A civil court in Dubai has invalidated the transfer of a land parcel worth more than Dh97 million, ruling that a 2015 transaction in which a company “gifted” over 33 million square feet of land to a related entity was legally void.
The ruling follows a lawsuit filed by a bank, which argued that the insolvent company’s transfer of the land was an attempt to evade repayment of debts affirmed under final court judgments.
The bank sued two companies: the original landowner, which was declared bankrupt in 2024, and the entity that received the land as a gift.
Bankruptcy trustees discovered during asset tracing that the parcel had been transferred years earlier to a company sharing the same owners, managers, and office premises.
Investigators found no proof that any actual financial consideration had been paid for the transfer, a crucial factor in determining whether the arrangement was legitimate. The recipient company maintained that the land had been mortgaged at the time and that it had paid substantial sums to have the lien lifted. However, a court-appointed expert found no documentation showing that a real purchase price had been paid.
The expert also highlighted the structural and administrative overlap between the companies. The bankrupt firm indirectly owned 99 percent of the recipient company through intermediary entities, with both operating under unified senior management.
Records also showed that the land later became part of a development project registered under the original owner.
After examining the expert report and case documents, the court concluded that the transfer lacked legal substance and was intended to shield assets from creditors. It nullified the transaction and ordered that the land be returned to the bankrupt estate so it could be included among the assets available to satisfy creditor claims.
