August 15, 2025 court of first instance - Orders
Claim No. CFI 041/2024
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
ANASTASIIA DENISOVA
Claimant
and
(1) ALEKSEI GALTCEV
(2) REALISTE HOLDING LTD
Defendants
ORDER WITH REASONS OF H.E. JUSTICE SAPNA JHANGIANI
UPON the Order with Reasons dated 15 May 2025 of H.E. Justice Sapna Jhangiani finding in favour of the Claimant on the preliminary issue, and ordering the Defendants to pay the Claimant’s costs in relation to the preliminary issue on a standard basis (the “Order”)
AND UPON the Order with Reasons dated 26 May 2025 of H.E. Justice Sapna Jhangiani immediately assessing the Claimant’s costs in relation to the preliminary issue on a standard basis (the “Costs Order”)
AND UPON the Defendants’ Appeal Notice dated 9 June 2025 seeking permission to appeal the Order and the Costs Order (the “Application for Permission to Appeal”)
AND UPON the Claimant’s submissions in opposition to the Defendants’ Application for Permission to Appeal
AND UPON the Defendants’ response to the Claimant’s submissions, shared to the Registry via email on 4 July 2025
IT IS HEREBY ORDERED THAT:
1. The Application for Permission to Appeal is refused.
2. The Claimant shall be entitled to her costs of responding to the Defendants’ Application for Permission to Appeal in any event, such costs to be determined at the conclusion of the case.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 15 August 2025
At: 11am
SCHEDULE OF REASONS
1. The crux of the Claimant’s case in this matter is that the Claimant had 10,000 shares in the Second Defendant (the “Claimed Shares”), which she paid for, was entitled to have registered in her name, and was entitled to sell. The Defendants claim that the Claimed Shares were not paid for by the Claimant, and that she was not entitled to have the Claimed Shares registered in her name due to her failure to pay for them.
2. By way of Case Management Order dated 29 January 2025, the Court ordered that the case would proceed by way of a preliminary issue to be tried first. The preliminary issue to be tried was whether the Claimant paid the USD 1,000 she was due to pay for the Claimed Shares in the Second Defendant.
3. Following a one-day trial (the “Trial”), the Order decided the preliminary issue in favour of the Claimant. The Defendant was ordered to pay the Claimant’s costs of the preliminary issue, to be immediately assessed on a standard basis, and the parties were invited to file costs submissions. The Claimant claimed costs relating to the preliminary issue of USD 76,591.50, including disbursements of USD 1,200. By way of the Costs Order, the Claimant’s costs relating to the preliminary were immediately assessed on a standard basis at USD 50,000.
4. The Defendants apply for permission to appeal the Order and the Costs Order.
5. The Application for Permission to Appeal is refused on the basis that none of the grounds of appeal has a real prospect of success, and there is no other compelling reason why the appeal should be heard.
Grounds of Appeal
6. The Defendants have raised 5 grounds of appeal against the Order, which are set out verbatim below and shall be referred to by their sub-paragraph number:
(a) The finding that the Claimant paid USD 1,000 for shares was against the weight of evidence: There was no direct or corroborative documentary evidence of payment. Relevant Authority: IGPL v Standard Chartered Bank [2015] DIFC CA 004; Re B (Children) [2008] UKHL 35.
(b) Failure to properly assess the credibility of the Claimant: Inconsistent and altered statements regarding payment dates and details were inadequately considered. Relevant Authority: Al Khorafi v Bank Sarasin-Alpen [2018] DIFC CA 003; Gestmin SGPS S.A. v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm).
(c) Misinterpretation of material evidence and consideration of irrelevant factors: Improper weight given to delays in raising payment issues and absence of later payment opportunities. Relevant Authority: Al Khorafi v Bank Sarasin-Alpen [2018] DIFC CA 003; Civil Aviation Authority v Jet2.com Ltd [2020] EWCA Civ 35.
(d) Procedural unfairness due to exclusion of relevant witness testimony: Exclusion of Mr. Maksim Kuchin’s testimony deprived Appellants of fair hearing rights. Relevant Authority: National Bank of Kuwait v Edris [2021] DIFC CA 005; Regina v Chief Constable of West Midlands Police ex parte Wiley [1995] 1 AC 274.
