UAE court rejects family loan claim in bitter dispute between brothers

A Dubai civil court has dismissed a lawsuit filed by a man seeking repayment from his brother of what he claimed was a “benevolent family loan” worth more than Dh2 million.

According to Emarat Al Youm, the plaintiff said he had transferred the funds in US dollars years earlier to help his brother through financial difficulties. The relationship later deteriorated, and the matter escalated into a legal dispute.

The court rejected the claim, stating that “a loan cannot be proven by assumption”, and ruled that the plaintiff failed to provide clear and definitive evidence. Case documents show that the Arab claimant asked the court to order his brother to repay the alleged debt and compensate him for damages, along with legal fees.

He argued that he had transferred $900,000 (about Dh3.3 million) to his brother’s bank account in the United States under an agreement that the money was an interest-free family loan repayable at a later stage. He said the agreement was expressly documented as a “family loan” and that his brother had acknowledged the debt in Google documents, emails, and chat messages. He also claimed the defendant had repaid $346,000, leaving an outstanding balance of around Dh2 million.

The plaintiff submitted expert reports, financial records, and copies of the alleged acknowledgements to support his case.

However, the defendant’s lawyer challenged the Dubai court’s jurisdiction, arguing that the transfers were connected to the settlement of their late father's estate and that any financial dealings between siblings were inseparable from inheritance matters. He requested that the case be moved to the probate court.

The court rejected this argument, noting that the transfers took place two years before the father’s death and were therefore unrelated to inheritance proceedings.

In its judgment, the court stressed that the burden of proof lies with the party claiming the existence of a loan. While acknowledging the numerous transfers and messages, it found that none provided conclusive proof that the money constituted a binding debt. It cited Court of Cassation principles stating that bank transfers are presumed to be payments of an existing obligation unless proven otherwise.

The court also noted that WhatsApp messages and inheritance-related documents merely reflected efforts to organise family finances, not evidence of an enforceable loan. It further held that the bank's description of the transfer as a “family loan” had no legal effect since the defendant had neither requested nor signed any such classification.

The court ultimately ruled that the plaintiff had not met the burden of proof, dismissed the case, and ordered him to pay court fees, expenses, and Dh1,000 in lawyer’s fees.