Claim No: CFI 106/2021

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

BAM HIGGS & HILL LLC

Claimant

and

(1) AFFAN INNOVATIVE STRUCTURES LLC
(2) AMER AFFAN

Defendants

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ORDER WITH REASONS OF H.E. JUSTICE MICHAEL BLACK

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UPON the Re-Amended Claim Form filed on 14 February 2023 (the “Claim”)

AND UPON the Particulars of Claim filed on 20 March 2023

AND UPON the Defence with Counterclaim filed on 22 June 2023 (the “Counterclaim”)

AND UPON hearing Counsel for the Claimant and Counsel for the Defendants at the Trial held before H.E. Justice Michael Black held on 21 October 2024 to 1 November 2024 (the “Trial”)

AND UPON the Judgment of H.E. Justice Michael Black dated 23 February 2026, dismissing the Claimant’s claims against the Defendants (the “Judgment”)

AND UPON the parties’ submissions on costs and interest dated 17 March 2026

AND UPON the parties’ submissions on costs and interest in reply dated 3 April 2026

IT IS HEREBY ORDERED THAT:

1. The Claimant shall pay pre-judgment interest in the sum of AED 18,160,315.

2. The Claimant shall pay post-judgment interest continuing at the daily rate of AED 6,871 until payment.

3. Subject to existing costs Orders, the Claimant shall pay to:

4. The costs of the First and Second Defendants shall be assessed by the Registrar on the indemnity basis in default of agreement.

5. The Claimant shall pay the sum of AED 2,944,981 to the Defendants’ legal representatives on account of the Defendants’ costs.

Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 30 June 2026
At: 3pm

SCHEDULE OF REASONS

INTRODUCTION

1. At paragraph 3 and 4 of my Order following the Judgment dated 23 February 2026, I directed that the parties shall file and exchange their written submissions on costs and interest within 10 working days of the date of the Judgment and written submissions in reply within 5 working days thereafter.

2. I will adopt the same abbreviations as in the Judgment.

3. The parties filed their first round of submissions on 17 March and their second round on 3 April 2026.

COSTS – THE APPLICABLE PRINCIPLES

4. The Rules of the DIFC Courts (“RDC”) provide in Part 38 as follows:

5. In Al Khorafi v Bank Sarasin-Alpen (ME) Ltd [2009] DIFC CFI 026 (16 January 2017) Sir John Chadwick, DCJ comprehensively summarised the relevant principles:

6. I followed these principles in Al Buhaira National Insurance Company v Arab War Risks Insurance Syndicate [2024] DIFC CFI 013 (9 September 2025), and noted that, as stated in Khorafi, there is no automatic rule requiring reduction of a successful party's costs if it loses on one or more issues. The fact that a successful party has failed on certain issues does not justify making a separate costs order on those issues [209]. In Wincore Advisory Group DMCC v JPV Management Consultancy [2024] DIFC CFI 054 (24 February 2026) H.E. DCJ Al Madhani held at [6]:

“While the Claimant succeeded overall, it did not succeed on all material aspects of its case. The final Judgment sum awarded was materially less than that sought: the commission arrears claim was dismissed and the sums awarded for outstanding invoices were reduced from those claimed. I also take into account the parties’ pre-action conduct, including the limited efforts made to narrow or resolve the dispute prior to commencement. In these circumstances, the Claimant’s recoverable costs should reflect its partial, rather than complete, success.”

7. Cleary there is a discretion to be exercised in each case. The use of the words “material” and “materially” in Wincore serve to highlight the importance of weighing the overall importance of the issues upon which a party failed in the wider context of the litigation.

8. If the Court is of the view that a party failed to recover a significant part of its claim because the claim was substantially exaggerated thereby causing costs to be incurred or wasted, the degree of exaggeration is a relevant factor in determining the appropriate costs order which may deprive the party of some or all of its costs: Martine Widlake v BAA Ltd [2009] EWCA Civ 1256, [39]-[41]; Brit Inns Limited (in liquidation) v BDW Trading Limited [2012] EWHC 2489 (TCC), [42].

9. In deciding whether or not to award costs to be assessed on the indemnity basis, the Court will have regard to Practice Direction No. 5 of 2014, DIFC Courts’ Costs Regime, dated 12 August 2014 which provides:

10. In Victor Kermit Kiam II v. MGN Ltd [2002] EWCA Civ 66 the English Court of Appeal held that:

“… conduct, albeit falling short of misconduct deserving of moral condemnation, can be so unreasonable as to justify an order for indemnity costs… however, such conduct would need to be unreasonable to a high degree; unreasonable in this context certainly does not mean merely wrong or misguided in hindsight.”

11. In Balmoral v Borealis [2006] EWHC 2531 (Comm), [1], the English Commercial Court stated:

“The discretion is a wide one to be determined in the light of all the circumstances of the case. To award costs against an unsuccessful party on an indemnity scale is a departure from the norm. There must, therefore, be something – whether it be the conduct of the claimant or the circumstances of the case – which takes the case outside the norm. It is not necessary that the claimant should be guilty of dishonesty or moral blame. Unreasonableness in the conduct of the proceedings and the raising of particular allegations, or in the manner of raising them may suffice. So may the pursuit of a speculative claim involving a high risk of failure or the making of allegations of dishonesty that turn out to be misconceived, or the conduct of an extensive publicity campaign designed to drive the other party to settlement. The making of a grossly exaggerated claim may also be a ground for indemnity costs.”

12. Turning to the DIFC cases, in Vegie Bar LLC v ENBD Properties PJSC [2020] DIFC CA 001 (17 March 2021) the Court of appeal held at [9] and [22]:

13. In Hexagon Holdings (Cayman) Limited V Dubai International Financial Centre Authority and Dubai International Financial Centre Investments LLC [2019] CFI-013 H.E. Justice French held at [24] that a “meritless application” justified costs to be assessed on the indemnity basis.