(e) Errors of law concerning the burden and standard of proof: Reversed the burden of proof incorrectly, requiring the Appellants to disprove the Claimant’s assertions. Relevant Authority: Barclays Bank plc v Alshaya [2016] DIFC CA 001; Miller v Minister of Pensions [1947] 2 All ER 372.
7. A further 4 grounds of appeal are raised in relation to the Costs Order. These grounds are set out verbatim below and shall be referred to by their sub-paragraph number:
(a) Misapplication of RDC Part 38 (Costs): Awarded USD 50,000 costs disproportionately to the disputed sum of USD 1,000, violating proportionality and reasonableness under RDC 38.2 and RDC 38.23. Relevant Authority: Credit Suisse (Switzerland) Limited v Goel & Others [2021] DIFC CA 002; Lownds v Home Office [2002] EWCA Civ 365.
(b) Erroneous factual determination: Concluded without adequate evidence or receipts, disregarding inconsistencies. Relevant Authority: ED&F Man Capital Markets Limited v Al Ghaith [2014] DIFC CFI 026; Re B (Children) [2008] UKHL 35.
(c) Improper inclusion of failed procedural applications: Allowed recovery of costs related to unsuccessful procedural applications, breaching RDC 38.7 and RDC 38.9. Relevant Authority: Nazeer v Noah [2024] DIFC CFI 032; Socrates Training Limited v The Law Society [2017] EWCA Civ 1538.
(d) Insufficiently detailed costs assessment: Immediate summary assessment lacked required clarity and itemization, violating RDC 38.18. Relevant Authority: Gate Mena v Tabarak Investment [2024] DIFC CA 002; Simcoe v Jacuzzi UK Group plc [2012] EWCA Civ 137.
Claimant’s Response to the Appeal Notice
8. The Claimant contends that:
(a) No formal application for permission to appeal has been made pursuant to RDC 44, and the Defendant’s Notice of Appeal fails to comply with RDC 44.30-44.34. Further, the Appeal Notice is out of time under RDC 44.8 because it ought to have been issued by 5 June 2025, within 21 days of the Order issued 15 May 2025, and instead it was issued on 8 June 2025, with no application to extend having been issued.
(b) The Defendants’ Application for Permission to Appeal has no real prospect of success.
(c) The Application is part of a continued pattern of procedural abuse and vexatious conduct, which includes a criminal complaint against the Claimant that has now been closed. The Defendants have not complied with a number of deadlines, and have failed to pay the Costs Order for USD 50,000 in favour of the Claimant.
The Defendants’ Response to the Claimant’s Submissions
9. The Defendants deny the Claimant’s allegations, and in particular, contend that:
(a) The Claimant’s allegation that the Application was filed late, or in breach of the RDC, is misconceived. The Defendants set out a chronology of events, supported by documentary evidence, to demonstrate that that they attempted to file within the time limit for the appeal and encountered technical failures beyond their control. They emphasise that the delay in filing was neither intentional nor negligent, but a direct result of technical problems with the Court’s own filing system. A representative of the Defendants visited the Court before the expiry of the deadline to explain the difficulties encountered, and numerous items of correspondence were sent to the Registry recording the Defendants’ attempts to file within the deadline. On 9 June 2025, the Defendants wrote to the Court Registry to confirm that the Appeal Notice had finally been successfully registered and payment duly made. The Defendants requested in that correspondence that the Appeal Notice be accepted.
(b) The brief delay in filing did not prejudice the Claimant and the overriding objective of dealing with cases justly (Rule 1.6 Rules of the DIFC Courts (the “RDC”)) would strongly disfavour shutting out the appeal on a mere procedural technicality. The Rules of the DIFC Courts are designed to prevent injustice, and both RDC 2.10 and RDC 44.13 exist to accommodate exactly this kind of situation – where a deadline is missed due to factors outside a party’s control despite its best efforts.
