Dubai court voids Dh97 million land transfer in bankruptcy case

Dubai: A civil court in Dubai has voided the transfer of a land parcel valued at more than Dh97 million, ruling that the 2015 transaction, in which a company gifted more than 33 million square feet of land to a related entity, was legally unenforceable.

The decision comes after a bank filed a lawsuit arguing that the insolvent company’s transfer of the land constituted an attempt to evade repayment of debts owed under final court judgments.

According to Al Khaleej newspaper, the bank sued two companies: the first, which owned the land and was declared bankrupt in 2024; and the second, which received the land as a gift.

Court-appointed bankruptcy trustees discovered during asset tracing that the land had been transferred years earlier to a company with overlapping ownership, management, and premises.

No evidence was found that any genuine financial consideration had been paid for the transfer, a key factor in determining whether the arrangement was legitimate.

The recipient company argued that the land had been encumbered by a mortgage at the time of the transaction and that it had paid substantial amounts to lift the lien.

However, an expert appointed by the court found no documentation proving that a real purchase price had been paid. The expert also highlighted the structural and administrative interconnectedness of the two entities at the time of the transfer.

The court instructed the expert to examine the corporate relationship between the companies, the ownership trail, the value of the property, the timing of debts, and whether any actual consideration had been exchanged.

The expert’s findings were unequivocal: the bankrupt company indirectly owned 99 percent of the recipient entity through intermediary companies, and both shared unified senior management.

The report further noted the absence of any evidence that the recipient company paid a genuine market price for the land.

The land, records show, later formed part of a development project registered under the name of the original owner as a real estate developer.

After reviewing the expert report and case file, the court ruled that the transaction lacked legal substance and constituted an attempt to shield assets from creditors.

It invalidated the transfer and held that the land must revert to the bankrupt estate, ensuring it could be included among the company’s assets available to meet creditor claims.