Claim No: CFI 036/2025

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF APPEAL

BETWEEN

STEPHAN CARL MORGENSTERN

Claimant/Respondent

and

SAIF SULTAN AL MEHRZI LAWYER & LEGAL CONSULTANTS

Defendant/Appellant

ORDER WITH REASONS OF H.E. CHIEF JUSTICE WAYNE MARTIN

UPON the Judgment of H.E. Justice Roger Stewart dated 20 May 2026 (the “Judgment”)

AND UPON the Defendant’s Appeal Notice dated 23 July 2026 seeking renewed permission to appeal the Judgment (the “Renewed Application”) and a stay on the enforcement of the Judgment in relation to the amount of AED 385,350 (the “Application for a Stay of Enforcement”)

AND UPON review of the Claimant’s submissions in opposition dated 13 August 2026

AND PURSUANT TO the Rules of the DIFC Courts (“RDC”)

IT IS HEREBY ORDERED AND DECLARED THAT:

1. The Renewed Application is dismissed.

2. The Application for a Stay of Enforcement is dismissed.

3. The Defendant shall pay the Claimant’s costs of the Renewed Application and the Application for the Stay of Enforcement to be assessed on the standard basis by a process of immediate assessment in accordance with the directions which follow.

4. Within twenty-one (21) days of the date of this order the Claimant is to file a Statement of Costs together with any submissions in support of the costs claimed.

5. Within twenty-one (21) days of the date of service of the Statement of Costs the Defendant is to file any submissions in opposition to the quantum of the costs claimed.

6. Within fourteen (14) days of the date of service of the Defendant’s submissions pursuant to the preceding order, the Claimant shall file any submissions in reply.

7. The quantum of the Claimant’s costs to be paid by the Defendant will thereafter be assessed on the papers by H.E. Chief Justice Wayne Martin.

Issued by:
Hayley Norton
Assistant Registrar
Date of issue: 8 September 2026
At: 11am

Summary

1. The Defendant, Saif Sultan Al Mehrzi Lawyer and Legal Consultants applies to the Court for Renewed Permission to appeal the decision of the Judge at First Instance (the “Judge”) in which the Judge entered judgment in favour of the Claimant, Stephan Carl Morgenstern in the amount of AED 1,412,950 together with pre judgment interest in the amount of AED 92,292.69 and costs in the amount of AED 397,912.34. The Renewed Application is made to the Court of Appeal because the Judge dismissed an Initial Application for Permission to Appeal made to him.

2. As the Defendant has failed to establish that any of the proposed grounds of appeal has a real prospect of success, and does not contend that there is some other compelling reason why the appeal should be heard, the Renewed Application must be dismissed with costs.

The judgment at first instance

3. In his reasons for decision the Judge summarised the facts established by the evidence. In short, on 28 November 2024 the Claimant was being held in prison in Albania pursuant to an Interpol “Red” Notice which had been issued by the authorities in Poland who were seeking the extradition of the Claimant in connection with what was said to be substantial frauds perpetrated in Poland between 2016 and October 2022.

4. On 28 November 2024 the Claimant, through his agent, entered into a contract with the Defendant for the provision of legal services on terms whereby USD 280,000 would be payable on execution of the Legal Services Agreement (the “Agreement”) and a further USD 220,000 would be payable upon cancellation of the Interpol Notice and the request to extradite the Claimant to Poland. A term of the Agreement required the extradition request to be cancelled in no more than 10 working days from the date of the Agreement. The Agreement further provided that all funds paid to the Defendant would be refunded if the extradition request was not cancelled within the agreed period.

5. The Claimant paid the equivalent of USD 280,000 in AED to the Defendant on 29 November 2024.

6. The Judge noted that although the Defendant asserted that it conducted substantive legal work pursuant to the terms of the Agreement:

7. For these reasons the Judge found that the Defendant did not conduct any substantive work pursuant to the terms of the Agreement.¹

8. The Judge referred to a series of WhatsApp messages between the Claimant’s agent and the Defendant between 24 December 2024 and 6 February 2025, in the course of which a representative of the Defendant asserted that, on 27 December 2024, the Defendant had submitted an extradition cancellation document to the relevant legal department in Poland, a copy of which would be provided to the Claimant’s agent the following week, after which the case against the Claimant would be over.

9. However, on the same day, the Claimant notified the Defendant that the Agreement was at an end and demanded the return of the money already paid. A letter to that effect from the Claimant to the Defendant was sent by WhatsApp on 27 December 2024.

