AE | Incident Report
Hallucination
2026-01-22
Abu Dhabi (ADGM) court orders law firm to pay costs after AI-hallucinated citations
AI Model: Unspecified generative AI tool Litigation ConductHallucinated CitationsCosts SanctionMiddle EastProfessional Responsibility
I. Executive Summary
Trade press reported that the Abu Dhabi Global Market (ADGM) court imposed substantial indemnity costs against a law firm after court pleadings contained non-existent and misapplied legal authorities linked to AI-assisted research. The decision framed the failure to verify AI outputs as a serious professional lapse and treated it as a conduct issue affecting litigation integrity.
II. Key Facts
- In Arabyads Holding Limited v Gulrez Alam Marghoob Alam (ADGM), the court addressed pleadings citing non-existent/misapplied authorities.
- The court ordered the firm (reported as MIO Legal Consultants LLP) to pay AED 282,508 in costs on an indemnity basis.
- The judgment criticised the failure to verify AI-generated research and linked it to breach of conduct obligations.
- The judgment date was 2025-12-18; the matter was widely reported in trade press on 2026-01-22.
III. Regulatory & Ethical Implications
Signals that common-law style courts in the region may use costs and conduct mechanisms to police AI-assisted drafting and research. Firms should implement mandatory verification controls for authorities, supervision/audit trails, and clear responsibility allocation to reduce sanction and professional-liability exposure.