June 17, 2022 court of first instance - Orders
Claim No: CFI 029/2018
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
THE INDUSTRIAL GROUP LTD
ABDELAZIM EL SHIKH EL FADIL HAMID
ORDER WITH REASONS OF JUSTICE SIR RICHARD FIELD
UPON considering the judgment herein issued on 6 April 2022 (the “Judgment”)
AND UPON considering the Defendant’s: (i) Submission on Costs dated 14 April 2022 and the attachments thereto; (ii) the Defendant’s email to the Claimant dated 19 April 2022 and the earlier submissions on interest served therewith; (iii) Reply Submission on Costs dated 4 May 2022
AND UPON considering the Claimant’s Interest and Costs Submissions dated 27 April 2022 in opposition to the aforesaid applications made by the Claimant
AND UPON considering the Procedural Order with Reasons issued on 25 May 2022 whereby the Defendant was debarred from: (i) advancing late submissions on the question of interest; (ii) certain submissions contained in his Reply Submission on Costs making allegations against the conduct of the Claimant’s legal representatives; and (iii) advancing his late application for an interim costs order unless he paid the Claimant’s costs in resisting this late application
AND UPON being informed by the Registry that the Defendant had elected not to advance his application for an interim costs order
IT IS HEREBY ORDERED THAT:
1. The Defendant is awarded his costs in respect of his Employment Claims and in respect of the Dismissal with Cause Issue, such costs to be the subject of a detailed assessment on the indemnity basis by the Registrar.
2. The Claimant is awarded its reasonable costs incurred in defending the tort claims, such costs to be the subject of a detailed assessment on the standard basis by the Registrar.
3. The Defendant is entitled to simple interest on the pre-judgment sum of AED 820,585 from 22 January 2018 to the date of the Judgment for this sum at the rate of EIBOR plus 1% at the daily rates set out in Schedule 1 to the Claimant’s Costs Submissions dated 27th April 2022 giving a total of AED 71,532.54 as at 20 November 2020.
4. The Defendant will have liberty to apply for an award of post judgment interest at the applicable rate on the said sum of AED 820,585 if there is a credible case for contending that judgment for the said sum has been given in advance of the date of the judgment herein dated 6 April 2022.
5. There shall be no order as to costs in respect of the parties’ respective applications for costs and interest.
Ayesha Bin Kalban
Date of issue: 17 June 2022
SCHEDULE OF REASONS
1. In his Submission on Costs dated 14 April 2022, the Defendant applied for an immediate assessment of costs under RDC 38.3 in the sum of AED 1,456, 701 on the indemnity basis (RDC 38.17 (2) & PD 5/2014). Most unwisely, he did not at this stage apply in the alternative for an interim costs order and, as related above, he has decided (again, most unwisely) not to make a late application for such an order on terms that he pay the costs of the Claimant in resisting the application.
2. In support of his claim that he be awarded costs on the indemnity basis the Defendant relies on:
(i) The finding in paragraph  of the Judgment that the senior management of TIG, particularly the Chairman and Mr Jaberah, egged on by TIG’s lawyers, adopted a course of action decided on shortly before 18 April 2018 which was designed to ensure that Mr Hamid was not involved in the steps they had determined to take to assemble as formidable and one-sided a case as could be put together in order to have Mr Hamid charged with and convicted of embezzlement and his passport confiscated.
(ii) The acceptance of the evidence of the Defendant which was accepted without qualification in preference to those parts of Mr Jaberah’s evidence identified in paragraph  of the Judgment which were rejected on the ground that such evidence was unreliable.1
(iii) The rejection by the Court of baseless allegations of fraud that totally lacked merit (cf Tavira Securities Ltd v Point Ventures FZCO & Ors, CFI-2017, 026 (29 January 2018) at 
3. In anticipation of it being argued by the Claimant that the costs awarded to the Defendant must take into account the dismissal of his tort claims, the Defendant contends that the evidence as to the dismissal issue and the evidence as to the tort claims overlapped. The Defendant also submits that the Court, in its discretion, should award the Defendant his costs on his tort claims on the ground that the underlying behaviour of the Claimant which would prove the torts (if held to exist) was established on the evidence: otherwise a wrong will have been established without any concurrent right.
