Abu Dhabi Court of Cassation, Commercial Appeal No. 1410 of 2021, judgment of 25 January 2022
Claims are ordinarily brought by a statement of claim filed with the court. The payment-order procedure is an exception, available only where everything claimed is a debt established by a document signed by the debtor or a specified movable; it cannot be used if only part of the claim qualifies, and a claim that adds accruing profits and compensation must proceed by ordinary action. Under Article 95 of the 1993 Commercial Transactions Law, claims on traders' obligations relating to their business are barred after ten years from the date the obligation falls due, and time runs from when the right becomes payable.
The claimant relied on a letter issued in September 2008 by the defendant's private office acknowledging a debt of about AED 9.29 million, plus a 25% profit share. She sued in 2021 for that sum, profits accruing since 2008 and AED 1 million compensation, and asked for an expert to examine the business records. After a three-member expert committee reported, the commercial court ordered the defendant to pay AED 9,298,642 with interest and AED 500,000; the Court of Appeal raised the interest rate from 1% to 5% and otherwise upheld the judgment.
The Court of Cassation dismissed the defendant's appeal. He argued that the claim should have been brought as a payment order because it rested on a written acknowledgement. The Court held that, under Articles 142, 143 and 145 of the Civil Procedure Law, the normal route is a statement of claim; the payment-order route is an exception that applies only where everything claimed is a debt proved by a document signed by the debtor, or a specific movable. It is not available if only part of the claim qualifies, because a payment order cannot be split, and here the claim also sought accruing profits and compensation. On limitation, under Article 95 of the Commercial Transactions Law (Federal Law No. 18 of 1993), claims concerning traders' obligations relating to their commercial business are not heard after ten years from the due date, where denied and without lawful excuse; time runs from when the right becomes payable, or when a condition is fulfilled. The claim was filed in May 2021 and the Court accepted that the amount became payable when the expert fixed it in July 2021, so the claim was in time. Findings on alleged sham documents were for the trial court. The case was decided under the 1993 law; Article 92 of the Commercial Transactions Law of 2022 now sets five years for merchants' obligations towards each other.
Creditors must use the summary payment-order procedure only when the whole claim rests on a signed document; mixed claims for profits or damages go by ordinary action. The judgment also shows the court fixing the start of the limitation period at the point when an unliquidated entitlement was quantified, which under the 1993 law kept an old acknowledged debt alive.
| Articles 142, 143, 145 of Federal Law No. 11 of 1992 (Civil Procedure Law) Decided under this law; it has been replaced by Civil Procedure Code. |
| Article 95 of Federal Law No. 18 of 1993 (Commercial Transactions Law) Decided under this law; it has been replaced by Commercial Transactions Law. |
“إذ هو طريق استثنائي للالتجاء إلى القضاء لا يجوز التوسع فيه ولأن الأمر بالأداء غير قابل للتجزئة”Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.
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