Naima v Narciso [2024] DIFC SCT 385 (12 January 2024)

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Cite as: [2024] DIFC SCT 385

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Naima v Narciso [2023] DIFC SCT 385


Claim No. SCT 385/2023










UPON the Judgment of SCT Judge Maitha AlShehhi dated 6 December 2023 (the “Judgment”)

AND UPON reviewing the Claimant’s Appeal Notice dated 18 December 2023 seeking permission to appeal the Judgment (the “Permission Application”)

AND UPON the hearing scheduled before me on 11 January 2024 with the Claimant’s and the Defendant’s representative in attendance (the “Hearing”)


1. The Permission Application is refused.

2. The Claimant must bear the court fees of the appeal.

Issued by:
Delvin Sumo
SCT Judge and Assistant Registrar
Date of Issue: 12 January 2024
At: 3pm



Permissible Grounds for Appeal

1. Under Rule 44.118 of the Rules of the DIFC Courts (the “RDC”), the Court of First Instance will allow an appeal from a decision of the SCT where the decision was either wrong in relation to a question of law, unjust because of procedural unfairness or a miscarriage of justice and/or wrong in relation to any other matter provided for in or under DIFC law. As indicated at the conclusion of the hearing of the appeal on 11 January 2024 (the “Hearing”), the Claimant cannot succeed on this appeal because it cannot satisfy those requirements. The SCT Judge’s findings of fact are not reviewable unless there is some procedural unfairness, miscarriage of justice or error of law. There are no realistic prospects of success on this appeal.

The Essence of the Claimant’s Complaint

2. The essence of the complaint made to this Court is that the bill of costs rendered by the Defendant was disproportionately high for the matter in which the Defendant was engaged, that the involvement of UK lawyers was not justified and that the whole strategy involving the drafting of a Settlement Agreement was unnecessary. It was contended that 70% of the bill of costs was concerned with time taken by the lawyers in the Defendant’s offices in talking to one another and to the UK lawyers with a degree of over analysis, consultation and strategising. When the end result is considered, where a payment of some AED 54,000 approximately was paid to the employee who undertook to abide by the post termination restrictions in her employment contract, costs of AED 313,766.70 appear disproportionate. The Claim Form stated that the value of the claim was AED 205,000, from which it appeared that the Claimant was saying that the Defendant was only entitled to the difference between those two figures in respect of its bill of costs.

3. What appears to have been put before the SCT Judge by the Claimant is very limited. The Claim Form itself was limited in its content and sought the“guidance of the DIFC Court in resolving a billing dispute”, expressing concern at the advice to draft a Settlement Agreement and the size of the Bill received which was much higher than expected. Intervention of the court was invited“to ensure transparency, fairness and equity in this matter”. The Claimant was represented by Ms Niba, a Senior Vice President at the Hearing but no evidence in the form of witness statements or materials were produced in accordance with the time limits laid down by the Court, although a late effort was made to introduce materials which are referred to later in this Judgement, which this Court has looked at and taken into account.

4. In the materials put before this Court by the Claimant, including the“Fairness Review”of the Defendant’s bill and the document headed“Key Speaking Points to the Court Hearing”, it was said that:

(a) Excessive hours were spent by the Defendant’s representatives on this matter;

(b) The Claimant was not advised of the buildup of costs incurred and monthly billing was not effected in accordance with the Letter of Engagement;

(c) There was no need for the Settlement Agreement, the drafting of which took up considerable time and involved considerable cost;

(d) The strategy of seeking to negotiate a Settlement Agreement was misguided when ultimately the employee was merely paid to 31 March 2023, the date of her resignation with a reminder of her contractual obligations with which she agreed to comply.

(e) The Claimant should have advised by the Defendant that the Settlement Agreement would likely not be accepted by the employee, as imposing additional obligations for which the Claimant was not prepared to pay additional compensation;

(f) The involvement of“external council”(sic) should not have occurred;

(g) The overall bill was disproportionate for the work which was required and by reference to the sums of money at issue; and

(h) A fair figure for the costs payable to the Defendant would be the sum of AED 101, 795, including VAT.

