armed with this award, Naqid approached the DIFC Courts ex parte. On 3 May 2024, H.E. Justice Shamlan Al Sawalehi issued an Enforcement Order alongside a draconian Freezing Order, effectively [restraining the Defendant from removing assets from the DIFC](https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-004-2024_20240926.txt#:~:text=restraining%20the%20Defendant%20from%20removing%20assets%20from%20the%20DIFC) or disposing of them globally. Ex parte freezing orders are inherently disruptive, designed to preserve the status quo before a judgment debtor can dissipate assets. However, rather than serving as a static preservation mechanism, the 3 May 2024 order became the catalyst for an unprecedented escalation in hostilities.
Naqid did not wait for the standard asset disclosure mechanisms to play out. Perceiving immediate non-compliance by Najam regarding the provision of asset information, the Claimant immediately weaponized the penal notices attached to the Freezing Order. On 13 May 2024—a mere ten days after the initial injunction was granted—Naqid filed its First Sequestration Application and its First Committal Application. The latter sought to invoke the Court’s quasi-criminal jurisdiction to [refer the Defendant and its officers to the Attorney General of Dubai](https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-004-2024_20240926.txt#:~:text=refer%20the%20Defendant%20and%20its%20officers%20to%20the%20Attorney%20General%20of%20Dubai).
The strategic intent behind Naqid’s rapid escalation was clear: bypass the slow grind of standard debt recovery by threatening the corporate officers with imprisonment and the company with total operational paralysis via sequestration. The Claimant’s aggressive posture was rooted in the doctrinal importance of transparency in freezing injunctions. As Justice Rene Le Miere later articulated regarding the mechanics of such injunctions:
An asset disclosure order helps identify the assets that are subject to the freezing order so that the claimant knows what assets are being frozen and can monitor them effectively.
When Najam allegedly failed to provide a properly sworn affidavit detailing its global assets, Naqid treated the omission not as a mere procedural defect, but as a contumacious breach warranting the severest sanctions available under DIFC law. Naqid doubled down on this strategy a month later. On 24 June 2024, the Claimant filed a Second Sequestration Application and a Second Committal Application, followed shortly by an Anti-Suit Injunction Application on 9 July 2024, likely designed to prevent Najam from seeking relief in parallel jurisdictions to undermine the DIFC proceedings.
Faced with the prospect of sequestration and criminal referral, Najam launched a symmetrical counter-offensive. The Defendant refused to capitulate to the pressure of the committal threats, instead filing a barrage of defensive applications aimed at dismantling the foundational orders upon which Naqid’s strategy relied. The scope of Najam’s retaliatory filings was comprehensive:
The Defendant has applied for orders setting aside the Enforcement Order (the “Set Aside Application”), striking out the First Committal Application (the “Strike Out Application”), discharging the freezing order (the “Discharge Application”), and to put on expert evidence in support of its Set Aside application (the “Expert Evidence Application”) (together the “Defendant’s Applications”).
By late July 2024, the Court’s docket was choked with overlapping, highly contentious interlocutory applications. Najam was [seeking to set aside the Enforcement Order and an extension of time](https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-004-2024_20240926.txt#:~:text=seeking%20to%20set%20aside%20the%20Enforcement%20Order%20and%20an%20extension%20of%20time) to submit evidence, while simultaneously attempting to strike out the committal proceedings entirely. This tactical gridlock is not entirely unique in high-stakes DIFC litigation; it mirrors the procedural friction analyzed in Eava v Egan, where parallel challenges and jurisdictional objections are frequently utilized to frustrate the immediate execution of arbitral awards. However, the sheer volume of applications filed within a two-month window in the present dispute threatened to consume disproportionate judicial resources and fragment the appellate process.
Recognizing the unsustainability of adjudicating a dozen interconnected applications piecemeal, Justice Rene Le Miere exercised the Court’s robust case management powers under RDC Part 4. On 9 August 2024, the Court intervened to impose order on the chaos, directing that all pending applications be [heard together and determined following a single hearing](https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-004-2024_20240926.txt#:~:text=heard%20together%20and%20determined%20following%20a%20single%20hearing) scheduled for five days commencing on 7 October 2024. This consolidation order was a critical procedural circuit-breaker. By forcing the parties to address the enforcement, the freezing order, the committal applications, and the sequestration requests in a single unified forum, the Court ensured a coherent resolution and prevented the litigation from fracturing into endless interlocutory appeals.
Yet, the 9 August consolidation order did not end the procedural maneuvering; it merely shifted the battleground to the mechanics of the hearing itself. Because committal proceedings carry quasi-criminal consequences, the evidentiary standards are exceptionally stringent, requiring proof beyond a reasonable doubt. Consequently, the manner in which witness evidence is adduced becomes a matter of intense dispute.
In September 2024, Najam filed further applications seeking to alter the evidentiary landscape of the upcoming consolidated hearing. The Defendant sought permission to substitute its primary witness, Mr. Novak, with a new witness, Mr. Narciso. Furthermore, Najam requested that the Court [permit the Defendant’s witness to give evidence via an interpreter](https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-004-2024_20240926.txt#:~:text=permit%20the%20Defendant’s%20witness%20to%20give%20evidence%20via%20an%20interpreter) and, crucially, allow its witnesses to testify via video link rather than appearing in person in Dubai.
Justice Le Miere’s handling of these late-stage evidentiary requests underscores the strict procedural safeguards inherent in contempt proceedings. While the Court is generally accommodating of remote testimony in standard commercial disputes to save costs, committal applications demand a higher level of scrutiny. The Court permitted the substitution of Mr. Narciso and allowed the use of an interpreter for Mr. Numair, recognizing the necessity of ensuring a fair hearing where a witness's first language is not English. However, the Court placed strict parameters on how the substituted evidence could be deployed, particularly concerning the committal aspects of the hearing:
(e) If the Defendant does not file an affidavit or witness statement of Mr Narciso, the Defendant may adduce oral evidence from Mr Narciso in opposition to the committal applications at the Consolidated Hearing.
The Court’s insistence on formal affidavits for written evidence opposing committal, and its specific directions regarding the right to [adduce oral evidence from Mr Narciso in opposition to the committal applications](https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-004-2024_20240926.txt#:~:text=adduce%20oral%20evidence%20from%20Mr%20Narciso%20in%20opposition%20to%20the%20committal%20applications), highlight the procedural rigidity required when a party's liberty is at stake. The refusal to allow video link testimony for the committal portions of the hearing further reinforced the principle that when a claimant seeks to invoke the penal jurisdiction of the DIFC Courts, they must be prepared to test the evidence in person, under the direct observation of the presiding judge.