Permission to Appeal – Applicable Principles
10. RDC 44.117 provides:
“44.117 The Court of Appeal will allow an appeal from the decision of the Court of First Instance where the decision of the lower Court was:
(1) Wrong; or
(2) Unjust because of a serious procedural or other irregularity in the proceedings in the lower Court.”
11. 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.
12. RDC 44.19 provides:
“44.19 Permission to appeal may only be given where the lower Court or the Appeal Court considers that:
(1) The appeal would have a real prospect of success; or
(2) There is some other compelling reason why the appeal should be heard.”
13. Applying the test that the appeal would have a real prospect of success requires a prospective assessment. In short, an applicant must show that there is a real (i.e. realistic as opposed to fanciful) prospect of persuading an Appeal Court that the decision of the Court of First Instance was wrong, or that the decision was unjust because of a serious procedural or other irregularity in the proceedings. This requirement must be satisfied by the grounds of appeal advanced, and any submissions showing how it is contended that the learned Judge erred in her findings and decision. If this threshold is not met, there must be some other compelling reason why the appeal should be heard.
Court’s Decision
Filing of the Appeal Notice
14. This Court has wide case management powers, which include under RDC 4.2 the power to extend the time for compliance with any Rule, Practice Direction or Court Order (even if an application for extension is made after the time for compliance has expired), and to take any other step or make any other order for the purpose of managing the case and furthering the overriding objective. It is not clear that the Defendants have issued a formal application for an extension. However, in any event, I find that the Defendants’ Appeal Notice should be accepted despite having been filed after the requisite deadline, and that doing so will further the overriding objective, given:
(a) the reasons for which the Appeal Notice was filed out of time, which were outside the Defendants’ control;
(b) the fact that the Appeal Notice was filed very shortly after the deadline; and that
(c) there was therefore no, or minimal, prejudice caused to the Claimant.
15. The Appeal Notice is accepted on form.
The Order
16. In relation to the Appellant’s grounds of appeal against the Order:
(a) Grounds (i) to (iii) repeat the Defendant’s arguments at Trial. The essence of the Defendants’ position is that they disagree with the Court’s assessment of the evidence at Trial, and the Court’s ultimate decision. As set out in the Order, the Court weighed and assessed all the evidence referred to by the Defendants in its submissions relating to the Appeal Notice, and assessed the Claimant’s credibility, before reaching a different conclusion to that argued for by the Defendants. The Defendants’ disagreement falls short of demonstrating a real prospect of success that the Order was wrong, or unjust because of a serious procedural or other irregularity in the proceedings.
(b) In relation to ground (iv) that a procedural irregularity occurred because of the exclusion of the evidence of Maksim Kuchin, Mr Kuchin’s evidence was excluded at Trial with the agreement of the Defendant. Given the Defendants’ agreement, I find that there is no realistic prospect of persuading an Appeal Court that there was a breach of the Defendants’ fair hearing rights. Mr Kuchin’s witness statement and the Trial transcript provide important context for the Defendants’ agreement to the exclusion of Mr Kuchin’s evidence:
(i) Mr Kuchin’s sworn witness statement adduced by the Defendants is appended as Appendix 1 to this Order. Mr Kuchin’s proposed evidence related to his role and the Claimant’s role in the Second Defendant, and his commitment to the Second Defendant as a Shareholder. The only statement relevant to the preliminary issue was the assertion that the Claimant “did not pay for her shares”, with no supporting explanation. The Defendants speculate in their skeleton argument as to what Mr Kuchin “might have shed light on”, and claim that the Judge could not conclude that his evidence was of “little relevance”, given that she did not know what Mr Kuchin would say because she did not hear him. The Defendants even suggest that Mr Kuchin might have understood the Claimed Shares to have been handed to the Claimant as a gift, notwithstanding that this did not form part of the Defendants’ case (or the Claimant’s case, for that matter). The Defendants’ arguments fail to take into account that a witness statement shall contain the oral evidence that the party serving the statement intends to rely on in any relation to any issues of fact to be decided at the trial (RDC 29.39), and shall stand as the evidence in chief of that witness unless the Court orders otherwise (RDC 29.42).
