Claim No. CFI 048/2025

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

ALIZZ ISLAMIC BANK S.A.O.C

Claimant

and

ALEF CAPITAL B.S.C.(C) (FORMERLY INVESTRADE COMPANY B.S.C (C))

Defendant

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ORDER WITH REASONS OF H.E. JUSTICE RENE LE MIERE

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UPON the Claimant’s Application No. CFI-048-2025/2 dated 11 February 2026 seeking (i) strike out of the Defence and Counterclaim (the “Strike Out Application”) (ii) immediate judgment (the “Immediate Judgment Application”) and/or (iii) strike out of the Defendant’s limitation defence (the “Limitation Defence Strike Out Application”) (together the “Applications”)

AND UPON the Defendant’s Application No. CFI-048-2025/3 dated 11 March 2026, for the issue of limitation to be determined as a preliminary issue (the “Limitation Application”)

AND UPON the direction of H.E. Justice Rene Le Miere, communicated by the Registry via email on 30 March 2026, that the Court declines to hear the Limitation Application as a preliminary issue at the 8 April Hearing (the “Court’s Direction”)

AND UPON the Order with Reasons of H.E. Justice Rene Le Miere dated 6 April 2026, upholding the Court’s Direction (the “Order of 6 April 2026”)

AND UPON hearing counsel for the Claimant and counsel for the Defendant at the Application Hearing listed before H.E. Justice Rene Le Miere on 8 April 2026 to determine the Applications (the “8 April Hearing”)

AND UPON review of the Rules of the DIFC Courts (“RDC”)

IT IS HEREBY ORDERED THAT:

1. The Immediate Judgment Application is dismissed.

2. The Limitation Defence Strike Out Application is dismissed.

3. The Defendant’s Counterclaim pleaded at paragraphs 72–78 of the Defence and Counterclaim, is struck out pursuant to RDC 4.16.

4. The costs of the Applications, including the costs reserved by the Order of 6 April 2026, are costs in the case.

Issued by:
Hayley Norton
Assistant Registrar
Date of issue: 28 April 2026
At: 3pm

A. Introduction

1. This judgment concerns three Applications brought by the Claimant, Alizz Islamic Bank S.A.O.C. ("Claimant" or "AIB"), against the Defendant, Alef Capital B.S.C.(c) (formerly Investrade Company B.S.C.(c)) (the "Defendant" or "Alef"). The Applications are:

2. The Defendant opposes all of the Applications.

3. The dispute arises out of two Wakalah investment transactions totalling USD 4.9 million, made by the Claimant under a Restricted Wakalah Agreement dated 19 July 2016. The investments were placed with Trade Finance Corp GmbH ("TFC") and matured in May 2019. The Claimant alleges that the Defendant failed to pay the maturity proceeds and late payment fees and breached its duties under the Agreement and under the Law of Obligations.

4. The Defendant denies liability, asserts a limitation defence, and counterclaims for recovery of legal costs incurred in post-default recovery efforts.

5. The Applications are supported and opposed by extensive pleadings, witness statements, contractual documents, and skeleton arguments. The procedural history and factual matrix are not materially in dispute. The determinative issues are whether the Defendant has any real prospect of defending the claim, whether the limitation defence is sustainable, and whether the Counterclaim discloses reasonable grounds.

6. For the reasons below, the Court finds:

B. Background

B1. The parties and the Agreement

7. The Claimant is an Islamic bank incorporated in the Sultanate of Oman that offers Shari’ah-compliant financial products. The Defendant is a closed joint stock company incorporated in Bahrain, formerly known as Investrade Company B.S.C. (c), operating as a boutique investment firm.

8. On 19 July 2016, the parties entered into a Restricted Wakalah Agreement (the “Agreement”). Under the Agreement, the Defendant was appointed as wakil (investment agent) to implement specified wakalah investment transactions on behalf of the Claimant. The Agreement contemplated that individual investments would be documented by separate Wakil Offer Notices and corresponding acceptances.

9. The Agreement required the Defendant, among other things, to act with professionalism and due care, to conduct due inquiry before proposing transactions, and to provide insurance confirmations in respect of transactions where applicable. It also contained provisions governing maturity, payment of proceeds, and late payment amounts.

10. DIFC laws govern the Agreement and any non-contractual obligations arising in relation to it to the extent that these laws are not inconsistent with the principles of Shari’ah. The DIFC Courts have exclusive jurisdiction.

B2. The transactions involving Trade Finance Corp GmbH

11. Between 2016 and 2018, the Claimant and the Defendant entered into a number of wakalah transactions pursuant to the Agreement involving Trade Finance Corp GmbH (TFC). Several of those transactions matured and were performed prior to the events giving rise to the present dispute.

12. The proceedings concern two transactions entered into in late 2018 and early 2019:

13. The 2019 Transaction followed the maturity, in January 2019, of an earlier wakalah investment entered into in July 2018. That earlier investment matured on

14 January 2019. The Defendant informed the Claimant that the anticipated maturity proceeds had not been received from TFC.

14. Following that notification and subsequent communications, the Claimant agreed to roll over its exposure. The rollover was documented by the Wakil Offer Notice dated 26 February 2019, which formed the contractual basis of the 2019 Transaction.

B3. The contractual relationship

15. The contractual documentation establishes a structured relationship comprising a master framework agreement and a series of transaction-specific contracts formed under that agreement.

16. The Restricted Wakalah Agreement dated 19 July 2016 operates as a master or framework agreement governing the parties' relationship. It does not, in itself, oblige either party to enter into any investment transaction. Rather, it prescribes the legal architecture, rights, obligations, standards of performance, liability regime, payment mechanics, and termination and default provisions applicable to any wakalah investment transaction which the parties may subsequently agree to undertake.

17. Each individual investment is effected through a Wakil Offer Notice, issued pursuant to cl 3.2 of the Agreement, and a corresponding Muwakkil Acceptance Notice, issued pursuant to cl 3.3. Upon receipt of a valid Acceptance Notice (or upon transfer of the investment amount in accordance with cl 3.3.2), a Wakalah Contract is constituted for that specific transaction.

18. The Wakalah Contract is an individual agency agreement that records the terms of a specific Wakalah Investment Transaction. It includes the transaction's particular terms outlined in the Offer and Acceptance, as well as the general terms of the Restricted Wakalah Agreement.

19. Critically, cl 1.3 of the Agreement provides that each Wakalah Contract and the Agreement form a single agreement between the parties, and that each Wakalah Contract is entered into in reliance upon that unity. The transaction documents are therefore not freestanding or self-contained contracts operating independently of the Agreement. Nor do they displace or vary the Agreement. Instead, they activate and particularise the Agreement for a given transaction by supplying the commercial variables - such as investment amount, profit rate, term, and Wakalah assets - against the backdrop of the pre-agreed contractual regime.

20. Accordingly, each Wakalah Investment Transaction is governed by a composite contractual instrument constituted by the Restricted Wakalah Agreement and the relevant Offer and Acceptance read together. Rights and obligations concerning matters such as the Wakil's duties, liability, profit and loss allocation, insurance, default, termination, and governing law arise from the Agreement and apply to each transaction as so constituted.

B4. Non‑payment and communications in early 2019

21. It is common ground that the maturity proceeds under the July 2018 investment were not remitted on 14 January 2019. By letter dated 15 January 2019, the Defendant notified the Claimant that the relevant funds had not been received from TFC.

22. A meeting was held between representatives of the Claimant and the Defendant on or about 27 February 2019 to discuss the position concerning TFC and the outstanding investments. A written summary of that meeting was subsequently circulated.

23. On 5 May 2019, shortly before the maturity date of the 2018 Transaction, the Defendant wrote to the Claimant providing an update on TFC. That correspondence referred to non‑payment of anticipated maturity proceeds and stated that insurance arrangements had been terminated with effect from 31 March 2019.

24. The Defendant did not remit the maturity proceeds in respect of either the 2018 Transaction (maturing on 6 May 2019) or the 2019 Transaction (maturing on 28 May 2019). The Claimant’s position is that no payment of the invested sums has been made to date.

B5. Subsequent events

25. Following the events of 2019, the Defendant undertook recovery efforts in relation to TFC together with other affected financial institutions. Those efforts included engagement with other creditors, legal proceedings in Bahrain, and communications with investors, including the Claimant, reporting on developments.

26. In later communications, including a written update provided in May 2023, the Defendant stated that TFC had defaulted on payments to a number of financial institutions in the region in or around November 2018. The Defendant also reported that proceedings commenced against certain parties had been unsuccessful.

27. The Claimant did not recover its invested principal or the anticipated maturity proceeds from TFC or through those recovery processes.

C. Procedural History

28. The Court Registry received the Claim Form on 5 May 2025, and the stamped Claim Form was issued on 6 May 2025.

29. The Claimant seeks recovery of the principal sums invested under the two wakalah transactions, together with contractual late payment amounts.

30. On 16 October 2025, the Defendant filed an Acknowledgement of service stating that it intends to defend all the claims.

31. On 30 October 2025, the Claimant filed Particulars of Claim (“PoC”).

32. The Claimant alleges that the Defendant breached the Agreement in the following respects.

33. First, the Claimant pleads that the Defendant breached its obligations of care, diligence, and due inquiry by proposing and facilitating the 2018 Transaction and the 2019 Transaction in circumstances where, it is alleged, the Defendant either knew or ought to have known that the underlying counterparty was not able to perform and that the anticipated profit rates would not be achieved. It is alleged that, had the Defendant carried out the due inquiry required by the Agreement, it would not have proposed those transactions.