Ultimately, the evolution of the case from a simple ex parte freezing order to a consolidated five-day hearing featuring sequestration, committal, and anti-suit injunctions illustrates the limits of procedural enforcement. Naqid’s attempt to shortcut the debt recovery process by weaponizing committal applications did not result in immediate compliance. Instead, it triggered a massive defensive mobilization by Najam, forcing the Court to impose a structured, consolidated framework. This procedural crucible set the stage for the rigorous substantive analysis that would follow in the final December judgment, where the high threshold for proving contempt would ultimately dictate the outcome of the Claimant's aggressive strategy.
What Is the Standard of Proof for Contempt in the DIFC Courts?
The invocation of the DIFC Courts’ contempt jurisdiction represents the deployment of the judiciary’s most coercive powers. Because committal and sequestration carry quasi-criminal consequences—potentially resulting in imprisonment or the seizure of corporate assets—the evidentiary threshold is deliberately unforgiving. In Naqid v Najam [2024] DIFC ARB 004, Justice Rene Le Miere reaffirmed that an applicant seeking committal must establish the alleged breach beyond a reasonable doubt. The burden rests entirely on the claimant, and the court will not infer contempt from ambiguous conduct, procedural friction, or incomplete compliance. Consequently, the First Committal Application is dismissed when these rigorous evidentiary standards are not met.
The dispute in Naqid arose from a worldwide freezing order issued by H.E. Justice Shamlan Al Sawalehi on May 3, 2024, designed to secure a massive arbitral award. The underlying financial stakes were substantial, setting the stage for aggressive enforcement tactics and heightened judicial scrutiny over the post-award asset preservation measures.
Judgment is entered against the Defendant to pay the Claimant Cr 38,58,54,542 and US$ 3,156,658 with 18% annual interest from 11 May 2022 until payment, plus arbitration costs of Cr 27,76,200 and legal costs of Cr 78,53,116, totaling Cr 1,06,53,116.
To protect this judgment debt, the freezing order imposed strict limits on Najam's ability to deal with its assets. However, before evaluating the substantive evidence of alleged dissipation, Justice Le Miere imposed a strict procedural boundary: a claimant is strictly confined to the allegations set out in the application notice itself. The court is similarly restricted to considering only those specific charges. When a claimant attempts to broaden the scope of the inquiry beyond the initial notice, the Second Committal Application is dismissed to prevent procedural unfairness.
This procedural straitjacket is a fundamental safeguard for defendants facing committal. In complex commercial litigation, parties frequently attempt to supplement, clarify, or expand their contempt allegations through voluminous supporting affidavits filed weeks after the initial application. Justice Le Miere rejected this practice, ruling that supporting affidavits cannot be used to cure a lack of particularity in the application notice. The notice must stand alone, detailing the exact nature of the breach with sufficient precision to allow the defendant to answer the quasi-criminal charge.
The strictness of this procedural requirement echoes the DIFC Courts' broader intolerance for procedural ambiguity in enforcement contexts, a theme similarly explored in ARB 009/2019 Ocie v Ortensia, where the limits of disclosure and ex parte integrity were heavily scrutinized. When a party seeks sequestration or committal, the application notice is treated akin to a criminal indictment. It cannot be a moving target.
Naqid’s application notices alleged multiple breaches, primarily focusing on Najam's failure to properly verify its asset disclosure. The freezing order required Najam to provide information relating to the value, details, and location of its assets, supported by a duly sworn affidavit. The rationale for such provisions is well-established in DIFC enforcement practice.
An asset disclosure order helps identify the assets that are subject to the freezing order so that the claimant knows what assets are being frozen and can monitor them effectively.
Naqid contended that Najam’s compliance with this disclosure mechanism was contumaciously defective. The specific charges were laid out in the application notice, attempting to pin the defendant to a precise violation of the order's mechanics.
(7) Najam breached [10] of the Freezing Order by failing to provide a properly furnished affidavit from one of its employees.
(8) Najam is in breach of [9] and [10] of the Freezing Order, which requires the Defendant to provide information relating to the value, details, and location of its assets and to furnish a duly sworn affidavit.
Despite these specific formulations, Naqid’s evidentiary record fell short of the requisite standard. The claimant argued that the affidavit provided was not sworn by an appropriate employee of Najam, thereby violating the strict terms of the freezing order. Justice Le Miere, however, found the evidence insufficient to cross the criminal standard of proof. The court requires more than technical deficiencies to establish contempt; it requires proof of willful disobedience.
Naqid has not proved beyond a reasonable doubt, or on the balance of probabilities, that Najam is in contempt by breaching the Freezing Order by failing to have the affidavit verifying the Asset Disclosure Letter by an employee of Najam.
The failure to meet the standard of proof extended to allegations of active asset dissipation. Naqid accused Najam of attempting to sell a vessel, the Niya, in direct contravention of the freezing order's prohibition on dealing with assets. The freezing order explicitly restrained Najam from removing, disposing of, or dealing with assets up to the specified value. Without concrete proof of an actualized breach, the First Sequestration Application is dismissed.
Yet, negotiating commercial terms does not automatically equate to a completed or actionable breach of a freezing order, particularly when the standard is beyond a reasonable doubt. The court scrutinized the timeline and the nature of the negotiations regarding the Niya. Justice Le Miere concluded that the claimant failed to establish that these negotiations constituted a contumacious defiance of the injunction.
Naqid has not proved beyond a reasonable doubt, or on the balance of probabilities, that Najam is in contempt by disobeying the Freezing Order by offering the Niya vessel for sale and negotiating commercial terms of sale.
Beyond the vessel sale, Naqid also attempted to prove that Najam had breached the ordinary living and legal expenses exception typical of freezing orders. Freezing orders generally permit a respondent to spend a specified weekly sum on legal advice and representation. Naqid alleged that Najam had exceeded this allowance by incurring massive legal fees to the firm Mayer Brown, funded through a third party, Nesbit.
Here again, the strict standard of proof shielded the defendant. To prove contempt, Naqid had to demonstrate beyond a reasonable doubt that Najam itself had incurred a liability exceeding the permitted threshold during the specific timeframe. Justice Le Miere dissected the financial arrangements and found the claimant's evidence lacking.
I find Naqid has not proved that Najam incurred legal expenses exceeding USD 5,000 a week between 3 May 2024 and 13 May 2024.