(ii) As he was being sworn in as a witness, the Defendants’ Counsel informed the Court that Mr Kuchin did not speak English and that no interpreter had been arranged. The Defendants claim in their skeleton argument that this situation only arose because the Claimant had not indicated beforehand that they intended to cross-examine Mr Kuchin. However, RDC 29.41 provides that if a party has served a witness statement and wishes to rely at trial on the evidence of the witness who made that statement, he must call the witness to give oral evidence unless the Court orders otherwise, or he puts the statement in as hearsay evidence. Under RDC 29.49, any witness called to give evidence at trial may be cross-examined.
(iii) The Court observes that the Defendants have not explained how Mr Kuchin could have sworn to the contents of a witness statement containing his evidence in chief in English when he has no proficiency in the language. RDC 29.20 provides that if a witness is not sufficiently fluent in English to give his evidence in English, the witness statement should be in the witness’s own language and a translation provided.
(iv) At the Trial, the Defendants’ Counsel indicated that upon learning that Mr Kuchin did not speak English, she informed her client "you should have arranged an interpreter because this will look bad and probably his statement will be struck off because, first of all, you should mention that this is a translated document". She further stated, “I apologise for the same and we can treat the evidence as hearsay because the main witnesses were the ones Aleksei and the claimant herself. If it was in my hands this would not happen.” On the relevance of Mr Kuchin’s evidence, she stated “I do agree that, yes, it is not so relevant to the point in question.” She then informed the Court that her clients agreed to Mr Kuchin’s evidence being struck from the case record.
(c) In relation to ground (v), the Court applied the civil standard and burden of proof such that the Claimant was required to prove her case on the preliminary issue on a balance of probabilities. I find that there is no realistic prospect of success in persuading an Appeal Court that the burden and standard of proof applied was an error of law.
The Costs Order
17. The Order found that it was not established that the Claimed Shares were only worth USD 1,000 or that the amount in dispute between the parties is limited to USD 1,000.
18. Further, and in any event, whilst the Court must have regard to the amount or value of any money or property involved when assessing costs pursuant to the Part 38.23 of Rules of the DIFC Courts (“RDC”), RDC 38.24 provides that in applying the test of proportionality, the relationship between the total costs incurred and the financial value of the claim may not be a reliable guide.
19. For the reasons set out above, I find no real prospect of success in an appeal on ground (i).
20. The Claimant’s costs schedule was submitted as required by RDC 38.34 (with the minor exception that the nature of the disbursement of USD 1,200 was not set out). I see no real prospect of success in an Appeal Court finding that the Costs Order was wrong for being issued without adequate evidence or receipts, as argued under ground (ii).
21. In relation to ground (iii), RDC 38.8 provides that in deciding what order (if any) to make about costs, the Court must have regard to, amongst other things, the conduct of the parties. Under RDC 38.9, that shall include whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue, and the manner in which a party has pursued or defended his case or a particular allegation or issue. The Costs Order found that the Claimant’s first application to exclude the Defendants’ witness evidence was warranted by the Defendants’ failure to comply with the deadline for the filing of witness evidence, but that the second application was unnecessary. The Costs Order also found that the costs of the Claimant’s application for default judgment were not recoverable by the Claimant as part of her costs of the preliminary issue, since that application had predated the Court’s Case Management Order dated 29 January 2025 ordering that the Claimant’s Claim would proceed by way of the determination of a preliminary issue. All these findings were taken into account in determining the amount of the Costs Order. I find no real prospect of success in an appeal on the ground that the Claimants’ applications were improperly taken into account, and that RDC 38.7 and RDC 38.9 were breached as a result.
22. Under ground (iv), whilst the Court must apply RDC 38.21 and weigh all relevant factors at RDC 38.23 in making an immediate assessment of costs, the approach is necessarily broadbush because of the nature of the exercise, in contrast to the approach taken upon a detailed assessment of costs. I do not consider that there is a real prospect of this ground succeeding.
23. For all the reasons set out above, the Application for Permission to Appeal is refused.