34. Secondly, the Claimant pleads that the Defendant breached the insurance-related obligations under the Agreement by failing to ensure that a valid insurance confirmation was in place for the relevant transactions. The Claimant alleges that the insurance confirmations provided were ineffective or invalid and that, in consequence, the contractual condition for a valid acceptance of the Wakil Offer Notices was not satisfied.

35. Thirdly, the Claimant pleads that the Defendant breached its obligation to remit the maturity proceeds of the 2018 Transaction and the 2019 Transaction on their respective maturity dates. It is alleged that the Defendant failed to credit the Claimant with the principal sums invested, or any maturity proceeds, upon maturity and has not done so to date.

36. Fourthly, the Claimant pleads that, as a result of the failure to pay sums due on maturity, the Defendant became liable under the Agreement to pay contractual late payment amounts, and that such amounts have accrued in accordance with the contractual formula pleaded in the Particulars of Claim.

37. In addition to contractual breach, the Claimant pleads causes of action under the DIFC Law of Obligations. It is alleged that the Defendant acted negligently and made misrepresentations and/or non-disclosures in relation to the wakalah investments, including the suitability of the transactions, the underlying counterparty, and the insurance arrangements. The Claimant pleads that those matters induced it to enter into and roll over the investments with TFC, and that it thereby suffered loss when the invested principal was not repaid.

38. On the basis of those alleged breaches of contractual and non-contractual obligations, the Claimant seeks judgment for unpaid principal sums and contractual late payment amounts, pleaded to total USD 5,061,907.38 as at the calculation date identified in the Particulars of Claim, together with continuing late payment amounts and costs.

39. On 27 November 2025, the Defendant filed a Defence and Counterclaim disputing liability. The Defendant's Defence disputes that it breached any contractual or other obligations owed to the Claimant and advances several grounds which, it is said, answer the Claimant's claims on the merits.

40. Among other defences, the Defendant pleaded that the Claimant’s claims are time‑barred.

41. The Defendant advanced a counterclaim seeking contribution to recovery‑related costs said to have been incurred following the default of the underlying counterparty.

42. On 18 December 2025, the Claimant filed a reply and defence to the counterclaim. The Claimant joins issue with the matters pleaded in the Defence, disputes the Defendant’s characterisation of its role under the Agreement, and responds to the reliance placed on risk allocation, insurance arrangements, causation, and limitation

43. On 11 February 2026, the Claimant issued the Immediate Judgment Application pursuant to RDC 24.1 and, in the alternative, orders striking out the limitation defence and the counterclaim pursuant to RDC 4.16. The application was supported by the witness statement of Mr Haitham Salim Al Hadhrami on behalf of the Claimant.

44. On 11 March 2026, after service of the Claimant’s Immediate Judgment Application, the Defendant filed a separate application seeking an order that the limitation defence pleaded in paragraphs 64 to 71 of the Defence and Counterclaim be determined as a preliminary issue pursuant to the Court’s case management powers under RDC Part 4 and RDC 26.35(7). The Limitation Application was supported by a witness statement from Mr Faris Shehabi, directed principally to the factual chronology said to be relevant to limitation.

45. The Defendant submitted in that Application that the limitation issue was discrete, largely documentary, and potentially dispositive of the claim. It contended that the final determination of limitation at an early stage would promote procedural efficiency and avoid unnecessary duplication of costs and resources.

46. The Defendant sought that the limitation issue be determined at the same hearing as the Claimant's Immediate Judgment Application and the Strike Out Application.

47. By the Court’s Direction dated 30 March 2026, the Court declined to direct that the limitation issue be tried as a preliminary issue at that stage. Notwithstanding that direction, the Claimant’s Immediate Judgment Application and the Strike Out Application requires the Court to consider the limitation defence for the purposes of RDC Part 24 and, insofar as relevant, RDC 4.16.

48. On 1 April 2026, the Defendant filed its skeleton argument in opposition to the Claimant’s Applications and on 2 April 2026 filed a witness statement from Ms Haseena Bangash, which addressed the Defendant's account of the wakalah relationship, the transactions with the underlying counterparty, communications between the parties in early 2019, the insurance arrangements, and subsequent recovery efforts.

49. The Claimant filed its skeleton argument on 2 April 2026, which did not address the witness statement of Ms Bangash.

50. On 2 April 2026, the Claimant wrote to the Court seeking directions that the witness statement of Ms Haseena Bangash not be admitted for the 8 April Hearing on the basis that it was served late and without permission, and that certain paragraphs of the Defendant’s skeleton argument, which rely on that statement, be struck out. The Defendant opposed those requests.

51. On 6 April 2026, the Court ordered:

52. On 6 April 2026, the Claimant filed a witness statement of Faizan Karim and a supplementary skeleton argument pursuant to the 6 April 2026 orders.

53. The present judgment therefore determines the Claimant’s Applications on the material filed for the purposes of those Applications. In doing so, the Court considers the pleaded defences, the evidence relied upon on the Applications, and whether the issues raised are suitable for summary determination. No findings of fact are made beyond those necessary to determine whether the Defendant has a real prospect of successfully defending the claim or whether there is any other compelling reason for the matter to proceed to trial.

D. Applicable Legal Principles and Issues

D1. Immediate judgment principles

54. An application for immediate judgment is governed by RDC 24.1. The Court may give immediate judgment against a defendant on a claim or issue if it considers that the defendant has no real prospect of successfully defending the claim or issue and that there is no other compelling reason why the matter should be disposed of at a trial.

55. The Court approaches an application under RDC Part 24 in accordance with well‑established principles, consistently applied by this Court.

56. First, the question is not whether the defendant’s case is likely to succeed at trial, but whether it has a realistic as opposed to a fanciful prospect of success. A defence is “realistic” if it carries some degree of conviction and is more than merely arguable; a defence that is wholly unsupported, speculative, or contradicted by incontrovertible documents may properly be characterised as fanciful.

57. Secondly, the Court must avoid conducting a mini‑trial. The immediate judgment jurisdiction is not intended to be used as a substitute for a full trial where the resolution of issues depends on the evaluation of disputed facts, the assessment of witness credibility, or the weighing of competing explanations capable of being tested only by oral evidence and disclosure.

58. Thirdly, the Court is not required to accept uncritically everything asserted in witness statements. The Court may examine the material before it and assess whether factual assertions are of real substance, particularly where they are contradicted by contemporaneous documents or by the inherent logic of the contractual framework relied upon.

59. Fourthly, in deciding whether a defence has a real prospect of success, the Court must consider not only the evidence actually placed before it on the application, but also the evidence that can reasonably be expected to be available at trial. It is not sufficient for a respondent merely to assert that evidence might emerge at trial; rather, the respondent must identify, at least in general terms, the nature and relevance of the evidence said to be capable of supporting its case. Conversely, where material factual development is realistically foreseeable, that may constitute a compelling reason for trial.

60. Fifthly, the existence of a short or potentially decisive point of law does not preclude summary determination. Where the Court is satisfied that it has before it all the material necessary to determine a legal question, and that the parties have had a fair opportunity to address it, the Court should grasp the nettle and decide the point. However, where a legal issue is closely intertwined with disputed factual matters or with the evaluation of a complex contractual or commercial relationship in its factual context, caution is required.

61. Sixthly, even where a defendant’s prospects appear weak, the Court must consider whether there is some other compelling reason why the case or issue should proceed to trial. Such reasons may include the need for fuller factual investigation, the development of expert evidence, or the proper resolution of issues that bear materially upon the outcome and cannot be fairly determined on the limited record available on a summary application. Such reasons may include wider points of public interest—for example, if the court considers that the case raises a point of construction of a form contract widely used in the market.

D2. Strike our principles

62. Where the Claimant alternatively seeks to strike out parts of the Defence or Counterclaim, RDC 4.16 applies. A pleading may be struck out where it discloses no reasonable grounds for defending the claim or bringing the counterclaim.

63. The strike‑out jurisdiction is distinct from the summary judgment jurisdiction and sets a high threshold. A defence or counterclaim will not be struck out merely because it appears weak or unlikely to succeed; it must be shown to be unsustainable as a matter of law or pleading, or otherwise an abuse of the Court’s process.

64. These principles inform the Court’s consideration of the issues identified above and the way the Claimant’s application must be determined.

D3. Issues on the Application

65. Against that procedural background, the following issues arise for determination on the Claimant's Applications:

66. These issues must be considered in light of the nature of the Claimant's claims, the contractual framework of the wakalah arrangement, the Claimant’s PoC, the Claimant’s Application Notice and supporting witness statement, the Defendant's pleaded defences and counterclaim, and the evidentiary material placed before the Court on the application.

E. The Claimant’s immediate judgment case

67. In its skeleton argument and its oral submissions, the Claimant's case rests on four breaches of the Agreement or the Defendant’s obligations under the Law of Obligations:

F. Breach 1: Failure to pay the Outstanding Sum (Agreement Clause 3.4)

F1. The Claimant’s case

68. The Claimant characterises this as its debt claim.

69. The Claimant submits that Defendant was obligated under Clause 3.4 of the Agreement to pay the Maturity Proceeds on the Maturity Dates (6 May 2019 for the 2018 Transaction and 28 May 2019 for the 2019 Transaction) and has not done so.

