61 leading UAE cassation judgments on banking & finance, summarised in English with the articles they apply and a link to the judgment on the court’s official service.
The legislation on this topic: Banking & finance — UAE legislation.
A murabaha financing is a sale at cost plus agreed profit and cannot be treated as an interest-bearing loan
A validly concluded contract has the force of law between the parties, and the judge must interpret it according to its clear wording without departing from the parties' intention. Interpreting a contract is a legal question the court must decide itself…
A cheque returned because the account is closed is an execution title, like one returned for lack of funds
Article 667 of the Commercial Transactions Law makes a cheque on which the drawee bank has recorded that there are no funds or insufficient funds an execution title, which the holder may enforce wholly or partly by compulsory means. The Authority held that…
A bank recovers its agreed interest up to filing and simple interest afterwards, all interest capped at the principal
A court must award the interest that the customer and the bank agreed or applied in their dealings for the period before the claim was filed. For the period after filing, it must award interest at the average rate prevailing in banks during the proceedings…
An insurance policy condition that defeats cover is void unless printed conspicuously, and courts must rule on that objection
Under Article 1028(1)(c) of the Civil Transactions Law, a printed condition in an insurance policy relating to a circumstance that leads to the avoidance of the contract or the lapse of the insured's right is void unless it is shown conspicuously, set…
A cheque bearing the executory formula can still be contested as a security cheque in a substantive execution dispute
A cheque is a means of payment that carries in itself the presumption of the cause for which it was handed to the payee, but the drawer may rebut that presumption, dispute the debt and prove that he has been discharged in whole or in part. Placing the…
Signing a company's security documents as authorised signatory does not make the signatory a guarantor of its debts
Joint liability between debtors arises only by agreement or by law, although the agreement may be implied from the circumstances (Article 450 of the Civil Transactions Law and Article 72 of the Commercial Transactions Law). A guarantee (kafala) is formed…
Judgments differing in parties, subject and cause do not conflict, as with a bank suing as endorsee of cheques
A conflict between two final judgments, for the Federal Supreme Court's conflict jurisdiction, exists only where the later judgment contradicts an earlier one that has become res judicata on an issue between the same parties, decided in its operative part…
A customer's deposit at a bank's foreign branch cannot be set off against facility debts in the UAE without agreement
Compulsory set-off under Article 370 of the Civil Transactions Law requires each party to be both creditor and debtor of the other, with debts of the same kind, description, maturity and strength, and the set-off must not prejudice third parties; failing…
A challenge to an insurance committee decision belongs to the court where the harm occurred, here Dubai
Each emirate that keeps its own judiciary forms a judicial authority independent of the federal courts and of the other emirates. The distribution of jurisdiction between them is public order: courts must keep within it, parties cannot vary it, and a…
A bounced cheque makes its signatory and the account holder jointly liable without proof of why it was issued
A cheque is in principle an instrument of payment and, at the least, a debt instrument entitling the holder to collect its value from the drawee bank. If it is returned unpaid, the signatory and the person from whose account it was drawn remain jointly…
A bank that discussed a copy of its deposit certificate cannot later deny it and must account for the deposit
Under Article 18 of the Evidence Law (Federal Law No. 10 of 1992), a party may ask the court to order its opponent to produce a document in its possession that is common to both and records their mutual rights and obligations. A party who has discussed the…
A telecom company is liable for its employee's illegal SIM swap only if the swap caused the fraud loss
Tort liability requires that the harmful act be the direct or effective cause of the loss claimed. Identifying the fault and assessing causation are for the trial court, but it must give sound reasons showing beyond doubt that the loss was the inevitable…
Service by newspaper is void if electronic service on the defendant's officially recorded phone numbers was not tried first
Under Article 6(1) and (3) of Cabinet Resolution No. 57 of 2018 (the implementing regulation of the Civil Procedure Law then in force), a defendant is served by recorded calls, text messages, smart applications, email, fax or other modern means, or…
A murabaha acceleration clause makes the whole unpaid balance due on default, and courts, not experts, interpret it
The terms of a contract govern the parties' obligations and how they are to be performed; a valid contract is the law of the parties, which neither party nor the judge may alter. Interpreting contracts is a question of law for the trial court, which may…
Interest on bank facilities runs at the agreed rate during the term and as simple interest after default
According to the Federal Supreme Court's settled case law, interest on bank facilities, whether loans or letters of guarantee, is charged at the agreed rate during the term of the facility; once the term ends and the debtor is late, delay interest is…
