Claim No: CFI 070/2018

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

IBDI BANK LIMITED

Claimant/Applicant

and

(1) MABANI DELMA GENERAL CONTRACTING CO LLC
(2) HELIOPOLIS ELECTRIC COMPANY LLC
(3) DELMA ENGINEERING PROJECTS COMPANY LLC
(4) DELMA EMIRATES DIESEL
(5) DELMA EMIRATES GENERAL TRANSPORT
(6) AHMED KHALIL KHALED ALMERAIKHI

Sixth Defendant/Respondent

(7) SHERIFA AHMED KHALIL KHALED ALMERAIKHI
(8) MARIAM AHMED KHALED ALMERAIKHI

Defendants

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ORDER WITH REASONS OF H.E. DEPUTY CHIEF JUSTICE ALI AL MADHANI

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UPON the Claimant’s Amended Claim Form dated 16 October 2018 (the “Claim”)

AND UPON the Order with Reasons of Justice Lord Angus Glennie dated 23 March 2022 (the “Sanctions Order”)

AND UPON the Sixth Defendant’s Application No. CFI-070-2018/11 dated 30 December 2024 and No. CFI-070-2018/12 dated 19 March 2025 (together, the “Applications”)

AND UPON the Order with Reasons of H.E. Deputy Chief Justice Ali Al Madhani dated 22 January 2026 granting the Applications, therefore ordering relief from sanctions imposed in the Sanctions Order to the extent those sanctions were operative against the Sixth Defendant (the “January Order”)

AND UPON the Claimant’s Appeal Notice dated 12 February 2026 seeking permission to appeal the January Order (the “PTA Application”)

AND UPON the Order with Reasons of H.E. Deputy Chief Justice Ali Al Madhani dated 25 March 2026 (the “Costs Order”)

AND UPON the Claimant’s Application No. CFI-070-2018/13 dated 9 April 2026 seeking a stay of the Costs Order pending the determination of the PTA Application (the “Stay Application”)

IT IS HEREBY ORDERED THAT:

1. The PTA Application is dismissed.

2. The Stay Application is dismissed.

3. Costs of the PTA Application and the Stay Application shall be awarded to the Sixth Defendant on the standard basis, to be assessed by the Court following the parties’ submissions on costs.

4. The parties shall file and serve costs submissions, of no longer than 3 pages, within 5 working days from the date of this Order.

Issued by:
Hayley Norton
Assistant Registrar
Date of issue: 21 May 2026
At: 9am

SCHEDULE OF REASONS

1. The Claimant (hence, the “Applicant” or the “Claimant”) seeks permission to appeal the January Order, and to stay the Costs Order pending determination of the PTA Application.

2. The January Order set aside the Sanctions Order, which struck out the Defendants’ defence and entered judgment against them to the value of USD 5,633,240.37 plus interest and costs, to the extent that the Sanctions Order was operative against the Sixth Defendant. Therefore, unless addressed to collectively, any reference to the Respondent will mean the Sixth Defendant only.

3. Chronologically, the PTA Application shall be determined first.

4. The Applicant advances only three grounds of appeal. As it is unnecessary at this point in the proceedings and unrelated to the Appeal Notice, I will dispense with a reiteration of the facts, background and procedural history.

Applicable Law and Rules

5. Granting permission to appeal stems from the threshold established at RDC 44.19, which states that the appeal would have to have a “real prospect of success” or otherwise give some “other compelling reason” as to why the appeal should be heard, within the meaning of RDC 44.19 (2). Additionally, pursuant to RDC 44.117, an appeal will be granted where the decision appealed is either “wrong” or “unjust” due to a serious procedural or other irregularity in the proceedings of the lower Court.

6. It is well understood that a “real prospect of success” needs to be realistic rather than fanciful, and so requires more than a merely arguable case (Barclays Bank v Essar Global Fund [2016] CFI 036). Where an error of law is alleged, it must be demonstrated that the alleged error was material to the outcome of proceedings; being, if the alternative was applied, the outcome would be different. On a similar thread, where an error of fact is alleged, considerable deference must be afforded to the decision of the trial judge who must be shown to have been plainly wrong in their interpretation (Al Khorafi & Ors v Bank Sarasin-Alpen (ME) Limited & Ors [2015] DIFC CA 003). If the alleged error is a mix of fact and law, it must be shown that the wrong legal principle was applied and irrelevant considerations were made which culminated in a plainly wrong conclusion (Protiviti Member Firm (Middle East) Limited v Al-Mojil & Ors [2016] DIFC CA 003).

7. Where an appeal is brought against a discretionary exercise, the appellate court must be satisfied that the appealed decision was made due to a mistake of fact or law, failed to take into account material issues, accounted for irrelevant factors, or reached a conclusion outside the reasonable scope of decisions open to a Judge properly directing themselves ( LXT Real Estate Broker LLC v SIR Real Estate LLC [2025] DIFC CA 005).

8. The Applicant also relies on public policy considerations concerning the administration of justice, including the importance of sanctions for disobedience of, and noncompliance with, Court orders.

Grounds of Appeal

First Ground

Applicant’s Submissions

9. The first ground of appeal, which is comprised under five principal heads, is that I made fundamental errors of fact in the January Order by taking into account irrelevant matters and failing to consider relevant considerations, therefore arriving at an incorrect conclusion.

10. To advance, the Applicant contends that my Reasons for the January Order were materially infected by a series of grave and fundamental errors, both of fact and of law, which permeated the entirety of the exercise of discretion undertaken below. It is said that I proceeded upon findings unsupported by the evidential record, attributed legal consequences to matters incapable in law of bearing such weight, and thereby allowed irrelevant considerations to intrude into the decisional process, whilst at the same time failing to have proper regard to matters which the governing procedural framework required him to consider.

