CFI 043/2014 DNB Bank ASA v (1) Gulf Eyadah Corporation (2) Gulf Navigation Holding Public Joint Stock Company

Claim No: CFI 043/2014

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BEFORE H.E. JUSTICE ALI AL MADHANI

BETWEEN

DNB BANK ASA

                                      Claimant/Respondent

and

(1) GULF EYADAH CORPORATION

(2) GULF NAVIGATION HOLDING PUBLIC JOINT STOCK COMPANY

Defendants/Applicants

  ORDER OF H.E. JUSTICE ALI AL MADHANI

UPON reviewing the Defendants’ Application Notice CFI 043/2014-3 dated 13 August 2015 seeking a stay of the cost assessment proceedings (“the Application”)

AND UPON reviewing the Claimant’s response to the Application dated 30 August 2015;

AND UPON reviewing the Defendants’ reply to the Claimant’s response dated 2 September 2015;

AND UPON reading the relevant material in the case file

IT IS HEREBY ORDERED THAT:

1. The Defendants’ application to stay the cost assessment proceedings is denied.
2. Costs in relation to this Application are the costs in the case to be paid by the Defendants.

Reasoning

3. This is my reasoning in response to the Defendants’ application to stay the cost assessment proceedings pending determination of the substantive appeal.
4. By way of background, the applicant is a UAE Company incorporated in Dubai outside the DIFC sued by the Respondent before this Court for recognition and enforcement of a foreign court judgment. The Applicant sought to challenge the jurisdiction of the DIFC Courts.
5. The jurisdiction issue was heard before this Court in a hearing that took place on 16 March 2015. The Applicants’ jurisdiction and privacy application was dismissed and the Respondent was awarded the cost of that application.
6. On 20 July 2015 the Respondent sought permission to appeal the substantive Judgment with regards to the finding of this Court that the DIFC Courts cannot operate as a “conduit jurisdiction” to enforce foreign court judgments beyond its jurisdiction. On 21 July 2015 the Applicants appealed the costs order on the grounds that they had been deprived of the right to make submissions on costs and that the Judge had failed to have regard to all of the circumstances surrounding the cost issue.
7. Both appeal requests were granted by the Court of Appeal
8. On 13 August 2015, the Applicants filed the current application seeking a Court Order to stay the cost assessment proceedings, pending the final outcome of the Court of Appeal.
9. In their submissions, the Applicants refer to Rule 44.4 of the Rules of the DIFC Courts (“RDC”) which provides that:

 “unless the appeal court or the lower court orders otherwise, an appeal shall not        operate as a stay on any order or decision of the lower court”.

In addition, the Applicants referred to the overriding objective involved in granting such an application for the following reasons as mentioned in their submissions:

“To save time and expense of the parties agreeing and/or assessing costs which may subsequently become subject to change depending on the outcome of the appeal.”

10. The Applicants in their submissions failed to provide an adequate legal threshold to justify a stay and did not provide any evidence that rejecting the application would result in loss or damages remotely close to irremediable harm. Furthermore, the Applicants did not provide any evidence to suggest that repayment of a costs award would not be an adequate remedy if the appeal were to succeed. Instead, the Applicants’ argument centers around the fact that they have a good, arguable case and that the Judge should have come to a different conclusion when deciding the issue of costs, making reference to Johnson Estate v The Secretary of State for the Environment [2001] EWCA Civ 353.
11. In their submissions, the Respondent also referred to Rule 44.4 of the RDC.
12. The Respondent’s argument is that if the Appeal or lower court is to grant the cost order it should first apply the test in Defra v Downs [2009] Civ 257 which requires the Applicants to establish that a) there is likely to be some form of irremediable harm to them if no stay is granted, and b) there is a risk of injustice to one or other or both parties if the Court grants or denies a stay.
13. In my view, although Rule 44.4 gives this Court the power and the discretion to grant a stay of any order, the test in Defra v Downs [2009] Civ 257 shall be applied if the Court is invited to apply a stay. The following test is based on English Civil Procedure Rule 52.7 the mirror rule of RDC 44.4 and reads, as relevant:

 “By CPR rule 52.7, unless the appeal court or the lower court orders otherwise, an appeal does not operate as a stay of execution of the orders of the lower court. It follows that the court has discretion whether or not to grant a stay. Whether the court should exercise its discretion to grant a stay will depend upon all the circumstances of the case, but the essential question is whether there is a risk of injustice to one or both parties if it grants or refuses a stay. In particular, if a stay is refused what are the risks of the appeal being stifled? If a stay is granted and the appeal fails, what are the risks that the respondent will be unable to enforce the judgment? On the other hand, if a stay is refused and the appeal succeeds, and the judgment is enforced in the meantime, what are the risks of the appellant being able to recover any monies paid from the respondent?…”

14. Based on the submissions of the Applicants and the Respondent, I am of the view that the Applicants did not put forth solid grounds to assist the Court in considering a stay according to test above. Instead the Applicants’ focus was occupied with what the trial judge, who ordered the costs, should have taken into account while deciding costs, rather that convincing this Court now why it should order a stay, despite Rule RDC 44.4 which states that an appeal shall not operate as a stay on any order or decision of the lower court.
15. For the reasons mentioned above, the application to stay the cost assessment proceedings is without merit and therefore must be dismissed.
16. Applicants are to pay the cost of this application.

Issued by:

Natasha Bakirci

Assistant Registrar

Date of issue: 5 October 2015

At: 4pm

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