Two ordered to repay AED22.9m in Dubai property fraud case

The Dubai Civil Court of First Instance has ruled that two Asian men must repay approximately AED22.9 million to a man of the same nationality after receiving money from him to purchase real estate, vehicles and residential equipment in the UAE. Instead, they appropriated the funds, used them to acquire the assets and registered them in the name of one of the defendants rather than the owner of the money. The ruling was based on a final criminal judgment that convicted them of misappropriating the disputed funds and sentenced them to imprisonment and fines. The civil court ordered the first defendant to repay AED21,685,557 and the second defendant to repay AED1,233,845, each according to the amount received. The court also ordered them to pay legal interest at a rate of 5% annually from the date the lawsuit was filed until full settlement. According to case records, the plaintiff handed more than AED21.6 million to the first defendant and more than AED1.2 million to the second defendant to purchase real estate and vehicles and provide residential equipment in the country. He later discovered that they had used the funds to buy property and vehicles and registered them in the name of the first defendant instead of his own. As a result, he filed a criminal complaint, leading to the defendants being referred to trial. The criminal court sentenced each of them to one year in prison, imposed fines equivalent to the value of the funds involved according to the amount misappropriated by each defendant, and ordered their deportation from the country. The judgment became final after their appeals were rejected. The plaintiff subsequently filed a civil lawsuit seeking the return of his money. The first defendant argued that the lawsuit was premature and requested that proceedings be suspended until a final ruling was issued in the criminal appeal. The second defendant also requested that the case be suspended on the same grounds, while reserving his right to submit arguments later. The court accepted the request and suspended proceedings pending the outcome of the criminal appeals. It later resumed consideration of the case after the plaintiff submitted proof that the criminal judgment had become final following its confirmation at both the appeal and cassation stages. In its reasoning, the court stated that a final criminal judgment has binding legal effect before civil courts on matters conclusively decided, including the occurrence of the crime, its legal description and the identity of the perpetrator. These matters cannot be reconsidered before the civil court. The court explained that the final criminal convictions established the defendants' fault and prevented them from disputing their responsibility for the incident. It noted that the role of the civil court was therefore limited to assessing the damage suffered by the plaintiff and determining the compensation due. The court concluded from the criminal judgment that the defendants had received the claimed sums, which belonged to the plaintiff, making it necessary to order each of them to return the amount he had received. The court rejected the plaintiff's request for interest at a rate of 12% annually from the date the funds were handed over. It explained that late-payment interest is awarded as compensation for damage caused by a debtor's delay in fulfilling an obligation, and that established judicial practice sets such interest at 5% annually from the date of filing the lawsuit when the debt is fixed and determined. As the amount claimed was fixed and specific, the court ruled that legal interest of 5% per annum was payable from the date the lawsuit was filed until full payment. It also ordered the defendants to pay court fees, expenses and legal costs.