10. The Judge noted that between 27 December 2024 and 7 January 2025 the Defendant sent to the Claimant’s agent the text of what was said to be the cancellation of the extradition request from the Polish authorities and requested additional funds “so that the telegram can be sent to Albania”.

11. The Judge further noted that on 7 January 2025 the Claimant paid AED 385,350 in cash to the Defendant who provided a receipt recording that the money was paid as “additional amount for removal of extradition case filed by the government of Poland” and which further noted that “if the extradition case is not removed within 3 days from the above date, the abovementioned amount will be returned back to” the Claimant’s agent.

12. The Judge noted that the Defendant provided a cheque dated 9 January 2025 made payable to the Claimant’s agent in the amount of AED 385,350. The cheque was provided by way of security for the obligation of the Defendant to repay that amount in the event that the extradition request was not cancelled.

13. The extradition request was not cancelled within the stipulated 3 days, and on 11 January 2025 the Claimant’s agent demanded the return of all monies and deposited the Defendant’s cheque for payment. On 14 January 2025 the cheque was returned unpaid on the grounds that there were insufficient funds in the Defendant’s account for the cheque to be honoured.

14. The Judge noted that after 14 January 2025 the Polish authorities did not cancel their request for extradition, although on 10 March 2025 the Albanian authorities released the Claimant from prison on the grounds of a successful asylum request rather than the cancellation of the request for extradition.

15. The Judge further noted that the Claimant’s agent issued proceedings on the cheque but no judgment had been given in his favour in those proceedings. The Judge further noted that on 10 March 2025 the Claimant issued a formal written demand for repayment of all the money paid to the Defendant and on 2 April 2025 commenced proceedings for the return of those monies in this Court.

16. The Judge then summarised the respective cases of the parties.

17. He noted that the Claimant’s case was deceptively simple, relying upon the express terms of the Agreement to the effect that all monies were to be returned if the Interpol Notice was not withdrawn by specified dates, and the Notice was not withdrawn by those dates. The money was therefore repayable as and from 11 January 2025.

18. The Judge noted that the Defendant asserted that the core objective of the Agreement was achieved in that the Claimant was released from prison on 10 March 2025, and further asserted that on 5 August 2025 “foreign counsel” had confirmed the cancellation of the extradition request. The Defendant further asserted that the release process had been frustrated by the failure to provide an official Power of Attorney requested on 21 and 26 May 2025. Further, the Defendant asserted that the cheque for AED 385,350 was provided by way of security.

19. In his analysis the Judge rejected any suggestion by the Defendant that there was any uncertainty or lack of commerciality in the express terms of the Agreement between the parties. The Judge observed that the Claimant’s release by the Albanian authorities on 10 March 2025 was irrelevant to the proceedings because it had nothing to do with the Defendant and was achieved by the Claimant and his Albanian lawyers. Further, the Claimant’s release did not mean that the Interpol Notice had been cancelled or that the Polish authorities’ request for extradition had been withdrawn or cancelled.

20. The Judge also expressed the view that the Claimant’s forbearance to demand the return of the initial payment following the expiry of the 10 day period within which the extradition request was to be cancelled was irrelevant.

21. The Judge further observed that the witness called on behalf of the Defendant was a “deeply unimpressive witness” who failed to answer straightforward questions and claimed credit for matters that were nothing to do with him – such as the Claimant’s release from prison.

22. The Judge further noted that while the Defendant did not assert that there had been a genuine decision by the Polish authorities to withdraw the extradition proceedings the WhatsApp messages were replete with suggestions that this had occurred or was about to occur. He further observed that the Defendant had produced what appears to be a forged document suggesting that the Polish authorities had withdrawn the extradition request, the provenance of which was wholly unclear.

23. In relation to the Defendant’s assertions with respect to the failure to provide a Power of Attorney, the Judge noted that the only pleaded requests for such signatures were in May 2025 after the Agreement had been terminated and these proceedings had been instituted and concluded that such requests were irrelevant to any question of non-performance of the Agreement, which had been terminated months earlier.

24. The Judge then noted that the Defendant’s witness, in the course of his evidence, pivoted towards what was said to be requests for the provision of Powers of Attorney contained in the WhatsApp communications. However, the Judge noted that those requests were for Powers of Attorney in favour of lawyers in Albania and there was no explanation as to why those requests were relevant to the work of the Defendant, which was to be centred on the withdrawal of the Interpol Notice and Extradition Request emanating from Poland. The Judge noted that it appeared that the reason for the requests for Powers of Attorney relating to Albanian lawyers was that it was intended to dismiss the Claimant’s existing Albanian lawyers in favour of lawyers connected with the Defendant.

