The Freezing Order Was Discharged: Can I Recover My Losses?

You may be able to recover losses caused by a discharged DIFC freezing order under the applicant's undertaking in damages. Discharge alone does not establish the amount payable. Check the actual undertaking, obtain advice on an inquiry and prepare evidence connecting each claimed loss to the order.

This guide starts after the restraint has been discharged. It concerns compensation for its consequences, not how to obtain a freezing order, vary living expenses or assess an ordinary opponent's costs bill. The first task is to separate the losses said to result from the restraint from expenses and problems that would have existed anyway.

What belongs in a DIFC freezing-order damages file?

This is a preparation table, not a list of automatically recoverable heads of damage. In particular, a lost transaction or additional borrowing cost needs its own legal and factual assessment. Naming an item "injunction loss" in a spreadsheet does not establish the causal link or the proper measure of compensation.

Keep an initial schedule broad enough to identify the issues, but mark uncertain entries. For each, record the person who incurred the expense, the date, currency, source document and reason it is attributed to the restraint. Add a column for the answer the other side is likely to give. The exercise should expose weaknesses before an expensive assessment begins.

Preserve the original records alongside the working spreadsheet. Later corrections to a total should not obscure which invoice or bank entry supported the first figure. A clear audit trail allows your adviser to remove duplication, explain changes and identify whether further evidence is genuinely necessary.

What does the undertaking actually promise?

RDC 25.25(1) normally requires an injunction applicant to undertake to pay damages which the court considers it should pay. The provision is subject to the court ordering otherwise and contains exceptions for the DFSA and Registrar of Companies. Read the sealed order rather than assuming every injunction contains identical protection.

Locate the undertaking in the original order and every continuation or variation. Identify who gave it, to whom it is expressed to extend and whether later directions changed its operation. Keep these pages with the discharge order. An email saying the injunction is over is not an adequate substitute for the documents governing a compensation application.

RDC 25.26 addresses possible protection for people other than the respondent. It requires the court to consider whether a wider undertaking should be required. It does not make every affiliate, customer or family member automatically entitled to invoke the respondent's protection. If another person suffered the claimed loss, show that issue to your adviser at the outset.

Ask separately whether security was provided to support the undertaking. RDC 25.25 allows security where the applicant cannot demonstrate sufficient assets within the jurisdiction to give the undertaking substance. The existence, terms and current status of any security require inspection. A compensation argument and a reliable source of payment are related commercial concerns, but they are not the same legal question.

Does discharge automatically entitle you to a damages inquiry?

The 5 March 2025 Sandra Holding decision treats the decision to order an inquiry as discretionary. A prima facie case of loss justified an inquiry there. Detailed questions of amount and causation belonged to the subsequent assessment, rather than being conclusively decided at that first stage. Delay and conduct could also matter.

Prepare the first application around the decision actually required. If permission for an inquiry is sought, identify the undertaking, the discharge and concrete evidence that the order may have caused loss. Do not assume that an impressive overall total can replace those links. Equally, ask whether commissioning an elaborate valuation report is proportionate before the court has given directions about the issues to be tried.

Keep two separate lists: evidence already available and evidence needed for a final assessment. A paid invoice tied to enforcement proceedings may support the first stage, while the precise allocation of work across several disputes still needs explanation. Recording that distinction is more candid than presenting an untested figure as a concluded entitlement.

Ask what application and service steps are needed under your own procedural position. Sandra followed a direction from the Court of Appeal and then specific first-instance directions. Its timetable should not be copied into another case as a universal filing period. Obtain the relevant dates from your orders and advice on the applicable procedural rules.

The inquiry need not happen immediately after discharge. In the later interim-injunction case Houlihan Lokey v SP International, 19 December 2025, the court ordered it to take place with, or immediately after, the substantive trial. The potential loss and the main claim were intertwined. The order established an inquiry, not the amount of damages. Ask how any continuing main claim affects the proposed timetable in your case.

Why did the court retain jurisdiction after the earlier order was set aside?

