May 20, 2026 court of first instance - Judgments
Claim No. CFI 036/2025
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai
IN THE COURT OF FIRST INSTANCE
BEFORE H.E. JUSTICE ROGER STEWART
BETWEEN
STEPHAN KARL MORGENSTERN
Claimant
and
SAIF SULTAN AL MEHRZI LAWYER & LEGAL CONSULTANTS
Defendant
| Hearing : | |
| Counsel : |
Stephen Doherty instructed by Horizons & Co for the Claimant Marium Razzaq instructed by Noorhan Abdulatif Alzaabi Advocates and Legal Consultants for the Defendant |
| Judgment : | 20 May 2026 |
JUDGMENT OF H.E. JUSTICE ROGER STEWART
UPON the Part 7 Claim Form filed on 2 April 2025 and the Amended Claim Form filed on 23 April 2025 (the “Claim”)
AND UPON the Case Management Order of H.E. Justice Roger Stewart dated 19 December 2025
AND UPON hearing Counsel for the Claimant and counsel for the Defendant at the Trial held remotely on 11 May 2026 before H.E. Roger Stewart
AND UPON review of the parties’ submissions on the Court file
AND UPON the Claimant making submissions as to costs and interest on 13 May 2026
AND UPON the Defendant responding to such submissions on 15 May 2026
IT IS HEREBY ORDERED THAT:
1. There be judgment for the Claimant in the sum of AED 1,412,950 together with interest to the date of this judgment of AED 92,292.69.
2. That the said judgment sum is payable within 14 days of the date of this judgment.
3. In the event the judgment sum is not paid, interest shall be due on the principal sum at the rate of 9% per annum or AED 348.40 per day.
4. The Claimant’s costs of the claim are assessed in the sum of AED 397,912.34 including VAT.
5. The Defendant is to pay the above costs to the Claimant within 14 days of the date of this judgment.
Issued by:
Hayley Norton
Assistant Registrar
Date of Issue: 20 May 2026
At: 11am
SCHEDULE OF REASONS
Introduction
1. This is a claim by the Claimant to recover a total of AED 1,412,950 plus interest from a firm of lawyers pursuant to the express terms of a contract. The facts are unusual. For reasons set out below, there is no defence to the claim and judgment will be entered accordingly.
The facts
2. On 28 November 2024, the Claimant was being held in prison in Albania pursuant to an Interpol “Red” Notice (the “Interpol Notice”) which had been issued by the Polish authorities in order to seek the extradition of the Claimant in connection with what were said to be very substantial frauds amounting to a financial pyramid (or “Ponzi”) scheme perpetrated by the Claimant and others relating to “Futurenet”. The frauds were said to have taken place in Wroclaw, Poland, and other places between 2016 and October 2022.
3. On that date the Claimant, through his attorney, Mr Ali Al Zarooni, entered into a contract with the Defendant with the following material provisions:
(a) The preamble recorded that the parties had agreed on fees which would be payable in two parts:
i. USD 280,000 on signature of the agreement; and
ii. USD 220,000 upon cancellation of the Interpol Notice and extradition request issued in Poland;
(b) Article 1 recorded that the Preamble should be considered an integral part of the agreement;
(c) Article 2.1 required the Defendant to “use its international legal expertise to cancel the extradition file and any petitions/notices/circulars related thereto, including the extradition request issued in Poland BMWP 42835/2023 NCB against [the Claimant]”;
(d) Article 2.2 required the Defendant to contact the Commission for the Control of Interpol’s Files to clarify the appeal against the judgment issued in Poland against the Claimant, and to annul the extradition request;
(e) Article 2.4 required the extradition request to be cancelled in no more than 10 working days as of the date of the agreement;
(f) Article 2.7 provided
“This agreement shall be deemed as concluded if the extradition case file is cancelled from Poland and the Polish competent authorities addressing the State of Albania to cancel the request along with any cases, circulars and notices in relation thereto, including the Interpol request, within the period agreed in Clause 4. [the Defendant] shall unconditionally refund all professional fees that are paid by [the Claimant] to [the Defendant], if the extradition file and all circulars and notices related thereto including the Interpol’s, are not cancelled within the period agreed upon herein as per Clause 4.”
(g) Article 4 provided
“Liabilities of the First Party
(1) [The Defendant] shall perform its work and exercise the due diligence, regardless of the result, by observing the advocacy laws, ethics and morals in force within the United Arb Emirates.