70. Clause 3.4 establishes a tiered payment mechanism under which the Wakil pays the Muwakkil the Maturity Proceeds (if any) on the Maturity Date, determined by reference to the Actual Profit Rate achieved:

71. In short, the clause operates as a descending “waterfall” that adjusts the Muwakkil’s return from full principal plus target profit, to principal plus lower profit, to a principal‑at‑risk outcome proportionate to the extent and duration of negative performance.

72. The Claimant argues that the amount the Defendant was obligated to pay is the amount calculated under subclause 3.4.3, which provides:

“if the Actual Profit Rate is a negative number, the Wakil shall pay to the Muwakkil the Investment Amount less an amount equal to (i) the Investment Amount multiplied by (x) one hundred per cent. (100%) minus the absolute value in per cent. of the Actual Profit Rate and (y) the number of days in the relevant Wakalah Transaction Period and divided by 360, less the Wakil Fee if unpaid.”

73. First, the Claimant submits that where there is a total loss of the Investment Amount, that is, the amount specified in the Wakil Offer Notice to be transferred by the Muwakkil to the Wakil on the Investment Date, then the Actual Profit Rate is a negative number, and hence the Wakil is obligated to pay an amount calculated in accordance with subclause 3.4.3.

74. Second, the amount payable is calculated as follows: Amount Payable = Investment Amount – (Investment Amount x (100% - absolute value of Actual Profit Rate) x time.

75. Third, where there is a total loss of the Investment Amount, the Actual Profit rate is - 100%, and the absolute value of the Actual Profit rate is 100%.

76. Fourth, inserting the values for the 2018 Transaction in the formula, the Amount Payable is: USD 2.4m – (USD 2.4m x (100% - 100%) x 182/365 = USD 2.4m.

77. Therefore, the Amount Payable is the Investment Amount. The Wakil bears the entire loss.

78. The Claimant submits that is a coherent outcome notwithstanding that the Claimant bore the investment performance risk. The Claimant says that is so because the risk of total loss arising from the Defendant's own failure to exercise due care or maintain valid insurance was not a risk the Agreement allocated to the Claimant; that risk was allocated to the Defendant by Clause 2.4(i). However, the Claimant’s debt case is that the Amount Payable is the Investment Amount, even where the loss was not a result of the Defendant's failure to exercise due care or maintain valid insurance.

F2. The Defendant’s case

79. The Defendant submits that the Claimant should not be granted immediate judgment on its debt case for two reasons. First, the Claimant’s debt case is not properly before the Court because it is not pleaded and whilst the Claimant’s skeleton argument asserted that under clause 3.4, the Defendant was obliged to pay the Maturity Proceeds on the Maturity Dates it did not refer to subclause 3.4.3 or the calculation which the Claimant says is required by the subclause 3.4.3 formula. The Claimant referred to subclause 3.4.3, the formula and how it is to be applied for the first time in counsel’s oral submissions on the hearing of the application. The Defendant’s counsel submitted that his instructors had not taken instructions on the Claimant’s debt case as now presented because it had no notice of that case.

80. Secondly, the Defendant submits that a different construction of the Agreement is arguable, and that a defence based on that construction has a real prospect of success.

F3. Debt case not properly before the Court

81. An application for summary judgment must be made in accordance with the RDC Part 24 application procedure. RDC 24.8 requires that the application notice identify any point of law or provision in a document on which the applicant relies. These procedural safeguards are important, see eg: Price v Flitcraft Ltd [2020] EWCA Civ 850, [43] and [87].

82. The Claimant's Immediate Judgment Application on its debt case proceeds, on a construction of clause 3.4 of the Agreement advanced at paragraphs [61]-[63] of its skeleton argument and developed in oral submissions and developed, namely that clause 3.4 gives rise to a self-standing obligation on the Wakil to pay the Investment Amount as a debt on the Maturity Date notwithstanding total loss of the underlying investment. That contention cannot properly be determined on this application.

83. RDC 24.8 requires an applicant for immediate judgment to identify, in the application notice or supporting evidence, any point of law or provision in a document on which it relies. The Application Notice in this case identifies the relief sought but does not identify clause 3.4. or any specific contractual construction arising from it as a ground for the Application.

84. In his witness statement, which was filed with the Application Notice, Mr Al Hamhrami identified the contractual payment obligation at clause 3.4 of the Agreement: "On the Maturity Date of each Wakalah Investment Transaction, the Wakil shall pay to the Muwakkil the Maturity Proceeds (if any)", which forms the core of the debt claim in the Claimant's Skeleton Argument and oral argument. Clause 3.4 is substantively articulated (payment at maturity, non-payment, breach), but clause 3.4 is not cited by number nor quoted verbatim.

85. The witness statement does not state that the Maturity Proceeds are calculated in accordance with subclauses 3.4.1-3.4.3. Indeed, the witness statement omits the words "calculated as follows" from its citing of clause 3.4.

86. The witness statement does not articulate the construction now relied upon or frame clause 3.4 as the legal foundation for an unconditional debt claim. Rather, the witness statement advances the Claimant's case primarily by reference to alleged breaches of other provisions of the Agreement, negligence, misrepresentation, and failure to maintain insurance.

87. That reflects the Particulars of Claim, which do not refer to clause 3.4 at all. The Particulars plead that the Defendant was obligated to pay the Claimant the maturity proceeds for each transaction on their respective maturity dates, but cites clause 4.2 as the source of that obligation.

88. The Claimant further pleads that "the Defendant has failed to return the investment", which appears to be an assertion that the Defendant was obliged to repay the amount invested in reliance on the clauses of the Agreement earlier referred to, especially clauses 2.3, 2.4(i) and 2.4(ii).

89. The Claimant pleads that it has suffered loss and damage, being the non-recovery of the Outstanding Sum, as a result of the breach of the Agreement and/or breach of the Defendant's obligations. The breaches of agreement are pleaded at [29]-[38]. They are:

90. The debt case argument presently relied upon is therefore advanced for the first time in the skeleton argument served for the hearing. It is not a matter of mere elaboration or emphasis, but a distinct and material point of contractual construction with potentially significant consequences for the allocation of risk under the Agreement. In those circumstances, the Defendant has not had the procedural opportunity contemplated by RDC Part 24 to address that point through evidence, nor has the Court been invited to determine it on a properly defined and notified basis.

91. In addition, the construction of clause 3.4 relied upon by the Claimant raises broader questions concerning the interaction between clause 3.4, the remainder of the contractual scheme, and the governing law provision reference to Shari'ah principles. Whether clause 3.4 can bear the weight placed upon it is not a short or self-contained point suitable for determination without full argument and evidential context, and its resolution would require the Court to go beyond the permissible limits of a Part 24 application by conducting, in substance, a mini-trial on issues of contractual interpretation and risk allocation.

92. For these reasons, the Court declines to determine the construction of clause 3.4 relied upon by the Claimant for the purposes of this Part 24 Application. The point is not properly before the Court in accordance with RDC 24.8, and it would be procedurally unfair to determine it on this application.

F4. The clause 3.4 construction issue

93. Clause 3.4.3 must be construed in the context of clause 3.4 as a whole, the Agreement’s express allocation of risk and liability, and the governing‑law provision, which provides that the Agreement is governed by DIFC law only to the extent that the application of that law is not inconsistent with the principles of Shari’ah, and that Shari’ah principles prevail in the event of such inconsistency and, arguably, constrains the legal consequences that may flow from the Agreement where application of DIFC law would be inconsistent with Shari’ah principles.

94. The Claimant’s construction is that the clause applies where the Actual Profit Rate is a negative number and prescribes a mechanical formula for calculating “Maturity Proceeds (if any)”.

95. When examined closely, clause 3.4.3 as interpreted by the Claimant does not produce a linear or proportionate reduction in the amount payable as losses deepen. Although expressed in performance-based terms, on the Claimant’s construction, the arithmetic of the clause results in a non-intuitive and non-linear effect. As the loss amount increases, the payment to the Muwakkil also increases rather than decreases, eventually leading to full repayment of the Investment Amount at an Actual Profit Rate of –100%. Therefore, once negative performance occurs, the clause creates an inverse relationship between investment outcome and recovery.

96. That effect raises a serious question about whether the clause was intended to apply mechanically to a case of total loss at all. Clause 3.4 is framed as a provision for the calculation and payment of “Maturity Proceeds (if any)”. The express qualification “if any” indicates that the parties contemplated that there may be cases where no proceeds are payable on maturity.

97. One plausible construction of the Agreement is therefore that a total loss of the Investment Amount falls outside the scope of clause 3.4 altogether, on the footing that there are, quite simply, no “Maturity Proceeds” to calculate or distribute.

98. An alternative, but related, construction is that in a total‑loss scenario, the phrase “Maturity Proceeds (if any)” requires the amount payable to be treated as nil, because the contractual premise of clause 3.4 — the existence of proceeds capable of calculation by reference to performance — is absent. On that reading, clause 3.4.3 governs only cases of partial under‑performance within a continuing investment, and not the situation where the investment has entirely failed, and no proceeds exist at maturity.

99. A further possibility is that clause 3.4.3 was intended to function only within a bounded range of negative performance outcomes and not at the theoretical extreme of –100%, so that its literal application in a total‑loss scenario produces a result that falls outside the parties’ contemplations and must yield to the broader contractual scheme.

100. Each of these constructions avoids the internally perverse result produced by the Claimant’s literal application of the arithmetic, under which the worst possible investment outcome delivers the most favourable payment.