4. It is further claimed that the Defendant was the overall winner and on that basis he should have all of his costs (cf Al Khorafi & Ors v Bank Sarasin Alpen (ME) Ltd & Anor  DIFC CFI 026 (16 January 2017).
5. The Defendant also contends that the costs claimed were reasonably incurred. It is said that preparation of the case and the dismantling of the Claimant’s case required considerable forensic resource and the careful assessment of every piece of evidence.
6. Finally, in his first set of submissions, the Defendant argues that the Claimant should pay his costs on the basis that the Claimant refused the Defendant’s offer to settle for AED 6 million, which is less than the total of AED 8,469, 94.29 awarded by the Court.
7. The Claimant submits in its Interest and Costs Submissions dated 27 April 2022 that the Defendant is entitled at most to a proportion of his costs reflecting the fact that Claimant’s tort claims for damages totalling AED 34,51,773.80 for abuse of process and malicious prosecution were dismissed and excluding those parts of the proceedings in which costs orders have already been made. In the submission of the Claimant the Defendant never had a coherent case as to how the alleged torts existed and the result was an enormous waste of costs and resources pursuing a nominally extremely valuable, but fundamentally misconceived, case.
8. The Claimant also rejects the Defendant’s submission that he is entitled to costs assessed on the indemnity basis, arguing that there are no grounds for concluding that the conduct of the Claimant takes the case out of the norm or that there had been conduct which justified the Court marking its disapproval thereof by awarding indemnity costs. The Claimant also submits that the Court should take into account the previous costs orders that were made in respect of: (i) the making and the subsequent setting aside of the default judgment which included indemnity costs to mark the Court’s disapproval; (ii) the order that there be no order for costs in respect of the application for an order that the Defendant’s passport be confiscated; and (iii) the order made in March 2020 on the Defendant’s application dated 19 November 2019 that the costs thereof should be costs in the counterclaim.
9. As to (iii), that order was made in the expectation that the Claimant would include in its counterclaim the “Merab Claim” by which it sought damages on the basis that the Defendant had acted in breach of duty in granting credit to Merab in respect of a purchase transaction. If the claim succeeded the damages awarded would be set off against sums awarded in favour of the Defendant. In the event, the Merab claim never came to be properly pleaded and the Claimant was debarred from bringing the claim. The consequence of this is that the original costs in the counterclaim order was rendered brutum fulmen and accordingly those costs should be awarded afresh, the appropriate order being that the Defendant should have his costs on those claims made in the application dated 19 November 2019 on which no costs award was made in the Defendant’s favour in the March 2020 order.
10. The Claimant also rejects the Defendant’s costs claim made on the basis of the alleged offer to settle the entire proceedings on receipt of AED 6 million. As to this, the Claimant points out that, as is admitted by the Defendant, the offer was not compliant with Part 32 RDC in that the offer was only open “for the next few days” and it was not expressed to be a Part 32 Offer, nor to carry any costs consequences.
11. The Claimant also comments that during the trial, the Court was highly critical of the conduct of the Defendant who, through his counsel, continually inserted fresh documents into the trial bundle during the trial without permission or warning and falsely asserted that the documents being inserted had been requested long ago but only recently produced.
12. Finally, the Claimant submits that, for two principal reasons, the Defendant’s costs should not be summarily assessed by the Court but should be the subject of a detailed assessment:
(1) In complicated proceedings that have endured for a period of years, the summary assessment by the Court of the costs is inappropriate.
(2) The detail provided in the supporting bills raises questions that ought to be resolved on a detailed assessment, including bills for amounts from which deductions should be made and the absence of information as to the seniority and experience of the fee earners in question.
13. In his Reply Submission on Costs dated 4 May 2022, the Defendant repeats his submission that there was an overlap between the evidence on the tort claims and the evidence on the dismissal for cause issue and rejected the suggestion that his tort claims were misconceived. He also made allegations about the conduct of the Claimant’s legal representatives which were effectively struck out by the Procedural Order with Reasons dated 5 May 2022.
14. In my judgment, for the reasons submitted by the Claimant, this is not a case where it is in the least appropriate for the Court to make a summary assessment of the Defendant’s costs. It follows that the costs I award the Defendant in this order are going to have to be the subject of a detailed assessment by the Registrar before the Defendant receives anything by way of costs. If he had made an application for an interim costs order he would have been awarded a sizable payment on account, but unwisely he did not do so.