A bank that let unauthorised partners move a company's money is liable in contract alongside the wrongdoers
Where the injured party and the person responsible are bound by a contract, the court may not apply the rules of tort liability unless the harm amounts to a crime, fraud or gross fault. A bank's liability to its customer for allowing unauthorised persons…
A creditor's claim against a garnishee who fails to declare is a merits case, not one for the execution judge
Under Articles 255, 256 and 259 of the Civil Procedure Code, a garnishee that neither deposits what it holds nor declares, within seven days of service of the attachment, what it owes the debtor, or that declares insufficiently or untruthfully or hides…
Islamic financial institutions cannot recover late-payment interest, even as compensation, on Sharia-governed transactions
Under Articles 468, 472, 473 and 474 of the Commercial Transactions Law (Federal Decree-Law No. 50 of 2022), in force from 2 January 2023, an Islamic financial institution, meaning one whose constitution says it operates under Sharia or which operates…
A creditor can set aside an insolvent debtor's transfers within three years of learning why they harm it
All of a debtor's assets secure his debts. A creditor may have a debtor's disposal declared ineffective against it (Articles 391, 396 and 397 of the Civil Transactions Law) if its right arose before the disposal and is due and undisputed; what matters is…
A mortgage securing present and future facilities survives repayment of one facility, and a guarantor-mortgagor can be sued first
Under Dubai Law No. 14 of 2008 on mortgages, a mortgage gives the creditor a real right over the property to be paid from its price ahead of ordinary and later creditors. Applying to sell the mortgaged property is only an option: the creditor may instead…
An arbitration clause binds only its parties, and enforcing a cheque in Dubai courts can waive it
A party who relies on an arbitration agreement must raise it before making any request or defence on the merits (Article 8(1) of the Federal Arbitration Law). The right to arbitrate may be waived expressly or impliedly, but implied waiver requires conduct…
An owner who signs facility terms for his free-zone company is not a guarantor unless he expressly guarantees its debts
A limited liability company formed in a Dubai free zone has, from its formation and registration, a legal personality and assets separate from those of its partners, who are liable for its debts only up to their shares. A person who signs a contract as the…
A cheque given as security can be enforced only for the part of the secured debt actually unpaid
A cheque is presumed to be an instrument of payment with a valid underlying cause, but the drawer may prove that it was given for another purpose, such as security. If it was given as security, the obligation to pay it is subject to a suspensive condition,…
Facilities run through a current account fall due on closure, and refinancing does not end guarantees reaffirmed for it
Where credit facilities are linked to a current account, the rights and obligations they create become entries in the account that set off against each other, and the final balance on closing is a debt immediately due to the bank, whatever the original…
A creditor whose payment order and asset freeze are later overturned is not liable without abuse of right
Under Articles 104 and 106 of the Civil Transactions Law, no one is liable for harm resulting from the lawful exercise of a right, including the right to go to court. The exercise of a right is unlawful, and gives rise to liability, if it is intended to…
A mortgaged property's auction award can be appealed only for defects in the bidding, its form or a missed stay
Under Article 300(1) of the Civil Procedure Code, a judgment awarding a property at auction may be appealed only for a defect in the bidding procedure or in the form of the judgment, or because it was issued without a stay that was legally required.…
A developer's mortgage of a project has no effect if the lender did not pay the loan into escrow
Under Article 13 of Dubai Law No. 8 of 2007 on Real Estate Development Escrow Accounts, a finance institution lending to a developer against a mortgage of the project must deposit the loan amount in the project's escrow account. The General Assembly held…
Funds in a Dubai project escrow account cannot be attached by any creditor of the developer
Article 9 of Dubai Law No. 8 of 2007 on Real Estate Development Escrow Accounts dedicates each project's escrow account exclusively to building the project and bars attachment of its funds for the developer's creditors. The bar is absolute: no…
Guarantors are released if the creditor does not claim within six months of maturity, unless they clearly agreed otherwise
Under Article 1092 of the Civil Transactions Law, once a guaranteed debt falls due the creditor must claim it within six months, failing which the guarantor is released; this applies to commercial guarantees. The rule is not of public policy, so a…
Bank loans earn compound interest until the account is closed, and suing to sell the mortgaged home does not close it
Loans granted by banks are commercial transactions whatever the borrower's status or purpose, and produce interest automatically during the loan, at the agreed rate or otherwise at the market rate, compounded unless agreed otherwise, even if interest…