In the 22 July 2025 Sandra Holding assessment, the court rejected the argument that the earlier jurisdictional objection defeated enforcement of the undertaking. Its reasons included the applicants' submission through their undertaking and the appellate direction for an inquiry. It also relied on Article 14(A)(7) of Dubai Law No. 2 of 2025, covering jurisdiction conferred by the specified laws and regulations.

There is an important history qualification. Carmon, decided in November 2024, rejected the restrictive jurisdictional reasoning of the earlier Sandra appeal. At paragraph 204 it nevertheless observed that the freezing order appeared unjustified on its merits. The July 2025 damages decision expressly recognised that development. It did not treat the earlier jurisdiction principle as unchanged law.

For your file, distinguish the reason an injunction ended from the court's authority to address the undertaking given to it. They should not be compressed into a statement that "no jurisdiction means no compensation". Equally, this history is not authority that every loss dispute falls within DIFC jurisdiction regardless of the parties, documents or orders.

This article makes no general claim about issuing or executing fresh worldwide restraints. That is a separate current-law and territorial analysis. Here the reader's concern is the working out of an undertaking following an order already made and discharged.

How do you separate injunction loss from ordinary litigation expense?

The July assessment distinguished loss caused by the freezing orders from loss caused simply by the litigation. It applied causation, mitigation and remoteness principles with the flexibility appropriate to an undertaking. The award concerned the proven expense of resisting enforcement in France and Massachusetts, rather than reimbursement of every expense arising from the parties' disputes.

As a practical exercise, assign each invoice or transaction to a defined activity. Was it preparation of the defence to the main claim, work responding to the restraint, an application concerning an unrelated asset or commercial advice that would have been required anyway? A broad matter description such as "dispute advice" may need further explanation from the professional who performed the work.

Where a bill covers mixed work, ask for a supported allocation. Avoid an arbitrary percentage chosen solely to maximise the claim. Explain how the records distinguish the activities and identify any portion that cannot reliably be separated. A modest, documented entry may be more useful than a large unexplained total.

Maintain the ordinary costs file separately. This reduces the risk of claiming the same professional work both as damages and under a costs order without explaining the relationship. The correct treatment is a matter for advice on the particular items and orders, not something settled by the label on the invoice.

What would have happened without the freezing order?

For a claimed commercial loss, write a short account of the alternative events you say would have occurred. Identify the transaction, the available funds, the necessary approvals and the point at which the restraint changed the outcome. This is a factual preparation method, not a promise that any lost-opportunity claim will be recoverable.

Consider an illustrative allegation that a purchase failed because an account was restrained. Useful records might include the signed purchase terms, the payment deadline, proof of the available balance and the bank's explanation for refusing the transfer. They may also reveal another difficulty, such as an unmet approval condition or an independent funding shortfall. Preserve that evidence too.

Compare the proposed transaction with what actually happened afterwards. Was it abandoned, delayed, completed using another account or replaced by a different transaction? Those outcomes need different calculations. A delayed payment does not necessarily produce the same financial effect as a permanently lost contract.

Ask the finance team to identify assumptions rather than burying them in a single total. Distinguish a recorded charge from an estimated commercial margin and explain the basis of any estimate. If an expert assessment may be needed, first define the question and the reliable inputs. Expertise cannot supply missing historical facts about whether the transaction was genuinely ready to proceed.

Prepare for the alternative explanation. Market changes, pre-existing debt problems or a counterparty's independent decision may have affected the result. Addressing those possibilities early makes the analysis more useful, even if it reduces the amount initially proposed.

How should you explain the steps taken to reduce the loss?

Keep a response chronology from the time the restraint was received. Record requests for clarification, advice obtained, lawful alternatives considered and the reasons for accepting or rejecting them. Do not reconstruct the file as though every option was obvious at the time. The decision-maker needs to understand the information actually available when choices were made.

A useful record might explain why a proposed substitute account could not lawfully be used, why a supplier rejected an extension or why an application for permission to make a payment was considered. These are examples of evidence to investigate. They are not instructions to move assets in breach of an order or a statement that every possible application had to be made.

In March 2025 Sandra, the court left a possible issue about delay in challenging the restraint open for the inquiry. The observation does not supply a fixed deadline for all damages claims or make every delay fatal. It does show why the chronology should explain periods during which the affected party took no action.