…
(4) [The Defendant] shall complete the work within the specified term and notify [the Claimant] of each procedure established”
(h) Article 5(2) provided that the Claimant should provide the Defendant with all information and data that the latter requests to duly perform the work.
(i) Article 5(3) provided that the Claimant should provide the Defendant with all documents that the latter needs during the consideration of the case or any other matters for the benefit of case progress.
(j) Article 7 provided for an exclusive jurisdiction clause in favour of the DIFC Courts.
4. The Claimant duly paid AED 1,027,600, the equivalent of USD 280,000, by cheque to the Defendant as recorded by the latter’s receipt dated 29 November 2024.
5. Although it is the Defendant’s case that it conducted substantive legal work pursuant to the terms of the Agreement:
(a) There are no pleaded details of such work;
(b) The Defendant’s witness, Mr Nasser Ali N Alasmarl (“Mr Alasmarl”) gave no details of such work in his witness statement or oral evidence; and
(c) The Defendant was ordered to produce documents relating to such work but did not do so.
6. In the circumstances, I find that the Defendant did not conduct any substantive work pursuant to the terms of the Agreement. It would have been impossible to carry out such substantive work without there being documents evidencing such work.
7. There have been produced a series of WhatsApp messages between Mr Al Zarooni and Mr Alasmarl. Initially some of these messages were produced by the Defendant and the Claimant then provided a fuller set. The WhatsApp messages, even as finally produced, are not a complete record of the exchanges between the parties as it is apparent that some of them have been deleted. Those that have been produced
(a) Show that Mr Alasmarl first became a contact of Mr Al Zarooni on 9 September 2024;
(b) Appear to record messages between 24 December 2024 and 6 February 2025;
(c) Record Mr Alasmarl claiming on 24 December 2024 that “the letter had been issued” and “the letter is with us”;
(d) Record Mr Al Zarooni stating on 26 December 2024:
i. That checks had been made in Albania, Singapore and Spain which had not found any letter;
ii. That the Claimant “had lost confidence in these guys. The document they gave from NCB Warsaw has turned out to be fake”.
(e) Contained a lengthy discussion on 26 December 2024 in which it appears that Mr Alasmarl sought to persuade Mr Al Zarooni that the Claimant should sign a power of attorney in Albania for new lawyers to represent him there and Mr Al Zarooni made it clear that this was not going to occur;
(f) On 27 December 2024, Mr Alasmarl stated
“Today, they submitted the extradition cancellation document manually to the legal department of the Polish Ministry of Justice, along with a Polish translation for authentication. It should be completed on Monday or Tuesday, inshallah, and you will receive a copy in your email. After that, my task regarding Stephen’s case will be finished, and may God help you with the gang of lawyers in Albania”;
8. On 27 December 2024, the Claimant notified the Defendant of the cancellation of the Agreement and demanded the return of the money already paid. This letter was sent by Mr Al Zarooni to Mr Alasmarl by WhatsApp on that day.
9. Between 27 December 2024 and 7 January 2025:
(a) Mr Al Zarooni initially insisted that the money was required to be returned;
(b) Mr Alasmarl insisted that everything was ready and that everything was complete and “everything is with me”;
(c) Mr Alasmarl sent what was said to be the text of a cancellation of the extradition request from the Polish authorities; and
(d) Mr Alasmarl requested additional funds to be provided “so that the telegram can be sent to Albania”.
10. On 7 January 2025:
(a) The Claimant paid AED 385,350 in cash to the Defendant;
(b) The Defendant signed a receipt recording that the money was payment for “Additional amount for removal of extradition case filed by the Govt of Poland against [the Claimant]”; and
(c) A note on the receipt recorded “If the extradition case is not removed within three days from the above date, the above mentioned amount will be returned back to Mr Ali”.
11. The Defendant provided a cheque dated 9 January 2025 made payable to Mr Al Zarooni in the amount AED 385,350.
12. Between 9 and 11 January 2025:
(a) Mr Alasmarl continued to promise the paperwork was or would be available;
(b) On 10 January 2025, Mr Al Zarooni made it clear that no paperwork had been provided and that that day was the last day for performance; and
(c) On 11 January 2025, Mr Al Zarooni demanded the return of all monies and also sought to cash the Defendant’s cheque for AED 385,350.
13. On 14 January 2025, the Defendant’s cheque was returned unpaid on the grounds that there were insufficient funds in the Defendant’s account to honour it.
