Al Ain court orders man to repay Dh919,000 after defaulting on Murabaha loan

The Al Ain court for Civil, Commercial, and Administrative Claims has ordered a man to pay a bank Dh919,199, the value of a loan he obtained and stopped repaying after the third instalment. The court found that the man also breached his agreement by refusing to transfer his salary to the bank, Emarat Al Youm reported.

According to court documents, the bank filed a lawsuit demanding repayment of Dh919,199 plus 5.75 per cent annual interest from the date of filing until full settlement, as well as legal fees and expenses. It stated that the defendant had received financing worth Dh958,332 under a Murabaha contract with a profit rate of 5.7 per cent but defaulted shortly afterwards and failed to honour the terms of the facility.

In his defence, the borrower denied the bank’s claims, arguing that it had no right to terminate the contract and asking the court to reschedule the debt and exclude compound interest. he also submitted documents, including a request to defer instalments and a car accident report.

The court-appointed financial expert confirmed that the man had obtained Murabaha-based personal financing from the bank, repaying only three out of 76 agreed monthly instalments of Dh12,609 each. The report found that the transaction complied with banking standards and that the bank had purchased the Murabaha commodity before selling it to the defendant with a mutually agreed profit margin.

The court noted that the bank had not imposed any extra fees or penalties on the account and ruled that the total outstanding amount was Dh919,199. Finding the defendant in breach of his contractual obligations, the court ordered him to pay the full amount, along with case fees, expert charges, and legal costs, while dismissing all other claims.