101. These alternative interpretations are reinforced by the Agreement's structure as a whole. Clause 2.4 ties the Wakil’s liability to wilful misconduct, negligence or breach. Clause 2.5 expressly excludes any characterisation of the Wakil as a trustee or fiduciary. There is no provision expressly allocating the risk of total capital loss to the Wakil in the absence of fault. Construing clause 3.4.3 as requiring repayment of the full Investment Amount solely because the investment has failed would, in substance, reallocate principal risk to the Wakil and operate as a de facto capital guarantee.

102. In that respect, the governing‑law provision has a limiting effect on the legal consequences that may be drawn from clause 3.4.3. Where the application of DIFC law to a contractual formula would produce an outcome inconsistent with Shari’ah principles applicable to wakalah‑based investment arrangements — in particular, the prohibition on unconditional guarantees of capital absent misconduct, negligence or breach — that application must yield. Shari’ah principles do not rewrite the contractual text or supply an alternative formula, but they constrain the range of permissible constructions.

103. Accordingly, whether clause 3.4.3 is properly construed as inapplicable to total loss, as yielding nil “Maturity Proceeds” in such circumstances, or as otherwise incapable of operating mechanically at –100% performance, there is at least a coherent and principled basis for reading the Agreement as not requiring repayment of the Investment Amount in a total‑loss scenario absent a separate fault‑based entitlement under clause 2.4.

104. On this application, the question is not whether the Claimant’s construction is ultimately correct, but whether competing constructions — that clause 3.4 does not impose such an obligation in the absence of fault — are arguable and have a real prospect of success.

105. At the very least, those competing constructions are reasonably arguable. They are supported by the text and structure of the Agreement, as well as by the Shari’ah standard to which the parties arguably subordinated their contractual rights in the way referred to.

106. In reaching these conclusions, the Court has fully considered the Claimant’s detailed submissions, both written and oral, including the step‑by‑step arithmetical analysis of Clause 3.4.3 advanced by Mr Osman at the hearing, and the contention that, on a total‑loss scenario, the contractual formula yields repayment of the Investment Amount as a matter of debt. The issue on this application is not whether that construction is correct, but whether it is appropriate for final determination on an application for immediate judgment. For the reasons given above, the Court concludes that it is not.

F5. Conclusion on Breach 1: Failure to pay the Outstanding Sum (Agreement Clause 3.4)

107. For those reasons, the Claimant’s debt case, that the Defendant breached the Agreement by failing to pay the Outstanding Sum, is not a basis for finding that the Defendant has no real prospect of defending the claim.

G. Breach 2: Failure to exercise due care, diligence and due inquiry (Agreement Clause 2.3)

G1: The Claimant’s case

108. Clause 2.3 imposes three core obligations on the Wakil:

109. The Claimant pleads that the Defendant breached its obligations under clause 2.3 by proposing the 2018 and 2019 Transactions to the Claimant despite TFC (the underlying investment entity) having already defaulted on all its payments for all financial institutions in the region as of November 2018. The 2018 Transaction was proposed on 5 November 2018, and the 2019 Transaction on 26 February 2019, after the default event. The Claimant pleads that had the Defendant properly fulfilled its obligations under clause 2.3 (and 2.4), it would not have proposed these transactions to the Claimant. Therefore, the Defendant’s actions in proposing these transactions breached clause 2.3, as the Defendant could not have reasonably and genuinely believed in the anticipated profit rates, given the material facts known at the relevant times.

110. The Claimant submits that the Defendant has no real prospect of defending the Clause 2.3 claim for the following reasons.

111. First, the Defence admits that the Defendant lacked the resources to independently verify the transactions and delegated verification to third‑party agent banks. That is incompatible, as a matter of law and logic, with the contractual obligation to act with “utmost due care and diligence” and to conduct “due inquiry” before proposing any transaction.

112. Secondly, the Defendant’s own case is that, by early 2019, it was aware of TFC’s payment difficulties. Despite that knowledge, it proposed the 2019 Wakalah Investment Transaction, positively representing that it reasonably and genuinely believed (after due inquiry) that the anticipated profit rate would be achieved. On the Claimant’s case, either that belief was not genuinely or reasonably held (constituting a direct breach of clause 2.3.3), or no due inquiry was in fact undertaken.

113. Thirdly, the Defendant has adduced no evidence of any due diligence, inquiry, verification, or monitoring consistent with clause 2.3. Bare denials in the Defence cannot meet the evidential burden on a summary judgment application.

114. Fourthly, explanations relying on TFC’s fraud, Shari’ah risk allocation, or characterisation of the Defendant as a mere conduit do not answer, and in some respects reinforce, the pleaded breach. Taken at its highest, the Defence therefore discloses no realistic basis on which compliance with clause 2.3 could be established at trial.

G2. Clause 2.3: delegation

115. The Claimant’s immediate judgment case on clause 2.3 proceeds on two closely related premises. The first is that the Defendant’s use of agent banks to place and verify the underlying TFC transactions is incompatible with the contractual requirements that the Wakil exercise “utmost due care and diligence” and form a “reasonable and genuine” belief, “after due inquiry”, before proposing any Wakalah Investment Transaction. The second is that, in any event, the Defendant could not properly have held such a belief at the relevant times, particularly in relation to the later transaction, once payment difficulties had emerged.

116. The Defendant’s answer is that clause 2.3 does not require that every element of due inquiry be performed personally by the Wakil. It is at least arguable that the Wakil may discharge the requisite standard of care by engaging competent, regulated banks to perform transaction level checks which the Wakil itself was not licensed or operationally equipped to undertake, provided it acted prudently in its selection and retained appropriate oversight. For present purposes, the Court does not determine the correct construction of clause 2.3 or make findings as to what inquiries were in fact undertaken or how they were supervised. The question is whether the Defendant’s case is arguable with a realistic prospect of success, or at least raises issues unsuitable for determination without a trial.

117. Clause 2.3.2 and clause 2.3.3 impose stringent obligations on the Wakil, but they do not prescribe the precise manner by which market inquiry, verification, or diligence must be carried out. The language goes to the standard to be achieved, not to the exclusive means by which that standard must be satisfied. Further, the Agreement expressly contemplates performance through intermediaries, referring to performance in accordance with a trade agency agreement between the Wakil or a Wakil agent and the relevant trade finance counterparty. That is at least capable of supporting an argument that the use of intermediaries formed part of the operating model contemplated by the parties, even though such use would not, of itself, relieve the Wakil of compliance with clause 2.3.

118. The Agreement also characterises the Wakil’s role as one of limited agency. While that does not disapply clause 2.3, it forms part of the contextual matrix against which the parties’ evidence as to how the relationship operated must be assessed.

119. The Defendant’s evidence is that it was a non banking financial institution without the regulatory permissions or operational capacity to enter directly into the underlying trade finance transactions, and that, with the Claimant’s knowledge, it therefore engaged regulated banks as agent banks to place and verify the underlying transactions. On the present record, it is at least arguable that the engagement of licensed banks to undertake banking level placement and checking functions could, depending on the facts, represent a prudent means of performing the Wakil’s role in accordance with a demanding standard of care, rather than being inherently inconsistent with it.

120. The Defendant also relies on the history of repeated transactions conducted over a period of years on the same general structure, during which no objection was raised at the time as to the use of agent banks. The evidence describes a consistent process whereby the Defendant prepared transaction documentation for the Claimant’s review and acceptance, and transactions were approved on a deal-by-deal basis. That history is capable of supporting the contention that the parties operated on a shared understanding that intermediary banks would be used.

121. The Defendant further contends that the Claimant was a sophisticated regulated bank with its own governance and approval structures, and that it independently evaluated and approved investments through its internal investment committee, legal advisers, and Shari’ah board. The evidence also describes the Claimant’s legal and Shari’ah teams being actively involved in reviewing and commenting on the Wakalah arrangement prior to execution, and the Claimant reviewing and accepting transaction documentation, including insurance confirmations and related documents, for each transaction.

122. If accepted at trial, that evidence is capable of supporting an argument that the Claimant gave informed consent to the transaction model, including the use of agent banks, and that such consent is relevant to assessing what inquiries it was reasonable to expect the Defendant itself to perform and what reliance on the agent banks was prudent in the circumstances. At the same time, informed consent to delegation does not, without more, wholly absolve the Wakil of its contractual obligations. Rather, it may be a relevant circumstance in determining the content of “due inquiry” and “utmost due care and diligence”, including the nature and degree of supervision required. Those are evaluative matters which ordinarily depend on findings of primary fact.

G3. Clause 2.3: the temporal dimension

123. Against that background, the Claimant’s case on clause 2.3.3 places particular emphasis on timing. The obligation is framed in negative terms: the Wakil “shall not propose” a Wakalah Investment Transaction unless it reasonably and genuinely believes, after due inquiry, that the anticipated profit rate will be achieved. The Claimant therefore submits that the Court must focus not on subsequent events or outcomes, but on the Wakil’s state of belief and inquiry at the moment each transaction was proposed.

124. It is accordingly necessary to distinguish between the two transactions relied upon.

125. As to the first transaction, effected pursuant to a Wakil Offer Notice dated 5 November 2018, the Defendant’s evidence is that, at that time, the underlying counterparty was not experiencing financial distress and was not in default. The Defendant relies on the prior history of profitable transactions, the absence of adverse payment indicators, and the information then available to suggest that anticipated profit would be achieved. Taking that evidence at its highest, it is at least arguable that, when the November 2018 transaction was proposed, the Defendant held a reasonable and genuine belief, formed after such inquiry as was then appropriate, that the anticipated profit rate would be achieved. Whether that belief was in fact reasonable, and whether the inquiry undertaken was sufficient, are evaluative matters dependent on findings of primary fact and are not suitable for determination on an application for immediate judgment.

