January 25, 2024 COURT OF FIRST INSTANCE - ORDERS
Claim No. CFI 041/2022
THE DUBAI INTERNATIONAL FINANCIAL CENTRE
IN THE COURT OF FIRST INSTANCE
BETWEEN
KIRTANLAL INTERNATIONAL DMCC
Claimant
and
(1) STATE BANK OF INDIA (DIFC BRANCH)
(2) JINGJIANG SPECIAL STEEL CO. LTD
(3) HUBEI XINYEGANG STEEL CO. LTD
(4) CITIC PACIFIC SPECIAL STEEL GROUP CO. LTD
Defendants
ORDER OF JUSTICE SIR JEREMY COOKE
UPON the Part 7 Claim Form dated 13 June 2022 (the “Claim”)
AND UPON hearing Counsel for the Claimant and Counsel for the First Defendant at the Trial held on 18 to 22 September 2023 (the “Trial”)
AND UPON reviewing all relevant material added onto the Court file
AND UPON reviewing the Rules of the DIFC Courts (the “RDC”)
AND UPON the Court giving judgment on 11 October 2023 against the Claimant and ordering that the Claimant pay the First Defendant the costs of the proceedings, and for submissions to be filed as to the basis of assessment of costs
AND UPON consideration of the Claimant’s Submissions on Costs dated 10 November 2023 and on 22 January 2024 and the First Defendant’s Responsive Submissions dated 5 January 2024
IT IS HEREBY ORDERED THAT:
1. The Claimant shall pay the costs of the First Defendant on the Indemnity Basis.
2. The Claimant shall make an interim payment to the First Defendant on account of costs in the sum of AED 2,237,704.06 within 14 days of the date of this Order.
3. The Claimant shall pay the balance of the First Defendant's costs of the action, such costs to be assessed by the Registrar if not agreed.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 25 January 2024
At: 12pm
SCHEDULE OF REASONS
1. The First Defendant’s costs are to be paid by the Claimant on the Indemnity basis because the case falls outside the norm. The Claimant’s case was originally made with allegations of fraud and dishonesty which were abandoned for the Trial. Such allegations should never have been made. A new case emerged of irrationality and bad faith, which was groundless. The claims were contrived and the evidence adduced in support of the case was found to be dishonest in places and unreliable generally. Attacks made on the integrity of the managers of the First Defendant were likewise groundless. The case as originally brought was wide ranging in its allegations, unfocused, confused and confusing and had to be repleaded until ultimately narrowed down by Counsel. It was a case which should never have been pursued against the First Defendant where the real wrongdoing alleged was against the other Defendants.
2. Where the Court orders payment of costs on the Indemnity Basis, the burden is on the unsuccessful party to show that costs have been unreasonably incurred and there is no requirement of proportionality. There can be no complaint here about proportionality of the professional fees, nor the disbursements incurred, particularly in relation to Counsel’s or experts’ fees which were necessarily incurred.
3. Payment on account of costs is normally ordered in an amount approximating to 50% of the costs claimed on the basis that the Court can be confident that such an amount will be recovered on a full assessment. Where costs are ordered on the Indemnity Basis, as here, the Court can be confident that a larger proportion will be recovered and the Court is satisfied here that 60% will be recovered, notwithstanding the criticisms made in the Claimant’s submissions of 10 November 2023, most of which appear to the Court to be without foundation.
4. The Claimant’s own conduct of the litigation led to unnecessary costs being incurred by the First Defendant as is plain from the early procedural orders of the Court. The Court considers that the second, third fifth and final points made by the Claimant in its submission of 10 November have no validity at all. As to the examples relied on to justify a discount in the first point made in those submissions, the Court does not consider that any of these would require any significant discount and most of them should give rise to no discount at all.
5. In these circumstances and for these reasons, the Court Orders an interim payment of AED 2,237,704.06 within 14 days of this order with interest to run at the Judgment Rate on that figure from the date of Judgment to the date of payment.