Personal accident cover for a vehicle's driver is capped at the endorsement sum, with blood money counted within it
Under the unified motor insurance policy (Insurance Authority Board Decision No. 25 of 2016), compulsory cover obliges the insurer to pay injured third parties whatever the insured or driver is legally liable for, and policy limits cannot be invoked…
Dubai courts must stay a claim to receivables of a company under an ADGM administration order barring proceedings
A final order of the ADGM Courts placing a company in administration, which forbids starting or continuing legal proceedings against the company or its property without the administrators' consent or the ADGM Courts' permission, has res judicata effect…
Appeal judgments in substantive enforcement disputes, unlike those on pure enforcement steps, can be challenged in cassation
The Civil Procedure Code distinguishes temporary enforcement disputes, which seek only a stay or continuation of enforcement without touching the right and are decided by the execution judge subject to a final grievance (Articles 209 and 239), from…
Challenges to insurance-committee decisions issued before 1 December 2023 go to first instance, later ones to appeal
Federal Decree-Law No. 48 of 2023 on Regulating Insurance Activities, in force from 1 December 2023, sends challenges against decisions of the insurance dispute settlement committees to the Court of Appeal within 30 days and bars insurers from challenging…
Joining the driver and vehicle owner does not oust the insurance committee's jurisdiction over the claim against the insurer
Under Article 4 of Insurance Authority Board Chairman's Decision No. 33 of 2019, insurance dispute committees hear complaints by insured persons, beneficiaries or injured parties against the insurer only. A claimant may sue the insurer together with the…
A debtor's only home cannot be sold in execution on the ground that it exceeds his housing needs
Under Article 106(2) of the Civil Procedure Regulation (Cabinet Resolution No. 57 of 2018), the house used as a residence by the debtor and the dependants living with him may not be attached, unless it is mortgaged and the debt arises from its price. The…
Where no rate is agreed, Dubai courts award legal and delay interest at 5 per cent a year
Where the parties have not agreed on an interest rate, interest on an adjudged debt, whether 'legal' interest or delay (late-payment) interest, is calculated at 5 per cent a year until full payment. The Dubai courts had applied 9 per cent a year as a…
A payment order requires a valid prior demand on each debtor, and one co-debtor's personal defect does not free the others
Under Article 63(1) of the Civil Procedure Regulation (Cabinet Resolution No. 57 of 2018), a creditor must first serve on the debtor a demand to pay within at least five days before applying for a payment order. The demand is an essential step: if its…
When ADGM Courts, rather than Abu Dhabi courts, hear contract, letter-of-guarantee and branch disputes
Under Article 13(7) of the ADGM Founding Law, ADGM Courts have exclusive jurisdiction over civil and commercial claims to which ADGM or its authorities or establishments are party, and over claims arising from a contract concluded, completed or performed…
A cheque returned because the account is frozen or suspended is not an execution title; a closed account is
To be enforced directly, a cheque must be sufficient in itself as an execution title and the right it embodies must be certain, liquidated, due, not seriously disputed and not conditional. Under Article 667 of the Commercial Transactions Law, read with the…
A bounced cheque is an execution title only when returned for no or insufficient funds (later overruled federally)
Article 667(1) of the Commercial Transactions Law makes a cheque that the bank has marked as unpaid for lack or insufficiency of funds an execution title that the holder may enforce directly. Because this departs from the rule that a returned cheque needs…
A bank's claim against an individual is admissible if it holds adequate security, even if it breached the salary multiple
Under Article 121 bis of the Central Bank Law (added by Decree-Law No. 23 of 2022), a licensed financial institution must obtain adequate security for facilities to individuals and sole establishments, and its claim is inadmissible if it did not; the rule…
Banks may charge agreed simple interest on commercial loans but not compound interest, a public-order rule
In a bank loan the bank advances money and the borrower must repay it with interest on the agreed terms. A creditor may charge interest on a commercial loan at the contractual rate; if no rate is agreed, the market rate at the time applies, capped at 9% a…
A registered mortgage is enforceable for the unpaid balance; part payment and interest disputes do not stop the sale
A notarised instrument, including a duly registered mortgage securing a certain, liquidated and due debt, is an execution title under Article 212 of the Civil Procedure Law, so the creditor can enforce it without first suing. Under Articles 1419, 1430,…
A respondent's counter-appeal must be filed by the first case-management hearing, even within thirty days
Under Article 164 of the former Civil Procedure Law (as amended in 2018), a respondent to an appeal may lodge its own appeal, by ordinary procedure or by a memorandum with grounds, only up to the first hearing for exchange of memoranda before the case…
An LLC manager is not personally liable for company debts without fraud, misuse of authority or gross fault