5. The Defendant says that this central complaint of excessive costs, overlooks the critical point that from the moment that the Defendant was first instructed by the Claimant the employment issue was seen as much more important than the financial figures would indicate because the employee was a relatively senior employee who, as it appeared to the Claimant, was likely to, or was actively considering, joining a competitor and taking with her confidential information for use there, whilst encouraging other employees to do the same and disparaging the Defendant’s business as a failing enterprise. At the outset, the Claimant was taking an aggressive attitude because of the potential precedent value of such a course of action and the potential loss of contracts worth billions of USD. The immediate issue raised by the Claimant was whether or not to seek urgent injunctive relief from the DIFC Court on the basis of the covenants in the employment contract relating to the use of confidential information, inability to compete for two years post termination and disparagement of the Claimant, or whether to find some other solution such as negotiation of a settlement agreement, post termination which, if for valuable consideration, would be enforceable where a two-year anticompetition clause in an employment contract might well be struck down by the Court. It was only on 29 March 2023, after the employee had disinstructed the international firm of lawyers that she had engaged that it became apparent that she had neither the financial resources nor the will to litigate in the DIFC.

6. That said, the Court is concerned with the Grounds of Appeal put forward in the Claimant’s letter of 15 December 2023, where the wrong rule is referred to as the criterion for an appeal from the SCT. The Claimant has failed to appreciate that an appeal only lies on an error in law as opposed to an error of fact. Whereas the latter can constitute a ground for appeal from the Court of First Instance to the Court of Appeal, although it is still hard to succeed on this basis, there is no room for such an appeal from the SCT.

7. There are four grounds advanced in respect of the decision of the SCT Judge dated 6 December 2023, following the SCT hearing on 24 November 2023 (the “Judgment”).

Ground 1

8. The first ground put forward was the late delivery of the invoice from the Defendant, dated 19 April 2023, but received on 24 April 2023.

(a) The SCT Judge found, at paragraph 30 of her Judgment, that that invoice was sent late because the Letter of Engagement referred to the rendering of bills on a monthly basis and instructions were first given to the Defendant on 8 March 2023. She went on to find however that an update of the fees had been given on 24 March 2023 in an email which referred to AED 175,000 (plus VAT) as the approximate amount incurred at that stage and that the Claimant continued to engage the Defendant and to request more work to be done without any request for further details of the costs incurred, in circumstances where the Claimant was fully aware that billing was taking place based on time spent by its lawyers. The Judge found, as a fact, that the Claimant had failed to establish that it had complained of inflated costs at any point.

(b) It cannot be said that the late delivery of the invoice of 24 April 2023 caused the Claimant any damage, as such. The rendering of monthly bills was not a condition of the Letter of Engagement, which, if not observed, would disentitle the Defendant from charging for work done in accordance with the Letter of Engagement. There is no basis for saying that the failure to bill timeously amounted to a repudiatory breach of the contract for services or a substantial failure to perform them. It is no answer to say, as the Claimant does, that it did not have details of the bill at the time upon which it could raise any objection in circumstances where it raised no objection to the absence of a formal bill at that stage and made no objection to the figure given on 24 March 2023.

(c) The Defendant has provided this Court with an explanation for the delay in any event in as much as the Letter of Engagement was not signed by the Claimant until 13 March and, following the KYC requirements that it was bound to observe, the matter was not entered on to its system until 19 March 2023 with the result that monthly billing would not occur until the following month. This explanation does not appear to have been given to the SCT Judge (as appears from paragraph 28 of her Judgement) but it is illustrative of the fact that this was not a point which was taken as such, before her, since she raised the issue herself.

(d) In the absence of any evidence before the SCT Judge (and before this Court) of loss and damage caused by the late rendering of this bill of costs, this ground cannot constitute a basis for an appeal, not having been advanced as such before the SCT Judge, with the result that there can be no error of law or injustice involved in her decision that, on the facts, the Claimants did not object to the Defendant’s fees until after the event.

9. It is not arguable that there was any mistake of law or procedural irregularity or injustice in the Judge making the findings she did at paragraphs 31 – 34 of her Judgement that the Claimant was not troubled by the absence of a formal invoice or the figures mentioned to which objection is now taken.

