Winning summary judgment is one thing; recovering what it cost you is another. In this April 2026 ADGM costs judgment — in which our team acted for a successful defendant — the Court awarded indemnity costs to the arm’s-length defendants and only standard costs to a defendant connected to a claim still running. The difference turned on the claimant’s conduct of its case, and on who was really at risk of duplicated work.
1. Where the costs question arose
A restaurant operator sued four defendants over a failed fit-out, claiming in total about USD 1.09 million, roughly a third of which was a claim for moral damages. Three defendants applied for summary judgment; in February 2026 the Court granted it, holding the claims against them had no real prospect of success. Costs were reserved and determined separately.
2. The two bases — and the test that separates them
Rule 199 allows indemnity costs that are “reasonably incurred and reasonable in amount”, with any doubt resolved in favour of the receiving party. Rule 198 requires standard costs to be proportionate as well as reasonable, with doubt resolved in favour of the paying party. Proportionality and the benefit of the doubt are what move between them.
The threshold for indemnity costs is conduct on the paying party’s side “which deserves a mark of disapproval; unreasonableness of a high degree may be sufficient” — Afkar Capital Ltd v Saifallah Fikry, applying Ghafoor v Cliff.
3. Why the claimant's conduct crossed the line
The Court had already criticised how the case was run. The legal bases for the claims were never articulated with precision, leaving counsel to engage in what the judge called “shadow boxing”. A claimant must identify the precise legal rationale for each cause of action and the facts which, if proved, would establish its elements. Instead the claimant argued in the language of general injustice.
Adding the attempt to stretch negligence beyond its limits, and a pre-hearing offer that had been refused, the Court found the claims against the arm’s-length defendants deserving of a costs sanction and awarded them on the indemnity basis.
4. One set of costs — and why one defendant fared differently
Two points of practical structure:
- Jointly represented co-defendants get one set of costs. Our client and its co-defendant were at arm’s length from the other parties, faced different claims, and shared one counsel — so they recovered a single set, assessed as one six-figure sum inclusive of court fees.
- Connection to a live claim invites a discount. The third defendant was the holding company of a defendant whose claim continues. Because duplication of effort was likely, the Court ordered standard-basis costs and applied a 25% deduction, arriving at a materially smaller figure.
Practical takeaways
- Plead the precise legal rationale and the facts that would establish each element. Vagueness is not neutral — it can cost you indemnity costs.
- Arguing “injustice” rather than analysing the cause of action is exactly the conduct that attracts a costs sanction.
- Make a well-judged pre-hearing offer; a refused reasonable offer strengthens an indemnity application.
- Co-defendants sharing counsel should expect one set of costs — structure representation with that in mind.
- Where a related party stays in the proceedings, expect a duplication discount rather than the full claim.
Sources & citations
- Judgment: ADGMCFI-2025-283 (costs following summary judgment reported at [2026] ADGMCFI 0005) (ADGM Court of First Instance — Real Property Division). Costs order of 15 April 2026 following the summary judgment given on 4 February 2026 in the same proceedings, reported at [2026] ADGMCFI 0005. See the ADGM Courts judgments database. See the ADGM Courts judgments database.
Rules & practice directions cited
- ADGM Court Procedure Rules 2016 — r.198 (standard basis) and r.199 (indemnity basis)
- Afkar Capital Ltd v Saifallah Fikry [2018] ADGMCFI 0002, applying Ghafoor v Cliff [2006] EWHC 825 (Ch) — test for indemnity costs
- ADGM Courts judgments database
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: 15 April 2026.