A limited liability company has legal personality and assets separate from its partners from formation; a partner is liable only up to his capital contribution (Article 71 of the 2015 Companies Law), and a manager is personally liable only for fraud,…
An arbitration clause in a subcontract cannot block a guarantee claim involving the issuing bank, which is not party to it
Under Article 8 of the Arbitration Law a court must declare a claim inadmissible if the defendant invokes an arbitration agreement before pleading on the merits, unless the agreement is void or incapable of performance. But a contract binds only its…
An individual seeking insolvency relief must prove how he lost his assets; unexplained default is not insolvency
Insolvency means that a debtor's debts equal or exceed his assets (Article 401 of the Civil Transactions Law). A debtor in that position may apply under Articles 3 and 7 of Federal Decree-Law No. 19 of 2019 on Insolvency to settle his obligations, and the…
Courts may not hear claims whose court fees are unpaid; an agent who signs a cheque is personally liable on it
Courts at every level may not hear a claim, appeal or request on which the fees due under Abu Dhabi Law No. 6 of 2013 on court fees (as amended in 2016) have not been paid in full, unless an exemption or deferral was granted; this is a matter of public…
A final civil award made in criminal proceedings survives the accused's later acquittal on the criminal charge
A judgment has res judicata effect only if it is final (قطعي) and issued by a court with jurisdiction, and only on a question that is fundamental, unchanged, argued between the parties and expressly decided; there is no implied res judicata. A civil award…
Banks may raise loan interest under a contractual clause tied to Central Bank rates and charge compound interest
The relationship between a bank and its customers is governed by freedom of contract, so the parties' rights are set by the contract unless it breaches public order, and clear contract wording must be applied as written. A bank that raises the interest…
A finance company's loan is commercial, so agreed delay interest and late fees are recoverable
The business of finance companies is commercial, so a loan they make is a commercial act even if it is civil for the borrower. Delay interest on the resulting debt is due at the agreed rate, subject to the statutory ceiling. Commercial loans by banks,…
A bank is not liable when a correspondent bank abroad freezes a transfer it executed correctly
A bank transfer is governed by the agreement between the ordering customer and the bank. In executing it the bank must exercise more than ordinary care, but its liability is measured by the data in the transfer order and by its own fault in choosing the…
A court must put a requested decisive oath unless it is abusive, even against written evidence
The Public Prosecutor may appeal in cassation, within a year, against final judgments that breach the law where the parties cannot or did not appeal (Article 174 of the Civil Procedure Law), to resolve conflicting rulings on the same point of law. The…
A transfer of a debt binds the creditor bank only with its consent; a sole proprietorship has no separate personality
An assignment of debt moves the debt from the original debtor to another person and takes effect against the creditor only if the creditor consents (Articles 1106, 1109 and 1110 of the Civil Transactions Law). A sole proprietorship has no legal personality…
Limitation must be pleaded and correctly characterised; a void earlier claim does not fix the date interest runs
The plea that a claim is barred by lapse of time is not a matter of public order; it must be raised before the trial court, and its period depends on the correct characterisation of the claim. The five-year bar applies only to periodic, renewable rights,…
LLC partners who sign a company loan as its representatives are not liable beyond their capital
A loan term falls due early if the borrower becomes insolvent, can no longer pay, or the security is lost, and generally whenever the creditor risks losing its security (Article 431(3) of the Civil Transactions Law). A partner in a limited liability…
Bank loans carry the agreed interest until full payment, including compound interest within Central Bank rules
A bank loan is a commercial act for both parties, whatever the borrower's status or purpose. Banking operations are exempt from the statutory ceiling on agreed interest, with the Central Bank empowered to set the rates banks may charge, and compound…
A cheque is presumed to be a means of payment; the drawer must prove a different cause or duress
A cheque is a payment instrument, and whoever claims otherwise must prove the reason it was issued, that its cause was unlawful or had lapsed, or that the payee failed to perform. Duress that vitiates consent requires a threat of serious and imminent harm…
A loan account is a simple account, not a current account, and must be assessed on the loan terms
The bank-customer relationship is governed by freedom of contract. A current account is an agreement to settle mutual claims through entries that offset each other, so only the closing balance is payable, whereas a bank loan obliges the bank to deliver or…
A mortgagee bank may, but need not, enforce against the mortgaged property before other assets
A secured creditor may enforce first against the mortgaged real estate, but this is an option, not an obligation: it may pursue the debtor's other assets to recover its debt. Whether a creditor committed a fault in conducting enforcement is a question of…
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