Claim No: CFI 119/2025

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

AZ

Claimant

and

BY

Defendant

REASONS OF H.E. JUSTICE MARK PELLING FOR THE CASE MANAGEMENT ORDER DATED 25 MARCH GIVEN EX TEMPORE AT THE HEARING ON 10 MARCH 2026

1. The issue I have to determine now concerns an application by the Claimant for the costs of and occasioned by an application issued by the Claimant for an order expediting the trial of these proceedings.

2. In broad summary, these proceedings concern a claim by the Claimant as an employee or former employee of the Defendant as to whether or not a contract of employment was wrongfully repudiated by the Defendant and, if it was, whether that had the effect of discharging various post termination covenants contained in the contract of employment. I summarise it in that way although the Defendant maintains that the last part of that formulation only arose after the Claimant had resigned or purportedly resigned from his employment and announced his intention to take alternative employment and once an amended pleading had been prepared on behalf of the Claimant.

3. As is common ground, this application engages Practice Direction No. 1 of 2025 (the “Practice Direction”), which applies specifically to employment cases. Insofar as is material, the practice direction provides:

4. The Claimant submits that the conduct of the Defendant in refusing to agree to expedition before it was necessary to issue the application was unreasonable within the meaning of Paragraph 3.2(a) of the Practice Direction and accordingly, a costs order should be made. The Defendant disputes that this is a sufficient basis for making an adverse costs order.

5. There is no DIFC case law that is relevant for present purposes as to how this particular provision should be construed. My attention was drawn to the rules which apply in England and Wales in Employment Tribunal Disputes, but as I pointed out in the course of the argument, Employment Tribunals are creatures of statute. In my judgment, it would be dangerous to import wholesale rules which apply to statutory tribunals in one particular common law jurisdiction as the mechanism for attempting to work out what the practice directions of this court require. The DIFC Courts are Common Law Courts that apply general principles of common law in order to resolve the disputes that arise. In those circumstances, it is much the sounder process to try and ascertain what general principles of Common Law might apply.

6. The purpose of the Practice Direction is to promote access to justice in respect of employment cases where one party may be substantially under resourced by comparison with the other party or parties by making it the default rule that employment disputes shall be resolved on the basis that each party bears its own costs. That strong policy constraint necessarily means that cases where the default position is not applied should be very much the exception rather than the rule. It follows that paragraph 3.2 of the Practice Direction is by definition, one which is engaged only in exceptional circumstances. As is apparent on the face of paragraph 3.2, it creates three gateways through one of which a party seeking costs must pass. Once an entitlement to rely on the relevant gateway has been established, the court then has a discretion as to whether or not to make an adverse cost order. It follows that establishing one of the gateways is a necessary but not a sufficient basis for seeking a costs order, with the exceptionality of the jurisdiction operating as a fetter on the circumstances in which in the exercise of its discretion the court will be persuaded to make an adverse cost order even where one of the gateways has been shown to apply. The Practice Direction does not operate asymmetrically so the same principles apply whether the party seeking costs is a former employer or employee.

7. Given the exceptionality of the power to make an adverse costs order in an employment case, I consider that in relation to the first gateway, there is a very strong analogy to be drawn between the circumstances where a party is to be treated as having conducted proceedings unreasonably for the purposes of the Practice Direction and the circumstances where a party will be treated as having behaved in such a way as as to justify the costs it has been directed to pay being assessed on the indemnity rather than the standard basis. The principle that applies in England in relation to a direction that costs be assessed on the indemnity basis is that identified by the Court of Appeal in Excelsior Commercial & Industrial Holdings Ltd, [2002] EWCA Civ 879, where the Court of Appeal held that directing a costs assessment on an indemnity basis would be appropriate only where either the conduct of the paying party and/or the other circumstances of the case were such as to take the situation “out of the norm” in a way which justified an order for indemnity costs being made. The court declined to give any more specific guidance because it recognized that there would be a very wide variety of different factual situations in which it may be appropriate to at least consider making such an order. The subsequent case law In this court and the courts of England and Wales has emphasized the need for there to be conduct which can be characterized as unreasonable to a high degree before costs can be ordered to be assessed on an indemnity basis.