126. The position in relation to the second transaction, proposed on 26 February 2019, is materially different and gives rise to the Claimant’s strongest point. By that stage, payment difficulties had emerged in relation to earlier transactions, and anticipated maturity proceeds due in January 2019 had not been received. The Claimant submits that, in those circumstances, the Defendant could not properly have held a reasonable and genuine belief that the anticipated profit rate would be achieved when proposing the February 2019 transaction. That temporal point identifies the central vulnerability in the Defendant’s case on clause 2.3.3.

127. The Defendant does not seek to ignore that difficulty. Its answer is that the February 2019 transaction must be assessed in its factual context. On its case, it was not a fresh deployment of new principal but a short term rollover of an existing exposure, undertaken at the Claimant’s request and in circumstances where the then understood problem was one of liquidity rather than established insolvency or fraud. The Defendant further contends that, in that rollover context, the relevant belief and inquiry for the purposes of clause 2.3.3 must be evaluated by reference to what was known, or reasonably believed, at the time; the communications then being received from market participants; and the protective features said to remain in place.

128. Whether those considerations are capable, at trial, of sustaining a conclusion that the Defendant nonetheless formed a reasonable and genuine belief after due inquiry is not something that can be resolved on the pleadings or submissions alone. It requires an assessment of contemporaneous knowledge, the characterisation and understanding of the rollover by both parties, the sufficiency of the inquiries undertaken in a developing situation, and the range of judgments reasonably open to an agent faced with incomplete and evolving information. Those matters are fact sensitive and evaluative, and are ill suited to summary determination.

129. Drawing these strands together, the Defendant has established, at least for immediate judgment purposes, a realistic basis for contending that clause 2.3 does not necessarily preclude reliance on competent intermediaries to conduct specialist transaction checks; that the use of regulated agent banks may, depending on the facts, be consistent with the exercise of “utmost due care and diligence”; and that the Claimant’s knowledge of, and consent to, the operating structure may be relevant to the assessment of reasonableness without constituting a complete answer. The temporal argument advanced by the Claimant in relation to the February 2019 transaction exposes a real weakness in the Defendant’s clause 2.3.3 defence, but it does not follow that the issue can be conclusively resolved on an application for immediate judgment. Rather, it confirms that the clause 2.3 allegations—particularly in respect of the February 2019 rollover—raise triable issues requiring a full examination of the evidence, and are not suitable for final determination at this stage.

G4. Clause 2.3: Causation and loss

130. Even if it were assumed, for the purposes of the present application, that the Claimant could establish a breach of clause 2.3 by the Defendant, that would not of itself entitle the Claimant to immediate judgment. The Claimant must also demonstrate, to the requisite standard, that any such breach caused the losses now claimed. The Defendant contends that causation and loss raise distinct and independently triable issues which cannot be resolved on an application for immediate judgment.

131. First, the Defendant’s case is that the Claimant made the decisions to enter the 2018 and 2019 transactions on its own independent judgment and not in reliance on any inquiry, assessment or recommendation by the Defendant. The Defendant asserts that the Claimant is a sophisticated regulated financial institution with its own investment committee, legal advisers and Shari’ah board, and that it selected the counterparty, set the commercial parameters, and approved each transaction through its internal processes. On that footing, the Defendant argues that, even if clause 2.3 were breached, the alleged breach did not induce or materially influence the Claimant’s decision to invest, and therefore did not cause the loss said to have been suffered.

132. Whether, as a matter of contractual causation, reliance or inducement is strictly required in the context of clause 2.3 is not a question that can be finally determined on the present application. The Defendant’s pleaded case and evidence give rise to a realistic contention that the Claimant would have entered the transactions in any event, and that any deficiency in the Defendant’s inquiry or belief did not cause the Claimant to assume the relevant risk. That contention raises competing inferences which depend on findings of primary fact and evaluative judgment, and is not amenable to summary disposal.

133. Secondly, and in any event, the Defendant advances a further causation and loss defence specific to the February 2019 transaction. It contends that the 2019 transaction was not a fresh investment of new principal, but a short term rollover of an existing exposure following non payment at maturity in January 2019. On the Defendant’s case, no new funds were advanced by the Claimant, and if TFC was unable to pay the earlier investment at maturity, the Claimant’s capital was already irrecoverable at that point. The rollover, it is said, did not place the Claimant in a worse position, nor did it cause any incremental or additional loss beyond that already sustained.

134. If that characterisation were accepted at trial, it would support a conclusion that, even if the proposal of the 2019 transaction involved a breach of clause 2.3.3, such breach caused no recoverable loss because the loss would have occurred in any event. Whether the rollover altered the Claimant’s position in a legally relevant way—by affecting recovery options, insurance coverage, timing, or otherwise—is a factual and evaluative question which cannot be resolved without a full examination of the evidence.

135. Taken together, these causation defences provide the Defendant with a realistic prospect of successfully resisting the Claimant’s claim even if breach of clause 2.3 were established. The issues of reliance, inducement, and loss, and the counterfactual question of what would have occurred absent the alleged breaches, are central to the dispute and require findings of fact. They reinforce the conclusion that the claim cannot be determined summarily.

136. Accordingly, the Court is not satisfied that the Claimant has shown an entitlement to immediate judgment on causation or loss. Those issues, like the alleged breaches of clause 2.3, raise triable questions which must await determination at trial.

137. In reaching these conclusions, the Court has taken into account the Claimant’s submissions in their entirety, including the arguments advanced in the Skeleton and Supplemental Skeleton and the oral submissions of Mr Osman at the hearing. This includes, in particular, the reliance placed on the Defendant’s admitted use of intermediaries, the contention that such delegation is inconsistent with the obligations imposed by Clause 2.3, the absence of contemporaneous evidence of due inquiry or verification, and the temporal focus on the February 2019 transaction as revealing any lack of reasonable and genuine belief after due inquiry. The Court’s refusal of immediate judgment reflects not any failure to engage with those submissions, but its conclusion that they raise fact‑sensitive and evaluative questions of construction, conduct, and causation which are unsuitable for final determination on an application under RDC Part 24.

G5. Clause 2.3 conclusion

138. For these reasons, the Court is not satisfied that the Claimant has shown that it is entitled to immediate judgment in respect of its claim that the Defendant breached clause 2.3 of the Agreement. The construction of clause 2.3, the scope and permissibility of delegation, the relevance of the Claimant’s knowledge and consent, the Defendant’s state of belief at the times the transactions were proposed, and the issues of causation and loss all give rise to fact‑sensitive and evaluative questions on which the Defendant has demonstrated a realistic prospect of success. Those matters cannot properly be resolved on a Part 24 application and must await determination at trial.

H Breach 3: Failure to ensure valid insurance (Agreement Clause 2.4(ii))

H1. The Claimant’s case

139. The Claimant advances a distinct and independent basis for immediate judgment founded on the Defendant’s alleged breach of clause 2.4(ii) of the Agreement.

140. The Claimant contends that the Defendant failed to comply with its obligation to represent a “valid Insurance Confirmation” in respect of each Wakalah Investment Transaction, with the contractual consequence stipulated in clause 2.4(ii) that the Claimant’s acceptance of the corresponding Wakil Offer Notice was null and void. On that footing, the Claimant seeks to recover the amount of its investment on the basis that the transactions were never validly constituted and that the loss suffered flows directly from that breach.

141. It is common ground on the pleadings that insurance confirmation letters issued by Atradius were provided in relation to both the 2018 Transaction and the 2019 Transaction, and that those confirmations named the Defendant as assignee or beneficiary.

142. The Claimant does not allege that the Defendant failed to represent insurance confirmations as documents, nor that the Defendant failed to procure confirmations identifying it as the first loss payee or beneficiary. The dispute instead concerns whether, notwithstanding their existence, those confirmations constituted a “valid Insurance Confirmation” within the meaning of clause 2.4(ii).

143. The Claimant’s case is that validity for the purposes of clause 2.4(ii) requires insurance that is effective, enforceable, and capable of responding to the relevant insured risk. It contends that insurance that cannot respond at all, whether because of defects in the underlying trade transactions or because it was not maintained or preserved, is not “valid” within the contractual scheme.

144. On that footing, the Claimant relies on evidence that the insurance did not respond and was later said to have been terminated, and argues that non‑compliance with clause 2.4(ii) rendered its acceptance null and void. The Claimant further contends that this breach is causative of its loss independently of any alleged breach of clause 2.3.

H2. The Defendant’s case

145. The Defendant’s answer is that clause 2.4(ii) is concerned with the provision of insurance confirmations as a formal and documentary requirement, and that this obligation was satisfied when validly issued Atradius confirmations were provided naming the Defendant as beneficiary.

146. On the Defendant’s case, the fact that the insurance did not respond in the circumstances that later emerged does not mean that the insurance was invalid when represented, nor that clause 2.4(ii) was breached. The Defendant contends that non‑response arose from matters extrinsic to its contractual obligation, including fraud affecting the underlying transactions, and that such matters do not deprive the insurance of its validity for clause 2.4(ii) purposes.