14. Costs arguments must not however be allowed to degenerate into satellite litigation. In some jurisdictions where cost-shifting applies, addressing the costs consequences of some applications may occupy the courts longer than the applications themselves. On the other hand, in international arbitration costs are often addressed as an afterthought with cursory consideration. The procedure of the DIFC Courts has its origins in the English CPR but also has some features in common with international arbitration (for example, in the production of documents and the treatment of so-called “foreign law”). It is important to maintain a sense of proportionality and steer a sensible course between the two extremes.

15. It is also important that submissions on costs should not amount to a repetition of arguments on substantive issues or a rehearsal of points to be made by way of appeal.

16. In this case BAM filed 2 rounds of written submissions on costs in the maximum permissible number of pages of 50 and the Defendants 40 pages (for both Defendants). This is to be contrasted with closing submissions after a long (for the DIFC Courts) and complex Trial resulting in a 600 paragraph Judgment: the Claimant’s closing submissions comprised 100 pages and the Defendants’ 78 pages.

17. The Defendants’ first round submissions were principally addressed to the quantum of their costs. The Claimant’s second round submissions addressed the proportionality and particularisation of the Defendants’ costs. Proportionality would only be relevant if I determined that the Defendants’ costs should be assessed on the standard basis and not on the indemnity basis as requested. Equally, the benefit of the doubt as to whether the costs were reasonably incurred or reasonable in amount would shift to the receiving party.

18. This is not an immediate assessment. I am only concerned with the incidence of costs and the basis of assessment. While I will not determine the amount of costs, the submissions on quantum may however have some relevance to any payment on account pending assessment that I may order.

AFFAN’S COSTS

19. BAM helpfully summarises its position:

20. Thus, the starting point is that the Defendants should be awarded their costs of the proceedings but those costs should be significantly reduced. I will consider each of the suggested grounds for reduction in turn.

AFFAN’s Limited Success and Inflated Counterclaim

21. It is suggested that AFFAN pleaded a Counterclaim of wholly disproportionate magnitude, which the Court ultimately found to be significantly inflated. In support of that submission reference is made to paragraph 39 of the Judgment. In that paragraph I made no such finding. I had on more than one occasion in my Judgment cause to observe that the Claimant’s conduct was misleading: I found of its principal witness Mr Doyle that “His witness statement was positively misleading” (paragraph 57); I found the Claimant’s entries on the “Agreed Chronology” “selective and misleading” (paragraph 231) and I found that at Trial, the Claimant sought to amend its Particulars of Claim on a “demonstrably false pretext” in order to hide what it had received from the Employer (paragraph 313). I found that the truth only emerged after, on the second day of the Trial, I made an order that BAM disclose (amongst other documents) the CCN 222 claim document and the Settlement Agreement entered into with the Employer (paragraph 314). I perceive a consistent course of conduct.

22. BAM submits that the Court should have regard to the specific heads of claim on which the Defendants were unsuccessful or which were substantially reduced:

23. BAM tries to make something out of those items where its expert’s, Mr Kenyon’s, figures were agreed. In my judgment, there is nothing in the point. If experts are truly independent and reach agreement it is irrelevant by whom they were instructed.

24. AFFAN submits that its Counterclaim was not inflated and, in any event, it still succeeded on all issues and there is no basis upon which costs could be said to have been wasted. Even in matters where the quantum was reduced, all issues were pursued at the hearing and were successful. On that basis, there is no reasonable basis upon which to assert that costs were wasted or became disproportionate to the issues in dispute.

Changing Case on Multiple Occasions

25. BAM says I should take into account that the Defendants changed their case on multiple occasions during the proceedings:

26. BAM claims that these successive changes of case required the Claimant to incur substantial additional costs in responding to new theories and evidence, including the need to instruct additional expert evidence and prepare further witness statements.

27. The Defendants say that the Judgment does not make any findings as to whether the Defendants changed their case. All matters that were ultimately pursued at the hearing had been part of the Defendants’ submissions from the outset. Whereas the precise detail of when the variation to the façade was instructed was subject of development, at all material times the Claimant knew that it had successfully brought a claim for a variation to the façade works package against the Employer and therefore should have admitted the First Defendant’s claim from the outset.

28. On that basis, the Defendants deny that the reduced Counterclaim warrants any reduction in costs. The legal and factual issues in the Counterclaim remained the same throughout and the Court was not surprised that the parties’ cases had developed from their initial pleadings.

Unsatisfactory Witness Evidence

29. It is said that the Court made a number of adverse findings regarding Dr Affan's evidence:

30. BAM claims that this unsatisfactory approach to evidence necessitated extensive cross- examination and re-examination, which prolonged the Trial and increased costs for all parties.

31. The Defendants acknowledged that the Court made comments about Dr Affan’s approach under cross-examination. However, the Court also acknowledged that there might be reasoning for this character such as “the “dire” situation in which he and his company were placed.” The Court stated that “I am sure that there were times when he felt that “his back was to the wall” and the existence of the business he had built was on the line” (paragraph 65 of the Judgment). In any case, say the Defendants, there is no basis to find that this had any connection to the sum or nature of costs incurred: it is irrelevant to assessment of costs.

32. The Defendants submit that there should be no reduction in costs in relation to the Second Defendant’s witness evidence, there being no evidence of wasted or abortive costs.

Unsatisfactory Conduct Regarding the CATIA Model

33. BAM not only claims that AFFAN’s conduct should lead to a reduction in its costs but also that I should make an order that the Defendants pay the entirety of the Claimant's costs incurred in relation to the CATIA model inspection.

