Dubai: An unusual commercial dispute worth Dh4.1 billion between a bank and its client was recently resolved by Dubai Ruler’s Court’s Administration of Expertise and Settlement of Disputes.
The client lodged a lawsuit before the Dubai Commercial Court against the bank and its company that trades in stocks across the country’s financial markets, seeking Dh4.1 billion in compensation for what he described as loss of his funds and financial damages.
“This commercial dispute was unprecedented and rarely happens between a bank and its client. The claimant alleged that the bank and its company traded his stocks in the financial market without his knowledge and consent. The pertinent court referred the dispute to our department and we commissioned three financial experts, who looked into the dispute and resolved it,” Hashem Salem Al Qiwani, the administration’s director told Gulf News.
It is worth mentioning that banks, according to Al Qiwani, are the parties that usually lodge such commercial lawsuits against clients, who fail to honour their payments, and not otherwise.
In his lawsuit, the claimant [client] demanded the bank and the company pay him Dh2 billion in compensation, and Dh2.1 billion that he claimed to have lost because of what he purported to be unconsented trade in stocks.
“The administration’s three-member committee of financial experts studied all the presented reports and documents … it also reviewed the agreements and contracts signed between the litigating parties [the claimant and the bank and its company]. The committee examined the stocks owned by the client at the time of trading them in the financial markets … and its members met with the litigants and reviewed the records at the bank and the committee and communicated with the pertinent financial markets where and when the trading happened and obtained financial statements about the overall operations. Meanwhile the traded stocks were also examined, whether those trades happened upon the client’s written or verbal consent and whether he had been involved in the trading. The committee also checked the client’s accounts and credit facilities granted to him by the bank to study the commitment of each of the litigating parties and whether they had honoured the agreements and contracts signed between them. “The committee’s findings revealed that the client had agreed with the bank to obtain credit facilities in the form of loans and overdrafts to finance an investment portfolio against mortgaging a number of his stocks. The client had also agreed with the bank that the company would be in charge of running his investment portfolio. The claimant alleged in his lawsuit that the company traded in what he alleged as exceeding Dh2 billion without his consent and that the trading had incurred a loss worth Dh2.1 billion. The inquiry revealed that the client had stocks in Dubai Financial Market and Abu Dhabi Financial Market as well … according to the committee’s findings, the client was aware of and had consented to the trading and that it had been carried out lawfully and as per the relevant rules and regulations. Investigations also confirmed that the company had prepared a file that contained copies of the client’s approvals for selling and purchasing stocks. The client had also requested the bank to unfreeze some of his mortgaged stocks to be able to sell them and pay for his losses. The Administration’s committee also looked into a chain of emails and messages exchanged between the client and the company which confirmed that he was aware of the losses and that he had authorised the company to sell his stocks to pay for his debts. Thereafter the committee concluded that the client’s demands [Dh4.1 billion] were inequitable,” said Al Qiwani. Based on the three-member committee’s report that was submitted to the pertinent court, the claimant’s lawsuit was dismissed, said the administration’s director.
Highlighting the role of Dubai Ruler’s Court’s Administration of Expertise and Settlement of Disputes in such cases, Al Qiwani told Gulf News: “We constantly handle and review such financial disputes and claims involving enormous figures. Clients are constantly advised and strongly urged to read thoroughly the contracts and agreements that they sign with banks and stock trading companies to be aware of and familiar with their rights and dues.”