Ask your adviser to distinguish a reasonable response to uncertainty from an avoidable continuation of loss. That assessment should account for the order's wording and the actual options, not assume that breaching the restraint was an available mitigation strategy. Preserve any refusal of a proposed solution as carefully as an acceptance.

Key takeaway. A convincing loss schedule explains the event, the response and the financial consequence. It also confronts what could reasonably have reduced that consequence.

Can expense incurred outside Dubai be part of the claim?

Sandra shows that foreign enforcement-resistance expense can be relevant to compensation under a DIFC undertaking. It does not establish that every overseas legal bill is recoverable. The particular enforcement steps, their connection to the freezing orders and the evidence of expense mattered to the result.

Prepare a separate record for each foreign proceeding. Include the originating application, the order it sought to enforce, the response and the disposition. This allows your adviser to distinguish direct enforcement of the DIFC restraint from a new substantive claim or another kind of proceeding between the same people.

Obtain an explanation from the lawyer responsible for the relevant work where appropriate. A bundle of invoices may establish that charges were made, but not why the work was needed or how it related to the DIFC order. The explanation should identify the specific matter, the work performed and the basis of the claimed expense without making unsupported statements about all cases in that jurisdiction.

Keep the foreign-law question narrow and properly supported. Whether an overseas court could award costs, what it actually awarded and what has been paid are separate facts. This guide does not give a general account of French or United States costs law. It uses a DIFC court's treatment of evidence in one compensation inquiry.

If documents need translation, preserve the original and ensure that names, dates, amounts and procedural descriptions can be matched. Ask what translation evidence the inquiry requires. A loose summary prepared for internal reporting may omit the distinction between a refusal, a withdrawal and an agreed dismissal.

How do existing awards and payments affect the calculation?

In the French-expense calculation in Sandra, the court deducted the legal-cost amounts already awarded there, even though recovery of those amounts was uncertain. Do not assume that an unpaid foreign costs award can simply be claimed again as damages without addressing duplication.

Create a reconciliation showing the original expense, any award relating to it, amounts actually received and the balance proposed for this inquiry. Preserve the currency of each original entry. If a conversion is used for presentation, identify the rate, date and reason rather than silently replacing the underlying records.

Ask about adjustments that appear elsewhere in the business records. A supplier may have refunded a charge, a lawyer may have issued a credit note or part of an invoice may have been settled by another person. These examples call for examination of the actual entitlement and accounting treatment, not an automatic rule that every third-party payment must be deducted in the same way.

Have someone other than the person who prepared the schedule trace a sample of entries back to the source records. This is a practical accuracy check, not a substitute for legal analysis. It often identifies a duplicated invoice, the use of a gross rather than credited figure or a currency sign copied incorrectly.

Who should prove the facts, and which documents should they explain?

Assign each factual proposition to a person with relevant knowledge. The finance manager may explain payment records. A transaction manager may explain what was ready to complete. The lawyer handling foreign proceedings may explain the work performed there. Avoid asking one witness to make confident assertions about matters known only from someone else's recollection.

Use a document index that follows the loss schedule. Each claimed item should lead to the relevant order, event and amount. Keep explanations concise enough that a reader can identify why the document is included. A very large bundle with no connection to the pleaded loss does not solve an evidential gap.

Separate facts from calculations and legal submissions. A witness can describe a bank's refusal and exhibit its email. The schedule can calculate the resulting charge. The adviser can address why that charge falls within the undertaking. Keeping those tasks distinct helps expose a missing link instead of disguising it through repeated legal conclusions.

Follow the court's directions about statements, affidavits and further evidence. The March Sandra order required a detailed claim and supporting material before the later assessment. It does not mean another applicant can adopt that order's particular evidence limits or service arrangements without their own directions.

Preserve records promptly after discharge. Staff move, account access changes and invoices may become harder to retrieve. A focused preservation request should cover the material needed to prove and test the proposed loss, including documents that may support an alternative explanation.

What should you not expect the inquiry to award?

Sandra declined the request for exemplary damages and reserved the broader question whether such an award would ever be competent. It should not be cited as establishing a general right to punitive compensation. The compensatory case needs to be assessed on its own evidence and legal basis.

Do not turn dissatisfaction with the opponent into an unexplained additional sum. If conduct is legally relevant, identify how and where it matters. A lengthy account of the relationship may distract from a straightforward claim for documented loss unless it establishes a necessary part of that claim.

Keep the costs of the compensation application separate from the substantive loss claimed under the undertaking. Budget the further hearing, evidence and professional work before deciding how far to pursue disputed items. The amount demanded is not the same as the expected net commercial benefit of proceeding.

Ask for an assessment of the strongest supported items and the most uncertain ones. It may be sensible to investigate a missing document before incurring valuation costs, or to remove a weak item that complicates an otherwise clear claim. Those are commercial choices for the affected party after advice, not rules requiring abandonment of a particular category.

Common mistake. Treating discharge as proof that every subsequent expense must be reimbursed confuses the end of the restraint with proof of a compensable loss.

What should you decide before starting the compensation process?

1. Collect the sealed restraint, undertaking, variations and discharge orders.
2. Identify the person who gave the undertaking and the person claiming each loss.
3. Prepare an initial evidence-backed schedule, separating injunction effects from the underlying litigation.
4. Explain the response to the order, relevant delay and available alternatives.
5. Reconcile all related awards, receipts and adjustments before setting the claimed total.
6. Obtain advice on the inquiry procedure, evidence directions, budget and payment prospects.

Before making a settlement proposal, identify exactly what it would resolve. A figure for the undertaking claim may not settle ordinary costs or other proceedings unless the terms say so. Check whether any security or remaining order also requires formal treatment. Do not assume that an informal agreement automatically directs a court or account holder to release money.

Keep the decision grounded in the documentary record. The strongest next step may be an inquiry application, a targeted evidence request or a carefully defined negotiation. The discharge order is the starting point for that assessment, not a substitute for it.

Sources checked on 1 October 2026. Obtain advice on the actual undertaking, current procedural requirements and the evidence supporting each proposed loss.

Frequently Asked Questions

Does discharge of a DIFC freezing order automatically produce damages? No. The undertaking, the court's decision on an inquiry and proof of compensable loss require separate attention.

Must I prove the final amount before an inquiry is ordered? Sandra's March 2025 decision distinguished a prima facie case of loss at that stage from the later assessment. Follow the evidence requirements and directions in your own case.

Can I claim all the costs of the underlying litigation? Do not assume so. The inquiry concerns loss caused by the injunction, not every expense of the parties' dispute. Ordinary costs require separate treatment.

Can costs of resisting overseas enforcement be relevant? Yes. Sandra awarded proven foreign enforcement-resistance expenses on its facts. The connection, reasonableness and treatment of other costs awards still need evidence.

Can I ignore a foreign costs award because it has not been paid? No. Address it expressly. Sandra deducted amounts awarded in France even though their recovery was uncertain.

Does delay in challenging the restraint always defeat compensation? No fixed rule of that kind follows from Sandra. The court identified delay and conduct as potentially relevant and left a particular delay issue open for the inquiry.

Did Carmon remove the Sandra undertaking claim? No such conclusion follows. Carmon rejected the earlier restrictive jurisdiction principle, and the July 2025 Sandra assessment acknowledged that development before determining compensation.

Did Sandra establish a right to exemplary damages? No. The court declined the request on the facts and reserved the broader question whether such an award could ever be made.

This article is for general information and does not constitute legal advice. Consult a qualified advocate about your undertaking, compensation application, evidence and current court directions.

Related Guides

See the Dubai and DIFC information hub, the guide to urgent freezing relief, the guide to expenses while assets are restrained and the guide to the opponent's legal costs bill.

Related Guides

Our judgments, awards and enforcement page treats recognition and enforcement as separate stages, and covers freezing orders and asset disclosure.

• The Debtor Still Will Not Comply: Can a DIFC Receiver Help?
• Judgment Money Has Arrived: Who Protects the Funder's Share?
• The Debtor Is Moving Assets: Can I Get a DIFC Freezing Order?