10. In fact, contrary to the broad submission made by the Claimant at this Hearing, the case was much more complex than it now makes out and the solution only became evident when the employee disinstructed the lawyers she had engaged, with whom the Defendant, had, on the express instructions of the Claimant sought to negotiate a Settlement Agreement to which she would not agree. At that point, the concerns over the issues which had previously appeared to be live in relation to her past misconduct, the legality of any restrictive covenants in her employment contract and the question of dismissal for cause, along with any need for interim relief from the DIFC Court were dissipated. It was only then that it became apparent that there was no longer a need for a lawyer drafted Settlement Agreement, which had been the subject of much time and work. It is clear from the letter of 15 March 2023 from the Defendant to the employee concerned, as well as from the terms of the Bill of Costs, that there confidentiality issues which caused the Claimant great concern and that there was a need for discussion of strategy in circumstances where the Claimant had originally wanted to seek injunctive relief and the Defendant was urging caution and negotiation of an amicable Settlement Agreement instead. Paragraph 4 of that letter illustrates the point and the need for urgent advice, consideration and action, as seen by the Claimant. It is easy with hindsight to look back and say that the matter could all have been resolved without incurring all the fees that were actually occurred but no one was to know at the time what the employee’s intentions were and the Claimant’s concerns about this, even if ultimately shown to be unjustified, were very real at the time and caused it to consult with the Defendant on an urgent basis and to require urgent action.

Ground 2

11. The Second ground advanced is a failure to advise on costs to be incurred or to obtain instructions to incur costs. There is no obligation in the Letter of Engagement as such to obtain instructions to incur costs, and where matters are urgent, it is not realistic. Solicitors would ordinarily, as a matter of good practice, keep a client informed of how much costs were being incurred from time to time and where possible, a budget is sometimes agreed in advance. It is said that the Defendant had professional obligations to inform the Claimant of the likely cost associated with its proposed strategy and to inform it of any alternative strategies which might be pursued for lower fees and to obtain its instructions to incur the fees which were actually incurred. Apart from the question of instructing “overseas lawyers” this does not appear to have been a point advanced before the SCT Judge. There is therefore no basis for pursuing this point on appeal and it is meritless in any event because there is no question at all, on the basis of the materials put before the court and the submissions made on behalf of the Claimant, that the issue of strategy was fully discussed in the context of the Claimant wanting to seek interim injunctive relief from the DIFC Court, with the Defendant advising against it because of the potential unenforceability of the restrictive covenants in the employment contract. The real objection here is to the extent of costs incurred in pursuing the strategy of the Settlement Agreement, which, it appears, the Claimant never fully accepted as the best course of action, whilst providing input into the draft of the Settlement Agreement and the negotiation which took place in a meeting between the respective lawyers on 24 March 2023.

12. The terms of the Letter of Engagement were clear as to the hourly rates for the work done. The strategy taken up to 29 March 2023 was agreed as is plain from the terms of the Defence and Counterclaim (with its statement of truth) and the terms of the Bill of Costs which show that the position was fully discussed as to what to do, what the terms of the 15 March letter of claim should be and what terms to seek to negotiate at the iner-solicitor meeting of 24 March. It is therefore wrong of the Claimant to assert that the Defendant had no authority to incur fees in pursuing the strategy of a Settlement Agreement to protect the Claimant in the light of possible arguments as to the unenforceability of post termination employment restrictions.

13. The SCT Judge determined at paragraph 38 of her Judgement that the Defendant’s actions were in line with the Letter of Engagement and there is no basis for challenging that as a matter of law on the facts as found by her. Once again, it cannot be said that there has been any error of law on the part of the SCT Judge not any unfairness in her approach.

Ground 3

14. The third ground of appeal overlaps with the second ground inasmuch as the complaint is made that there was a failure to obtain instructions to retain English lawyers and is dealt with under this ground rather than the earlier ground. The essence of this complaint is that the Defendant involved Mr Nash of the London office affiliates of the Defendant to discuss the strategy to be adopted in relation to the seeking of immediate interim injunctive relief in the DIFC. The law on this is said by the Defendant not to be as well-developed as in the UK and where employment law tends to follow UK law. The Letter of Engagement named the two individuals who would be responsible for the conduct of the matter but went on to say that the size and seniority of the team that would be needed would depend on how the matter developed. The letter went on to say:“we try hard to avoid changing the lawyers involved in the conduct of a matter but if this cannot be avoided we will notify you promptly of any changes”. A table of the charging rates of various levels of partner and employee was set out and it was said that:“we may also need to involve other lawyers on this matter as necessary.”The Defendant’s terms of business refer specifically to the use of the services of affiliated offices in the provision of the services to be provided by the Defendant.