H3. Evaluation of the Claimant’s clause 2.4(ii) case

147. The proper construction of the requirement of a “valid Insurance Confirmation” in clause 2.4(ii) is therefore central to the determination of this claim. In particular, the Court is required to determine whether “valid” in this context is to be understood as referring to the formal existence and issuance of an insurance confirmation naming the correct beneficiary, or whether it imports a substantive requirement of effectiveness and responsiveness to the particular transaction structure and risk profile.

148. That question is one of contractual construction informed by commercial context and purpose. It is not answered by the mere fact that an insurance policy existed, nor by the fact that it later failed to respond in the circumstances that occurred.

149. Further, the contractual consequence relied upon by the Claimant—namely that non‑compliance with clause 2.4(ii) renders acceptance null and void—raises additional questions as to the operation of that stipulation, including whether any such nullity is automatic or elective, and what consequences follow where funds have in fact been transferred and invested.

150. Those are matters of legal effect and commercial intention which cannot be resolved in the abstract and without a full examination of the contractual scheme as a whole.

151. The parties’ competing cases also engage factual and evaluative issues, including the nature of the insurance arranged, its intended commercial function within the Wakalah structure, the circumstances in which it failed to respond, and whether those circumstances bear upon its validity within the meaning of the Agreement.

152. It is at least arguable that expert evidence as to trade‑finance insurance practice and the commercial understanding of “validity” in such a context may be relevant. The need for such evidence further underlines that the claim is unsuitable for determination on an application for immediate judgment.

H4. Conclusion on Breach 3

153. In those circumstances, the Court is not satisfied that the Claimant has established a clear entitlement to judgment on the clause 2.4(ii) claim without a trial. The meaning and operation of “valid Insurance Confirmation”, the effect of non‑response and termination of insurance, the contractual consequences of any non‑compliance, and the issues of causation and loss all raise triable issues which cannot properly be resolved on a Part 24 application.

I. Breach 4: Tort - concurrent liability (Articles 17 and 30, DIFC Law of Obligations).

I1. The Claimant’s case

154. The Claimant has pleaded causes of action under Articles 17 and 30 of the DIFC Law of Obligations, alleging misrepresentation and breach of duty of care in connection with the 2018 and 2019 transactions. Those claims are advanced in parallel with, and as alternatives to, the Claimant’s contractual claims under the Agreement.

155. However, in determining the present application for immediate judgment, it is necessary to have regard to the manner in which the Claimant has chosen to advance its case at the interlocutory stage.

I2. Article 17 – misrepresentation

156. First, although Article 17 (misrepresentation) is relied upon in the pleadings, the Claimant did not advance any substantive argument for immediate judgment on that basis in its skeleton argument, nor was any such argument developed in oral submissions.

157. The Claimant’s application was framed and pursued by reference to alleged breaches of contract and, in particular, clauses 2.3 and 2.4(ii) of the Agreement, together with Article 30 insofar as it was said to reflect a duty of care coextensive with those contractual obligations.

158. In those circumstances, the Court is not required to determine, and does not determine, whether the Claimant has an arguable or sustainable claim under Article 17, and that aspect of the pleaded case does not form part of the basis for immediate judgment

I3. Article 30

159. Secondly, so far as Article 30 is concerned, the Claimant’s pleaded case is that the Defendant owed it a duty of care as Wakil and investment agent, and that the Defendant breached that duty by substantially the same acts and omissions relied upon to establish breaches of clause 2.3 of the Agreement.

160. In its section G of these reasons, the Court has already concluded that the Claimant’s claim for breach of the contractual duty of care under clause 2.3 gives rise to fact‑sensitive and evaluative issues which are not suitable for resolution on an application for immediate judgment. Those conclusions apply with equal force to the Claimant’s reliance on Article 30, which rests on materially the same factual foundation and raises no distinct or additional considerations capable of supporting summary disposal.

161. Accordingly, to the extent that the Claimant relies on Article 30 of the DIFC Law of Obligations as an alternative ground for immediate judgment, that claim likewise raises triable issues. It does not provide an independent basis for granting relief under RDC Part 24.

I4. Conclusion on Breach 4

162. The Claimant’s tort claims under Articles 17 and 30, therefore, do not advance its application for immediate judgment beyond the contractual grounds already considered.

J. Other compelling reason

163. The court may refuse a summary judgment application, even though the respondent has been shown to have no real prospect of succeeding at the trial, if there is some "other compelling reason why the case or issue should be disposed of at a trial; RDC 24.1(2).

164. It will be only in exceptional cases that the court would refuse to give summary judgment after the applicant has shown that the respondent has no real prospect of success. This may include wider points of public interest, for example, if the court considers that the case raises a point of construction of a standard form contract widely used in the market: A C Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098 [35].

K. Conclusion - Part 24

165. For the reasons set out above, the Court is not satisfied that the Defendant has no real prospect of successfully defending the Claimant’s claims. The issues raised in relation to the alleged breaches, causation and loss give rise to fact‑sensitive and evaluative questions which cannot properly be resolved without a trial. It follows that the Claimant has not established an entitlement to immediate judgment under RDC Part 24, and the Immediate Judgment Application must therefore be dismissed.

L. The Claimant’s Application to Strike Out the Limitation Defence

L1. The nature of the application

166. In the alternative to its application for immediate judgment, the Claimant applies for an order striking out the Defendant’s limitation defence pursuant to RDC 4.16. The Limitation Strike Out Application is directed to paragraphs 64–71 of the Defence and Counterclaim, in which the Defendant pleads that the Claimant’s claims are time barred.

167. The Court has not considered the limitation defence for the purposes of the Claimant’s application under RDC Part 24. As explained in Section K above, the Court refused the Immediate Judgment Application on the basis that the Defendant has a real prospect of successfully defending the claim on the merits, without it being necessary to consider limitation at that stage. The Claimant’s Limitation Defence Strike Out Application therefore falls to be determined independently, by reference to the strike‑out jurisdiction alone.

L2. The applicable legal principles on strike out

168. The Court’s power to strike out a statement of case under RDC 4.16 is an exceptional jurisdiction, to be exercised sparingly and only in clear and limited circumstances. Its function is to police the boundaries of permissible pleading, not to determine disputed issues of law or fact. As explained by Zuckerman in Civil Procedure, the jurisdiction is directed to cases which are legally incoherent, incurably defective, or abusive on their face, and not to the evaluation of the strength or weakness of arguable claims or defences. A defence will therefore be struck out only where it is plainly unsustainable as a matter of law, even if the pleaded facts are assumed to be true, or where it constitutes an abuse of the Court’s process (see Zuckerman, Civil Procedure; CPR PD 3A; S v Gloucestershire County Council [2001] Fam 313).

169. It is well established that the Court should not undertake a merits‑based or evaluative assessment under the guise of strike‑out. Provided that a defence discloses a recognisable legal basis, articulated with sufficient factual particularity to permit a response and capable of being argued within the framework of the governing law, it will ordinarily disclose reasonable grounds, even if the Court considers the defence weak, improbable, or ultimately likely to fail. As Zuckerman observes, questions of legal classification and the application of contested principles are paradigm examples of matters unsuitable for resolution at the strike‑out stage, save in the clearest of cases.

170. The strike‑out jurisdiction is conceptually and functionally distinct from the summary‑judgment jurisdiction under RDC Part 24. The question under RDC 4.16 is not whether the defence has a real prospect of success, but whether it is so fundamentally defective that it should not be permitted to proceed at all. A defence may raise matters unsuitable for determination on a summary basis and, for that very reason, disclose reasonable grounds sufficient to survive strike‑out. This distinction—often described as one of threshold rather than degree—is fundamental to the structure of the RDC.

171. These principles have been repeatedly emphasised in the DIFC Courts. Decisions of both the Court of First Instance and the Court of Appeal have reiterated the need for procedural restraint under RDC 4.16 and have cautioned against striking out defences which turn on contested questions of legal characterisation, accrual, or loss, particularly where those questions admit of more than one arguable view.

172. Conversely, the Court’s decision to refuse immediate judgment—especially where that refusal is reached without reliance on the defence sought to be struck out—does not pre‑empt, determine, or constrain the analysis under RDC 4.16. Each jurisdiction serves a distinct procedural purpose and must be exercised in accordance with its own rationale and threshold. Where a pleaded defence raises issues of legal classification or accrual which admit of more than one arguable view, the Court will ordinarily decline to strike out the defence and will leave those issues to be resolved at trial or on a proper dispositive application.

173. A defence may raise matters unsuitable for determination on a summary basis and, for that very reason, still disclose reasonable grounds sufficient to survive strike‑out. This distinction—often described as one of threshold rather than degree—is fundamental to the structure of the RDC.

174. It follows that the Court’s task under RDC 4.16 is not to determine whether the limitation defence is likely to succeed, or even whether it appears weak when measured against the Claimant’s submissions, but whether it is so legally incoherent or incurably defective that it should not be permitted to proceed at all. A defence may ultimately fail on a proper application of the relevant accrual principles and yet remain one that the Court is not entitled to strike out at the pleading stage.

L3. The Defendant’s pleaded limitation case

175. The limitation defence is pleaded at paragraphs 64–71 of the Defence and Counterclaim. In summary, the Defendant pleads that the Claimant’s causes of action accrued prior to the maturity dates of the 2018 and 2019 Transactions and that the Claimant was aware, or ought reasonably to have been aware, of the facts giving rise to its claims by January 2019, February 2019, or (at the latest) 5 May 2019.