The court further clarified that third-party payments do not necessarily constitute a breach by the frozen entity unless a direct liability is proven. When claimants fail to trace the liability directly to the respondent, the Second Sequestration Application is dismissed.
I find that by 13 May 2024, Najam had not incurred a liability to Nesbit for the legal expenses paid by Nesbit to Mayer Brown, even if those payments exceeded USD 5,000.
The attempt to pierce the corporate veil and hold Najam's officers personally liable for the alleged contempt also collapsed under the weight of the evidentiary burden. In committal proceedings against corporate directors, the claimant must prove not only that the company breached the order, but that the specific officer willfully directed or was complicit in that breach. Justice Le Miere relied on established precedent regarding director liability in contempt applications.
Sir Jeremy Cooke said at [34] that to establish contempt by breach of an order, it is necessary to show that the person was in some way responsible for the breach by the company.
Because Naqid could not establish the primary breach by Najam beyond a reasonable doubt, the derivative claims against the officers inevitably failed. The court will not construct a chain of liability based on inferences of corporate control when the foundational breach remains unproven. The dismissal of the committal applications reinforces the principle that the DIFC Courts will not allow committal proceedings to be used merely as a tactical weapon to apply commercial pressure. Ultimately, even the Strike Out Application is dismissed as the court clears the procedural docket of unproven allegations.
The judgment serves as a stark reminder to practitioners drafting committal applications. The dual requirement—absolute precision in the application notice and proof beyond a reasonable doubt—creates a formidable barrier. Justice Le Miere’s concluding assessment of the evidence was unequivocal, dismissing the allegations not just on the criminal standard, but noting they failed even the civil standard.
For the reasons which follow I find that Naqid did not prove any breach by Najam beyond a reasonable doubt or on the balance of probabilities.
This comprehensive evidentiary failure dictates that claimants must conduct rigorous pre-application diligence. Relying on the court to draw adverse inferences from a defendant's sluggish compliance or ambiguous commercial negotiations is a flawed strategy. The standard of proof for contempt in the DIFC Courts remains resolutely high, protecting defendants from the severe sanctions of committal and sequestration unless their contumacious conduct is established with absolute certainty.
How Did Justice Le Miere Evaluate the Alleged Breaches of the Freezing Order?
The adjudication of contempt applications within the Dubai International Financial Centre (DIFC) Courts demands an exacting adherence to procedural rigor and a stringent standard of proof. When a claimant seeks to invoke the Court’s coercive powers—specifically through committal to prison or the sequestration of assets—the burden rests entirely upon them to establish the alleged breaches beyond a reasonable doubt. In Naqid v Najam, Justice Rene Le Miere conducted a granular, forensic examination of the Claimant’s allegations, ultimately dismantling the assertion that the Defendant had willfully violated the Order of H.E. Justice Shamlan Al Sawalehi dated 3 May 2024. The Court’s methodical evaluation serves as a definitive doctrinal statement on the boundaries of asset preservation injunctions and the heavy evidentiary burden required to penalize alleged non-compliance.
At the core of the Court’s analysis was a refusal to conflate technical disputes over compliance with deliberate, contumacious defiance. Justice Le Miere established the baseline for the inquiry early in the judgment, confirming the overarching failure of the Claimant’s evidentiary presentation:
For the reasons which follow I find that Naqid did not prove any breach by Najam beyond a reasonable doubt or on the balance of probabilities.
One of the primary battlegrounds in the Application No. ARB-004-2024/4 filed on 13 May 2024 concerned the Defendant’s legal expenditures. Standard freezing orders routinely incorporate carve-outs permitting the respondent to expend a specified sum on ordinary living expenses or legal advice, ensuring that the injunction does not paralyze the respondent’s ability to mount a defense. In this instance, the Freezing Order capped Najam’s permissible legal expenses at USD 5,000 per week. Naqid alleged that Najam flagrantly breached this limitation by utilizing funds to pay its legal counsel, Mayer Brown, in amounts far exceeding the weekly allowance.
Justice Le Miere’s evaluation of this claim hinged on the precise mechanics of the funding arrangement. The evidence revealed that the legal fees were not paid directly from Najam’s frozen accounts, but rather by a third party, Nesbit. For a breach of the freezing order to occur in this context, the Claimant needed to prove that the Defendant’s own asset pool was depleted or encumbered by these payments. The Court found the evidentiary record entirely lacking in this regard:
I find Naqid has not proved that Najam incurred legal expenses exceeding USD 5,000 a week between 3 May 2024 and 13 May 2024.
The analytical distinction drawn by the Court is critical for cross-border practitioners structuring litigation funding or third-party payment arrangements for injuncted entities. If a third party gratuitously discharges a defendant’s legal fees without creating a corresponding debt or liability that attaches to the defendant’s frozen assets, the underlying purpose of the freezing order—the preservation of the asset pool for eventual enforcement—remains uncompromised. Justice Le Miere solidified this principle by explicitly addressing the liability matrix:
I find that by 13 May 2024, Najam had not incurred a liability to Nesbit for the legal expenses paid by Nesbit to Mayer Brown, even if those payments exceeded USD 5,000.
Beyond the expenditure dispute, the Court scrutinized Naqid’s allegations regarding the mandatory asset disclosure provisions. The efficacy of any worldwide freezing order relies heavily on the respondent’s compliance with disclosure obligations, which map the terrain of the frozen estate. Justice Le Miere articulated the fundamental utility of this mechanism:
An asset disclosure order helps identify the assets that are subject to the freezing order so that the claimant knows what assets are being frozen and can monitor them effectively.
Naqid’s grievance, however, did not center on a complete failure to disclose, but rather on the procedural execution of the disclosure. The Claimant alleged that the Defendant failed to provide a properly sworn affidavit from a direct employee, thereby violating the strict terms of the injunction. The specific charges were articulated in the committal filings:
(7) Najam breached [10] of the Freezing Order by failing to provide a properly furnished affidavit from one of its employees.
(8) Najam is in breach of [9] and [10] of the Freezing Order, which requires the Defendant to provide information relating to the value, details, and location of its assets and to furnish a duly sworn affidavit.
In evaluating this alleged breach, Justice Le Miere applied a rigorous filter to distinguish between a substantive failure that frustrates the Court’s monitoring capabilities and a mere technical deficiency in the deponent’s employment status. To secure a committal, the Claimant must demonstrate that the specific procedural failure was an act of willful defiance attributable to the corporate officers. The Court found that Naqid failed to cross this high threshold:
Naqid has not proved beyond a reasonable doubt, or on the balance of probabilities, that Najam is in contempt by breaching the Freezing Order by failing to have the affidavit verifying the Asset Disclosure Letter by an employee of Najam.
