Question:
Three (3) years ago, I gave someone a sum of money as a loan, signed by me and the debtor, but the date of repayment of the debt was not mentioned. Orally, we agreed that the debt would be repaid within 6 months.
Currently, the debtor refuses to repay the debt and is relying on the pretext that the date of repayment of the debt is not mentioned in the debt agreement. My question: What is the appropriate action to take against the debtor in this case? Please advise.
Answer:
To answer such question, I would advise the questioner that:
According to Article 718 of the Civil Transactions Law: “(1) if the loan has a fixed or usual term, the borrower must return the property to the lender upon the expiry of that period, even if no benefit would accrue to him thereby. (2) If there is no term for the loan, the borrower will only be obliged to return the property upon the expiry of such period as enables him to have the usual benefit of such property.”
This Article indicates that the borrower is obligated to return the loan amount within the period specified for it. If no period is specified for it, he is also obligated to return it after a sufficient period during which he can benefit from it.
In accordance with Article 359 of the Civil Transactions Law, the judge may, in exceptional cases, grant the debtor a deadline to fulfill his obligation if his condition so requires and the creditor does not suffer serious harm.
It is established in Dubai Court of Cassation no. 335/2001 (Rights Cassation) that the trial court has the discretion to determine the appropriate deadline for repaying the loan that the two parties did not agree to determine.
Estimating the cases that require granting the debtor a deadline to fulfill his obligation, the court bases its ruling on justifiable reasons that have proven basis in the papers.
You have to notify the borrower to return the loan within a specific date, in case he refuses, then you have to file a civil case since a period of three years had passed which seems to be sufficient for the borrower to benefit from the loan. You may use any means of proof like witnesses to prove the oral agreement of 6 months, messages and emails for any conversation that took place between you. But after all, the court will decide about the matter taking into consideration the circumstances and the documents of the case.
