Dubai court orders Dh1.443 million payment in failed car purchase agreement

Dubai: A commercial dispute between two men involved in car-purchase deals has ended with a ruling from the Dubai Civil Court ordering one of them to pay Dh1.443 million as the first instalment of a larger financial claim. 

The case, according to Emarat Al Youm, centred on allegations that substantial sums were transferred for vehicle purchases that were never completed.

The plaintiff, an Arab national, filed a lawsuit seeking Dh2.884 million, saying he had transferred the funds to the defendant to buy cars for resale. 

He told the court that no vehicles were purchased or delivered and that repeated attempts to recover the money were ignored.

The defendant did not deny the debt. Instead, he signed a written acknowledgment confirming the full amount and agreeing to repay it in two equal instalments spaced roughly nine months apart. 

But he failed to pay the first instalment when it became due, a lapse the court viewed as conclusive evidence of his outstanding liability, especially in light of the documented bank transfers and the signed acknowledgment.

The hearings were conducted remotely, with the plaintiff represented by his lawyer and the defendant appearing in person. After reviewing the submissions, the court reserved the case for judgment.

In its reasoning, the court noted that the repayment agreement did not contain any clause accelerating the entire amount in the event of default, nor did it make the second instalment immediately due. 

Since the deadline for the second instalment had not yet arrived, the court ruled that this part of the claim was premature and therefore inadmissible.

However, the court held that the defendant’s failure to settle the first instalment obligated him to pay Dh1.443 million, along with 5 per cent annual interest from the date of default until full settlement, a rate consistent with commercial practice in Dubai’s courts.

The plaintiff had also obtained a travel ban against the defendant in a separate case and asked the court to confirm it in the present dispute, though the final judgment did not address that request in detail.