This strict approach to the penal consequences of disclosure defects aligns with the broader DIFC jurisprudence concerning the limits of ancillary orders. As explored in ARB-009-2019: ARB 009/2019 Ocie v Ortensia, the DIFC Courts consistently guard the boundaries of disclosure obligations, ensuring that severe sanctions are reserved for substantive evasions rather than formalistic missteps. When seeking to hold corporate officers personally liable for a company’s procedural defaults, the evidentiary burden is particularly acute. Justice Le Miere reinforced this by invoking established common law standards regarding corporate attribution in contempt proceedings:
Sir Jeremy Cooke said at [34] that to establish contempt by breach of an order, it is necessary to show that the person was in some way responsible for the breach by the company.
Perhaps the most commercially significant facet of the Court’s granular analysis involved the allegations surrounding the vessel 'Niya'. In its Application No. ARB-004-2024/10 filed on 24 June 2024, Naqid sought a second writ of sequestration, arguing that Najam had actively attempted to dissipate assets by negotiating the sale of the vessel. The prohibition against dissipation was explicitly codified in the injunction:
Paragraph 8 of the freezing order provides:
"If the total Unencumbered Value of the Respondent’s assets in the DIFC does not exceed Cr 39,50,12,697 (or USD equivalent at the time of payment) and USD 3,156,658, the Respondent must not remove any of those assets from the DIFC and must not dispose of or deal with any of them.
The Claimant posited that the mere act of offering the vessel to the market and engaging in commercial negotiations constituted "dealing with" the asset in violation of Paragraph 8. Justice Le Miere rejected this expansive interpretation, drawing a sharp doctrinal line between exploring commercial terms and executing a transaction that actually alters the legal or equitable status of the asset.
Naqid has not proved beyond a reasonable doubt, or on the balance of probabilities, that Najam is in contempt by disobeying the Freezing Order by offering the Niya vessel for sale and negotiating commercial terms of sale.
The Court’s reasoning provides vital clarity for asset-heavy defendants operating under the shadow of a freezing order. A prohibition against disposing of or dealing with an asset does not inherently paralyze a company’s ability to solicit valuations, engage brokers, or discuss potential future transactions, provided that no binding agreement is formed that encumbers the asset or transfers an interest prior to the discharge of the injunction or the receipt of Court approval. The act of negotiation, in isolation, does not dissipate the asset pool available for the satisfaction of the underlying judgment. Justice Le Miere concluded the analysis of the vessel dispute with unequivocal finality:
Naqid has not proved beyond a reasonable doubt, or on the balance of probabilities, that Najam breached the Freezing Order by negotiating the sale of the Niya.
The cumulative failure of the Claimant’s evidentiary presentation was compounded by profound procedural irregularities in how the contempt charges were framed. Contempt proceedings are quasi-criminal in nature; consequently, the accused is entitled to know the exact nature of the charges from the face of the application notice itself. Naqid’s reliance on voluminous supporting affidavits to articulate the specific breaches, rather than particularizing them within the formal notices, fundamentally undermined the applications. By the time the parties convened for the consolidated in-person hearing commencing on 7 October 2024, the structural defects in the Claimant’s strategy were insurmountable.
Justice Le Miere’s systematic dismissal of the committal and sequestration applications reinforces a critical tenet of DIFC enforcement practice: the Court’s coercive powers are a weapon of last resort, designed to punish genuine, proven defiance, not a tactical lever to be pulled in the midst of ordinary enforcement friction. The granular evaluation of the legal fees, the affidavit technicalities, and the vessel negotiations collectively demonstrate that the DIFC Courts will not infer contempt from ambiguous commercial conduct or third-party financial arrangements. Claimants seeking to deploy the ultimate sanctions of committal or sequestration must arrive at the Court armed with unimpeachable evidence of deliberate dissipation and strict adherence to the procedural mandates of the Rules of the DIFC Courts.
How Does the DIFC Approach to Anti-Suit Injunctions Compare to Other Jurisdictions?
The deployment of anti-suit injunctions in cross-border commercial litigation often serves as a barometer for a court’s jurisdictional confidence. In jurisdictions like England and Wales, the Commercial Court frequently utilizes anti-suit injunctions under Section 37 of the Senior Courts Act 1981 as a robust, sometimes aggressive, mechanism to protect its seat and enforce exclusive jurisdiction clauses. The Dubai International Financial Centre (DIFC) Courts, however, operate within a unique constitutional matrix alongside the onshore Dubai judicial system. Consequently, the DIFC approach to anti-suit relief is characterized by a distinct pragmatism, prioritizing judicial economy and the mootness of foreign proceedings over symbolic assertions of authority. The handling of the anti-suit application in Naqid v Najam [2024] DIFC ARB 004 perfectly encapsulates this restrained, highly functional jurisprudence.
The procedural warfare that necessitated the anti-suit application was rooted in a high-stakes enforcement effort. The underlying arbitration had resulted in a massive liability for the Defendant. The tribunal ordered Najam to pay Naqid Cr 38,58,54,542 and USD 3,156,658, along with 18% annual interest from 11 May 2022. Seeking to secure these sums, Naqid initiated proceedings in the DIFC. On 11 March 2024, Naqid filed a without notice application under the DIFC Arbitration Law of 2008 and RDC rules, seeking recognition and enforcement of the Award. This initial maneuver was successful; Naqid obtained orders from this Court recognizing and enforcing the Award (the “Enforcement Order”) and a worldwide freezing order that restrains Najam from transferring assets out of the DIFC up to the amount of the Award.
Faced with the freezing of its global assets, Najam launched a multi-front counter-offensive. Within the DIFC, Najam sought to dismantle the enforcement infrastructure. On 17 May 2024 Najam applied to this court to set aside the Enforcement Order because it had not been given proper notice of the appointment of the arbitrator in the arbitral proceedings pursuant to which the Enforcement Order was issued, and the Award has not yet become binding on the parties (“Set aside Application”). Simultaneously, Najam attacked the asset preservation measures, arguing there was no real risk that Najam will dissipate its assets, Naqid has failed to provide evidence that its undertakings in damages to the Court are valuable, and Naqid has breached its full and frank disclosure obligations (“Discharge Application”).