14. After 14 January 2025:
(a) The Polish authorities did not cancel the extradition request;
(b) The Albanian authorities did release the Claimant from prison on 10 March 2025 on the grounds of a successful asylum request rather than cancellation of the request for extradition;
(c) Mr Al Zarooni issued proceedings on the cheque in his favour but the Defendant resisted the same and no judgment has been given in Mr Al Zarooni’s favour;
(d) On 10 March 2025, the Claimant issued a formal written demand for repayment of all sums paid to the Defendant; and
(e) On 2 April 2025, the Claimant issued these proceedings.
The Claimant’s Case
15. The Claimant’s case is attractively simple:
(a) Pursuant to the express terms of the Agreement and the Receipt, the total monies payable were to be returned if the Interpol Notice was not withdrawn by specified dates;
(b) The Interpol Notice was not withdrawn by those dates or at all; and
(c) The money is therefore repayable and has been repayable since at least 11 January 2025.
The Defendant’s Case
(a) That the alleged “core objective” of the contract was met in that the Claimant was released from prison on 10 March 2025;
(b) That on 5 August 2025, “foreign counsel further confirmed suspension/cancellation of the extradition process”;
(c) That the release process was frustrated by the failure of an official Power of Attorney to “complete administrative formalities” and referred to requests on 21 and 26 May 2025;
(d) That the Defendant’s cheque for AED 385,350 was a security cheque not a fee paid absolutely; and
(e) That the claim constitutes an attempt by the Claimant to avoid his obligations.
17. At trial the Defendant contended:
(a) That the contract should be construed as a whole and in accordance with the well known canons of construction; and
(b) That it undertook substantial legal work and requested Powers of Attorney and documentation which were not provided.
Discussion
18. None of the matters put forward by the Defendant begin to provide a defence to the Claim.
19. The original agreement was completely clear in requiring the cancellation of the extradition request and Interpol Notice which required action in Poland. The receipt recording the terms upon which the additional sum of AED 385,350 was paid is similarly clear. It granted a very limited additional period of time for performance but only on the basis that the money would be returned if performance did not take place.
20. The Defendant sought to argue that considerations of business common sense suggested some form of alternative (although unspecified) construction of the agreement such that the monies were not repayable. I do not consider that the express and clear terms of the agreement were in any way uncommercial. They no doubt reflected the considerable benefit that would be achieved by the Claimant if the extradition request were cancelled in short order. A commensurate benefit would be obtained by the Defendant in such event. If however the terms were not achieved, the Defendant would receive nothing.
21. The fact that the Claimant was released by the Albanian authorities on 10 March 2025 is irrelevant to the claim or the Defence. The release had nothing to do with the Defendant and was achieved by the Claimant and his existing Albanian lawyers. The release did not mean that the Interpol Notice was cancelled or that the Polish authorities request for extradition was cancelled. It reflects instead what became a successful asylum request. The WhatsApp communications reveal the Defendant being very disparaging about those lawyers and the filing of the successful asylum request.
22. The Defendant’s counsel pressed the point that the original agreement had not been strictly enforced in relation to the return of the initial monies. This is true but irrelevant. No doubt if the extradition request had been cancelled after 7 January and before 10 January 2025, the Claimant would not have been entitled to the return of the initial sums paid but the initial forbearance cannot provide a defence when the Defendant continued to fail to provide what it had promised. It is clear that the forbearance was only achieved as a result of successive representations by the Defendant which came to nothing.
23. I have already found that no substantial legal work was performed by the Defendant. The WhatsApp messages demonstrate a continual stream of promises and representations by Mr Alasmarl for which there was no justification. Mr Alasmarl was a deeply unimpressive witness who failed to answer straightforward questions. He sought to claim credit for matters which were nothing to do with him – such as the release from prison of the Claimant in March 2025.
24. Wisely the Defendant did not attempt to assert that there had actually been any genuine decision by the Polish authorities to withdraw the extradition proceedings but the WhatsApp messages are replete with suggestions that this had occurred or was about to occur. Further there has been produced what appears to be a forged document suggesting that the Polish authorities had withdrawn the extradition request. The provenance of this document is wholly unclear. In the circumstances there are only two possibilities:
(a) That Mr Alasmarl was being misled by unknown others; or
(b) He was misleading Mr Al Zarooni.
25. If there were communications with others, it would be expected that they would be produced but they have not been. In any event neither of the two possibilities provides any form of defence to the claim.