11. The complaint advanced is not merely that another tribunal might have reached a different conclusion. Rather, it is asserted that my reasoning strayed beyond the permissible scope of judicial discretion. The consequence, so the Applicant submits, is that the impugned decision falls outside the range of reasonable decisions open to the Court and is therefore “plainly” or “obviously” wrong within the applicable appellate standard.

I. First Principal Head: The Scope of the Abu Dhabi Criminal Judgment

12. The first and most substantial criticism concerns my treatment of the judgment of the Abu Dhabi Criminal Court dated 16 October 2024 (the “Abu Dhabi Criminal Judgment”).

13. The Applicant submits that I fundamentally erred in extending the determinative reach of that criminal judgment beyond its lawful and proper scope, and in treating it as conclusively dispositive of issues relating to the IDBI Facility Agreement and the Personal Guarantee, notwithstanding that those instruments were neither identified nor adjudicated upon in the criminal proceedings.

14. Particular reliance is placed upon paragraphs 54 and 59 of the Reasons, wherein it was stated that the Abu Dhabi Criminal Judgment constituted a “definitive and binding determination” that officers within the Delma Group had engaged in fraud “including in relation to the Facility Agreement and the Personal Guarantee relied upon by the Claimant”, and further observed that the Sixth Defendant had been found not to have been involved in the procurement of the loan.

15. The Applicant contends that such conclusions represented a profound misdirection in law.

16. It is submitted that I misconstrued and misapplied Article 269 of the Federal Criminal Procedure Code, which confines the binding effect of a criminal judgment to the occurrence of the criminal act, its legal characterisation, and its attribution to the accused. Reliance is also placed upon Article 88 of the Federal Law of Evidence, under which a criminal judgment binds a civil court only in relation to matters actually determined by the criminal tribunal and necessary to the disposal of the criminal proceedings.

17. The Applicant further invokes the authority of Sir John Chadwick in TVM Capital Healthcare Partners Ltd v Ali Akbar Hashemi [2014] DIFC CA 006, particularly at [22- 23], wherein it was held that Article 269 cannot operate to bind a civil court in circumstances where the relevant issue was not before the criminal court, was unnecessary to its determination, and was the subject of no finding by that court.

18. Applying those principles, the Applicant submits that the Abu Dhabi Criminal Judgment did not determine, and could not properly be construed as determining, any issue concerning IDBI, the Facility Agreement, or the Personal Guarantee. It is emphasised that the criminal judgment made no reference whatsoever to IDBI, to any facility agreement entered with IDBI, or to any personal guarantee executed in its favour.

19. Accordingly, it is argued that I impermissibly attributed to the criminal court findings which it never in fact made.

20. The Applicant further assails my reliance upon extracts from an expert report filed in the Abu Dhabi proceedings. I had concluded that the “combined effect of the criminal judgment and the expert findings” established that the Sixth Defendant was not a true signatory to the relevant agreements.

21. That reasoning, it is submitted, was likewise erroneous in principle.

22. The Applicant relies in this regard upon the decision of the Dubai Court of Cassation in Cassation Appeal No. 832 of 2020 (Criminal) dated 19 October 2020, for the proposition that an expert report possesses no autonomous determinative force; its evidential value depends entirely upon the extent to which its conclusions are expressly adopted by the court rendering judgment.

23. It is said that the Abu Dhabi Criminal Court neither referred to nor adopted any findings concerning IDBI documentation, the Facility Agreement, or the Personal Guarantee. Nor, indeed, was the entirety of the expert report before the Court below. Only selected extracts were adduced, notwithstanding that the expert committee’s mandate extended across numerous matters of substantially broader compass.

24. The Applicant further observes that, in relation to IDBI documentation, the expert committee examined 71 signatures attributed to Mr Almeraikhi, of which 68 were electronic signatures. In respect of the remaining three wet-ink signatures, the report merely expressed the opinion that those signatures appeared to be imitations rather than genuine signatures of the Sixth Defendant. It did not purport to determine fraud, still less to conclude that the Facility Agreement or the Personal Guarantee had been procured fraudulently.

25. Moreover, the same expert exercise undertaken in respect of the Seventh and Eighth Defendants resulted in findings that their signatures upon the same documents were genuine

26. The Applicant therefore submits that I elevated a limited handwriting opinion into a binding judicial determination of fraud, contrary both to principle and to the evidential record.

27. Complaint is also made that I erred in observing, at paragraph 55 of the Reasons, that the Claimant had failed to confront the implications of the Abu Dhabi Criminal Judgment. The Applicant contends that this was demonstrably incorrect, given that IDBI had expressly submitted in its skeleton argument dated 1 July 2025 that the criminal judgment made no mention of IDBI, any IDBI facility, or any related guarantees.

II. Second Principal Head: The Extent of the Sixth Defendant’s Compliance

28. The Applicant next contends that I fundamentally misapprehended the procedural history in concluding that the Sixth Defendant had made “genuine” and “proportionate” attempts to comply with the Court’s orders.

29. The submission advanced is that no meaningful attempt at compliance was ever undertaken.

30. The Applicant draws attention to the Order of 2 March 2022, which imposed extensive obligations upon the Sixth Defendant, including the production of documents arising from an alleged internal fraud investigation, the swearing of corrective affidavits addressing serious disclosure deficiencies, the disclosure of documents mentioned in witness evidence pursuant to RDC 28.5, the remediation of disclosure failures identified in Schedule B to the Order, and the provision of access for forensic imaging of the former Delma Group CEO’s computer hard drive.

31. It is said that those obligations were met not merely with inadequate compliance, but with complete inaction.

32. The Applicant recounts that repeated correspondence seeking compliance, including letters dated 3 March, 8 March, and 15 March 2022, elicited no response whatsoever, nor did the Defendants attend the hearing listed for 22 March 2022 to address compliance, having informed the Registry that they would not appear.

33. Further, it is submitted that even following the later appointment of new solicitors, the Sixth Defendant remained in continuing breach of both the October 2021 Order and the Order of 2 March 2022, without explanation or remedial action.

