Dubai court awards Dh1.2 million compensation in decade-long cross-border legal dispute

Dubai: A legal dispute spanning more than a decade and crossing multiple jurisdictions has ended with a Dubai court awarding Dh1.2 million in compensation to a businessman who spent years trying to recover money he had initially paid under a court ruling that was later overturned.

The case began in a Gulf country, where a court of first instance ordered the businessman to pay about Dh3.5 million to another claimant. Rather than waiting for enforcement measures, he voluntarily settled the amount in full once execution proceedings were opened.

What initially seemed to resolve the matter soon became a prolonged legal battle. The businessman appealed the ruling, and an appellate court later overturned the original judgment in his favour. The decision was subsequently upheld by the country’s court of cassation, reversing the legal positions of the parties.

With the final judgment annulling the earlier ruling, the businessman became entitled to recover the Dh3.5 million he had paid. Although an order was issued requiring the opposing party to return the funds, repayment was delayed for nearly ten years despite formal demands.

After the debtor relocated to the UAE, the businessman turned to Dubai courts to pursue enforcement. His initial attempt to execute the foreign ruling was rejected because the appellate judgment had dismissed the claim but did not explicitly order repayment.

He later filed a new case in his home country, resulting in a judgment obliging the defendant to return the funds. Once the ruling met the formal requirements for enforcement in the UAE, Dubai authorities seized the debtor’s assets, prompting him to repay the Dh3.5 million.

The businessman then brought a further case before Dubai’s civil courts seeking compensation for the damages caused by the prolonged withholding of his funds.

His claim relied on the legal principle of unjust enrichment, set out in Article 324 of the UAE Civil Transactions Law, which provides that anyone who receives money without lawful basis must return it along with any benefits derived from it.

The defendant argued that the claim should be dismissed because more than three years had passed, citing a limitation period under the same law.

The court rejected this argument, ruling that the dispute concerned unjust enrichment rather than a wrongful act, and therefore was not subject to the three-year limitation.

The court found that the defendant had retained the money for nearly seven years after the judgment against him became final, depriving the claimant of the use of his funds and forcing him to pursue lengthy legal proceedings in both his home country and the UAE.

Judges also considered the financial costs incurred during the dispute, including legal fees, documentation costs, travel expenses, and other litigation-related expenditures. The court further recognised the moral damage suffered by the claimant, who had initially paid the amount to avoid enforcement and later endured years of legal proceedings to recover it.

In its ruling, the Dubai court ordered the defendant to pay Dh1.2 million in compensation for material and moral damages, along with 5 per cent legal interest from the date the judgment became final until payment is made, in addition to court fees and legal costs.

With the compensation added to the original repayment, the businessman’s total recovery now stands at Dh4.7 million.