176. The Claimant submits that the defence should be struck out on the basis that it mischaracterises the statutory framework governing limitation and advances an unsustainable analysis of accrual. The Defendant, however, maintains that its defence is directed to the timing of loss and accrual as a matter of substance, and does not depend upon the existence of any knowledge‑based statutory test.

L4. The Claimant’s strike out case, including the insurance obligation and the post hearing correspondence

177. The Claimant’s strike out case rests on two related contentions.

178. First, it submits that the limitation defence is pleaded on a false legal premise, namely that time runs from knowledge or discoverability, whereas, properly analysed, limitation depends on accrual of the cause of action and not on knowledge.

179. Secondly, the Claimant contends that, on any correct analysis of accrual, none of its claims accrued before the maturity dates in May 2019. That submission is advanced in respect of the contractual claims generally and, in particular, in respect of the alleged breach of the insurance obligation under clause 2.4(ii).

180. As pleaded, the Claimant’s insurance case is that the Defendant was obliged to represent and maintain a valid insurance confirmation and breached that obligation by allowing the insurance to be terminated during the transaction period and by failing to disclose that termination until 5 May 2019. The pleaded case focuses on termination, non maintenance, and late disclosure, and does not plead that the insurance was invalid ab initio by reason of the identity of the named “Insured”.

181. In its written submissions, the Claimant treated the insurance breach as not giving rise to any distinct or earlier accrual for limitation purposes. It submitted that any loss said to flow from absence or failure of insurance crystallised, at the latest, when the Defendant failed to pay on maturity.

182. In oral submissions, the Claimant developed the insurance issue by reference to the structure of the Wakalah transactions and the Defendant’s letter of 5 May 2019 recording termination of insurance effective 31 March 2019. It submitted that clause 2.4(ii) imposed a continuing obligation throughout the transaction period.

183. Following the hearing, the Claimant wrote to the Court withdrawing a specific submission advanced orally, namely that the insurance confirmation was invalid because TFC Europe, rather than Investrade, was named as the “Insured” under the master policy. The Claimant maintained, however, that this did not affect its pleaded case under clause 2.4(ii), which it said depended on termination and non maintenance of insurance, not on the identity of the “Insured”.

184. The Defendant responded by letter objecting that the Claimant’s post hearing letter amounted to a material recasting of its case after argument. The Defendant submitted that the PoC does not plead the basis on which insurance is said to have been invalid; that the “wrong insured” point was first advanced at the hearing; that the Claimant’s oral case was in substance an “invalid from inception” case; and that the subsequent withdrawal was a transparent attempt to avoid adverse limitation consequences said to follow from that position. The Defendant further submitted that it would be procedurally unfair to permit the Claimant to substitute a different case after the hearing.

185. The post hearing correspondence does not alter the nature of the task under RDC 4.16. The Court is not required to adjudicate upon which articulation of the Claimant’s insurance case is correct, nor to resolve disputes about the proper scope of submissions advanced at the hearing. The question remains whether, taking the Defence as pleaded, the limitation defence is so legally incoherent or incurably defective that it discloses no reasonable grounds.

L5. Whether the limitation defence discloses reasonable grounds

186. The limitation defence, as pleaded and explained at the hearing, advances a coherent and intelligible case as to accrual of loss and the point at which proceedings could, on the Defendant’s case, first have been brought. Although the Claimant disputes that case and it may ultimately be rejected, it is not without a pleaded legal and factual foundation.

187. At the hearing, the Defendant explained that, while its Defence pleads matters of knowledge, it does not contend that the applicable limitation provisions themselves incorporate a statutory knowledge‑based trigger. Rather, it submits that references to knowledge are pleaded as part of the factual chronology relied upon to support its accrual analysis, and in response to the way the Claimant itself had advanced its case. Whether that explanation is ultimately sufficient to cure any pleading difficulty is not a matter for determination on this Strike‑Out Application. The Defendant’s limitation defence therefore does not depend upon importing a knowledge‑based statutory trigger into Article 28 of the Courts Law.

(a) The Defendant’s case as to when loss accrued and when proceedings could first have been brought

188. For the purposes of this application, the Defendant’s case proceeds by reference to Article 123 of the DIFC Contract Law and to principles governing the accrual of loss. It contends that not all of the Claimant’s pleaded causes of action are properly characterised as pure debt claims accruing only upon non‑payment at contractual maturity. On its case, certain alleged breaches are said to have caused immediate and irreparable economic impairment at an earlier stage, such that breach and loss coincided at that point for the purposes of accrual.

189. Whether that characterisation is correct as a matter of law will depend upon the proper classification of the Claimant’s claims—particularly whether they fall to be analysed as contingent‑loss cases or as “transaction cases” within the established authorities—and upon findings of fact as to the nature and timing of any alleged impairment. Those are not matters capable of resolution at the strike‑out stage.

190. The Court does not accept that the mere fact that a claim might have been vulnerable to dismissal as premature if brought earlier necessarily precludes accrual at an earlier point. Questions of prematurity, repudiation, or actionable loss turn upon the nature of the obligation relied upon and the character of the loss said to have been suffered. The Defendant’s contention that, on its case, the exposure had already failed in substance before the contractual maturity dates is one that may ultimately fail, but it is not legally incoherent on its face.

(b) The Defendant’s characterisation of the Claimant’s causes of action

191. The limitation defence proceeds on a particular characterisation of the Claimant’s pleaded claims. The Defendant does not deny that the 2019 Wakil Offer Notice constituted a fresh transaction as a matter of contractual form. However, it contends that this does not of itself determine accrual, because on its case the Claimant’s economic position had already been materially impaired beforehand, such that the later transaction did not reset the accrual clock in respect of all alleged breaches.

192. The Claimant strongly disputes that characterisation. The present question, however, is not whether the Defendant’s analysis is correct, but whether it is recognisable and arguable within the framework of the law governing accrual of loss. In the Court’s judgment, it is.

(c) The Defence factual chronology

193. The Defendant supports its accrual analysis by reference to a pleaded chronology, including non‑payment under earlier transactions, the rollover of exposure, contemporaneous communications in early 2019, and later confirmation of default and insurance issues. References to the Claimant’s knowledge are pleaded as part of that narrative and not as an independent statutory trigger.

(d) Evaluation at the strike‑out stage

194. At the strike‑out stage, the Court assumes the pleaded facts at their highest and does not adjudicate upon contested issues of legal characterisation or factual inference. The limitation defence advances an intelligible accrual theory, grounded in pleaded facts and recognised legal concepts. That is sufficient to clear the RDC 4.16 threshold, even if the defence may ultimately be rejected on its merits.

(e) Clarification as to pleading coherence

195. The Court emphasises that it has not re‑written or repaired the limitation defence. The pleaded references to knowledge do not render the defence legally incoherent simply because they may prove to be irrelevant or misconceived when the applicable statutory provisions are finally applied. Read as a whole, paragraphs 64–71 of the Defence are capable of sustaining the accrual‑based case the Defendant advances. Whether that case is correct is not a matter for determination on strike‑out.

L6. Why strike out is not appropriate

196. For the reasons given in L5 above, the limitation defence is not amenable to strike‑out. The Claimant’s criticisms raise arguable questions of legal characterisation and accrual, but do not establish that the Defence is legally incoherent or incurably defective. Those issues fall to be determined, if at all, on a properly framed substantive basis.

197. The same is true of the insurance obligation. The Claimant’s clarification and withdrawal of a particular oral submission does not demonstrate that the limitation defence is bound to fail as a matter of law, nor does it show that the defence discloses no reasonable grounds. At most, the post-hearing correspondence highlights a dispute about how the insurance case should ultimately be characterised and what consequences follow for accrual. Those are precisely the kinds of issues that fall outside the proper scope of RDC 4.16.

L7. Conclusion on the limitation strike out application

198. For those reasons, the Court declines to strike out paragraphs 64–71 of the Defence and Counterclaim pursuant to RDC 4.16. The Claimant's application to strike out the limitation defence is dismissed.

199. Nothing in this conclusion pre‑judges the correct application of Article 123 of the DIFC Contract Law, the relevance (if any) of Article 28 of the Courts Law, or the ultimate categorisation of the Claimant’s claims within established accrual taxonomies. Those matters remain to be determined, if necessary, on a substantive basis.

M. The Claimant's Application to Strike Out the Counterclaim

M1. Nature of the application and scope of the Counterclaim

200. In addition to its applications under RDC Part 24 and RDC 4.16 addressed above, the Claimant seeks to strike out the Defendant's Counterclaim pleaded at paragraphs 72- 78 of the Defence and Counterclaim pursuant to RDC 4.16.

201. By the Counterclaim, the Defendant seeks recovery of USD 144,358.38, said to represent the Claimant's alleged "pro rata share" of legal fees and recovery costs incurred by the Defendant in connection with proceedings and recovery efforts undertaken following TFC's default.

202. The Defendant relies on its pleaded case and the First Witness Statement of Ms Haseena Bangash, dated 1 April 2026, which sets out the history of recovery efforts, communications with the Claimant, and the accounting treatment of legal costs. The Defendant asserts that these matters give rise to a contractual and/or equitable entitlement to contribution.

M2. The applicable strike out principles

203. The same principles under RDC 4.16 govern the Strike Out Application, to strike out the Counterclaim, as those set out in Section L2 above.

