ASW Hospitality AG v MAG Of Life FZ-LLC [2025] DIFC CFI 077 (02 April 2025)

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You are here: BAILII >> Databases >> The Dubai International Financial Centre >> ASW Hospitality AG v MAG Of Life FZ-LLC [2025] DIFC CFI 077 (02 April 2025)
URL: https://www.bailii.org/ae/cases/DIFC/2025/DCFI_077.html
Cite as: [2025] DIFC CFI 77, [2025] DIFC CFI 077

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CFI 077/2022 ASW Hospitality AG v MAG Of Life FZ-LLC

April 02, 2025 court of first instance - Orders

Claim No. CFI 077/2022

IN THE COURTS OF DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

ASW HOSPITALITY AG

Claimant

and

MAG OF LIFE FZ-LLC

Defendant


ORDER WITH REASONS H.E. JUSTICE SIR PETER GROSS


UPON the Part 7 Claim Form dated 7 November 2022 (the “Claim”)

AND UPON the Judgment of H.E. Justice Sir Peter Gross dated 1 October 2024 (the “Judgment”)

AND UPON the Consent Order dated 7 February 2025 (the “Consent Order”)

AND UPON the Claimant’s Statement of Costs dated 24 February 2025 and submissions on interest and costs dated 24 February 2025

AND UPON the Defendant’s submissions on costs dated 25 February 2025

AND UPON the Claimant’s and the Defendant’s Reply Costs submissions dated 10 March 2025

IT IS HEREBY ORDERED THAT:

1. As to costs, MAG must pay ASW 40% of AED 1,600,000 = AED 640,000, within 28 days of this Order.

2. MAG must pay to ASW pre-Judgment simple interest on the principal sum awarded in the Judgment (namely, AED 1,928,609.20) from 7 March 2024 until 1 October 2024 at the rate of EIBOR + 1%. In the absence of the parties’ agreement on the quantum of pre-Judgment interest within 7 days of this Order, the Registry is to decide the figure within 28 days of this Order.

3. MAG must pay to ASW post-Judgment simple interest on the principal sum of AED 1,928,609.20 awarded in the Judgment, at the rate of 9%per annumfrom 1 October 2024 until the date of payment.

4. MAG must pay to ASW simple interest at the rate of 9%per annumon the costs ordered to be paid in this Order (namely, AED 640,000), from the date of this Order until payment.

5. MAG must pay to ASW simple interest at the rate of 9%per annumon the pre-Judgment interest awarded (under (2) above) from 28 days after this Order until payment.

Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 2 April 2025
At: 10am

SCHEDULE OF REASONS

Introduction

1. On 1 October 2024, I gave Judgment on the substantive matters in dispute in this litigation (the “Judgment”). At [148] of the Judgment, I expressed the hope that the parties would agree costs and interest. Regrettably, that hope was not fulfilled, and it now falls to me to determine questions of costs and interest. In doing so, I have well in mind the content of the Judgment but do not repeat it here.

2. I note that the principal sum ordered to be paid by MAG to ASW within 28 days of the Judgment (Order, para. 1), namely, AED 1,928,609.20, has not been paid. No reason has been advanced for this failure to make payment.

3. I deal first with Costs and, thereafter, with Interest.

4. I am grateful to the parties for their various submissions on these topics, namely the Claimant’s Costs Submissions and the Defendant’s Costs Submissions, dated 24 February 2025, and the Claimant’s Reply Costs Submissions and the MAG Reply Costs Submissions, dated 10 March 2025, together with their respective attachments. All of these have been considered.

Costs

5. (A) Jurisdiction and principles: In DIFC law, costs are dealt with in Rules 38.6 – 38.9 of the Rules of the DIFC Courts (the “RDC”), which, so far as relevant, provide as follows:

“38.6 …the Court has discretion as to:
(1) whether costs are payable by one party to another;
(2) the amount of those costs;

38.7 If the Court decides to make an order about costs:
(1) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(2) the Court may make a different order.

38.8 In deciding what order (if any) to make about costs, the Court must have regard to all the circumstances, including:
(1) the conduct of all the parties;
(2) whether a party has succeeded on part of his case, even if he has not been wholly successful; and
(3) any payment into Court or admissible offer to settle made by a party which is drawn to the Court’s attention and which is not a Part 32 offer.

38.9 The conduct of the parties includes:
(1) conduct before, as well as during, the proceedings;
(2) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(3) the manner in which a party has pursued or defended his case or a particular allegation or issue; and
(4) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim.”

6. In broad terms, as these provisions demonstrate, DIFC law and English law are essentially the same. The relevant principles were comprehensively summarised inAl Khorafi v Bank Sarasin-Alpen(ME) Ltd [2009] DIFC CFI 026 (16 January 2017) at [36]. The general rule is that costs follow the event – the unsuccessful party will be ordered to pay the costs of the successful party. The Court, however, has a wide discretion and may depart from the general rule where there is a (good) reason for doing so. Thus, the Court may make an issues based order or give effect to such considerations (where the overall successful party has failed on a number of issues) by making an order for only a proportion of the successful party’s costs to be paid. The Court’s discretion extends, in an appropriate case, to ordering the overall successful party to pay the unsuccessful party’s costs but, plainly, there would need to be good justification for such an order. The object is to do practical justice – to make an order reflecting the overall justice of the case(Travellers’ Casualty v Sun Life [2006] EWHC 2885 (Comm), at [11]) - so that a realistic view must be taken of the outcome of the litigation.