34. I make two preliminary observations. First, both a reduction in costs generally and an order for payment of BAM’s costs would be double counting. Secondly, it is hard to see why any order for costs should be made against Dr Affan personally.

35. BAM complains that the Defendants repeatedly attacked and criticised the CATIA-based conclusions yet failed to produce the underlying native CATIA model(s) which their own expert(s) relied upon or referenced. This failure meant that:

36. It says that the Court found the Defendants' approach to the CATIA evidence was unsatisfactory. The Court's findings demonstrate that the Defendants' conduct in relation to the CATIA model caused the Claimant to incur substantial wasted costs in pursuing an inspection that ultimately proved fruitless through no fault of the Claimant. In these circumstances, the inspection was entirely wasted. The Claimant’s expert was required to prepare for the inspection, travel to the Defendants' premises, attend the inspection, and prepare a report on the inspection, all of which proved to be of no utility whatsoever because the Defendants failed to make available the original master CATIA model which had been ordered for inspection.

37. It is true that I did describe the Defendants’ evidence about the use of CATIA as “unsatisfactory”. Taking that in isolation is again misleading. It is important to read paragraph 536 of the Judgment in full:

“536. Having found that it is not possible to infer from those images an intention to span floor to floor, I am not willing to go further still and infer there was something behind them that would have shown such an intention and that it was deliberately supressed. While I agree that both Dr Affan’s evidence and the circumstantial evidence concerning the use of CATIA are unsatisfactory, I do not accept that is enough to make a finding that the Defendants are effectively guilty of perjury. On reading the 24 November 2024 report, the position is not as stark or as simplistic as BAM seeks to paint it. It was possible to retrieve some information albeit there were missing links and files. The disarray was as consistent with chaotic management over the preceding 9 years as an intention deliberately to mislead. I have reservations about accepting Dr Affan’s evidence that it was BAM who caused the data loss, but on the other hand BAM’s analysis (and indeed whole case) seems to be infected by Mr Doyle’s desire to accuse the Defendants of dishonesty at every possible turn. There is simply not enough to conclude that the Defendants deliberately suppressed evidence.”

38. The reality is that BAM was seeking to support its failed case on dishonesty. As AFFAN notes the only reason the CATIA model argument was pursued was in aid of the Claimant’s rejected position that the work was not varied.

39. As to the unparticularised allegation that AFFAN failed to produce the underlying native CATIA model(s) which their own expert(s) relied upon or referenced. I have tried to find any relevant passages in the reports of AFFAN’s technical expert Mr Smith but have been unable to do so. I see that in paragraph 537 of the Judgment, I accepted Mr Smith’s technical analysis in preference to that of Ms Kindelan (the Claimant’s expert). Mr Smith made no reference to any CATIA model in the passage of the evidence I cited in support of that finding.

40. It is true that I found that AFFAN’s records were in “disarray … consistent with chaotic management over the preceding 9 years” but that is quite different from conduct in relation to the proceedings.

41. The Defendants suggest that the assertion that the Defendants’ conduct regarding the CATIA model should result in a costs reduction is nonsensical. Paragraph 536 of the Judgment states that “I do not accept that is enough to make a finding that the Defendants are effectively guilty of perjury. On reading the 24 November 2024 report, the position is not as stark or as simplistic as BAM seeks to paint it.” Accordingly, say the Defendants, if any conduct has caused the Court to waste resources on the CATIA Model issues, it was the Claimant’s intent on creating issues and unsubstantiated allegations against the Defendants.

Apportionment of Costs and Proportionality

42. BAM submits that the appropriate approach to costs in a case involving both a Claim and Counterclaim is to assess the costs reasonably attributable to each component of the proceedings. I do not agree with this submission where, as BAM immediately thereafter points out, there was a substantial overlap between the factual and legal issues arising on both the Claim and the Counterclaim, concerning the interpretation of the Subcontract and the Addendum, the alleged variations, and the valuation of the works; witness evidence addressed both the Claim and the Counterclaim simultaneously and the expert evidence, which necessarily dealt with both quantum issues on the Claim and the Counterclaim concurrently. I find BAM’s suggested apportionment of the Defendants' costs is 50% to the defence of the main Claim and 50% to the prosecution of the Counterclaim to be arbitrary, artificial and bearing no relation to reality.

43. Nor do I accept that cost should be approached on a simplistic arithmetical basis as BAM suggests. It must be borne in mind that it was BAM who commenced proceedings and it is conceded by BAM that the Counterclaim was not a mere unconnected cross- claim. Even adopting BAM’s crude analysis the apportionment could be recalculated as follows more accurately to reflect the true position.

Quantum Expert Costs

44. BAM submits that the costs of and occasioned by the Defendants' quantum expert should be disallowed entirely, to reflect:

45. BAM submits that the Defendants' quantum expert was of limited, indeed, negligible, utility to the proceedings. Mr Atherton either failed to provide valuations or provided valuations that were "subject to further verification", or subsequently abandoned his valuations in favour of Mr Kenyon's figures during the joint minute process. The Court's findings were largely based upon the common ground between the experts rather than any superiority of Mr Atherton's approach.

46. It is said that critically, to the extent the First Defendant succeeded on the Counterclaim, that success cannot be attributed to any useful input from Mr Atherton. On the contrary:

47. BAM submits that the Claimant's quantum expert did most of the substantive work on quantum. The Defendants' quantum expert contributed virtually nothing of independent value. Accordingly, the Claimant submits that the Defendants' quantum expert costs should be disallowed entirely.