34. Against that background, the Applicant submits that my finding that genuine efforts at compliance had been made was wholly inconsistent with the contemporaneous record and constituted a material error of fact.

III. Third Principal Head: Misunderstanding the Nature of IDBI’s Case

35. The Applicant further contends that I fundamentally misunderstood the nature of the pleaded case advanced against the Sixth Defendant.

36. In the Reasons, I stated that the claims were unsustainable if the Sixth Defendant had not personally signed the Facility Agreement and Personal Guarantee and further suggested that his joinder to the proceedings thereby became procedurally irregular.

37. The Applicant submits that such reasoning entirely overlooked the alternative case expressly pleaded by IDBI.

38. That alternative case, pleaded at paragraph 8(f) of the Reply to Defence, was that the Sixth Defendant had authorised, directed, or otherwise caused his signature to be affixed to the relevant agreements by an agent acting on his behalf.

39. Accordingly, even if the signatures were not physically written by the Sixth Defendant himself, which is disputed by IDBI in any event, liability could nevertheless arise upon ordinary principles of authority and agency.

40. The Applicant therefore contends that the Judge’s conclusion that no coherent basis for liability had been articulated was contrary to the pleadings and amounted to a consideration of an irrelevant matter founded upon a misunderstanding of the case advanced.

IV. Fourth Principal Head: Applications for Extensions of Time and Stays

41. The Applicant next challenges my finding that the Sixth Defendant had “continuously” sought extensions of time and/or stays of proceedings.

42. It is said that the procedural history reveals no such thing.

43. The Applicant submits that no application for an extension of time was ever filed at any stage of the proceedings, whether formally or informally, whether by evidence or otherwise.

44. As to any application for a stay, the Applicant points only to a single oral application made during the hearing of 1 March 2022, after the hearing had already commenced and following the late appearance of Ms Alanood, notwithstanding prior indication that she would not attend.

45. That oral application, based upon an alleged criminal complaint in Dubai against employees of the Claimant, was unsupported by documentary evidence, particulars, or even a case number. It was expressly refused by the Court, which indicated that any renewed application would require proper evidential support. No subsequent application was ever made.

46. The Applicant therefore submits that my characterisation of the Sixth Defendant as having “continuously” pursued procedural relief was plainly contradicted by the court record and amounted to a material factual error.

V. Fifth Principal Head: Failure to Take into Account Relevant Considerations under RDC 4.49

47. Finally, the Applicant submits that I failed properly to direct myself to the mandatory considerations arising under RDC 4.49 in determining the application for relief from sanctions.

48. In particular, it is submitted that insufficient regard was had to:

49. The Applicant therefore submits that the Judge’s exercise of discretion under RDC 4.49 was undertaken upon an incomplete and legally defective evaluative basis, thereby vitiating the decision as a whole.

Respondent’s Submissions

50. By way of foundational summary, the Respondent resists the PTA Application in its entirety, as the Applicant’s grounds of appeal do not satisfy either limb of RDC 44.19. It is stated that the proposed appeal has “no real prospect of success” and that there is “no other compelling reason” as to why the appeal should be heard, within the meaning of RDC 44.19 (2). The Respondent submits that the January Order was a discretionary case management decision, reached after consideration of the relevant procedural history, the evidence before the Court, and the applicable governing principles governing relief from sanctions under RDC 4.49 and Denton. On that basis, the Applicant’s challenge is characterised as an attempt to relitigate matters of evaluative judgment and evidential weight, rather than a satisfactorily arguable appealable error.

51. The Respondent also submits that the applicable threshold for appellate intervention is deliberately exacting. A real prospect of success must be realistic, not fanciful. Where, as here, the decision under challenge involves a discretionary assessment under RDC 4.49, the Respondent submits that appellate restraint is uncommonly important. As per the Respondent’s reasoning, it is not sufficient enough for the Applicant to show that a different judge might have attached different weight to individual factors. The Applicant must identify an actual material error of law or principle, a failure to consider a relevant matter, reliance upon an irrelevant matter, or a conclusion falling outside the range of reasonable decisions open to the Court. The Respondent stated that none of the aforementioned requirements are met.

52. As to the alternative limb of RDC 44.19, the Respondent denies that the appeal raises any “compelling reason” warranting appellate scrutiny. The proposed appeal is said to raise no novel point of law, no issue of public importance, and no question requiring authoritative clarification by the Court. The Respondent submits that the Applicant’s invocation of public policy and the importance of compliance with court orders is too general to satisfy the compelling-reason threshold. The January Order did not weaken the authority of the Court orders, as it applied the established relief from sanctions jurisdiction to the exceptional facts of this case.

53. Turning to the Respondent’s objection to the First Ground, it is submitted that the Applicant mischaracterises the incorporation and reliance of the Abu Dhabi Criminal Judgment and the AD Prosecution Expert Report in the Judge’s final determination. The Respondent does not contend that those materials finally determine IDBI’s contractual claim or conclusively dispose of all civil issues arising under Facility Agreement or the Personal Guarantee. Rather, the Respondent’s position is that those materials were properly treated as highly material evidence within the overall assessment under RDC 4.49. They bore directly upon the justice and proportionality of maintaining a sanctionsbased judgment against the Sixth Defendant in circumstances where his alleged participation in the relevant transaction was seriously disputed.

54. The Respondent therefore states that the Applicant’s reliance on Article 269 of the Federal Criminal Procedure Code, Article 88 of the Federal Law of Evidence, and TVM Capital does not answer the reasoning of the January Order. Those authorities, in fact, concern the extent to which a criminal judgment may bind a civil court. The Respondent submits that the January Order did not proceed on the basis that the Abu Dhabi Criminal Judgment was binding as to IDBI’s civil claim. The Respondent submits that I was entitled to consider the criminal findings and expert conclusions as part of the evidential matrix relevant to relief from sanctions. The Applicant’s argument is therefore said to conflate binding effect with the evidential relevance.