Crucially, Najam did not confine its resistance to the offshore jurisdiction. In a classic maneuver designed to exploit the UAE’s dual-court system, Najam initiated parallel proceedings onshore. On 30 May 2024, Najam commenced an appeal before the Dubai Court of Appeal, seeking to set aside the Award; and a ruling that this Court had no jurisdiction to hear this Claim (the “onshore appeal”). This onshore action represented a direct existential threat to the DIFC enforcement process, prompting Naqid to seek the ultimate coercive remedy. Naqid has applied to this Court for an anti-suit injunction to prevent Najam from continuing the Annulment Proceedings in the onshore Dubai Courts (the “Anti-suit Injunction Application”). Expanding the scope of its defensive perimeter, on 9 July 2024, Naqid applied for an anti-suit injunction order to prevent Najam from participating in any legal proceedings in the UAE or elsewhere, except in Mumbai, India, concerning the Award.
The legal threshold for granting such relief in the DIFC is stringent, designed to balance the protection of the Court's processes with the principles of international comity. Justice Rene Le Miere articulated the doctrinal foundation for the remedy, confirming that anti-suit injunctions are used to safeguard court processes and prevent interference:
An anti-suit injunction can be issued to safeguard court processes, prevent foreign proceedings from interfering with local cases, or to enforce a contract that prohibits litigation or upholds an exclusive jurisdiction agreement.
In many common law jurisdictions, the mere filing of a vexatious parallel proceeding designed to undermine a local enforcement order would trigger an immediate, prohibitive injunction. The English courts, for example, have historically shown little hesitation in enjoining parties from pursuing foreign annulment proceedings if those proceedings are deemed oppressive or a breach of an arbitration agreement. The DIFC Courts have also demonstrated a willingness to protect their jurisdiction, as seen in ARB-010-2016: Hayri International Llc v (1) Hazim Telecom Private Limited (2) Hazim Telecom Limited [2016] DIFC AR, where the Court took a robust stance to defend the DIFC seat.
However, Naqid v Najam presented a different matrix: the protection of an enforcement order for a foreign award, rather than the protection of a DIFC-seated arbitration. Furthermore, the parallel proceedings were not in a distant foreign jurisdiction, but in the onshore Dubai courts, raising delicate questions of intra-Emirate judicial harmony. The DIFC Court navigated this friction by maintaining a strict boundary regarding its own competence. The Court held that it did not have the authority to determine that this Court lacked jurisdiction to hear the Claim, a matter that Najam had improperly asked the onshore courts to adjudicate.
The potential for a constitutional clash was ultimately defused not by a heavy-handed DIFC injunction, but by the onshore courts' own adherence to jurisdictional boundaries. The Dubai Court of Cassation dismissed Najam's annulment proceedings. In its decision, the Court agreed with Naqid that it lacked jurisdiction to either annul the Award, as it was a foreign award not issued in Dubai.
This onshore dismissal fundamentally altered the landscape of the DIFC litigation. The application became moot once the onshore Dubai proceedings were dismissed. At this juncture, the DIFC Court faced a critical doctrinal choice. It could have issued a declaratory injunction to establish a precedent, penalize Najam's tactical overreach, and anchor a punitive costs award—a path sometimes favored in other jurisdictions to deter future vexatious litigation. Instead, Justice Le Miere chose a path of strict pragmatism. The Anti-suit Injunction Application was dismissed as moot. By declining to issue a redundant coercive order, the Court avoided issuing an advisory opinion, thereby prioritizing judicial economy and respecting the effective resolution provided by the onshore court.
This pragmatic dismissal immediately triggered a complex dispute over the allocation of costs. In English litigation, when an application becomes moot due to the respondent's capitulation or an external event, the applicant often seeks costs on the basis that they would have won had the matter proceeded to a full hearing. Naqid, having successfully seen off the onshore threat, naturally sought the costs of its anti-suit application.
The DIFC Court, however, declined to award costs, adhering to the principle that costs follow the event only where appropriate. Because the merits of the anti-suit injunction were never fully ventilated or determined, the Court refused to conduct a retrospective mini-trial simply to declare a "winner" for costs purposes. Justice Le Miere ruled definitively on the financial fallout of the mooted application:
There will be no order as to costs, that is each party will bear their own costs of the Anti-suit Injunction Application whatever costs order the Court makes about the other applications heard at the Hearing.
The Court noted that no order as to costs was appropriate because the application's ultimate success was uncertain at the time it was filed, and neither party's conduct warranted a departure from the standard rule that costs are not awarded without a hearing on the merits.
This costs ruling carries significant strategic implications for practitioners litigating in the DIFC. It signals that launching an anti-suit injunction application carries an inherent financial risk if the target proceedings might resolve themselves before the DIFC Court issues a ruling. The decision acts as a subtle deterrent against utilizing anti-suit applications purely as tactical pressure mechanisms. If the underlying jurisdictional conflict is likely to be resolved correctly by the foreign or onshore court itself, the DIFC Court will not reward the preemptive applicant with a costs windfall.
Ultimately, the DIFC Court’s handling of the anti-suit injunction in Naqid v Najam reinforces its maturity as a supervisory and enforcing jurisdiction. The Court possesses the coercive tools to protect its processes, but it exercises them with surgical restraint. By allowing the onshore Dubai courts to correctly decline jurisdiction over a foreign award, and subsequently dismissing the DIFC anti-suit application as moot with no order as to costs, the Court charted a course that respects the UAE's dual-court system while maintaining the absolute integrity of the DIFC's enforcement regime. This approach stands in stark contrast to the more interventionist postures seen in other common law hubs, cementing the DIFC's reputation for pragmatic, commercially sensible dispute resolution.
Which Earlier DIFC Cases Frame This Decision?
The doctrinal architecture of the Dubai International Financial Centre Courts has long been defined by a rigorous adherence to the principles of arbitral autonomy and the seamless enforcement of foreign awards. Justice Rene Le Miere’s ruling in Naqid v Najam [2024] DIFC ARB 004 does not merely resolve a high-stakes commercial dispute; it actively reinforces the hierarchy of legal instruments governing enforcement actions within the jurisdiction. By systematically dismantling the Defendant’s attempts to rely on domestic DIFC Arbitration Law to resist an Indian arbitral award, the Court cemented the absolute primacy of bilateral treaty obligations—specifically, the India-UAE Judicial Cooperation Agreement.
To understand the gravity of the Court’s approach, one must examine the procedural battlefield upon which the enforcement action was fought. The dispute originated from a substantial arbitral victory for the Claimant, an entity deeply embedded in the South Asian energy sector. The commercial reality of the parties dictated the jurisdictional friction that followed. The Court noted the corporate identities driving the litigation, observing that the Claimant is incorporated under the Indian Companies Act and provides extensive oil and gas services, while the Defendant is incorporated under Liberian law and operates within the offshore oil and gas industry across the Arabian Gulf and the Indian sub-continent.