48. I find BAM’s approach misconceived. It is inappropriate to pick over the experts’ work- in-progress in an attempt to find errors. What matters is the end result and it is to the experts’ credit that they were able to narrow their differences significantly. It is highly revealing of the Claimant’s overall mindset in approaching these proceedings that they criticise Mr Atherton for acting independently and collaboratively. I was largely impressed by the diligence of both quantum experts and encouraged them to continue their discussions even after the close of evidence - which they did and produced the Fourth Joint Minute. Indeed, the only significant criticism I made was for declining to value certain items on a fair and reasonable basis when a cost has obviously been incurred (paragraph 570(7) of the Judgment).

49. I agree with the Defendants that there is nothing in the Judgment that suggests that the Defendant’s quantum expert did not assist the Court or that he did not perform his overriding duty to the Court. In fact, to the contrary, the Court relied upon the calculations provided by Mr Atherton and, in one instance, stated that Mr Kenyon had not provided a “reasoned” lower sum, therefore the I was not able to rely on Mr Kenyon’s evidence.

50. I agree that the Claimant’s assertions that Mr Atherton “deferred to and adopted Mr Kenyon’s figures” is baseless as a criticism. Mr Atherton carried out his own assessment on quantum based upon his instructions, prepared his own conclusions and assisted the Court in doing so. It is not unusual for experts to agree issues or calculations on a “figures as figures” basis and, in fact, such agreements between experts assist the Court in narrowing the issues in dispute and in turn reduce costs.

Technical Expert Costs

51. BAM submits that the Defendants' technical expert costs should be reduced by 50% to reflect the limited utility of Mr Smith's evidence and the extent to which his analysis was dependent upon the extensive work undertaken by the Claimant's experts.

52. BAM says that the Technical Expert Joint Statement dated 2 September 2024 demonstrates that on numerous issues, Mr Smith was unable to provide independent technical analysis and deferred questions of fact for the Court to decide, whilst the Claimant's experts provided substantive technical opinions:

53. As already noted, in the event, I accepted Mr Smith’s technical analysis in preference to that of Ms Kindelan. I found that Ms Kindelan artificially constrained her evidence in order to reach a predetermined result (paragraph 525 of the Judgment). I rejected her factual analysis which was, as Mr Smith correctly identified, a matter for the Court (paragraph 531 of the Judgment).

54. BAM suggests that technical issues in this case were complex and required substantial expert analysis. The Claimant's experts undertook detailed technical work including analysis of the CATIA model, panelisation process, and the feasibility of AFFAN's tender proposal. The Joint Statement reveals that Mr Smith was frequently unable to provide independent technical opinions on key issues, instead deferring to the Court on questions that required technical expertise. In circumstances where the First Defendant's Counterclaim was reduced by approximately 83%, and where the technical expert evidence was deployed primarily in support of the Counterclaim, the Claimant submits that the Defendants' technical expert costs should be reduced proportionately.

55. I find these submissions flawed. As has been seen the suggestions that the First Defendant's Counterclaim was reduced by approximately 83% and that the reduction was attributable to acceptance of the Claimant’s technical expert evidence are both unjustified.

56. As AFFAN observes, Mr Smith was instructed to determine inter alia whether, in his professional opinion, (i) the design of the façade changes were to overcome technical issues or for aesthetic reasons, and (ii) from a technical perspective, whether the First Defendant’s tender return was sufficient to meet the requirements of the provided design. He performed that role and opined in a matter that resulted in his findings being accepted by the Court in their entirety. I agree that it is not the role of the expert to provide an opinion on who instructed the variation. This was a factual matter which was for the witnesses of fact. The criticisms of Mr Smith are therefore not criticisms at all. The Court benefitted from Mr Smith’s evidence and adopted it in its entirety.

The Claimant's Entitlement to Costs

57. In its second-round submissions, the Claimant notes that the Defendants submit that "there are no circumstances in which the Claimant would reasonably be entitled to its costs". The Claimant disagrees.

58. The Claimant submits regardless of the reason for the First Defendant's failure to make the master CATIA model available, whether deliberate suppression or "chaotic management over the preceding 9 years" as the Court found, the Claimant incurred costs of USD 374,011.62 in connection with an inspection that proved to be of limited utility through no fault of the Claimant.

59. Furthermore, it is said, the value of the Claimant's defence of the Counterclaim is demonstrated by the reduction of the award from the pleaded sum of AED 297,583,642.15 to AED 50,159,022.86, a saving of approximately AED 247 million or 83% of the amount originally claimed due to the specific contributions of the Claimant's expert and legal teams, including the forensic analysis of Mr Kenyon and BRG, the technical evidence of Ms Kindelan and Mr Cordon of AESG, the cross-examination of Dr Affan, and the legal submissions of Lord Marks KC. That defence had real and measurable value which should be recognised in the costs order.

60. The Claimant submits that it would be unjust to disregard the substantial commercial benefit achieved through the defence of the Counterclaim. The Defendants' position, that there are no circumstances in which the Claimant would be entitled to any of its costs, fails to account for the fact that the Claimant's forensic and legal efforts saved approximately AED 247 million. In those circumstances, the Court should award the Claimant its costs of the CATIA model inspection and should reflect the value of the Claimant's defence in any overall costs order.

Issue-based Order

61. AFFAN submits that BAM is wrong to suggest that the Court should make an award of costs on an “issue-based” assessment. The Claimant relies on the case of Al Khorafi v Bank Sarasin-Alpen (ME) LTD [2009] DIFC CFI 026 (16 January 2017) (“Al Khorafi”) which, in its submissions, suggests that an issue-based analysis of costs should be adopted in cases where a party does not succeed in the entirety of its claims. The section of the case highlighted by the Claimant specifically highlights that an issue-based assessment is appropriate where, “… a winner fights and loses certain issues …”.