7. Further citation of authority is unnecessary, save that, for completeness and contrary to what appears to be MAG’s submission,Sky News Arabia FZ-LLC v Kassab Media FZ (LLC) (July 12, 2017)CA010/2016, at [145] – [148] is not authority for any different or novel statement of principle. Properly understood,Sky Newsdoes no more than repeat the general rule (costs follow the event) while re-stating that the court has discretion to depart from the general rule, depending on a consideration of the entirety of the surrounding circumstances.

8.(B) The rival cases in outline:The nub ofASW’ssubmission was as follows:

“[MAG’s] persistent refusal to simply accept that it owes Cs these sums, is the root cause of this litigation and the costs of these proceedings, and now the wholly unnecessary costs of preparing these submissions.”

In short, given MAG’s refusal to pay anything, in order to recover any of the commission it claimed, ASW had no choice but to litigate; it did, and it succeeded in the principal amount of AED 1,928,609.20 as awarded in the Judgment. There was no reason to depart from the general rule as to costs (set out above). ASW was the successful party overall and should be awarded its costs in the amount claimed of AED 1,645,726.00. That sum was reasonable and proportionate; it was significantly less than the MAG figure for costs (USD 739,482.55).

9. The thrust of MAG’s submission was very different:

“In the Judgment, the Judge found in favour of the Claimant (“ASW) on only two of the eight issues before him - allowing recovery under only one issue - and ordered MAG to pay ASW AED 1,928,609.20 (c. USD $ 525,000). That is a small fraction of the over c. AED 31, 312, 107(c. USD $ 8,525,000) sought in the Particulars of Claim and at trial. For these and other reasons, MAG submits that this is a proper case for the Court to make a percentage order in MAG’s favour based on the issues on which MAG succeeded. MAG seeks 90% of its costs, corresponding to an amount of USD 665,534.29.”

Furthermore, Issue VIII (as described in the Judgment) was the only Issue on which ASW managed to recover. In that regard, MAG submitted that the basis upon which ASW recovered had not been pleaded or properly advanced in oral submissions by ASW. In any event, Issue VIII was a short point, of itself inexpensive to have resolved. Accordingly, ASW should not be awarded any of its costs or, in the alternative, no more than 2.5% of its costs. Finally, MAG drew my attention to its Part 32 Offer to Settle (the “Part 32 Offer”) contained in its letter dated 8 May 2023 to ASW’s legal representatives, offering to pay USD 300,000, inclusive of interest in full and final settlement of ASW’s claim. ASW neither accepted nor engaged with the Part 32 Offer.

Discussion and Conclusions

10. My reasons and conclusions can be briefly stated. Over-elaboration is unnecessary.

11. First, in my judgment, the MAG submissions lack realism. ASW was, and plainly was, the successful party in the litigation. Contrary to MAG’s submission that ASW had“technically”succeeded, ASW has substantively succeeded in the principal amount AED 1,928,609.20 which, it is to be recollected, remains outstanding. That is the reality of the outcome. Accordingly, my starting point reflecting the overall justice of the case is the general rule, costs follow the event; overall justice requires an order that MAG pays costs to ASW.

12. Secondly, though that is my starting point, I have well in mind MAG’s success on most of the principal Issues set out in the Judgment. To my mind, the practical and just method of reflecting MAG’s success on these Issues is to make a substantial reduction in the percentage of costs awarded to ASW. I see no attraction in, or justification for, becoming embroiled in an Issue by Issue analysis (which would lead to yet further costs being incurred), still less to distort the outcome of the case by making an order requiring payment of any sum by ASW to MAG.

13. Thirdly, MAG’s effort to undermine ASW’s success on Issue VIII is misplaced. The basis for my conclusions on Issue VIII is set out in the Judgment at [140] et seq and need not be repeated here. It is water under the bridge. Further, the notion that, in all the circumstances of this case, ASW could or should have pursued Issue VIII alone, is fanciful.

14. Fourthly, I do not overlook the Part 32 Offer, but it carries no weight (even as a matter of discretion) given that the amount awarded to ASW in the Judgment has comfortably exceeded it. The Part 32 Offer apart, MAG demonstrated a resolute refusal to pay anything at all; ASW had no option but to proceed to litigation if it wished to recover any of the commission claimed. ASW took up that gauntlet and won.

15. Fifthly, for completeness, although the case was hard-fought and, as described in the Judgment, somewhat personalised, I am not persuaded that the conduct of either party warrants a departure from the approach I have outlined.