55. The Respondent also submits that the Applicant’s criticism of the AD Prosecution Expert Report is similarly misplaced. The Respondent’s case is that the expert findings concerning the authenticity of signatures attributed to the Sixth Defendant were directly relevant to the fairness of maintaining judgment entered by reason of procedural default. Even if the expert report did not itself constitute a binding adjudication of civil liability, the Respondent submits that it remained probative material which the Court was entitled to evaluate. The issue in question is, in fact, whether the expert report materially affected the justice of shutting the Sixth Defendant out from defending the Claim altogether.

56. In that regard, the Respondent states that the Applicant’s challenge is, at most, a disagreement with the weight attributed to the criminal and expert materials. The Respondent submits that such disagreement cannot justify permission to appeal, as I did not rely upon extraneous material, nor did I decide that IDBI’s claim must fail. I eventually decided that the Sixth Defendant should not remain subject to the ultimate consequence of strike-out and judgment without trial, given the subsequent evidence bearing upon the authenticity of the documents said to found liability.

57. As per the second head under the first ground, namely the extent of compliance, the Respondent submits that the Applicant wrongly isolates the disclosure failures from their surrounding context. The Respondent’s position is that I was entitled to consider the practical difficulties affecting the Sixth Defendant, including “loss of access to documents”, alleged “internal fraud” within the Delma Group, lack of legal representation, financial pressure, and the broader criminal investigations. Those matters were relevant to both the explanation for non-compliance and the proportionality of maintaining the sanction.

58. The Respondent does not appear to dispute that there had been non-compliance with prior orders. His submission is rather that relief from sanctions does not operate mechanically. The mere presence of breach is the premise upon which RDC 4.49 is engaged. The Respondent submits that I was required to consider whether, in all the circumstances, the sanction should continue to operate. The Respondent further submits that the Applicant’s approach treats non-compliance as necessarily determinative, whereas the applicable test requires a broader evaluation of the seriousness of the breach and the interests of justice.

59. In relation to the Applicant’s contention that the court misunderstood IDBI’s pleaded case, the Respondent submits that this point does not, in fact, establish an appealable error. The Respondent denies that he authorised any person to affix his signature to the Facility Agreement or the Personal Guarantee. The burden remains on IDBI to prove any pleaded case based on agency or authority. The Respondent submits that a bare pleaded alternative could not, without more, justify maintaining a sanctions-based judgment where material evidence had emerged calling into question the authenticity of the documents relied upon. If IDBI maintains its case based on authority or agency, that is inherently a matter for trial, not a reason to deny relief from sanctions.

60. As to the Applicant’s criticism concerning applications for extensions of time or stays, the Respondent submits that the point is “immaterial”. The Respondent further submits that I was entitled to consider the Sixth Defendant’s attempts to explain the difficulties affecting compliance and to seek procedural accommodation, whether those attempts were made formally or informally. The Respondent says that the distinction between formal written applications and oral requests does not bear materially upon the outcome. The relevant issue was whether the Sixth Defendant’s procedural conduct, viewed in context, justified the continuation of the sanction.

61. On the alleged failure to consider the factors under RDC 4.49, the Respondent submits that the Reasons demonstrate a holistic assessment of the relevant considerations. The Respondent says that I considered the administration of justice, the need for proportionality, the impact of the criminal and expert evidence, the delay in seeking relief, the explanation for non-compliance, and the prejudice to both parties. The Respondent also submits that the administration of justice is not served by rigidly maintaining a procedural judgment in circumstances where serious evidence has emerged which may undermine the factual basis for liability.

62. The Respondent’s position is that the Applicant’s prejudice remains capable of management through directions, costs, and trial case management. In contrast, refusal of relief would deprive the Sixth Defendant of any opportunity to defend a claim based on documents which he says he did not sign and did not authorise. The Respondent therefore submits that the balance of prejudice was one which I was entitled to resolve in his favour.

First Ground: Discussion and Conclusion

63. The First Ground must be assessed by reference to the threshold in RDC 44.19. Permission to appeal will only be granted where the proposed appeal has a real prospect of success or where there is some other compelling reason for the appeal to be heard, within the meaning of RDC 44.19 (2). In the context of an appeal from a discretionary case management decision, that threshold is not met solely because the Applicant can identify matters which, in its submission, should have been given greater weight. The Applicant must identify a material error of law, fact, principle, or procedure, and must further show that the correction of that error would realistically affect the outcome.

64. That is the proper starting point for the First Ground. The January Order was concerned with relief from sanctions under RDC 4.49. That exercise required the Court to consider the seriousness and significance of the relevant non-compliance, the explanation for it, and all the circumstances of the case, including the administration of justice, delay, prejudice, and the need for compliance with Court orders. It was not a determination of the substantive merits of IDBI’s claim against the Sixth Defendant.

65. The Applicant’s principal complaint is that the January Order failed to give sufficient weight to the administration of justice, the need for compliance with Court orders, promptness, the intentional nature of the defaults, the loss of the original trial date, and the prejudice said to have been suffered by IDBI. Those matters were plainly relevant. However, the question for present purposes is not whether those factors could have been weighed differently, but whether the January Order failed to consider them, misdirected itself as to their significance, or reached a conclusion outside the range reasonably open to the Court.

66. I do not accept that the First Ground identifies such an error. The January Order did not proceed on the basis that Court orders need not be obeyed, nor did it diminish the importance of sanctions as a mechanism for securing compliance. It recognised that relief from sanctions requires an evaluative assessment of all the circumstances, including both the need to enforce Court orders and the need to avoid maintaining a judgment where later material raised a serious question as to the basis upon which judgment had been entered.

67. The matters relied upon by the Applicant, including delay, continuing non-compliance, the loss of the trial date and prejudice to IDBI, were relevant, but they were not necessarily determinative. The Applicant’s complaint is, in substance, that those matters should have been given greater weight. That is not sufficient for permission to appeal unless the resulting conclusion is arguably outside the range of reasonable decisions.