Following the initial arbitral success in India, Naqid moved swiftly to secure its position in the UAE, obtaining the Order of H.E. Justice Shamlan Al Sawalehi on May 3, 2024, which recognized and enforced the award while simultaneously freezing Najam’s assets. The financial exposure for the Liberian entity was immense, a fact captured precisely in the underlying judgment:
The judgment requires Najamto pay Naqid Cr 38,58,54,542 and USD 3,156,658, with an annual interest rate of 18% from May 11, 2022, until payment, along with arbitration costs of Cr 27,76,200 and legal costs of Cr 78,53,116, totalling Cr 1,06,53,116.
Faced with this crippling liability, Najam launched a multi-pronged collateral attack against the Enforcement Order. The Defendant filed a barrage of applications, seeking to set aside the order, strike out committal applications, and discharge the freezing injunction. The sheer volume of interlocutory skirmishes prompted Justice Le Miere to order that the matters be determined together at a single consolidated in-person hearing in October 2024.
At the heart of Najam’s defense was a calculated attempt to exploit the procedural mechanisms of the Rules of the DIFC Courts (RDC). The Defendant argued that the Enforcement Order should be set aside because the underlying award was not binding and proper notice had not been given. To anchor these arguments, Najam looked to the familiar, UNCITRAL Model Law-inspired grounds found within the DIFC Arbitration Law. The RDC itself appears, at first glance, to invite such an approach when dealing with the postponement or setting aside of enforcement orders. As the Court acknowledged regarding the procedural rules:
RDC Rule 43.72 states that an application under Rule 43.70(1) must specify any grounds under Article 44(2) of the Arbitration Law that the applicant believes justify the postponement of the decision to set aside the Order.
However, Justice Le Miere identified a fundamental flaw in the Defendant’s reliance on Article 44 of the DIFC Arbitration Law. The award in question was not a domestic DIFC award, nor was it an award from a jurisdiction lacking a specific bilateral enforcement mechanism with the UAE. It was an Indian award, squarely governed by the 1999 Agreement on Juridical and Judicial Cooperation in Civil and Commercial Matters between the Republic of India and the United Arab Emirates.
The analytical pivot of the judgment rests on the Court’s refusal to allow domestic arbitration statutes to override or supplement the exhaustive grounds for refusal contained within a ratified international treaty. The India-UAE Judicial Cooperation Agreement provides a specific, exhaustive list of scenarios under which enforcement of a judgment or arbitral award may be refused. By attempting to import the broader, or at least differently articulated, grounds from Article 44 of the DIFC Arbitration Law, Najam was effectively asking the Court to rewrite the bilateral treaty obligations of the UAE. Justice Le Miere firmly closed this door, stating the procedural requirement with absolute clarity:
In my opinion, the rule requires a party seeking to set aside an award under the India – UAE Judicial Cooperation Agreement to specify the grounds of the application.
This strict constructionist approach to treaty application aligns seamlessly with the broader trajectory of DIFC jurisprudence. The decision echoes the foundational principles established in cases like ARB-001-2014: (1) Fiske (2) Firmin v (1) Firuzeh, where the DIFC Courts fiercely guarded their arbitral autonomy and statutory mandate against unwarranted jurisdictional incursions. Just as Fiske v Firuzeh shielded the DIFC’s internal arbitration framework from external constitutional challenges, Naqid v Najam shields the UAE’s external treaty commitments from internal statutory dilution. The DIFC Courts operate as a conduit for international enforcement, and when a treaty occupies the field, domestic laws—even those as robust as the DIFC Arbitration Law—must yield.
The Defendant’s failure to properly articulate its challenge within the confines of the India-UAE Judicial Cooperation Agreement proved fatal to its Set-Aside Application. Najam’s arguments regarding the commencement of the arbitration and the alleged lack of notice were scrutinized not under the lens of DIFC procedural expectations, but under the strict parameters of Indian law and the treaty. The Court paid particular attention to the mechanics of how the dispute was initiated in the foreign seat, noting:
By s.21 of the Indian Arbitration Act, arbitral proceedings commence when the respondent receives a request to refer the dispute to arbitration.
Because Najam could not demonstrate that the procedural history in India violated the specific, narrow grounds for refusal permitted by the bilateral treaty, the Court found the grounds for setting aside the Enforcement Order unsupportable. The attempt to adjourn the DIFC proceedings pending the outcome of a parallel challenge in the Bombay High Court was similarly rejected, reinforcing the DIFC Court’s reluctance to act as a secondary appellate venue for foreign arbitral processes. The mandate is clear: unless a treaty explicitly demands a stay, the DIFC Courts will proceed with enforcement to give teeth to the arbitral tribunal’s findings.
The strategic takeaway for practitioners litigating in the DIFC is profound. When seeking to enforce, or resist the enforcement of, an award originating from a jurisdiction with which the UAE shares a judicial cooperation treaty, the text of that treaty is the alpha and omega of the legal analysis. Drafting an application that relies heavily on Article 44 of the DIFC Arbitration Law in such circumstances is not merely a tactical error; it is a fundamental misunderstanding of the hierarchy of norms applied by the DIFC judiciary.
Justice Le Miere’s methodical dismantling of the Defendant’s procedural strategy culminated in a decisive operational command: The Set-aside Application is dismissed. This dismissal was not based on a mere technicality, but on a robust defense of the India-UAE Judicial Cooperation Agreement’s supremacy. By holding the line against the improper application of domestic arbitration law to treaty-governed foreign awards, the Court has provided a masterclass in the limits of procedural enforcement and the high threshold required to disrupt the recognition of international arbitral outcomes. The ruling ensures that the DIFC remains a hostile environment for debtors seeking to use creative statutory interpretation to evade their cross-border liabilities.
What Does This Mean for Practitioners and Enforcement Strategy?
The strategic reality of enforcing massive foreign arbitral awards in the Dubai International Financial Centre (DIFC) often dictates a rapid escalation from standard recognition to the deployment of coercive judicial powers. When a judgment debtor appears recalcitrant, claimants frequently reach for the heaviest weapons in the procedural arsenal: worldwide freezing orders, writs of sequestration, and applications for committal. However, Justice Rene Le Miere’s rigorous management of the post-award litigation in Naqid v Najam establishes a definitive boundary. The ruling mandates a significantly higher degree of precision in drafting contempt applications and strictly enforces the evidentiary burden required to sustain quasi-criminal sanctions against corporate entities and their officers.
