Dubai court dismisses Dh169 million claim in major ownership dispute

Dubai: A Dubai court has dismissed a commercial dispute involving claims exceeding Dh169 million after ruling that a claimant’s registered ownership in several companies and establishments, including an advertising company, was purely paper-based and intended for sponsorship purposes rather than genuine partnership.

The Dubai Court of First Instance upheld a counterclaim filed by the defendants and found that the claimant’s recorded 51 per cent shareholding in an advertising and publicity company and ownership of associated establishments did not reflect the true legal and financial relationship between the parties. The court ordered the claimant to pay court costs and Dh1,000 in legal fees.

The dispute centred on extensive financial claims brought by the claimant, who sought Dh79.5 million in alleged profit shares, Dh32.7 million in company funds linked to the advertising and publicity company, and Dh36.9 million from related establishments. He also demanded Dh196,200 allegedly transferred to a personal account without justification, in addition to Dh20 million in compensation for material, moral and reputational damages.

In his lawsuit, the claimant argued that he owned a magazine and related commercial licences through a sole proprietorship established in 2000, and held a majority stake in the advertising company. He accused the defendants of mismanagement, financial irregularities and diversion of funds, which he claimed caused operational failures and financial losses across the businesses.

However, the defendants contested the claims, arguing that the claimant was never the true owner and had acted only as a registered shareholder and sponsor. They maintained that the businesses were registered in his name for sponsorship and regulatory purposes, with no financial contribution or genuine participation in ownership or management.

The court relied on documentary evidence submitted by the defence, including written declarations signed by the claimant acknowledging that he had not paid for the shares registered in his name and had made no financial contribution to the companies. The documents indicated that share capital had been funded by other parties. The court also examined an irrevocable power of attorney and receipts describing payments as sponsorship fees.

After reviewing the case file and expert report, the court concluded that the evidence established a sponsorship arrangement rather than a real ownership structure. It ruled that the claimant therefore had no legal standing to claim profits, recover company funds or bring claims on behalf of the businesses.

The court also rejected an alternative claim for Dh15.46 million, which the claimant said he had personally paid to settle corporate liabilities, including debts, labour claims and banking obligations. Judges found the evidence insufficient, noting the absence of detailed creditor records, lack of audited financial statements after 2018, and no personal bank documentation proving payment from his own funds. The expert report was also unable to verify whether some liabilities had already been settled.

In addition, the court dismissed the Dh20 million compensation claim, ruling that no wrongful act had been proven and that the legal requirements for damages—fault, harm and causation—had not been met.

With all principal claims rejected, the court upheld the counterclaim, confirmed the disputed ownership and shareholding structure, and dismissed the case in full.