26. The Defendant also pressed the assertion that there had been no signature by or on behalf of the Claimant of a Power of Attorney. As to this:
(a) The only pleaded requests for such signature were in May 2025, after these proceedings had been instituted;
(b) Such requests could not possibly have amounted to a request relevant to non performance of the agreement;
(c) Mr Alasmarl sought, in his evidence, to pivot towards what were said to be requests in the WhatsApp communications;
(d) As to these:
i. The Defendant was pressing for Powers of Attorney in favour of Albanian lawyers;
ii. There was then no explanation as to why these requests were relevant to the Defendant’s work which was centered on the withdrawal of the Interpol Notice emanating from Poland;
iii. The Defendant was unable to suggest in argument why Powers of Attorney in favour of Albanian lawyers were relevant to work in Poland;
iv. In fact, it appears that the purpose of the Powers of Attorney in Albania were intended to oust the Claimant’s existing Albanian lawyers in favour of lawyers connected with the Defendant;
v. I consider there is no possible link between such Powers of Attorney and the Defendant’s ability to secure the withdrawal of the Interpol Notice; and
(e) It follows that the requests are wholly irrelevant to the claim and do not provide a defence to it.
27. As to the cheque for AED 385,350:
(a) It is true that this was a security cheque which was provided against the further cash payment;
(b) The cheque was dishonoured when it should have been met following the failure of the Defendant to fulfil its obligations by 10 January 2025;
(c) The wrongful dishonour of the cheque does not provide any defence to the claim; and
(d) It is, of course, the case that the Claimant would not be entitled both to enforce this judgment and, through, Mr Al Zarooni, enforce the cheque but there is no suggestion that this is likely to occur.
28. It follows that none of the matters put forward by the Defendant provide any defence to the claim.
Interest
29. The Claimant seeks interest from 11 January 2025 to the date of judgment at EIBOR plus 1% and interest post judgment at 9%.
30. The Defendant asserts that the Claimant has not demonstrated why interest should be payable prior to judgment so that the Court should exercise its discretion in favour of the Claimant in accordance with RDC 36.32.
31. I consider that this is a clear case where the Court’s discretion should be exercised in favour of the Claimant. The Defendant should have made payment by 11 January 2025. It had specifically agreed to do this but failed to do so. I have found that there was never any defence to these proceedings. In the circumstances, not allowing interest would permit the Defendant to benefit from its wrongful failure to fulfill its obligations.
Costs
32. The Claimant seeks costs on an indemnity basis in the total sum of AED 413,662.34 (including VAT) made up as to Court Fees of 54,677.80, Counsel Fees of AED 152,617.54, legal costs of AED 196,540 and VAT on such costs in the amount of AED 9,827.
33. The Claimant seeks assessment on an indemnity basis and, in any event, assessment in the sum claimed.
34. The Defendant objects to the orders sought on the basis:
(a) That indemnity costs are not justified;
(b) The total costs are excessive;
(c) There is no adequate justification of the sums sought; and
(d) That the attendance of several solicitors at trial was not justified.
35. I consider that assessment on an indemnity basis is not only justified but required in this case. I fully accept that in order to justify such an order there has to be a departure from the norm and that orders for indemnity costs are usually reserved for cases where the Court wishes to mark its disapproval of the paying party’s conduct.
36. This is just such a case:
(a) There was never a defence to this claim which required the repayment of substantial sums of money to the Claimant;
(b) The Defendant never did any substantive work to justify such sums;
(c) The Defendant has put forward an inconsistent and incoherent case in order to seek to justify not returning money when it should have done so;
(d) The effect of the Defendant’s conduct has been such as to require a trial when one should not have been necessary if the Defendant, a firm of lawyers, had done what it plainly agreed to do; and
(e) It is not to be expected that lawyers shall behave in such a way.
37. It is, of course, still the case that costs will not be allowed which have been unreasonably incurred or are unreasonable in amount.
38. With one limited exception, I consider that there is nothing to suggest that the costs were unreasonably incurred or are unreasonable in amount. The costs bear a sensible relationship to the sums claimed and the work done to prepare for a trial and then conduct the trial.
39. The one exception is the 5 hours of hearing time allowed for Mr Al Zarooni. He attended the trial principally as a witness rather than as counsel. In the circumstances I do not consider that the Defendant should be obliged to pay for his time and attendance at trial. His costs would also attract VAT. This means that there will be a reduction of AED 15,000 plus VAT namely AED 15,750. The costs are accordingly assessed at AED 397,912.34 including VAT.