The sheer scale of the financial liability in this dispute explains the aggressive posture adopted by the Claimant. Naqid, an Indian oil and gas services company, successfully navigated the initial recognition phase, awarding it substantial sums against Najam, a Liberian entity operating in the Arabian Gulf. The resulting Enforcement Order crystallized a massive debt:
The judgment requires Najamto pay Naqid Cr 38,58,54,542 and USD 3,156,658, with an annual interest rate of 18% from May 11, 2022, until payment, along with arbitration costs of Cr 27,76,200 and legal costs of Cr 78,53,116, totalling Cr 1,06,53,116.
Faced with a judgment debtor holding substantial offshore operations, Naqid secured a preemptive strike on 3 May 2024, obtaining an order restraining the Defendant from removing assets from the DIFC or diminishing their global value. The Freezing Order included standard mandatory disclosure provisions, compelling the Defendant’s officers to swear affidavits detailing their global asset positions. When Mr. Numair filed an affidavit on 14 May 2024 providing information about the Defendant’s assets, Naqid deemed the disclosure evasive or incomplete, immediately launching the First Committal Application and First Sequestration Application.
For practitioners, the subsequent dismissal of these coercive applications serves as a critical doctrinal warning. A committal application is not an ordinary interlocutory mechanism to apply commercial pressure; it invokes the Court’s penal jurisdiction. Consequently, the evidentiary standard shifts from the balance of probabilities to proof beyond a reasonable doubt. Counsel must ensure that application notices for contempt are entirely self-contained and highly specific. A claimant cannot rely on generalized allegations of non-compliance or infer willful defiance from a purportedly thin asset disclosure. The application must meticulously map the exact paragraphs of the Freezing Order to specific, provable acts or omissions by the contemnor, supported by incontrovertible evidence. Naqid’s failure to clear this elevated hurdle illustrates that the DIFC Courts will fiercely protect defendants against unsubstantiated allegations that threaten the liberty of their officers or the total sequestration of their operational assets.
The gravity of committal proceedings also fundamentally alters the Court’s approach to case management and witness testimony. In an era where remote hearings have become standard practice for commercial disputes, Justice Le Miere drew a hard line when penal sanctions were on the table. The Defendant had argued that requiring its witnesses, who were not based in Dubai, to travel for the hearing would result in unreasonable additional costs. The Court rejected this economic rationale for the committal aspects of the dispute. When a party faces quasi-criminal sanctions, the presiding judge must have the opportunity to assess the demeanor and credibility of witnesses in person during cross-examination.
However, the Court balanced this strictness by accommodating the Defendant’s need to substitute its primary witness, replacing Mr. Novak with Mr. Narciso. To prevent procedural ambush and ensure the Claimant was not prejudiced by late-stage evidentiary shifts, the Court imposed rigid guardrails on the scope of Mr. Narciso’s testimony, limiting it strictly to matters already addressed by his predecessor. Yet, recognizing the fundamental right to a robust defense against contempt charges, Justice Le Miere preserved the Defendant’s ability to mount an oral defense even if written formalities were delayed:
If the Defendant does not file an affidavit or witness statement of Mr Narciso, the Defendant may adduce oral evidence from Mr Narciso in opposition to the committal applications at the Consolidated Hearing.
Parallel to the contempt battle, the enforcement strategy hinged on a complex jurisdictional challenge regarding the underlying arbitral award. Najam launched a sweeping counter-offensive, seeking to discharge the Freezing Order and set aside the Enforcement Order entirely. Here, the strategic lesson centers on the precise application of bilateral treaties in the DIFC. Because the arbitral award originated in India, the standard grounds for setting aside an award under the DIFC Arbitration Law were superseded by the specific provisions of the India-UAE Judicial Cooperation Agreement.
Najam’s Set-aside Application faltered because it failed to strictly align its pleadings with the treaty’s requirements. Justice Le Miere emphasized that RDC Part 43 demands absolute clarity when challenging recognition orders based on foreign treaties:
I have referred to RDC Rule 43.72, which requires, amongst other things, that an application to set aside an order under Rule 43.70(1) must specify the grounds under Article 44(1) of the DIFC Arbitration Law for setting aside the order.
The Court’s dismissal of the Set-aside Application confirms that generic defenses—such as broad claims of lack of notice or assertions that the award is not yet binding—will not survive scrutiny if they do not map perfectly onto the exhaustive grounds permitted by the governing judicial cooperation treaty. The DIFC Courts will not entertain collateral attacks on foreign awards that attempt to bypass the strictures of international enforcement frameworks.
Despite dismissing the substantive challenge to the Enforcement Order, the Court granted the Defendant’s Expert Evidence Application. This procedural nuance is vital for cross-border litigators. Reliance on expert evidence in post-award enforcement is permissible, but it must be properly introduced and justified. The Court remains receptive to specialized testimony—particularly concerning the mechanics of foreign law, such as the Indian Arbitration Act—provided the expert report is tightly focused on elucidating complex jurisdictional or procedural defenses rather than re-litigating the commercial merits of the underlying dispute.
The sheer volume of interlocutory applications generated in this matter—spanning set-aside, strike-out, discharge, sequestration, committal, and anti-suit injunctions—threatened to derail the enforcement process entirely. To prevent the litigation from fracturing into an unmanageable war of attrition, Justice Le Miere ordered that all pending matters be heard and determined together at a single Consolidated Hearing. This decisive case management reflects a growing judicial intolerance for fragmented, tactical skirmishing, a doctrine similarly enforced in ARB-027-2024: ARB 027/2024 Nalani v Netty. The Court will not tolerate procedural obstructionism designed merely to delay execution.
Ultimately, the resolution of Naqid v Najam provides a comprehensive blueprint for post-award enforcement in the DIFC. Claimants must recognize that while the Court will readily deploy freezing orders to secure assets, the subsequent leap to committal and sequestration requires an airtight evidentiary foundation that meets a quasi-criminal standard. Conversely, defendants facing massive enforcement actions cannot rely on scattergun interlocutory applications or generic arbitration defenses; they must anchor their resistance in the precise text of applicable bilateral treaties and manage their witness evidence with absolute procedural discipline.
What Issues Remain Unresolved?