68. The Applicant’s complaints concerning the Abu Dhabi Criminal Judgment and the expert report do not alter the analysis. The January Order did not treat those materials as finally determining IDBI’s civil claim, or as conclusively resolving liability under the Facility Agreement or the Personal Guarantee. They were treated as relevant to the justice and proportionality of maintaining a sanctions-based judgment against the Sixth Defendant.

69. Nor does IDBI’s alternative pleaded case based on authority or agency demonstrate a real prospect of success. If IDBI maintains that the Sixth Defendant authorised, directed, or caused his signature to be affixed by another person, that case remains available to be advanced and tested at trial. The January Order did not decide otherwise.

70. The complaint concerning applications for extensions of time or stays is also immaterial. Even if there was no formal extension application and only one oral stay application, the January Order did not turn on repeated formal applications. The material question was whether, viewed in the round, the procedural history justified maintaining or relieving the sanction.

71. Accordingly, the First Ground does not identify a material error of law, fact, principle, or procedure. At its highest, it shows that the Applicant considers that the relevant factors should have been weighed differently. That is insufficient under RDC 44.19. The First Ground is rejected.

Second Ground

Applicant’s Submissions

72. I turn next to the second ground of appeal, which advances the Applicant’s contention that, whilst I correctly identified the governing principles applicable to an application for relief from sanctions, I nevertheless fundamentally misapplied those principles in the course of my analysis, with the result that the entirety of the discretionary exercise became vitiated by error.

73. The complaint is advanced by reference to the well-known three-stage test articulated by the English Court of Appeal in Denton v TH White Ltd [2014] EWCA Civ 906 (“Denton”) and subsequently adopted within this jurisdiction in Mad Atelier International BV v Man Industries LLC [2022] CFI 030 (“Atelier v Man”). Although the Applicant recognises that those authorities were appropriately relied on, I am invited to conclude that my application of them was affected by several errors of principle of a fundamental character.

74. The first criticism concerns my treatment of the initial stage of the Denton inquiry.

75. At paragraph 61 of the Reasons, I concluded:

The Applicant’s criticism of that reasoning is one of considerable force.

76. It is submitted that the Sanctions Order was the consequence imposed by the Court following the Sixth Defendant’s antecedent failures to comply with the Order of 2 March 2022. The first stage of the test prescribed in Denton requires the Court to identify and assess the seriousness and significance of the very breach which engaged the sanction in respect of which relief is later sought. As was made plain in Denton, the Court’s focus must be directed to the underlying non-compliance which triggered the sanction, not to the sanction order itself.

77. It is submitted that I, however, directed my attention to whether the Sixth Defendant’s “breach” of the Sanctions Order was itself significant or serious. In so doing, he addressed the wrong juridical question. The proper inquiry was whether the Sixth Defendant’s failures to comply with the Order of 2 March 2022 were serious or significant. By misidentifying the relevant breach, the Judge materially misapplied the first stage of the Denton framework.

78. That error, moreover, is advanced to not be merely semantic. It infected the entirety of the analysis. Had I directed myself correctly, I would have been required to confront the undisputed procedural history, namely that there had been no meaningful compliance with the Order of 2 March 2022 at all. The breaches were therefore not peripheral or technical in nature; they went directly to disclosure obligations, the administration of justice, and the orderly conduct of litigation. On any orthodox application of Denton, such breaches were plainly both serious and significant.

79. Further, the Applicant submits that this misdirection also impaired my consideration of the wider conduct of the Sixth Defendant, including the extent to which he had complied with other rules, Practice Directions, and court orders, matters which RDC 4.49(5) required the Court to take into account.

80. The second criticism concerns my treatment of the remaining stages of the Denton inquiry.

81. Having concluded, erroneously, in the Applicant’s submission, that the breaches were not serious or significant, I gave only cursory attention to the second and third stages of the analysis. Yet even where a breach is regarded as less serious, the Court must nevertheless proceed to examine why the default occurred and whether, in all the circumstances, relief ought justly to be granted.

82. As to the second stage, the Applicant argues that my analysis was necessarily undermined by my earlier misidentification of the relevant breach. The question was not why the Sixth Defendant had failed to comply with the Sanctions Order, but why he had failed to comply with the Order of 2 March 2022.

83. On the material before the Court, the Applicant submits that there existed no good explanation whatsoever for that default. The Sixth Defendant had, prior to the imposition of sanctions, wholly failed to comply with the Court’s orders, and there had been no proper justification advanced for such inaction. Thus, it is said, the second stage of the Denton exercise ought to have weighed heavily against the grant of relief.

84. The Applicant further contends that my treatment of the third stage, namely whether relief should be granted in all the circumstances of the case, was similarly deficient.

85. Particular reliance is placed upon RDC 4.49 and the constellation of factors therein identified, including the interests of the administration of justice, the need for litigation to be conducted efficiently and at proportionate cost, the promptness of the application, the intentional nature of the breaches, the prejudice caused to the opposing party, and the impact upon trial dates and the efficient deployment of Court resources.

86. The Applicant submits that these matters were either inadequately addressed or omitted altogether from the Reasons. In particular, the delay of nearly three years before the application for relief was brought, the continuing non-compliance with prior orders, the loss of the original trial date, and the prejudice occasioned to IDBI by the prolonged procedural default were all matters of obvious relevance which required explicit and careful evaluation.

87. The third and perhaps most serious criticism concerns my reconsideration of the propriety of the Sanctions Order itself.

88. Earlier in the Reasons, at paragraph 53, the Applicant submits that I correctly recognised that an application for relief from sanctions proceeds upon the footing that the sanction was properly imposed. Yet notwithstanding that self-direction, I thereafter embarked upon an evaluative exercise directed to whether the Sanctions Order ought ever to have been made.

89. Thus, at paragraph 55, it is stated:

And at paragraph 60:

90. In my judgment, the Applicant is incorrect to characterise this as a material error of approach.

91. The authorities establish with clarity that an application for relief from sanctions is not an appeal against the sanction order itself. The starting point is that the sanction has been properly and validly imposed in accordance with the overriding objective. If a party contends that the original order was wrongly made, the appropriate course is to pursue an appeal or seek variation of that order, not to invite the court hearing the relief application to rehear the original decision.

92. That principle was emphasised in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537 at [45], where the Court made plain that an application for relief from sanctions presupposes the propriety of the sanction itself.

93. The Applicant submits that, by revisiting whether the strike-out sanction ought to have been imposed at all, I entered upon an inquiry which, in principle, I ought not to have undertaken. In so doing, I impermissibly allowed my disagreement with the original sanction to influence the subsequent exercise of discretion on the relief application.

94. The Applicant therefore submits that my analysis was affected by multiple interrelated errors of principle: first, in identifying the wrong breach for the purposes of Denton stage one; secondly, in failing properly to analyse stages two and three; and thirdly, in impermissibly reconsidering the correctness of the Sanctions Order itself.

95. Accordingly, it is said that I failed to apply the governing principles applicable to relief from sanctions in the manner required by authority, with the consequence that the decision reached was plainly wrong and cannot safely stand.

Respondent’s Submissions

96. In response to the second ground, the Respondent denies that I misapplied Denton principles, as the reference in the Reasons to a “breach” of the Sanctions Order should be read in substance, not with excessive technicality. In making my decision, I was addressing the non-compliance which led to the sanction and the continuing justice of allowing that sanction to operate. The Respondent therefore says the Court was fully aware that the relevant procedural default arose from the Unless Order and the subsequent Sanctions Order.

97. The Respondent further submits that I did not collapse the second and third stages of the Denton analysis. Rather, my adjudication considered the seriousness of the breach, the circumstances in which default occurred, and the broader justice of granting relief. The Respondent therefore says that the Applicant’s complaint is that I gave insufficient weight to the Applicant’s preferred factors. That is not a basis for permission to appeal.

98. The Respondent also denies that the January Order “impermissibly” revisited the correctness of the Sanctions Order. The Respondent submits that I expressly proceeded on the footing that the Sanctions Order had been properly made on the material then available. My task, in the Respondent’s opinion, was to decide whether subsequent developments, including the Abu Dhabi Criminal Judgment and AD Prosecution Expert Report, meant that the sanction should no longer continue to operate against the Sixth Defendant. That is said to be the very function of relief from sanctions, as it is not an appeal against the original sanction, but a fresh discretionary assessment of whether relief should now be granted.

99. Accordingly, the Respondent submits that the second ground discloses no real prospect of success. The Applicant seeks to characterise an evaluative relief from sanctions decision as an “error of principle”, but the substance of the complaint is disagreement with my balancing exercise. The Respondent contends that this constitutes an insufficient reason, particularly where the decision concerned a discretionary procedural matter.

Second Ground: Discussion and Conclusion

100. The Second Ground is concerned with the application of the principles governing relief from sanctions. The applicable framework was not in dispute. The Applicant accepts that the relevant test is the three-stage approach in Denton v TH White Ltd [2014] EWCA Civ 906, as adopted in this jurisdiction in Mad Atelier International BV v Man Industries LLC [2022] CFI 030. The complaint is instead that, although the correct test was identified, it was misapplied in a manner said to vitiate the discretionary exercise.

101. The Applicant’s first criticism is directed to the statement at paragraph 61 of the January Order that the Sixth Defendant’s “breach” of the Sanctions Order was not “significant or serious”, because there had been “proportionate attempts to comply, at least partially”, and because the Sixth Defendant’s maintained defence of fraud had been “proven in the Abu Dhabi criminal courts”. The Applicant submits that this involved a misidentification of the relevant breach. It says that the focus should have been the underlying noncompliance with the Order of 2 March 2022, rather than any “breach” of the Sanctions Order itself. That submission identifies a point of language in the January Order, but it does not, in my view, identify a material error with a real prospect of success.

102. The January Order must be read as a whole. The Court was not unaware of the procedural default which led to the Sanctions Order. Nor was the Court treating the Sanctions Order as though it imposed some independent obligation which had itself been breached. The substance of the reasoning was directed to whether, in light of the procedural history and the later material relied upon by the Sixth Defendant, the sanction should continue to operate against him. The reference to the “breach” of the Sanctions Order should therefore be understood as shorthand for the procedural default and its consequences, rather than as a misdirection as to the juridical source of the sanction.

103. The second criticism is that the Court gave only “cursory attention” to the second and third stages of Denton, including why the default occurred and whether relief should be granted in all the circumstances. I do not accept that this gives the proposed appeal a real prospect of success. The January Order considered the wider circumstances relied upon by the Sixth Defendant, including the alleged fraud within the Delma Group, the loss of access to documents, lack of representation, financial pressure, and the subsequent Abu Dhabi Criminal Judgment and expert material. The Applicant’s real complaint is that those matters should have been given little or no weight when set against the seriousness of the default, delay, and prejudice to IDBI.

104. The Applicant also submits that the Court impermissibly reconsidered the propriety of the Sanctions Order itself. It relies in particular on paragraph 53 of the January Order, where it was recognised that an application for relief from sanctions proceeds on the footing that the sanction was properly imposed, and contrasts that with paragraphs 55 and 60, where the Court stated that the Claimant had failed to articulate a coherent basis upon which the Sixth Defendant could be liable for the loan or “properly subjected to the ultimate sanction of strike-out and judgment”, and that the Sanctions Order was “not only disproportionate, but fundamentally misdirected as against the Sixth Defendant”. However, read in context, the aforementioned paragraphs were not an appeal against the Sanctions Order. They formed part of the Court’s assessment of whether, in light of later material, the continued operation of the sanction remained just.

105. Relief from sanctions necessarily proceeds from the premise that a sanction has been imposed. Nevertheless, the Court is not required to blind itself to subsequent developments which bear upon the justice of maintaining that sanction. The Abu Dhabi Criminal Judgment and the expert material were not used to set aside the Sanctions Order as wrongly made on the material then before the Court. They were considered as part of the later evaluative exercise under RDC 4.49. The Applicant’s reliance on the proposition that relief from sanctions is not an appeal against the sanction order is correct as far as it goes, and it does not follow that the Court was precluded from considering whether the sanction should continue to operate.

106. In my view, the Second Ground therefore does not identify a material error of law or principle. The Applicant has identified aspects of the January Order which it says should have been framed differently or weighed differently. It has not shown, however, that the wrong test was applied, that the Court failed to conduct the required evaluative exercise, or that the outcome was outside the range of decisions reasonably open to it. Nor has it shown that, if the alleged errors of phrasing were corrected, the result would realistically have been different. The Second Ground has no real prospect of success and is therefore rejected.

Third Ground

Applicant’s Submissions

107. For the third ground, the Applicant further contends that I erred in law and principle by treating the Sixth Defendant’s Applications as though they constituted a single procedural exercise capable of collective determination. At [52] of the Reasons, I stated that I would “merge” the applications. It is submitted that this course was impermissible, since the applications were materially distinct in character, juridical basis, and relief sought, and ought therefore to have been determined separately and according to their own procedural and substantive foundations.

108. The Applicant submits that the first application, being Application No. CFI-070-2018/11 dated 30 December 2024, was not, in substance or form, an application for relief from sanctions at all.

109. By the first application, the Sixth Defendant sought orders setting aside the Sanctions Order, varying or amending that order so as to remove his name, and striking him out from the proceedings altogether on the basis that he was not “an essential or appropriate party to the Claim.” The application was supported by the witness statement of Ms Alanood dated 30 December 2024, wherein reliance was placed upon RDC 1.6, 4.1, 20.2 and 20.8. The gravamen of the application was that it would be “unjust, unreasonable and contrary to … fundamental principles” for the Sixth Defendant to remain subject to the proceedings or to the consequences of the Sanctions Order.

110. The Applicant emphasises that no relief from sanctions was sought in that first application. Rather, the application proceeded upon an altogether different juridical footing, namely that the Sixth Defendant ought never properly to have been included in the proceedings at all.

111. By contrast, the second application, Application No. CFI-070-2018/12 dated 19 March 2025, constituted the first formal application by the Sixth Defendant seeking relief from sanctions in the true procedural sense.

112. That application expressly sought relief from the consequences of the Sanctions Order and relied heavily upon the Abu Dhabi Criminal Judgment as allegedly establishing that the Sixth Defendant had been wrongfully joined to the proceedings and bore no valid contractual liability to the Claimant. The application was supported by a further witness statement of Ms Alanood dated 14 March 2025, which contained extensive submissions directed specifically to the principles governing relief from sanctions.

113. The Applicant therefore submits that the Applications were conceptually and procedurally distinct. The first sought to challenge the propriety of the Sixth Defendant’s inclusion within the proceedings and to vary or set aside the Sanctions Order on that basis. The second, by contrast, accepted the existence and operation of the Sanctions Order and sought discretionary relief from its consequences pursuant to the established principles governing such applications.

114. Against that background, the Applicant contends that I erred in “merging” the applications and treating them as though they formed part of a single composite application for relief.

115. It is said that the first application ought properly to have been dismissed, with costs, because it had been brought upon the wrong procedural basis. If the Sixth Defendant wished to escape the consequences of the strike-out sanction imposed upon him, the proper course was to seek relief from sanctions directly. That relief was not sought in the first application, thereby necessitating the subsequent commencement of the second application.

116. The Applicant submits that the Judge impermissibly overlooked the significance of that procedural distinction and thereby failed to recognise that only the second application was properly directed to the relief ultimately granted. The complaint is not merely technical, as the merger materially affected the question of costs.

117. The Applicant observes that substantial portions of the relief sought by the Sixth Defendant were ultimately refused. Although I set aside the Sanctions Order (wrongly, as the Applicant contends elsewhere in these grounds) I did so only through the exercise of the jurisdiction to grant relief from sanctions. I did not grant the substantive relief sought in the first application, namely the removal of the Sixth Defendant from the proceedings altogether, nor did I strike out the claims against him.

118. Accordingly, the Applicant submits that the Judge ought to have recognised that the first application failed in substance and that only one application was necessary.

119. In those circumstances, it is said that I further erred in awarding the Sixth Defendant the costs of both applications. The Applicant contends that the learned Judge should instead have reflected, in the costs disposition, both the procedural impropriety of the first application and the fact that significant portions of the relief sought therein were unsuccessful.

120. The Applicant therefore submits that the Judge’s decision to merge the applications constituted a further material error of principle which infected both the procedural analysis and the consequential order as to costs.

Respondent’s Submissions

121. As to the third ground, the Respondent submits that the criticism of my decision to treat the Set Aside Application and the Relief from Sanctions Application together is misconceived. Both applications arose from the same Sanctions Order, relied substantially on the same factual background, and sought relief from the continuing operation of that order against the Sixth Defendant. The Respondent accepts that the practical objective of both applications substantially overlapped, despite their not being identical in form. Further, the reason for what is essentially a duplication in applications is said to be the Sixth Defendant’s unfamiliarity with the appropriate application format.

122. The Respondent relies on the Court’s broad case-management powers under RDC 1.6 and RDC 4.1. It is said that I was entitled to manage two related applications together where doing so avoided duplication, reduced cost, and enabled the real controversy to be determined coherently. There is no rule requiring related applications to be determined in artificial isolation solely because they are expressed under different procedural provisions.

