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Claim No: CFI 073/2024

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

LXT REAL ESTATE BROKER L.L.C

Claimant

and

SIR REAL ESTATE LLC

Defendant

ORDER OF JUDICIAL OFFICER MAITHA ALSHEHHI

UPON the claim having been filed on 17 October 2024 (the “Claim”)

AND UPON the Defendant’s Application No. CFI-073-2024/1 dated 10 December 2024 for the Claimant to provide security for the Defendant’s costs of these proceedings in the amount of USD 1,750,000 (the “Defendant’s Security for Costs Application”)

AND UPON the Defendant’s Application No. CFI-073-2024/2 dated 16 December 2024 seeking an order to strike out the Claim pursuant to Rule 4.16 of the Rules of the DIFC Courts (“RDC”) or for immediate judgment pursuant RDC 24.1(the “Defendant’s Strike Out Application”)

AND UPON reviewing the Claimant’s Application No. CFI-073-2024/3 dated 31 December 2024 for an extension of time to file its evidence in answer to the Strike Out Application by 20 January 2025 instead of 13 January 2025 and to defer the determination of the Defendant’s Security for Costs Application until the Defendant’s Strike Out Application has been determined and should the Defendant's Strike Out Application be unsuccessful, then the Claimant shall be permitted to file and serve evidence in answer to the Defendant's Security for Costs Application within 14 days of the filing of the Defence and any Counterclaim (the “Claimant’s Application”)

AND UPON reading the Defendant’s evidence in answer to the Claimant’s Application in the form of Witness Statement of Rita Catherine Jaballah dated 7 January 2025 along with exhibit RCJ2

AND UPON reading the Claimant’s evidence in reply to the Claimant’s Application in the form of Witness Statement of Daniel Jonathan Dodman dated 10 January 2025

AND PURSUANT TO Part 4 and Part 16 of the Rules of the DIFC Courts (“RDC”)

IT IS HEREBY ORDERED THAT:

1. The Claimant’s Application is granted in part.

2. The extension of time component of the Claimant’s Application is granted.

3. The Claimant is permitted to file its evidence in answer to the Defendant’s Strike Out Application by 4pm on Monday, 20 January 2024.

4. The Defendant shall file its evidence in reply to the Defendant’s Strike Out Application 14 days thereafter i.e. 4pm on Monday, 3 February 2025.

5. Thereafter, the Registry shall proceed and list the Defendant’s Strike Out Application for a hearing.

6. The deferral component of the Claimant’s Application shall be rejected.

7. The Claimant shall file its evidence in answer to the Defendant’s Security for Costs Application within 7 days of the date of this Order i.e. by 4pm on Wednesday, 22 January 2025 and the Defendant shall file its evidence in reply (if any) by no later than 4pm on Friday, 24 January 2025.

8. The Registry shall list the Defendant’s Security for Costs Application as soon as possible and at a date most convenient to the Court.

9. Costs shall be costs in the case.

Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 15 January 2024
At: 2pm

SCHEDULE OF REASONS

1. On 31 December 2024, the Claimant filed an application seeking the following reliefs:

2. The Defendant has agreed to the Claimant's request for an extension of time in its response dated 9 January 2025. Therefore, the Claimant is permitted to file and serve its evidence in answer to the Defendant's Strike Out Application by 4pm on Monday, 20 January 2025.

3. As the Defendant’s Strike Out Application is deemed a heavy application, I shall grant the Defendant 14 days (i.e. 4pm on Monday, 3 February 2025) to file its evidence in reply (if any) in accordance with RDC 23.46(3)

4. The Claimant argues that the Defendant’s Security for Costs Application is premature and should not be considered first, as it would be procedurally inefficient and a waste of time and costs. This is because if the Court grants the Defendant’s Strike Out Application, any consideration of costs for the entire proceeding would be redundant, as the case would be dismissed, making any discussion of the reasonableness of the costs unnecessary

5. The Claimant asserts that such applications should only be filed once pleadings have been finalised i.e. at the case management conference and after the exchange of defence and or/counterclaim and reply.

6. The Claimant notes that it is highly likely that the Defendant will file a counterclaim, as indicated in the email dated 1 July 2024, which could overlap with the current Claim. This will be an important consideration for the Court in deciding whether to grant the Defendant’s Security for Costs Application.

7. The Claimant advances its position that in the absence of a defence and/or counterclaim, it would be almost impossible for the Claimant to properly consider the costs estimates provided.

8. In reply to the above, the Defendant asserts that it has already provided a detailed breakdown of its estimated costs in the Security for Costs Application, specifically on pages 139-142, in accordance with RDC 25.99.

9. The Defendant asserts that, given the nature of security for costs applications, it should be addressed and resolved promptly, as it is a straightforward matter and should be considered before significant costs are incurred. In this case, the application was filed prior to the Strike Out Application and, as such, should be heard first.

10. The Defendant expresses serious concerns about the Claimant's ability to cover any adverse costs awarded against it, given the uncertainty surrounding whether the Claimant’s company is generating any revenue, especially since the Defendant acquired the Claimant’s business in 2020.

11. Furthermore, since the Claimant’s shareholder resides outside the UAE, enforcing any costs order would be difficult. The Claimant has also confirmed that it is funded by a thirdparty litigation financer, Arbitrium Litigation Financing Ltd, making the Claimant entirely dependent on this funding to pursue the claim. As a result, the Defendant finds this arrangement concerning, as the Claimant is unable to cover its own legal costs, let alone any potential adverse costs orders regarding the Defendant’s legal fees.

12. Finally, the Defendant submits that the Claimant has not provided documents relating to its financial position, despite multiple requests, or documents evidencing the terms of any purported agreement between it and Arbitrium to reassure the Defendant.

13. Having reviewed both parties’ submissions, I am satisfied that the deferral component of the Claimant’s Application be dismissed.

14. Although the Defendant has not yet filed a defence or counterclaim, I am of the view that the Security for Costs Application must be heard first as there are arguable concerns raised regarding the Claimant’s financial position and its ability to pay any costs awarded to the Defendant if they are successful.

15. There is no evidence that runs contrary to the above.

16. Furthermore, I believe that addressing the Defendant's Security for Costs Application first would be more cost-effective and time-efficient. If the application were deferred until after the Strike Out Application is determined and was then unsuccessful, considerable time would have passed, and both parties would have incurred additional costs and expenses, which could be avoided by dealing with the Security for Costs Application initially.

17. As the Defendant’s Security for Costs Application is deemed an ordinary application and since it has been filed over a month ago from today’s date, I am of the view that the Claimant shall be given 7 days to respond to it.

10. Therefore, the Claimant shall file its evidence in answer to the Defendant’s Security for Costs Application by 4pm on Wednesday, 22 January 2025.

11. The Registry shall first list the Defendant’s Security for Costs Application for a hearing as soon as possible and at a date most convenient to the Court.

12. Costs shall be costs in the case.