The December 24 judgment clears the immediate threat of sequestration and committal, but leaves the core dispute untouched. The underlying arbitral award, issued on 1 November 2023, remains in a state of suspended animation. The Claimant, Naqid, initially secured an ex parte Enforcement Order from H.E. Justice Shamlan Al Sawalehi on 3 May 2024, alongside a sweeping worldwide freezing order. However, the Defendant, Najam, swiftly retaliated with a barrage of procedural challenges that have effectively stalled the execution of the debt.
The financial stakes are massive, and the precise quantification of the liability underscores the severity of the ongoing enforcement battle. The arbitral tribunal's mandate translated into a formidable financial burden for the Defendant, setting the stage for the aggressive asset-tracing and freezing applications that followed.
Judgment is entered against the Defendant to pay the Claimant Cr 38,58,54,542 and US$ 3,156,658 with 18% annual interest from 11 May 2022 until payment, plus arbitration costs of Cr 27,76,200 and legal costs of Cr 78,53,116, totaling Cr 1,06,53,116.
Despite this clear quantification, the finality of the award enforcement is entirely contingent on the resolution of pending applications. Najam has not passively accepted the imposition of the award. On 17 May 2024, the Defendant filed Application No. ARB-004-2024/5 seeking to set aside the Enforcement Order. This application strikes at the jurisdictional and procedural heart of the Claimant's strategy. Under DIFC Court practice, the mere registration of an award does not guarantee its execution if the award debtor mounts a credible challenge under Article 44 of the DIFC Arbitration Law. The Court explicitly recognized the suspensive effect of these challenges on the Claimant's ability to realize the assets.
The Award cannot be enforced until the end of this period or until any application by the Defendant is resolved.
The interplay between the India-UAE treaty and DIFC procedural rules continues to be a point of contention in this matrix. The denomination of the primary award in Indian Crores (Cr) points to an underlying commercial nexus with India, triggering the complex mechanics of the 1999 Agreement on Juridical and Judicial Cooperation in Civil and Commercial Matters between the UAE and India. When parties seek to enforce Indian-seated arbitral awards or judgments within the DIFC, award debtors frequently invoke public policy or procedural irregularities rooted in the originating jurisdiction. Najam's strategy appears to follow this well-trodden path. On 7 June 2024, the Defendant filed an application for permission to submit an expert report in support of its Set-Aside Application. The introduction of expert evidence at the enforcement stage typically signals a deep dive into foreign law—likely Indian arbitration jurisprudence—to argue that the award suffers from fatal defects that should preclude its recognition in the DIFC.
This dynamic echoes the jurisdictional friction observed in ARB-004-2022: Muzama v Mihanti [2022] DIFC ARB 004, where the boundaries of the DIFC Courts' willingness to second-guess foreign arbitral procedures were severely tested. The DIFC Courts generally maintain a pro-enforcement bias, but the introduction of foreign legal experts forces the Court to carefully balance its obligations under international treaties against the streamlined enforcement mechanisms of the DIFC Arbitration Law. Until Justice Rene Le Miere rules on the Set-Aside Application and the accompanying expert evidence, the Claimant's victory remains strictly theoretical.
Parallel to the substantive enforcement battle, the Court’s stance on the use of remote evidence in high-stakes hearings remains a developing area of practice, heavily scrutinized in the lead-up to the December judgment. The procedural skirmishes reached a crescendo regarding how evidence would be heard at the consolidated proceedings. On 9 August 2024, the Court ordered that the myriad applications be heard together and determined following a single hearing scheduled for October. Shortly thereafter, on 16 September 2024, the Defendant filed an application seeking to substitute the Defendant’s cross-examination witness and, crucially, to permit its witnesses to give evidence by video link.
The Defendant argued that compelling witnesses to travel to Dubai for an in-person hearing would inflict unreasonable additional costs. This argument carried a certain equitable weight, particularly because the Claimant had previously indicated a preference for remote proceedings to minimize expenses. However, Justice Le Miere drew a hard line, distinguishing between ordinary commercial disputes and applications that carry penal consequences. Because the Claimant was pursuing committal and sequestration—remedies that could result in the imprisonment of corporate officers or the seizure of assets—the Court determined that the gravity of the proceedings demanded in-person scrutiny.
The refusal to allow video-link testimony in the context of a committal application reinforces a critical procedural safeguard in the DIFC. While Part 32 of the Rules of the DIFC Courts (RDC) grants judges broad discretion to allow remote evidence, the quasi-criminal nature of contempt proceedings elevates the standard. A judge must be able to assess the demeanor, hesitation, and real-time reactions of a witness accused of deliberately flouting a court order. The convenience of remote technology cannot override the fundamental right of the accused to confront their cross-examiner in the physical presence of the adjudicator, nor can it dilute the Court's ability to evaluate credibility when liberty and massive financial penalties are at stake.
Despite rejecting the video-link request, the Court did exhibit procedural pragmatism regarding witness availability. Justice Le Miere permitted the Defendant to substitute Mr. Narciso for its primary witness, Mr. Novak, but imposed strict evidentiary ring-fencing to prevent trial by ambush. The Court ordered that any new witness statements must be strictly limited to matters already addressed by Mr. Novak, explicitly barring the introduction of new issues. Furthermore, the Court provided a procedural safety valve for the Defendant regarding the committal defense, stating that if the Defendant did not file an affidavit or witness statement of Mr Narciso, the Defendant could adduce oral evidence from Mr Narciso in opposition to the committal applications at the Consolidated Hearing. [https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-004-2024_20240926.txt]
This nuanced approach to witness management—denying remote testimony to preserve the integrity of the committal hearing, while allowing witness substitution with strict scope limitations—demonstrates the DIFC Courts' sophisticated handling of complex, multi-jurisdictional litigation. It ensures that the procedural rights of the Defendant are protected without allowing them to derail the hearing timetable or ambush the Claimant with unheralded defenses.
Ultimately, the dismissal of the committal and sequestration applications on December 24 merely resets the board. The Claimant failed to meet the high burden of proving contempt beyond a reasonable doubt, but the Defendant remains encumbered by the underlying Freezing Order and the looming specter of the arbitral award. The true test of the DIFC Courts' enforcement regime will arrive when Justice Le Miere adjudicates the Set-Aside Application. The Court must then navigate the intricate interplay of the India-UAE treaty, evaluate the admissibility and weight of the Defendant's expert evidence on foreign law, and determine whether the Cr 385 million award will finally be translated into executable DIFC judgments. Until that substantive ruling is delivered, the enforcement landscape in Naqid v Najam remains highly volatile, serving as a cautionary tale for practitioners relying on ex parte enforcement orders in high-value, cross-border disputes.