204. The presence of a witness statement does not, of itself, preclude strike out. The question remains whether the Counterclaim discloses reasonable grounds as a matter of law, assuming the pleaded facts and the evidence relied upon by the Defendant to be true. Where a counterclaim is foreclosed by express contractual provisions, or where the facts proved are incapable of sustaining the legal right asserted, it is amenable to strike out notwithstanding that evidence has been adduced.

M3. The contractual framework and the Defendant's reliance on an implied agreement

205. At the hearing, the Defendant did not contend that the Counterclaim was supported by any express contractual provision of the Restricted Wakalah Agreement. Instead, it characterised its claim as arising from an implied or inferred agreement, said to have come into existence by reason of the parties' post-default dealings, communications, and accounting treatment of recovery costs, as described in the Bangash witness statement.

206. That framing makes it necessary to begin with the express contractual framework. The Agreement contains detailed and specific provisions governing costs, indemnities, and payment obligations. In particular:

207. Clause 3.8 provides that, in consideration of the Wakil receiving the Wakalah fee and any incentive payment, the Wakil irrevocably agrees that any costs or expenses incurred by it in relation to a Wakalah Investment Transaction shall be borne by the Wakil.

208. Clause 2.4(i) contains an indemnity running solely from the Wakil to the Muwakkil in defined circumstances.

209. Clause 4.3 provides that all payments under a Wakalah Investment Transaction are to be made without set-off or counterclaim.

210. The Agreement therefore makes express and comprehensive provision as to the allocation of costs and liabilities between the parties. Any implied or inferred agreement must be assessed against that contractual context.

M4. No implied or inferred contractual entitlement

211. The Counterclaim cannot be sustained on the basis of an implied or inferred contract.

212. An implied agreement cannot arise where doing so would be inconsistent with, or contradict, an express term of a concluded contract governing the same subject-matter. Here, the Defendant relied at the hearing on evidence said to show that the Claimant was informed of recovery efforts, received updates, did not object to debit advices, and discussed legal costs. Even if all those facts are assumed to be true, they are, as a matter of law, incapable of giving rise to an implied agreement that reverses the allocation of cost risk in Clause 3.8.

213. The circumstance that one party incurs costs, informs the other party of those costs, or records them in account statements cannot, without more, give rise to a contractual obligation to contribute where the governing contract expressly provides the opposite. Silence, acquiescence, or failure to object does not supply the necessary elements of offer, acceptance, and consideration required to infer a binding contract reallocating costs.

214. Nor is there any pleaded or evidenced basis for concluding that the parties intended to vary or supersede the Agreement. The Bangash witness statement does not identify any communication in which the Claimant agreed, expressly or by necessary implication, to assume liability for recovery costs. To imply such an agreement would not fill a contractual gap; it would rewrite the bargain the parties deliberately made.

215. Accordingly, the Counterclaim discloses no reasonable grounds insofar as it is advanced on the basis of an implied or inferred contract.

M5. Clause 4.3 as an independent bar

216. In addition, independently of Clause 3.8, Clause 4.3 precludes the assertion of any set- off or counterclaim against amounts payable under a Wakalah Investment Transaction.

217. The Counterclaim is advanced precisely as a counterclaim. The factual circumstances relied upon in the Bangash witness statement do not displace or qualify the operation of Clause 4.3.

M6. No equitable, restitutionary, or estoppel-based basis

218. At the hearing, the Defendant relied in the alternative on non-contractual grounds, variously characterised as equitable contribution, restitution or unjust enrichment, and estoppel, all said to arise from the Defendant's recovery efforts and the Claimant's awareness of, and engagement with, those efforts.

219. None of those bases discloses reasonable grounds for the Counterclaim.

(a) No equitable contribution

220. There is no recognised basis for a claim in equitable contribution. The Defendant and the Claimant were not subject to a joint obligation or a shared liability to any third party. The Defendant incurred the recovery costs in proceedings brought in its own name, in pursuit of its own exposure, and under arrangements entirely within its control. The Claimant was not legally liable for those costs, whether directly or contingently.

221. In the absence of a common liability discharged by one party for the benefit of another, the doctrine of equitable contribution is not engaged.

(b) No restitution or unjust enrichment

222. Nor do the facts relied upon support any claim in restitution or unjust enrichment.

223. Even if it is assumed that the Claimant may have benefited indirectly from the Defendant's recovery efforts, that is insufficient. Any such benefit was incidental to steps taken unilaterally by the Defendant in performance of its own perceived interests. The Defendant acted voluntarily and pursuant to a contractual framework under which it had expressly agreed to bear its own costs.

224. Restitution does not permit recovery where the alleged enrichment is not unjust, and it is not unjust for a party to bear costs it agreed, by contract, to bear.

(c) No estoppel capable of sustaining the claim

225. At the hearing, the Defendant also relied on a putative estoppel, said to arise from the Claimant's awareness of recovery efforts, its ongoing communications with the Defendant, its engagement in discussions concerning legal strategy, and the absence of contemporaneous objection to debit advices or account entries recording legal costs.

226. That contention likewise discloses no reasonable grounds.

227. No form of estoppel-whether by representation, convention, or acquiescence-is properly made out. The facts relied upon do not identify any clear and unequivocal representation by the Claimant that it would bear recovery costs, nor any shared assumption that can be said to have displaced the express contractual allocation of cost risk. Silence or failure to object, in circumstances where the governing contract placed responsibility for costs on the Defendant, cannot found an estoppel.

228. Still less is there any pleaded detriment relied upon by the Defendant other than the incurring of costs which it had already contractually undertaken to bear.

229. Estoppel cannot be used to impose on one party an obligation which the contract expressly excludes, or to circumvent a carefully structured allocation of risk and expense agreed in advance.

M7. The unilateral character of the expenditure

230. Ms Bangash’s witness statement confirms that the Defendant initiated, organised, and funded the recovery proceedings and related steps, largely in respect of its own substantial exposure to TFC. The Claimant was not a party to those proceedings, did not control their conduct, and did not commit to bearing their costs.

231. A party who elects to incur substantial legal and recovery costs in pursuit of its own commercial interests, without agreement or legal compulsion, cannot subsequently impose a share of those costs on another contracting party whose agreement is neither pleaded nor evidenced.

M8. Evaluation at the strike out stage

232. Even taking Ms Bangash’s witness statement at its highest, the Counterclaim remains legally unsustainable. The evidence relied upon is incapable of overcoming:

233. No further factual investigation could cure those defects. The Counterclaim is not merely weak; it is bound to fail as a matter of law.

M9. Conclusion on the Counterclaim

234. For those reasons, notwithstanding the evidence relied upon by the Defendant, the Counterclaim pleaded at paragraphs 72-78 of the Defence and Counterclaim discloses no reasonable grounds and is contractually and legally foreclosed. It should be struck out pursuant to RDC 4.16.

N. Costs

235. The Court has a broad discretion as to costs, to be exercised in accordance with the overriding objective and the principle of proportionality. The usual starting point—that costs follow the event—is not a rigid rule, particularly where an application has produced a mixed outcome or where issues raised were reasonably arguable but ultimately unsuccessful.

236. In the present case, the Claimant has succeeded in striking out the Defendant’s Counterclaim. However, that aspect of the Applications occupied a relatively limited part of the hearing and the parties’ written submissions, and did not dominate the overall forensic or procedural burden.

237. The Claimant has not succeeded in its Immediate Judgment Applications or the Limitation Defence Strike Out Application. Those Applications were, nonetheless, reasonably brought. They raised issues of substance, including questions of contractual construction, legal characterisation, limitation accrual, and the procedural suitability of summary determination. Those issues were legitimately arguable and required careful consideration. The Court does not regard the Claimant as having pursued those Applications unreasonably, tactically, or in a manner warranting adverse costs consequences.

238. The Court also takes into account the Defendant’s procedural defaults addressed in the Order of 6 April 2026, including the late service of evidence, which gave rise to a procedural dispute shortly before a fixed hearing. In that Order, the Court granted permission to rely on the late evidence as a proportionate course, but expressly reserved the costs of the procedural issues generated by that default, to be determined in light of the overall conduct and outcome of the Applications.

239. In all the circumstances—where the outcome of the Applications is mixed; where the issues were properly arguable on both sides; where the Claimant’s success was confined to a discrete issue; where the Defendant’s defaults occasioned additional procedural steps; and where it would be disproportionate and unhelpful to attempt a granular or issue‑by‑issue apportionment of costs—the appropriate order is that the costs of the Applications are costs in the case.

240. That order includes the costs of the Claimant’s Application addressed in, and costs reserved by, the Order of 6 April 2026.

O. Outcome and Orders

241. For the reasons set out above, the Court reaches the following conclusions.

242. The Claimant’s Immediate Judgment Application under RDC Part 24 is dismissed. The Court is not satisfied that the Defendant has no real prospect of successfully defending the Claimant’s claims, nor that the issues raised are suitable for final determination on a summary basis at this stage.

243. The Claimant’s Limitation Defence Strike Out Application under RDC 4.16 is also dismissed. While the Court has not determined the merits of the limitation defence, it discloses reasonable grounds and is not amenable to strike‑out.

244. The Claimant’s Strike Out Application under RDC 4.16 succeeds. The Counterclaim discloses no reasonable grounds, is contractually foreclosed, and is incapable, as a matter of law, of being sustained on the alternative bases advanced.

245. As to costs, for the reasons given in Section N above, the Court orders that the costs of the Applications, including the costs of the procedural issues addressed in and reserved by the Order dated 6 April 2026, are costs in the case.

246. Accordingly, the Court orders that: