ADGM Court awards wasted costs against law firm for misuse of AI

The ADGM Court has issued a landmark decision on the appropriate use of AI by lawyers. Sajid Suleman acted for the successful Claimant in a wasted costs application against the law firm.

In Arabyads Holding Limited v. Gulrez Alam Marghoob Alam [2025] ADGMCFI 0032, the Abu Dhabi Global Market (“ADGM”) Court of First Instance, in what is thought to be the first such case in the UAE, made a substantial wasted costs order against a law firm for misusing AI in legal research for court submissions. Sajid Suleman acted for the successful Claimant in its wasted costs application. He was instructed by Ahmed Tony, Youssef Nassar, and Alia Elraey of Matouk Bassiouny.

In this case, the Defendant’s then legal representatives filed a Defence which was unnecessarily lengthy and referred to authorities which either did not exist or did not stand for the proposition for which they had been cited. The Court held that this conduct, in particular the lawyer’s failure to verify whatever legal research was undertaken through AI, was reckless and amounted to a breach of the ADGM Rules of Conduct. The Court granted a wasted costs order against the law firm, noting that the jurisdiction to award costs against lawyers is not only compensatory but also punitive in nature.

Mr Justice Paul Heath KC carried out a review of the case law of other common law courts who had recently addressed similar issues, and in particular the English High Court decision in R (On the Application of Ayinde) v London Borough of Haringey [2025] EWHC 1383 (Admin) and the Superior Court of Justice of Ontario’s decision in Ko v Li [2025] ONSC 2766. From this, the following key duties of lawyers using AI can be discerned:

• It is the lawyer’s duty to use technology, conduct legal research, and prepare court documents competently.
• It is the lawyer’s duty to ensure human review of materials prepared by non-human technology such as generative artificial intelligence.
• It is the lawyer’s duty to read cases before submitting them to a court as precedential authorities. At its barest minimum, it is the lawyer’s duty not to submit case authorities that do not exist or that stand for the opposite of the lawyer’s submission.

The Court went on to state that “lawyers using AI tools for research purposes should start from the premise that all authorities and/or articles on a particular topic that are revealed by AI research may not necessarily be accurately summarised in the response, or indeed may not exist. That puts the onus on a legal practitioner using AI for research purposes to verify the existence of authorities on which they wish to rely and to confirm that they stand for the propositions for which they are being offered for opposing counsel’s consideration, and the Court. Without undertaking that verification task, the lawyer runs a serious risk that the Court may be misled.”

As the use of AI becomes increasingly prevalent, this case provides helpful guidance on best practices for lawyers using AI and makes clear that the sanction for misusing AI can be very serious. The risk of AI-generated errors is perhaps even more acute in offshore jurisdictions such as the ADGM and the DIFC, where the legal systems are based on a combination of common law and their own laws, and therefore, the potential for AI-generated inaccuracies is even greater.

Finally, it is important to recognise where the fault lies in the use of AI. As the Court stated, “the fault for reliance on AI ‘hallucinations’ as factually accurate lies not with the research programme used (for example, Gemini, in the case of a Google search) but with the person responsible for conducting the search. Much depends on the specificity of the question put to the AI programme and the researcher’s ability to review what has been provided in response to ensure it is both accurate and relevant; the process of verification.”

Read the judgment

Commercial barrister, Sajid Suleman, acted for the successful Claimant in its wasted costs application. Read the full judgment here: Arabyads Holding Limited v. Gulrez Alam Marghoob Alam [2025] ADGMCFI 0032

Find out more

Sajid is a commercial barrister with a broad international practice spanning high‑value commercial litigation, civil fraud, construction and international arbitration. He acts for financial institutions, multinational corporates, investment funds, state‑owned entities and high‑net‑worth individuals. His work frequently concerns allegations of fraud, breaches of fiduciary and contractual duties, misfeasance and complex commercial wrongdoing.

Sajid has a substantial Middle East practice and is frequently instructed in high‑value matters before the DIFC and ADGM Courts. His cases often involve parallel proceedings in multiple jurisdictions, interim remedies, jurisdictional challenges and the enforcement of foreign judgments and arbitral awards. He also has significant experience in construction and engineering disputes, particularly in the MENA region, and has acted as sole counsel in delay, defect and variations claims under ICC, LCIA and DIAC Rules.

To find out more about Sajid, contact Lexie Johnson on + 44 (0) 207 427 0801 for a confidential discussion.

News 22 Dec, 2025