62. AFFAN says that the reliance on this case, however, is not understood where the Claimant has not identified any issues on which the Defendants “lost”. Whilst the Defendants’ quantum was not entirely awarded, the Defendants did succeed on all issues, including the entire dismissal of the Claimant’s Claim. On that basis, Al Khorafi does not apply. Further, there are no discrete costs of the Counterclaim that can be separated from the Claim. The issues raised in the Claim against AFFAN necessarily required consideration of the issues raised in the Counterclaims (and the associated costs).

63. AFFAN denies that the costs of the Counterclaim (i) are somehow separable from the costs of defending the Claim, and (ii) that the costs of the Counterclaim are somehow linear and proportionate to the quantum of the Counterclaim. Both positions are wrong. It says that the defence of the Claim necessarily required a determination of whether there was a variation as the Claimant wrongly sought re-payment of the actual sums incurred in carrying out the work over and above the Sub-Contract Price. The Claim as put necessarily required the Court to decide if the works were varied and, if so, how. This is not a case where the costs of the Counterclaim can somehow be separated from the costs of defending the Claim such as to make an issues-based costs order.

64. AFFAN says that any reduction in the quantum of the Defendant’s Counterclaim is only one of the factors that the Court should consider when determining costs. It does not automatically necessitate an issue-based costs order nor any other type of costs order outside of the general rule. The conduct of the parties goes much wider than the quantum of the claims brought and the Defendants consider the Claimant’s poor conduct to far outweigh any increased Counterclaim value put forward by the First Defendant.

DR AFFAN’S COSTS

65. Dr Affan says that BAM brought improper and inappropriate claims of fraud against him, without merit or evidence to support its Claim. The allegations of fraud were brought as a result of “Mr Doyle’s desire to accuse the Defendants of dishonesty at every possible turn,” (paragraph 536 of the Judgment) and not because there was any real evidence that a fraud had been committed.

66. He notes that I found that the allegations against him were “unsustainable” (paragraph 417 of the Judgment); “unarguable” (paragraph 388 of the Judgment); escaped “being struck out by the narrowest of margins” (paragraph 395 of the Judgment) and failed (paragraph 432of the Judgment).

67. I found at paragraph 397 of the Judgment:

“397. In his oral opening Lord Marks did not mention the case against Dr Affan at all. It is true that the claims were canvassed in BAM’s written opening, but nevertheless I find the omission remarkable. I should have expected Dr Affan to have been given the opportunity to hear how the case is put against him at least in general terms before cross- examination.”

And at paragraphs 400, 401, 404 and 407:

68. BAM accepts that it was unsuccessful in its fraud Claim against Dr Affan. However, it submits that the following matters should be taken into account in relation to Dr Affan's evidence during the course of the proceedings:

BASIS OF ASSESSMENT

69. The Defendants submit that costs of the Claims against both the Defendants should be awarded on an indemnity basis.

70. AFFAN submits that the Claimant’s conduct throughout the litigation was unreasonable to a high degree; inappropriate in a wider sense in relation to the commencement and conduct of the litigation itself; and, in some instances, constituted an abuse of process. AFFAN refers to the following:

71. AFFAN claims that the defence to its Counterclaim was disingenuous:

72. AFFAN submits that this conduct amounts to conduct that is unreasonable and inappropriate to a high degree, taking it away from the norm.

73. Further, says AFFAN, In the Statement of Claim, the Claimant pursued a case that the Addendum permitted the Claimant to step-into the Subcontract. Its primary case relied upon clause C6 of the Addendum which, in its submission, acted as an indemnity and entitled the Claimant to recover its additional costs from AFFAN. The Claimant then abandoned the claim under Clause C6 and sought to recharacterize the pleaded claim for an indemnity under Clause C6 as a claim for damages for breach of contract.

74. I found as follows:

75. The recharacterization was therefore also linked to the BAM’s attempted suppression of disclosure of what it had received from the Employer in respect of AFFAN’s works.

76. AFFAN points to my findings that the Claimant put forward a “hopelessly muddled argument conflating as it does the grounds for exercising the step-in rights under the Addendum and the costs that flowed from them (should the individual grounds constitute actionable breaches)” (paragraph 345 of the Judgment). The recharacterisation was stated in the same paragraph to be “an attempted and impermissible resurrection of the claim under Clause C6 to claim not only any costs allegedly incurred pursuant to the breaches said to justify the takeover but also the totality of the costs incurred to complete the Subcontract Works”.

77. AFFAN cites the next paragraph:

“346. Not all of the alleged breaches were actionable, and not all could be said to be causative of loss. It is hard to see how “Failure to provide full substantiation of claimed variations” and “failure to employ a claims specialist on an intensive and continuous basis as required pursuant to Clause C8 of the Addendum to the Cladding Subcontract” as alleged in the 23 June 2019 letter can be said to have caused loss to BAM. On the contrary, it provided BAM with a reason to withhold payment to AFFAN. Further, as Mr Hussain observed how could “Failing to provide various quality records and design elements” cause millions of dirhams in losses.”

78. AFFAN submits that that this amounts to unreasonable conduct to a high degree as well as inappropriate conduct which takes this case outside of the norm. The Claimant’s new recharacterised claim under C6 had no prospect of success and can be characterised as “meritless”.

79. While the Claimant acknowledges that the Court made adverse findings in relation to the disclosure of CCN 222, it is firmly refuted that CCN 222 was deliberately or purposefully concealed from the Defendants or their legal representatives at any stage.

80. The Claimant points out that there were references to CCN 222 in certain documents and in, in the First Expert Report of Ms Kindelan and Dean Cordon dated 16 May 2024 yet no application was made for its disclosure. I do not find that surprising. With the benefit of hindsight, one can find references to CCN 222 in the documents but they are directed to an extension time claim by BAM rather than a variation claim. The claim document itself was not disclosed. I also note that Ms Kindelan did not in fact see CCN 222 herself until disclosed by BAM in the proceedings, nor must she have realised its significance as she did not ask to see it (Transcript 25 October 2024, page 80, lines 9- 14).