15. In paragraph 34 A of the Defence and Counterclaim, it is said, with a statement of truth from the solicitor concerned, that the Claimant was told on 13 March of the involvement of a London employment law specialist. That evidence was not contradicted by the Claimant before the SCT Judge and there is reference in correspondence to the views of that English lawyer on the enforceability of the post termination restrictions. The Bill of Costs shows three entries for Mr Nash of the London office, totaling AED 11,206 in all for work done on 8 March, 13 March and 14 March. His hourly rate was AED 4, 310 which exceeded any of the rate set out in the table in the Letter of Engagement. Nonetheless, that letter, signed by the Claimants specifically gave liberty to the Defendant to involve other lawyers as necessary and the matter was both urgent and important to the Claimant as is plain from the dealings between them, the Defendant and the lawyers for the employee, as well as the employee herself. To obtain instructions in advance might have been helpful but was not required as a matter of contract or professional duty.

16. The SCT Judge dealt with this issue at paragraphs 35 – 38 of her Judgement, finding that not only was the Claimant made aware of discussions with the London lawyer but that no complaint was raised about this at the time. The Claimant should have been aware that any time spent dealing with the matter would incur costs including the exchange of phone calls, emails and discussions between the Defendant’s internal team, which for this purpose included not only other employees in the DIFC Office but also London. It is fair to say that the vast majority of the bill of costs relates to the two named individuals in the DIFC (AED 248,980) with small contributions from associates in the DIFC and one other partner, whilst Mr Nash’s total figure was as set out in the preceding paragraph.

17. As the SCT Judge found, in paragraph 38 of her Judgement, the Defendant’s actions were in accordance with the Letter of Engagement and there is no basis for an appeal from this finding.

Ground 4

18. The last ground of appeal relates to the Claimant’s failure to file submissions with the Court in support of its attempt to seek a reduction in fees. This issue was the subject of paragraph 39 of the SCT Judgement, where the Judge found that:

“Though the Claimant is seeking a reduction of the fees and is not seeking a cancellation, ….. the reduction is not permissible at this instance as the Claimant failed to file submissions with the Court on time to support such a reduction. As such, the Claimant has failed to provide the Court with any legal basis for a reduction of AED 205,000 to be made.”

19. In the Notice of Appeal, this is said to be incorrect as a matter of fact and failed to address the Claimant’s argument that it faced difficulties in filing submissions because of the Thanksgiving holiday. It is also said to be incorrect as a matter of law because of the absence of any prejudice to the Defendant from any late filing. The Claimant made the point that it did make submissions at the hearing in relation to the unreasonable nature of the Defendant’s costs which must have been along the lines of those made to this Court. It was said that the SCT Judge failed to consider the oral submissions made about the unreasonable level of costs incurred.

20. The Claimant did not produce the Fairness Review of the Defendant’s Bill of Costs in the time scale permitted by the orders of the SCT whilst seeking to rely on it in this Court. Whilst the Claimant states that there were difficulties in complying with the requirements for the production of evidence to the Court, there is no basis for finding that the SCT Judge in declining to accept any late submission in the form of the Fairness Review which has been made available to this Court. There was plenty of time available before the Thanksgiving Holiday for compliance with the Court Orders for production of materials to it. I have considered the Fairness Review which examines the Bill and makes the general points which I have already addressed in relation to the internal team discussions, including those with the London lawyers and makes subjective discounts from the figures for the individual items put forward by reference to those criticisms. If this material had been adduced following the hearing, as the Claimant sought and suggested it should have been, there would have been a need for evidence in reply and a further hearing. That would have been prejudicial to the Defendant and unjustified. In the circumstances the SCT Judge was entitled to take the view that there should be no further submission of evidence in circumstances where the parties had been given every opportunity to produce all the material to the court on which they wished to rely. This was a decision that she was entitled to take which was entirely fair to both parties and cannot constitute a ground for appeal.

21. In such circumstances, it is not open to this Court to admit evidence which was not before the SCT as this is a review hearing and not a rehearing, save in exceptional circumstances which do not apply here. Although I have looked at the material advanced, it is not such as to cause me to question the Judgement of the SCT Judge, particularly since the detailed points taken in relation to individual items largely reflect the more general points which I have already addressed and which do not constitute grounds for challenge.

22. The Judge took the view that in the absence of any earlier objection, the Claimant’s agreement to the terms of the Letter of Engagement, and its continued engagement of the Defendant following the costs update on 24 March 2023, there was no reason to reduce the sums claimed and that the Defendant was entitled to interest in accordance with the terms of the Letter of Engagement in respect of all of the outstanding fees where no payment of any kind had been made. That was a finding she was entitled to make and cannot be challenged here, for the reasons I have already given.


23. In the circumstances and for these reasons, the application for permission to appeal must be dismissed and the Claimant must bear the costs of the court fees incurred in pursuing it.

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