The Dubai Civil Court of First Instance ruled that an engineer must repay AED4.2 million to his employer, who is also a relative. The employer said he had provided the money as an interest-free loan to help the engineer establish a company, but the engineer failed to repay it on time.
The case centred on a business relationship between the plaintiff and the defendant, his employee. The plaintiff stated that he granted his relative a loan of AED6 million in two instalments under two agreements. In those agreements, the defendant acknowledged receiving the funds and committed to repaying them after requesting financial assistance to establish a company.
The plaintiff said the amount included cheque payments worth AED5.25 million, in addition to AED750,000 that he claimed to have handed over in cash. He demanded that the defendant be ordered to repay the full amount, along with legal interest.
The court examined the case documents and the evidence submitted. It also relied on an expert report prepared in a previous commercial dispute between the two parties. The report dealt with several cheques linked to financial transactions between them and concluded that there were four personal cheques issued by the plaintiff in favour of the defendant, with a total value of AED4.2 million.
The court noted that the four cheques were not included in the commercial accounts or in the settlement of the company's and project's dues addressed in the previous dispute. It was also established from the defendant's statements before the expert that the amounts were received from the plaintiff as part of the loan agreement between them. The court ruled that these statements amounted to an extrajudicial admission that could be relied upon as evidence, with its significance assessed alongside the other case documents.
The court explained that the expert report in the previous case did not prevent it from relying on the facts and documents contained within it, provided it was satisfied with their contents and subject to its own assessment. It noted that the burden of proving an obligation rests with the person making the claim and found that the plaintiff had provided sufficient documents and evidence to show that the defendant received AED4.2 million as a loan.
However, the court did not accept the plaintiff's claim for the full amount. It found that another cheque worth AED1.05 million had already been included in a settlement covered by a judgment issued in a previous commercial dispute between the parties. That judgment had acquired the force of res judicata, making it impermissible to raise the same claim again in the current case and risk conflicting rulings on the same right.
The court also rejected the plaintiff's claim that he had paid the defendant AED750,000 in cash, finding that he had failed to provide evidence to support the payment or substantiate this part of the loan claim. The court said that while family relationships and mutual trust may help explain the circumstances surrounding a transaction, they do not remove the requirement to provide proof of the amounts claimed.
Regarding interest, the court rejected the plaintiff's request for interest at a rate of 9% from the loan's due date. Instead, it ordered the defendant to pay legal interest of 5% per annum on the awarded amount from the date the lawsuit was filed until full payment. The court found that the debt had become specific and fixed by virtue of the judgment.
The court based its ruling on the provisions of the Civil Transactions Law relating to loans and the obligation to perform contracts in accordance with their terms and the principle of good faith. It also relied on rules governing evidence and the binding effect of judicial rulings.
The court ruled that the defendant must pay the plaintiff AED4.2 million, plus legal interest at a rate of 5% per annum from the date the lawsuit was filed until full payment. It also ordered him to pay the legal expenses and attorney fees.