8. In my judgment, that is the approach that is required to be taken in relation to an assertion that costs should be paid by reference to the First Gateway identified in paragraph 3.2 of the Practice Direction. It is thus necessary, in my judgment, for the Claimant to demonstrate unreasonableness to a high degree on the part of the Defendant before it will be appropriate to displace the general rule identified in paragraph 3.1.

9. The other general point of principle that I ought to make at this stage relates to the nature of the application to which it is said the Defendant should have consented. So far as that is concerned, as I've already said, it was an application to expedite. The principles which apply in relation to an application to expedite in the context of general litigation at least, are well established and are set out the judgment of the Court of Appeal in Petter v. EMC Europe Ltd & Anor, [2015] EWCA Civ 480starting at paragraph 11. The point of principle that emerges is that where the court is asked to exercise its discretion to expedite proceedings, it considers any such application in a context where courts are busy and expediting one case over others will simply slow the progress of others unreasonably. It follows that before any expedition is ordered, there must be a real and objectively identifiable reason for urgency. Whilst this authority is concerned with the position in England, the general principle it identifies is as applicable to the DIFC Courts as it is to the Courts of England and Wales. There are two points which follow from the application of this general principle. First, before expedition will be ordered by any court, it will require an application and it will be for the party applying for expedition to identify real, objectively identifiable urgency. Secondly, and perhaps rather more importantly in the circumstances of this case, it is not for the parties to agree that a case should be expedited. It is for a court to direct that expedition is appropriate on an application by one or possibly by both parties applying to the court together.

10. In the circumstances of this case, it necessarily follows, therefore, that firstly there would have had to be an application for expedition in any event because it is not open to the parties to agree it. Secondly, it was necessary for the Claimant to identify what reasonable grounds there were for directing expedition in the circumstances of this case. From that stems a third point, which is that the Defendant was fully entitled to resist an application for expedition, unless satisfied there were grounds which would lead a court on an application to direct expedition. The reason why a party is entitled to resist expedition is an obvious one. A trial which is expedited so as to lead to a very tight timetable, such as has been adopted in this case, places all parties, and therefore the party resisting expedition under extreme pressure of time and cost in preparing for trial that would not otherwise arise. In those circumstances, I am not able to agree that the Defendant can be criticized for unreasonably resisting expedition unless there is something in the circumstances that would make expedition inevitable. In relation to this point, it was submitted on behalf of the Claimant that from an early stage in the correspondence, it had been made clear that expedition was being sought, and what the Claimant was concerned to obtain from the court was a declaration concerning whether or not the contract of employment had been wrongfully repudiated. The submission made on behalf of the Defendant, which I accept, is that at that stage there was nothing in the facts of the case as it was then pleaded or then being advanced in correspondence, which would justify expediting this case, ahead of all the others that are to be litigated in this court.

11. I am not proposing in an extemporary judgment of this sort to go through each of the letters and emails to which I was taken or the underlying Witness Statements or the original pleading. The fact of the matter is, however, that there came a point in the chronology of this dispute when the Claimant by his Solicitors informed the Defendant that he was resigning from his current employment, that he wished to take up employment with another employer and that he would be amending his pleadings so as to bring into the dispute the impact on the post termination restraint provisions of the issue concerning the repudiation of the contract. It was only when the Claimant indicated its intention to amend so as to bring those matters into issue that it became apparent that the post termination restraints were likely to expire before there could be a trial in the ordinary course. In those circumstances, it cannot sensibly be said that the Defendant conducted itself in a way which was unreasonable to a high degree by declining to agree to expedition prior to that indication. It was accepted on behalf of the Claimant that the requests for expedition preceded this change in the focus of his claim. In those circumstances, I am satisfied that there has not been conduct on the part of the Defendant, which is sufficiently unreasonable to engage the first gateway or any of the other gateways in paragraph 3.2, from which it follows that the court has no discretion as to whether or not to make an order for costs because the general rule applies, and it follows that each party must bear its own costs. If that is wrong, I would nevertheless not have made an adverse cost order as a matter of discretion given the circumstances.

Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 14 July 2026
At: 11am