Dubai court orders four people to return AED3.5 million deposit to woman

The Dubai Civil Court ordered four Asian defendants, jointly liable, to return an AED3.5 million deposit to a woman after they failed to repay it on the agreed date and a security cheque was returned unpaid by the bank. According to court records, the plaintiff filed a lawsuit seeking AED4.33 million from the four defendants. She said they had entered into a deposit and guarantee agreement under which they received AED3.5 million from her, with the understanding that the amount would be returned on a specified date. The agreement stated that the amount was provided solely as a deposit and for safekeeping. It expressly prohibited its use or disposal through sale, mortgage or any other means, and required its return on the agreed date. To secure repayment, the first defendant issued a cheque for the same amount drawn on a bank and signed by the second and third defendants, who were company owners. According to records, the deadline for returning the deposit passed without the plaintiff recovering her money, and there was no evidence that any part of the amount had been repaid. When the security cheque was presented to the bank, it was returned unpaid. The plaintiff then filed a lawsuit seeking recovery of the funds. The plaintiff's claim extended beyond the deposit amount. She argued that the fourth defendant had signed a letter approving the payment of dues and obligations, which, she maintained, included a commitment to pay the amounts claimed. On that basis, she sought AED4.33 million from all defendants, along with legal interest, fees and expenses. After reviewing the agreement and supporting documents, the court found that the relationship between the plaintiff and the first three defendants was governed by a clear deposit contract. Under the agreement, the recipients of the money were obliged to safeguard it, return it to its owner and refrain from using or disposing of it in a manner contrary to the agreed terms. The court noted that a deposit is entrusted to the recipient, whose responsibility extends beyond receiving the money to preserving and returning it on the agreed date. Since the plaintiff proved she had transferred AED3.5 million and the defendants provided no evidence that the amount, or any part of it, had been returned, the court found the debt remained outstanding. The court also noted that the security cheque had not been honoured and that the amount remained due despite the agreed repayment date having passed. It therefore ruled that the full value of the deposit must be repaid. Regarding the fourth defendant, the court found that the consent letter he signed confirmed his guarantee of the principal amount of AED3.5 million, giving the plaintiff the right to pursue him alongside the original debtors. The court relied on the provisions governing guarantees under the Civil Transactions Law, which allow a creditor to pursue the debtor, the guarantor, or both once the obligation and scope of the guarantee are established. It held that the document submitted was sufficient to establish the fourth defendant's liability for the amount specified in the deposit agreement. The court emphasised that a guarantee cannot be presumed and cannot extend beyond the obligation undertaken by the guarantor. Accordingly, it declined to hold the fourth defendant liable for the additional sums claimed. It also rejected the request to refer the case for witness testimony, finding that the documentary evidence was sufficient to decide the dispute. The defendants did not appear before the court despite being properly notified and provided no evidence that the deposit, or any part of it, had been repaid. Nor did they challenge the documents submitted by the plaintiff. In conclusion, the court ordered the four defendants, jointly liable, to pay the plaintiff AED3.5 million, together with legal interest at 5 per cent per year from the date the lawsuit was filed until full settlement.