A 2025 ADGM Court of First Instance judgment — in which our team acted for the successful claimant — carries two lessons that matter far beyond the USD 737,092 recovered. First, a contract that names the “Courts of the Emirate of Abu Dhabi” can be enforced in the ADGM Courts. Second, even on an unopposed claim, the Court will assess costs for proportionality rather than rubber-stamping the schedule.
1. The claim
Our client, a real estate management company, sued for roughly USD 737,092 in unpaid charges due under a written Service Agreement. The defendant, a general trading company, entered an appearance but did not file a defence within the time allowed by the Rules. The Court was satisfied that service had been effected and entered judgment for the full amount claimed, together with pre-judgment interest and filing fees.
2. Does an 'Abu Dhabi Courts' clause reach the ADGM?
Before entering judgment, the Court addressed a jurisdiction point that catches out many contracting parties. The Service Agreement’s exclusive-jurisdiction clause referred to the “Courts of the Emirate of Abu Dhabi” — not, in terms, to the ADGM Courts. Did that clause empower the ADGM Courts to hear the claim?
Following Re NMC Healthcare Ltd [2022] ADGMCFI-0003, the Court held that it did. The ADGM Courts sit within the Emirate of Abu Dhabi, and a general reference to the Emirate’s courts is wide enough to include them. A clause drafted for the onshore Abu Dhabi courts will not, without more, oust the ADGM’s jurisdiction.
3. Costs are assessed for proportionality — even unopposed
The claimant sought costs of USD 62,573. The Court considered that disproportionate to a straightforward claim and reduced the award to USD 37,000 (about 5% of the judgment sum). Two principles drove the result:
- An award of costs is a reasonable contribution that the paying party should bear — a different exercise from what is reasonable as between a party and its own lawyers under their retainer.
- The Court aligned the figure with its own comparator, Turcon v Assaf [2025] ADGMCFI-0002, where a similar proportion of the judgment sum was allowed under Practice Direction 9.
The message for claimants: a large fixed-fee or success-fee arrangement will not automatically be passed on to the defendant. Build the costs schedule around what is proportionate to the claim.
Practical takeaways
- If you intend to litigate in the ADGM, say so expressly — but a “Courts of Abu Dhabi” clause will generally reach the ADGM Courts rather than exclude them.
- Do not assume a defendant’s silence means full costs recovery; the Court assesses proportionality regardless.
- Keep the recoverable-costs schedule anchored to the value and complexity of the claim.
Sources & citations
- Judgment: ADGMCFI-2024-240 (ADGM Court of First Instance — Commercial & Civil Division). Commercial and Civil Division judgment of 23 April 2025. Not yet published on the public ADGM judgments database; a sealed copy is on file with the firm. See the ADGM Courts judgments database.
Rules & practice directions cited
- ADGM Court Procedure Rules 2016 (rr.37, 39, 44) & Practice Direction 9 (costs)
- Re NMC Healthcare Ltd [2022] ADGMCFI-0003 (jurisdiction) and Turcon v Assaf [2025] ADGMCFI-0002 (costs) — ADGM authorities relied on
This case note is for general information only and does not constitute legal advice. For advice on an ADGM debt-recovery, enforcement or set-aside matter, please contact us. Last updated: 23 April 2025.