Ras Al Khaimah Court of Cassation, Commercial Appeal No. 46 of 15 JY, judgment of 24 January 2021
Regular commercial books are evidence in commercial disputes between traders (Article 15 of the Evidence Law). A trader who runs his business with modern technology may keep electronic records in place of paper books (Article 38 of the Commercial Transactions Law), and these have the same evidential value. A supply undertaking is not a separate contract but an obligation within another contract; it is consensual and needs no writing. LLC share transfers take effect against the company and third parties only on registration.
The first respondent sued the appellant in the Ras Al Khaimah court for AED 806,122.38 with interest, for goods supplied. The appellant disputed that any contract existed and challenged the evidence. Relying on an expert report based on the first respondent's account statements and invoices generated by the computer system it used to run its business, the courts below held the relationship commercial and ordered the appellant to pay; claims involving other respondents, partners in a limited liability company who had assigned their shares by a notarised contract and notified the Department of Economic Development, were also decided. In cassation the Court held that under Article 15 of the Evidence Law regular books are evidence in commercial disputes between traders, and that a trader who uses modern technology to organise his business may, under Article 38 of the Commercial Transactions Law, keep electronic records instead of traditional books, which then carry the same evidential force; the courts were right to rely on the computer-generated statements and invoices. A contract is formed once offer and acceptance match (Articles 125 and 130 of the Civil Transactions Law). A supply undertaking is not an independent contract but an obligation contained in another contract; it is consensual and does not require writing. Characterising the contract is for the trial court, which had properly found a complete supply contract proved by unchallenged documents. The Court restated that an LLC's memorandum and amendments must be registered, and that a partner's assignment of shares takes effect between the parties and against the company and third parties on entry in the company's register and the commercial register, and it upheld the trial court's findings on the assignment and standing. Grounds framed in vague, general terms were inadmissible. The appeal was dismissed.
Decided under the 1992 Evidence Law and the 1993 Commercial Transactions Law, the ruling gives full evidential weight to ERP and accounting-system output in trade disputes. Suppliers who sell without a signed contract can prove the debt from system invoices and statements, while buyers need concrete evidence to rebut them.
| Article 15 of Federal Law No. 10 of 1992 (Evidence Law) Decided under this law; it has been replaced by Evidence Law. |
| Article 38 of Federal Law No. 18 of 1993 (Commercial Transactions Law) Decided under this law; it has been replaced by Commercial Transactions Law. |
| Articles 125, 130 of Federal Law No. 5 of 1985 (Civil Transactions Law) — text of articles 125, 130 Decided under this law; it has been replaced by Civil Transactions Law 2025. |
| Federal Law No. 2 of 2015 on Commercial Companies Decided under this law; it has been replaced by Commercial Companies Law. |
“حجية دفاتر التجار المنتظمة في الدعاوى التجارية ما بين تاجر وتاجر. شرطه. م 15 ق إثبات. التزام التاجر بمسك الدفاتر التجارية. استثناء.”Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.
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