15. I reject the Defendant’s claim for costs based on the alleged offer to settle for AED 6 million. As the Claimant submitted, the offer was not compliant with Part 32 RDC since it was only open “for the next few days” and it was not expressed to be a Part 32 Offer, nor that it would carry costs consequences.
16. I am of the opinion that the Defendant is entitled to the reasonable costs he incurred in bringing his employment claims including his successful opposition to the Claimant’s case that he had been dismissed for cause. His notice pay claim was for a sum calculated on the basis that his notice period was 90 days. The Court rejected this claim but awarded him a sum based on a notice period of 30 days. In these circumstances, I nonetheless think it appropriate to award him his costs for this claim (which will be small) since he recovered an award based on 30 days and was overall the successful party on the other employment claims and on the dismissal with cause issue.
17. In my judgment, the aforementioned costs should be assessed on the indemnity basis. I say this because I regard the conduct of the Claimant and HPA (this latter entity being the Claimant’s appointed expert and representative in the investigation conducted by the Dubai Police) in which the Claimant attempted to have the Defendant prosecuted for embezzlement, as highly reprehensible. This conduct is part and parcel of, and closely related to, the conduct referred to in paragraph 117 of the judgment and includes: (i) the attempt to obtain a passport confiscation order on the ex parte application made on 23 April 2019 (judgment paras 23 – 27); (ii) the filing of the criminal complaint against the Defendant with the Dubai police alleging that the Defendant had dishonestly embezzled large sums of money belonging to the Claimant which led to many hours of interrogation when in fact the Claimant was in possession of many documents that showed to a considerable extent that the Defendant was entitled to receive the sums that were transferred to his bank account (judgment para 37); (iii) the deployment of the cynically one-sided HPA report in seeking to persuade the police in an unbalanced, partial way to charge the Defendant with embezzlement (judgment, paras 42, 43 & 65); (iv) persuading the police to confiscate the Defendant’s passport and have his visa revoked which had a devasting effect on the Defendant’s family life and his prospects for employment (judgment, para 77); (v) deployment of HPA’s further submissions on 8 April 2019 (judgment, para 68); and the refusal to accept the court appointed expert’s report (judgment para 71).
18. In my opinion, the fact that there was no order for costs in respect of the ex parte application for a passport order is no reason for not including this conduct in justifying an order for indemnity costs. The Defendant was not party to those proceedings and the court making the costs order was in no position to assess the emptiness of the extravagant claims in the evidence that the Defendant had acted dishonestly. It is also my view that the evidence on how the Defendant was treated by the Claimant (who must accept responsibility for the conduct of HPA) was relevant to the dismissal with cause issue at the same time that it was also relevant to the Defendant’s tort claims.
19. In my judgment, the Defendant must pay the reasonable costs of the Claimant incurred in resisting the Defendant’s tort claims. It will therefore be for the Registrar to determine what these reasonable costs are and to set off the smaller of the sums that result from the assessments of the Defendant’s costs and the Plaintiff’s costs against the larger of the sum that results from these assessments.
20. The sum in question is AED 820,585 which was due on 22 January 2018. I accept the submission of the Claimant that the applicable rate is EIBOR plus 1%, there being a practice of applying this rate as seen from GFH Capital v Zahra  DIFC CFI 025 (19 December 2013); GFH Capital v Haigh  DIFC CFI 020 (4 July 2018); Al Khorafi & Ors v Bank Sarasin-Alpen (ME) Ltd & Anor DIFC CFI 026 (16 January 2017  – .
21. I accept the daily rates of interest using this measure that are set out in Schedule 1 to the Claimant’s Costs Submissions dated 27th April 2022 which give a total of AED 71,532.54 as at 20 November 2020.
22. The Claimant’s submissions on interest assume that judgment has not yet been given for AED 820,585. In case this assumption be misplaced, I shall give the Defendant liberty to apply for an award of post judgment interest on the sum of AED 820,585 if there be a credible case for contending that judgment for the said sum of AED 820,585 has indeed been given in advance of the date when the judgment herein was issued, 6 April 2022.