25. In relation to the cheque for AED 385,350, the Judge noted that the cheque had been dishonoured and if the Claimant obtained judgment for the amounts paid in full, it would not be possible for his agent to enforce payment on the cheque and achieve double recovery, but according to the Judge “there is no suggestion that this is likely to occur”.

26. The Judge concluded that none of the Defences advanced by the Defendant had any substance and judgment should be entered in favour of the Claimant for the amount claimed in full, with interest from 11 January 2025 until judgment and costs assessed on an indemnity basis because of the manifest inadequacies of the Defence.

Permission to appeal – legal principles

27. RDC 44.117 provides:

28. RDC 44.5 requires that an appellant obtain permission to appeal to the Court of Appeal except where the appeal is against a committal order.

29. RDC 44.19 provides:

30. RDC 44.19 provides that permission to appeal may only be given where the appeal would have a real prospect of success or there is some other compelling reason why the appeal should be heard.

31. In the context of an assessment of the prospects of success “real” means realistic rather than fanciful and involves the same test as is applied in applications for immediate judgment.²

32. A real prospect of success does not mean a probability of success, but more than mere arguability.³

33. “Some other compelling reason why the appeal should be heard” may include the public interest in clarifying the meaning and scope of relevant practice and provisions of DIFC and wider UAE law.⁴

34. It is established that “real” in the context of an assessment of the prospects of success means realistic rather than fanciful, applying the same test as is applied in an application for immediate judgment.⁵

35. It is also established that a real prospect of success does not mean a probability of success, but more than mere arguability.⁶

36. Accordingly, in order to obtain the grant of permission a prospective appellant needs to establish more than the proposition that the proposed appeal is reasonably arguable – rather, it must be established that there is a real prospect of success.⁷

37. When a renewed application made to the Court of Appeal is refused, it is appropriate for the Court to provide reasons which adequately explain the reasons why permission has been refused. The adequacy and extent of those reasons will be informed by the fact that the refusal of permission is final and conclusive and determines the issues the subject of the appeal.

38. On the other hand, when a renewed application for permission to appeal is granted, the reasons for the grant can and should be expressed more briefly, and any views expressed should be expressed and read as provisional, on the basis that a different view might well be formed following the consideration of the fuller argument which will be presented at the hearing of the appeal. Further, the reasons for granting permission in respect of grounds of appeal will be expressed economically, not only because the determination of the issue raised by the ground must await the hearing of the appeal but also to limit the prospect that a party might consider that a member of the Court of Appeal does not retain an open mind in relation to any of the issues in the appeal.

The grounds of appeal

39. The Defendant has not provided a succinct statement of the grounds of appeal relied upon and a skeleton argument as required by RDC 44.29 and RDC 44.31.⁸ Rather, the Defendant has provided a single document in which the grounds of appeal are expressed in discursive and argumentative terms.

Ground 1

40. Ground 1 contends that the Judge erred by including AED 385,350 in the Judgment having regard to the proceedings commenced in the Courts of Sharjah by the Claimant’s agent against the Defendant. This is said to be the “primary” ground of appeal. In support of the ground the Defendant relies upon documents not in evidence before the Judge namely:

41. The Defendant has made no application to adduce new or additional evidence on appeal and has made no attempt to satisfy the requirements that would have to be met before such an application could be granted, being those specified in Ladd v Marshall⁹ which have been adopted by this Court. In particular, no attempt has been made to establish that the documents could not have been obtained without reasonable diligence for use at the trial.

42. Further, no attempt has been made to identify the findings of fact which the Court is invited to make based on the documents produced. The documents are by no means self-explanatory, and the inferences that might be drawn from them are contradictory. For example, if the Claimant’s agent received payments relevant to the dispute between these parties in April 2025, why would the Defendant pay AED 385,350 into the trust account of the Sharjah Courts in November 2025? No answer to this conundrum has been suggested by the Defendant.

43. It is unnecessary to try and unravel these mysteries because the Defendant does not assert that the documents constitute proof of disbursements of the amount of AED 385,350 to the Claimant.¹⁰ Rather, doing the best one can to construe the argument in support of this ground, the case appears to be advanced on the basis that the Court should have allowed a credit in the amount of AED 385,350 in these proceedings because of the prospect that funds in that amount might be recovered and paid to the Claimant as a result of the proceedings in Sharjah.