81. The Claimant submits that the Court did not find that the failure to disclose CCN 222 constituted an abuse of process or was motivated by dishonesty. In those circumstances, it is clear that the alleged non-disclosure cannot properly justify the imposition of indemnity costs, particularly where CCN 222 was never intended to be concealed and had, in substance, been brought to the Defendants’ attention well before the Trial.

82. I find the suggestion that the CCN 222 had, in substance, been brought to the Defendants’ attention well before the Trial to be both astonishing and untrue. It is clear beyond argument that the substance of the CNN 222 was not communicated to the Defendants or the Court before the Trial.

83. The Claimant accepts that the Court found that BAM's position in these proceedings was inconsistent with the position it took in CCN 222. The Claimant accepts that this was a finding adverse to it. However, it says, the Court did not find that BAM's defence to the Counterclaim was brought in bad faith or was an abuse of process. The Court's finding that BAM's position was "not attractive" (paragraph 514 of the Judgment) does not equate to a finding that the litigation was conducted in a manner warranting the exceptional remedy of indemnity costs. As confirmed in National Westminster Bank v Rabobank Nederland [2007] EWHC 1742 (Comm), mere lack of success, over-optimistic pleading, or forensic misjudgement does not suffice for indemnity costs.

84. The Claimant accepts that the Court made adverse findings regarding the formulation of its Claim. The Claimant does not seek to go behind those findings. However, the question for the purposes of costs is not whether the argument succeeded, but whether the conduct of advancing it was so unreasonable as to take the case outside the norm. It suggests that the Defendants' reliance on Hexagon Holdings (Cayman) Limited v (1) Dubai International Financial Centre Authority (2) Dubai International Financial Centre Investments LLC is misplaced. In that case, the claim was found to be entirely without merit from the outset. The present case is materially different. The Claimant's Claim engaged complex questions of contractual construction and UAE law that required extensive judicial analysis.

85. The Claimant says that the Defendants’ submission that they were forced to respond to a "new claim" during the Trial overstates the position. The factual basis of the Claim remained unchanged throughout. The breaches relied upon, the factual narrative, and the quantum were the same whether the Claim was advanced under Clause C6 or as a damages claim. The Defendants did not need to adduce new evidence or investigate new facts. Their counsel, Mr Hussain KC, was able to address the re-characterised Claim fully in his submissions, as the Judgment records at length.

86. In Kiam v MGN Ltd (No 2) [2002] EWCA Civ 66, Simon Brown LJ stated that conduct must be "unreasonable to a high degree" and that "'unreasonable’ in this context certainly does not mean merely wrong or misguided in hindsight." The Claimant submits that its formulation of its Claim does not constitute unreasonable conduct. The Defendants have not identified any element of impropriety, bad faith, or abuse of process in the Claimant's approach; they rely solely on the fact of failure, which is precisely the circumstance that Kiam holds to be insufficient.

87. Dr Affan submits that on the basis of the conduct set out at paragraphs 65 to 67 above the decisions to award indemnity costs in the cases of Vegie Bar LLC v ENBD Properties PJSC [2020] DIFC CA 001 and Hexagon Holdings (Cayman) Limited V Dubai International Financial Centre Authority and Dubai International Financial Centre Investments LLC [2019] CFI-013-2019 should be followed.

88. The Claimant replies that in assessing whether indemnity costs are warranted, the Court should also have regard to the Defendants' own conduct. In particular:

89. I pause here to note that I have already had cause to criticise the Claimant for seeking to mislead the Court. This is yet another example. The contents of paragraph 502 of the Judgment are asserted to be my findings. This is untrue. Paragraph 502 begins with the words “BAM invites the Court to reject Dr Affan’s evidence that AFFAN had not produced a CATIA model prior to March 2017 for the following reasons:”.

90. The Claimant submits that the Defendants' assertion that "they do not believe that they have engaged in any conduct which has caused the costs of the Proceedings to increase" is difficult to reconcile with the Court's findings. The Defendants' conduct, including the evolving case on panelisation, the inconsistent witness evidence, and the unsatisfactory CATIA model inspection, materially increased the length and cost of these proceedings for both parties. In those circumstances, it is submitted that it is neither just nor proportionate to impose the exceptional sanction of indemnity costs on the Claimant while disregarding the Defendants' own significant contribution to the costs incurred.

Costs of the Jurisdiction/Amendment Applications

91. Notwithstanding the fact that the Court must give effect to any orders which have already been made when making a costs Order, the Defendants submit that the position resulting from the costs Order made on 23 May 2023 in respect of the jurisdiction and amendment applications (CFI-106-2021/1 and CFI-106-2021/2) should be “neutralised”.

92. In the light of RDC 38.22 (paragraph 0 above). I cannot reopen these Orders. Further, I agree with the Claimant’s submissions:

93. Any costs orders in BAM’s favour shall be set off against any in Dr Affan’s favour.

INTEREST

94. At paragraph 589 of the Judgment, I decided that 5% was the appropriate rate of interest.

95. AFFAN refers to Article 17(1) of the DIFC Law of Damages and Remedies (DIFC Law 7 of 2005, as amended):

“If a party does not pay a sum of Money when it falls due the aggrieved party is entitled to interest upon that sum from the time when payment is due to the time of payment whether or not the nonpayment is excused.”

96. AFFAN submits that it is entitled to interest on the amount of the subcontract variation from the date on which the subcontract variation should have been granted up to and including the date of the Judgment. It submits that the subcontract variation should properly have been awarded by the Claimant on 29 October 2018 (being the date when it was first able to issue a notice containing an “initial assessment and forecast of costs to complete”, and that interest should therefore accrue on the amounts awarded to it in the Judgment from that date up to and until 23 February 2026 being the date of the Judgment.

