A Dubai civil court has ordered an Arab man to repay Dh1.47 million to a woman who lent him money through a combination of cash and a bank loan taken out on his behalf. The court, however, rejected the additional Dh40,000 profit the parties had initially agreed upon.
According to court records, the woman sought repayment of Dh1.41 million plus 5 percent legal interest from the date of her claim until full settlement.
She said the defendant issued five cheques totaling Dh1.37 million as a guarantee, but the bank refused to honor them because they were drawn from outdated cheque books. Repeated attempts at amicable settlement failed, prompting her to file the case.
A financial expert appointed by the court confirmed the existence of a valid loan agreement and found that the defendant was obliged to repay the bank loan, its interest, and the cash amount he received.
The expert also noted that the woman could not recover her money from a property pledged as security because the defendant and another joint owner had sold it to a third party.
The court ruled the loan contract legally valid under Articles 125, 243, and 710 of the Civil Transactions Law, which require parties to fulfill contractual obligations and repay loans when due. However, the judge annulled the Dh40,000 extra profit clause under Article 714, which prohibits additional benefits for lenders in personal civil loans.
The defendant was ordered to repay Dh1.47 million, with 5 percent annual interest from the date the case was filed until full payment. The court also required him to cover legal costs and lawyer’s fees, while rejecting the request for expedited enforcement.
The judgment emphasized the need to protect lenders’ rights while preventing borrowers from being subjected to unlawful additional gains.