44. The ground is misconceived. Even if judgment has been entered in favour of the Claimant’s agent in the Sharjah proceedings (and that is by no means clear) the Defendant accepts that it cannot establish that the judgment has been satisfied. There is no rule or principle preventing multiple judgments in respect of the same debt, although there is, of course, a rule against double recovery. That rule is applied at the point of enforcement of the judgments, rather than prior to the judgments being entered.

45. In this case the Judge noted the Claimant’s concession that there could be no double recovery and the Claimant has made the same concession in its submissions in response to the Renewed Application.

46. For these reasons ground 1 has no prospect of success.

Ground 2

47. Ground 2 is said to rely upon the rule against double recovery and unjust enrichment. However, in argument provided in support of this ground it is again conceded that there is no proof that either the Claimant or his agent received payment of the amount of AED 385,350 as a consequence of the proceedings in Sharjah. However, it is said that this “does not eliminate the serious issue whether the same amount was being pursued in parallel in a way requiring judicial adjustment or protection”.

48. That proposition is incorrect, for the reasons given in relation to ground 1.

49. Ground 2 has no prospect of success.

Ground 3

50. Ground 3 is said to raise issues with respect to the Sharjah proceedings, including res judicata and judicial consistency. However, all that is said in support of the ground is that the documents raise an issue as to whether the judgment of this Court is “inconsistent with the status of the same cheque debt in the on-shore courts”. However, the Defendant goes on to assert that it “does not overstate this point in the absence of full certified records already before this court”.

51. The basis of this ground is difficult to comprehend from the statements made in its support. However, there appears to be no doubt that the Defendant does not assert that the Claimant has received an amount of AED 385,350 in partial satisfaction of his judgment debt. It follows that, for the reasons already given, unless and until the Defendant proves that such a payment has been made and received by the Claimant or his agent, it is irrelevant to the enforcement of the judgment in these proceedings. Further, unless the Defendant could establish that the amount was paid prior to the entry of judgment in these proceedings, it is irrelevant to the judgment and only relevant to issues relating to the enforcement of the judgment. If the Defendant had in fact paid the amount of AED 385,350 to the Claimant or his agent prior to the entry of judgment in these proceedings, no doubt that could have been easily established. However, no assertion of that kind was made to the Judge.

52. Ground 3 has no prospect of success.

Ground 4

53. Ground 4 asserts that the Defendant substantially performed the Agreement by procuring legal work to be done through Albanian counsel and secured the release of the Claimant on 10 March 2025.

54. In support of this ground the Defendant accepts that it “is not the strongest stand alone PTA ground”.¹¹ That is an understatement. In support of the ground no attempt is made to suggest any reason why the Judge’s findings that:

should be overturned.

55. For these reasons ground 4 has no prospect of success.

Ground 5

56. Ground 5 is said to rely on “the prevention principle”, and the proposition that the Claimant failed to provide a Power of Attorney necessary to enable the Defendant to complete its work.

57. No substantive argument is provided in support of this ground. In particular, no matters are identified which would give any reason to doubt the Judge’s findings that:

58. Ground 5 has no prospect of success.

Ground 6

59. Ground 6 contends, apparently for the first time, that the witness called on behalf of the Defendant at trial, Mr Nasser Al Asmari, had no authority to bind the Defendant when he signed the receipt on 7 January 2025.

60. Clearly it is far too late to raise an issue of this kind. If the issue had been raised at trial, no doubt Mr Al Asmari would have been specifically questioned in relation to it. Nevertheless, such evidence as he gave is entirely inconsistent with the proposition that he lacked the authority of the Defendant in his dealings with the Claimant’s agent. He was listed as a representative of the Defendant in the Agreement dated 28 November 2024.

61. Ground 6 has no prospect of success.

Ground 7

62. Ground 7 challenges the Judge’s award of interest and indemnity costs in the event that any of the previous grounds of appeal are successful. As none of those grounds has any prospect of success, it follows that this ground has no prospect of success.

The application for a stay on enforcement

63. The Defendant also sought an application for a stay on the enforcement of the Judgment in relation to the amount of AED 385,350. As the Renewed Application must be dismissed, there is no basis for any such stay, and the Application for a Stay of Enforcement must also be dismissed.

Summary and conclusion

64. For these reasons none of the proposed grounds of appeal has any prospect of success and the Renewed Application and the Application for a Stay of Enforcement pending appeal must each be dismissed with costs.