Dubai Court of Cassation (General Assembly), Appeal No. 1 of 2020, judgment of 27 January 2021
Although ownership of real property passes, between the parties and against others, only on registration (Article 1277 of the Civil Transactions Law), Article 166(1) of the Civil Procedure Regulation (Cabinet Resolution No. 57 of 2018) allows a third party who has evidence of ownership or facts of possession to bring an action to annul enforcement steps and claim attached property. A buyer under an unregistered sale contract may therefore bring such a claim; the General Assembly abandoned earlier rulings that only a registered owner could. A court that dismisses the claim merely because the property is not registered in the claimant's name, without examining his evidence of full payment, delivery and possession, fails to deal with an essential defence.
In March 2010 the claimant bought an apartment in a Dubai tower from two companies for AED 2,903,300, paid the full price, took delivery and connected the utilities. The sellers did not issue the no-objection certificate needed for registration, and he later discovered that the unit had been attached in execution proceedings brought in 2017 for the benefit of another party, and that a sale by auction had been ordered. He sued for validation of the sale, a declaration of his entitlement to the unit and a stay of the enforcement. The court of first instance dismissed the claim, and the Court of Appeal upheld that judgment. He appealed in cassation.
The chamber hearing the appeal referred it to the General Assembly under Article 20(a)(2) of Dubai Law No. 13 of 2016 to reconsider the principle that, because ownership passes only on registration (Article 1277 of the Civil Transactions Law), a claim to recover attached property rests on ownership, so that a buyer under an unregistered private contract from the debtor cannot bring it.
The Assembly held that, although Article 1277 makes registration necessary for ownership to pass, Article 166(1) of the Civil Procedure Regulation issued by Cabinet Resolution No. 57 of 2018, then applicable, allows a third party to seek the annulment of enforcement steps and the recovery of attached property by an ordinary action against the attaching creditor, other creditors and the debtor, and requires the court to stay the sale at the first hearing if the statement of claim sets out precise evidence of ownership or facts of possession with supporting documents. Anyone holding such evidence may therefore bring the action. By the majority under Article 20(b), the Assembly adopted that principle.
The buyer had relied on the sale contract showing full payment, receipts for connection fees, electricity and water bills since April 2010 and service charges. The Court of Appeal's statement that the unit was not registered in his name did not answer that defence. The Assembly quashed the judgment and remitted the case to the Court of Appeal, to be heard by a differently composed panel.
Buyers in Dubai sometimes wait years for registration while the seller's creditors attach the unit. The ruling gives such buyers standing to challenge the attachment and seek a stay of the auction if they can prove payment and possession, rather than losing the property to the seller's creditors because the title was not yet transferred.
| Article 1277 of Federal Law No. 5 of 1985 (Civil Transactions Law) — text of article 1277 Decided under this law; it has been replaced by Civil Transactions Law 2025. |
| Article 166(1) of Cabinet Resolution No. 57 of 2018 on the Regulation of the Civil Procedure Law Decided under this law; it has been replaced by Civil Procedure Code. |
| Article 20 of Dubai Law No. 13 of 2016 on the Judicial Authority in the Emirate of Dubai (referral to and majority of the General Assembly) |
“يجيز لمن بيده أدلة ملكية أو وقائع حيازة أن يرفع دعوى بطلب استحقاق العقار المحجوز عليه او بعضه”Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.
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