97. AFFAN claims post-judgment interest on the Judgment principal, pre-Judgment interest and costs.

98. BAM submits that AFFAN’s proposed commencement date for pre-judgment interest of 29 October 2018 is misconceived for the following reasons:

99. As to post-judgment interest, BAM submits that:

PAYMENT ON ACCOUNT

100. Before the costs are assessed on any basis, the Defendants request that an amount be paid to the Defendants on account in accordance with RDC 38.13.

101. The Claimant submits that no payment on account should be ordered at this stage. The quantum of any costs order remains in dispute and is subject to the substantial reductions contended for in the Claimant's cost submissions and reply submissions.

102. In circumstances where the Claimant contends that the Defendants' recoverable costs should be reduced by well over half, and where the Claimant has its own costs claim in respect of the CATIA model inspection to set off against any award, it would be premature and unjust to order a payment on account before the costs issues have been fully determined. Any payment on account would risk overpayment and the need for subsequent repayment, which would serve only to increase costs and delay final resolution.

CONCLUSIONS

AFFAN’s Costs

103. In Al Khorafi Sir John Chadwick, DCJ summarising the English authorities noted that generally, because of the practical difficulties which this causes, the judge should hesitate before making an issue-based costs order and, where practicable, should make an order for payment of a percentage of costs recoverable or costs recoverable for a specific period of time. It is important to identify at the outset who is the successful party in real life. While the Court should consider the issues on which the parties have succeeded and failed, in making its decision in any litigation, especially complex litigation, any winning party is likely to fail on one or more issues in the case and the simple fact that a successful party has failed on certain issues does not justify making a separate costs order on those issues.

104. Further, Wincore highlights that issues should be “material” in their overall importance before they are taken into account.

105. In the present case, I do not consider that an issue-based costs order is appropriate. As BAM points out, there was a substantial overlap between the factual and legal issues arising on both the Claim and the Counterclaim concerning the interpretation of the Subcontract and the Addendum, the alleged variations, and the valuation of the works. Witness evidence addressed both the Claim and the Counterclaim simultaneously and the expert evidence necessarily dealt with both quantum issues on the Claim and the Counterclaim concurrently.

106. I do accept that AFFAN was unsuccessful in establishing some of its claims as pleaded. I do not however accept that this was due to conscious exaggeration but rather poor record keeping. I also accept that the poor record keeping will have contributed to some extent in increasing the costs of the quantum expert evidence.

107. This lack of success may be reflected in the award of costs by way of a percentage reduction in accordance with RDC 38.8 and 38.9. AFFAN’s lack of success was however nothing remotely like that consistently suggested by BAM in its submissions (see paragraph 43 above).

108. I do not accept that “the Defendants chang[ing] their case on multiple occasions during the proceedings” led to any additional costs for the reasons set out at paragraphs 27 and 28 above.

109. While I did make criticisms of Dr Affan’s evidence, given the manner in which BAM’s case was conducted at the Trial and the unsustainable personal allegations made against Dr Affan, it stretches credulity that his “unsatisfactory approach” had the slightest effect on the length of his cross-examination or the re-examination necessitated thereby. I agree with the Defendants that there is no evidence of wasted or abortive costs.

110. As to BAM’s submissions that AFFAN’s “unsatisfactory” conduct should lead to a reduction in its costs but also an order that the Defendants pay the entirety of the Claimant's costs incurred in relation to the CATIA model inspection: as noted at paragraph 37 above BAM cites my comments out of context. I considered that the object of the exercise was to bolster BAM’s failed case on dishonesty by seeking to show that Dr Affan deliberately supressed evidence. I agree with the Defendants that if any conduct has caused the Court to waste resources on the CATIA Model issues, it was the Claimant’s intent on creating issues and unsubstantiated allegations against the Defendants.

111. BAM submits that the costs of and occasioned by the Defendants' quantum expert should be disallowed entirely. As noted at paragraph 48 above, I consider BAM’s approach to be misconceived. I am satisfied that Mr Atherton properly discharged his duties to the Court and worked constructively with Mr Kenyon to agree “figures as figures” wherever possible.

112. BAM makes a similarly unjustified criticism of the Defendants’ technical expert. The criticism bears no relation to reality. In fact, I accepted Mr Smith’s technical analysis in preference to that of Ms Kindelan. I entertained serious reservations that Ms Kindelan was working to reach a predetermined result. I rejected her factual analysis which was, Mr Smith correctly identified, a matter for the Court. I agree with the Defendants that Mr Smith properly performed his role as an independent expert and opined in a matter that resulted in his findings being accepted by the Court in their entirety.

113. In the light of my findings, I cannot see any principled or rational basis on which BAM could be entitled to any costs. The simple fact is that it lost on its principal Claim and that AFFAN made a rather more substantial recovery on its Counterclaim than BAM appears willing to admit.

114. In my judgment, there is something to be said for the argument that while neither side exactly covered themselves with glory in their conduct of these proceedings AFFAN was simply the overall winner and should have all of its costs. This would be consistent with RDC 38.7 and the guidance in Al Khorafi that there is no automatic rule requiring reduction of a successful party's costs if it loses on one or more issues, particularly in complex litigation. Nor do I consider that poor record keeping or chaotic management during the course of a contract is the type of conduct contemplated by RDC 38.9(1). Those matters will be reflected in a reduced recovery in the substantive claim. On the other hand, I do consider that deliberate suppression of unfavourable evidence would be a paradigm example of such conduct.

115. Equally, I cannot disregard the fact that it was the Claimant that initiated these proceedings and it was wholly unsuccessful.