16. For the reasons given, subject to the adjustment immediately following, the costs order reflecting the overall justice of the case is that MAG should pay ASW 40% of its costs. Making a realistic and minor adjustment to the quantum of costs claimed, MAG should pay ASW 40% of AED 1,600,000 =AED 640,000, within 28 days of this Order.

Interest

17. (A) Introduction: Three principal questions arise under this heading. First, is ASW entitled topre-Judgmentinterest on the principal sum awarded in the Judgment (namely, AED 1,928,609.20)? If so, for what period and at what rate? Secondly, is ASW entitled topostJudgmentinterest on the principal sum awarded in the Judgment? If so, at what rate? Thirdly, is ASW entitled to interest postthis Judgment(i) on the Costs awarded (namely, AED 640,000) and (ii) any pre-Judgment interest awarded? If so, at what rate?

18.(B) Pre-Judgment interest on the principal sum awarded in the Judgment, namely, AED 1,928,609.20?MAG submitted that ASW was not entitled to any such interest because it was insisting on payment of commission under the SCA on a basis not upheld in the Judgment. At the risk of generosity to MAG, in the exercise of my discretion and in all the circumstances, I am content not to award interest until the date of ASW’s skeleton argument (7 March 2024). From that date, it was plain beyond peradventure that the basis on which I decided Issue VIII in ASW’s favour was “live”, even if not ASW’s preferred outcome. On any view, MAG’s objection to pre-Judgment interest is unsustainable after that date. I therefore conclude that ASW is entitled to pre-Judgment interest from7 March 2024 until 1 October 2024(the date of the Judgment).

19. As to therateof such pre-Judgment interest, ASW has argued (on the basis of various DIFC authorities) for the award of simple interest at EIBOR + 1%. MAG has not contended for any rival rate. Accordingly, I conclude that ASW is entitled to preJudgment simple interest on the sum of AED 1,928,609.20 from 7 March 2024 until 1 October 2024 at therate of EIBOR + 1%.

20. I have not been supplied with any figures on which to make the necessary calculations. I therefore direct thatin the absence of the parties’ agreement on the figure for preJudgment interest within 7 days of this Order, the Registry is to decide the figure within 28 days of this Order.To avoid incurring disproportionate costs, this matter is not to come back to me.

21.(C) Post-Judgment interest on the principal sum awarded in the Judgment?MAG advanced the argument that post-Judgment interest should not be awarded until this Order, as the net sum due to ASW would not be known until now. The argument thus (optimistically) assumed an award of costs payable to MAG. For the reasons already given, MAG’s submissions on costs lacked realism. As it is, the manifestly correct course was for MAG to pay the principal sum awarded in the Judgment in accordance with the Order made; the remote possibility that a costs order might be forthcoming entailing payment to MAG did not in any sense give MAG liberty to ignore the Order in the Judgment. I unhesitatingly conclude that ASW is entitled topost-Judgment interest from 1 October 2024 until payment of the principal sum.

22. As to therateof post-Judgment interest, ASW contended for simple interest at the rate of 9% in accordance withDIFC Court Practice Direction No. 4 of 2017. In response MAG asserted, without any supporting reasoning or basis, that 5% would be appropriate. I prefer the ASW submission and hold thatpost-Judgment simple interest on the principal sum of AED 1,928,609.20 awarded in the Judgment is to be paid by MAG to ASW at the rate of 9% per annum from 1 October 2024 until the date of payment.

23.(D) Interest post- this Judgment on the Costs awarded (namely, AED 640,000) and any pre-Judgment interest awarded?For the same reasons as those just given, the relevantrateshould besimple interest at 9%per annum.

24. In the case of interest on Costs, such interest should runfrom the date of this Order until payment.

25. In the case interest on the pre-Judgment interest awarded (above),such interest should run from 28 days after this Order(by when the quantum will have been resolved, as set out above).

Disposal

26. Summarising the orders made in this Order:

(a) As to costs, MAG must pay ASW 40% of AED 1,600,000 = AED 640,000, within 28 days of this Order.

(b) MAG must pay to ASW pre-Judgment simple interest on the principal sum awarded in the Judgment (namely, AED 1,928,609.20) from 7 March 2024 until 1 October 2024 at the rate of EIBOR + 1%. In the absence of the parties’ agreement on the quantum of pre-Judgment interest within 7 days of this Order, the Registry is to decide the figure within 28 days of this Order.

(c) MAG must pay to ASW post-Judgment simple interest on the principal sum of AED 1,928,609.20 awarded in the Judgment, at the rate of 9%per annumfrom 1 October 2024 until the date of payment.

(d) MAG must pay to ASW simple interest at the rate of 9%per annumon the costs ordered to be paid in this Order (namely, AED 640,000), from the date of this Order until payment.

(e) MAG must pay to ASW simple interest at the rate of 9%per annumon the preJudgment interest awarded (under (2) above) from 28 days after this Order until payment.


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URL: https://www.bailii.org/ae/cases/DIFC/2025/DCFI_077.html