123. The Respondent further submits that, even if the first application and second application were procedurally distinct, no material prejudice resulted from hearing and determining them together. The Claimant had notice of both applications, opposed both applications, and made submissions on the applicable principles. I ultimately granted relief from the operative sanctions against the Sixth Defendant. The Respondent says that the Applicant has not identified any procedural unfairness capable of rendering the January Order wrong or unjust.

124. The Respondent also resists the Applicant’s costs complaint on the basis that it was successful on the substantive objective of the applications, namely relief from the Sanctions Order insofar as it operated against the Respondent. The fact that not every form of relief originally sought was granted does not constitute a failure in substance on the Respondent’s part. Costs were therefore within my discretion and do not provide an independent basis for permission to appeal.

125. The Respondent’s submissions proceed on the basis that the January Order did not finally determine the merits of IDBI’s claim. It restored the Sixth Defendant’s ability to defend the claim at trial. The Applicant remains able to advance its pleaded case, including any case based on agency or authority, and to subsequently test the Respondent’s reliance on the criminal and expert materials. The Respondent submits that the Claimant has therefore not been deprived of any substantive right, indicating that the effect of the January Order is procedurally fair.

126. The Respondent accordingly submits that each of the three proposed grounds fails at the permission stage. The first ground is said to challenge evidential weight and factual evaluation. The second ground mischaracterises my application of Denton and RDC 4.49. The third ground challenges an ordinary case-management decision within my discretion. None of the latter establishes a realistic prospect that the Court of Appeal would interfere. Nor, in the Respondent’s submission, is there any compelling reason to grant permission. The case turns on its own unusual facts, including the subsequent criminal and expert material, the Sixth Defendant’s individual position, and the proportionality of maintaining a sanctions-based judgment. It does not raise a general question about the enforcement of Court orders or the operation of sanctions in ordinary cases. The Respondent therefore submits that the Applicant fails both limbs of RDC 44.19.

Third Ground: Discussion and Conclusion

127. The Third Ground concerns the treatment of the Sixth Defendant’s two applications. The Applicant submits that I erred in law and principle by treating Application No. CFI-070- 2018/11 dated 30 December 2024 and Application No. CFI-070-2018/12 dated 19 March 2025 as a single procedural exercise. Particular reliance is placed on the statement at paragraph 52 of the January Order that the applications would be “merged”. The Applicant says that the applications were materially distinct in character, juridical basis, and relief sought, and that they ought to have been determined separately.

128. I do not accept that this ground has a real prospect of success. The two applications were not identical in form, but they were directed to the same essential procedural problem, which is the continuing operation of the Sanctions Order against the Sixth Defendant. The first application sought to set aside, vary, or amend the Sanctions Order so as to remove the Sixth Defendant from its operation, and was advanced on the basis that it would be “unjust, unreasonable and contrary to … fundamental principles” for him to remain subject to the proceedings or the consequences of that Order. The second application expressly sought relief from the consequences of the Sanctions Order.

129. The Court’s decision to determine the applications together was therefore a case management decision. The Court has broad powers under RDC 1.6 and RDC 4.1 to manage proceedings in a manner which avoids duplication, reduces unnecessary cost, and enables the real dispute to be determined fairly and efficiently. There is no rule requiring related applications to be determined in artificial isolation merely because they are framed under different procedural provisions.

130. The Applicant has not identified any material unfairness arising from the course adopted. The Applicant had notice of both applications, opposed both applications, and made submissions as to the applicable principles. Nor has the Applicant identified any point which it was prevented from taking because the applications were heard and determined together. In those circumstances, even if the applications were procedurally distinct, the manner in which they were managed did not render the January Order wrong or unjust.

131. The Applicant’s further complaint is that the first application ought to have been dismissed, with costs, because no relief from sanctions was sought in that application and because significant parts of the relief sought were not granted. That submission also does not meet the permission threshold. The question for present purposes is not whether the applications could have been labelled or sequenced differently. It is whether the January Order was affected by a material error of principle or whether the outcome would realistically have been different. In my view, it would not. The relief ultimately granted was relief from the operative consequences of the Sanctions Order against the Sixth Defendant, and that was the substantive objective common to both applications.

132. Nor does the costs aspect give the proposed appeal a real prospect of success. Costs were a matter for the Court’s discretion. The Sixth Defendant succeeded in substance by obtaining relief from the operative sanctions. The fact that every form of relief originally sought was not granted does not mean that he failed in substance or that the costs order was outside the permissible range of discretionary outcomes.

133. The Third Ground therefore challenges an ordinary case management decision and a consequential costs discretion. It identifies no material procedural unfairness, no error of law or principle, and no realistic prospect that the outcome would have been different had the applications been addressed separately. The Third Ground is rejected.

The Stay Application

134. The Claimant seeks a stay of the Costs Order until either the PTA Application is refused, or the final determination of the Appeal is issued in the event the PTA Application is granted.

135. As the PTA Application has been denied, it naturally follows that the Stay Application is similarly rejected. No further discussion is required.

Conclusion

136. For the reasons set out above, the Applicant has not identified any material error of law, fact, principle, or procedure in the January Order. The proposed appeal does not disclose a real prospect of success within the meaning of RDC 44.19, nor is there any other compelling reason for the appeal to be heard.

137. The three grounds advanced are, in substance, an attempt to reopen a discretionary and fact-sensitive assessment under RDC 4.49. The Applicant’s complaints concern the weight attributed to matters including compliance, delay, prejudice, the Abu Dhabi Criminal Judgment, the expert material, and the procedural treatment of the Sixth Defendant’s two applications. None of those complaints demonstrates that the January Order was wrong in an appealable sense or unjust by reason of a serious procedural or other irregularity.

138. Permission to appeal the January Order is therefore denied.

139. As the PTA Application is refused, the Stay Application is dismissed.

140. The Applicant shall pay the Sixth Defendant’s costs of the PTA Application and the Stay Application on the standard basis, to be assessed by the Court if not agreed. The parties shall file submissions on costs within 5 working days from the date of issue of this Order, limited to 3 pages each.