116. I must however recognise that AFFAN’s recovery on the variations element in its Counterclaim was substantially lower than the pleaded claim. Once a claim is pleaded any questions of poor record keeping should have been addressed. All elements of the claim should be justifiable. If that is not the case, then it is appropriate to make a reduction in recoverable costs to reflect that as noted in Wincore. The variations claim was of course just one element in the overall real world success.

117. Weighting the extensive submissions of both parties considered in the Judgment and taking into account the conduct of the parties on which I have had occasion to comment, I consider that the appropriate order is that AFFAN should recover 85% of its costs.

Dr Affan’s Costs

118. An order that BAM pays the totality of Dr Affan’s costs could not realistically be resisted. BAM’s Claim failed on every point.

119. The criticisms of Dr Affan‘s evidence at paragraph 68 above are nothing to the point. First, Dr Affan need not have given any evidence in his defence at all and the Claim would still have failed. Secondly, the remarks cited from the Judgment do not relate to the personal allegations against Dr Affan. Thirdly, the criticisms repeat the misrepresentation of the contents of the Judgment I identified at paragraph 89 above.

Costs of the Jurisdiction/Amendment Applications

120. I have held at paragraph 92 above that I cannot reopen these Orders and that I agree with the Claimant’s submissions that the Orders were made on the merits at the time and cannot be reversed retrospectively save on an appeal (which this is not).

Basis of Assessment

121. I deal first with the submission that AFFAN’s costs be assessed on the indemnity basis.

122. I am satisfied that BAM’s suppression of the CCN 222 document and (perhaps more critically) the fact that it had reached a settlement with the Employer that included elements attributable to AFFAN’s works as conduct that was “unreasonable to a high degree” (Kiam v MGN) and “out of the norm” (Practice Direction No. 5 of 2014).

123. I find that (as BAM accepts was the case) a main contractor taking a position in a claim by a sub-contractor inconsistent with the position taken with the employer to be, as correctly characterised by AFFAN, “disingenuous” in the true sense of the word. BAM claims that the concealment of CCN 222 was not deliberate. It is impossible to understand how that could be true given BAM’s new, but false, case that CCN 222 had, in substance, been brought to the Defendants’ attention. That aside I consider that it would still be unreasonable to a high degree.

124. BAM does not even seek to justify supressing the terms of the settlement with the Employer. I found that BAM’s desire to hide the settlement led to an amendment of the Statement of Claim to replace the true figure received from the Employer with a hypothetical false figure that I found was “not [a] genuine” (paragraph 314 of the Judgment). This in turn led BAM’s counsel to distort the true position (paragraph 311 of the Judgment). I am in no doubt that this conduct amply justifies the assessment of AFFAN’s costs on the indemnity basis. It is unnecessary for me to make any findings of dishonesty, but such conduct undeniably goes well beyond the merely wrong or misguided in hindsight.

125. I also take into account that at paragraph 21 above, I indicated that I perceived a consistent course of conduct on the part of BAM in seeking to mislead the Court during the Trial. That impression was reinforced by BAM’s submissions in relation to costs – see paragraphs 37, 82 and 89 above.

126. BAM’s criticisms of the Defendants’ conduct are again irrelevant on the facts of this case. What matters is BAM’s conduct.

127. So far as Dr Affan’s costs are concerned, I cannot see that assessment on the indemnity basis could realistically be resisted. Had any independent and realistic judgment been brought to bear upon the claims against Dr Affan they would, in all likelihood, never have been made. They appear to have been motivated by personal animosity rather than legal analysis. The claims were “meritless” and I follow the example of H.E. Justice French in Hexagon Holdings in directing assessment of the costs on the indemnity basis.

Interest

128. I agree with BAM’s submissions that:

129. So far as the commencement date for pre-judgment interest is concerned, as the Defendants observe, BAM’s position is wholly negative: it does not make any submissions on the dates from which interest should run and provides no calculations to assist the Court. I am therefore left to reach my own conclusion. In my judgment, the appropriate date from which pre-judgment interest is to run is 28 November 2018. On that day, BAM called the Advance Payment Guarantee under the Subcontract. BAM was effectively certifying to the Bank that AFFAN was in breach of contract and that no further sums are or will be due to AFFAN. It marked a breakdown in relations although that was not communicated to AFFAN as BAM wanted to keep AFFAN’s local authority approvals (paragraph 187 of the Judgment).

130. Simple interest will therefore run at 5% per annum on AED 50,159,023 from 28 November 2018 to 23 February 2026 in the sum of AED 18,160,315 and continuing at the daily rate of AED 6,871.

Payment on Account

131. The Defendants do not apportion the costs between those of AFFAN and Dr Affan. It may not be important at this stage although it may be necessary on a detailed assessment. The Defendants claim AED 5,889,961.41 in total.

132. I note BAM’s comments on the amounts of:

133. Practice Direction No. 5 of 2014 provides at paragraph 5:

“Where the Court has ordered a party to pay costs subject to detailed assessment unless agreed, it will order 50% of the amount claimed in the statement of costs to be paid on account before the costs are assessed, unless the Court sees fit to order otherwise.”

134. I see no reason depart from the default position. BAM shall make a payment on account of the Defendants’ costs in the sum of AED 2,944,981.

DISPOSITION

135. The Claimant shall pay pre-judgment interest in the sum of AED 18,160,315.

136. The Claimant shall pay post-judgment interest continuing at the daily rate of AED 6,871 until payment.

137. Subject to existing costs Orders, the Claimant shall pay to

138. The costs of the First and Second Defendants shall be assessed by the Registrar on the indemnity basis in default of agreement.

139. The Claimant shall pay the sum of AED 2,944,981 to the Defendants’ legal representatives on account of the Defendants’ costs.