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The Dubai Court of First Instance has ordered an investor to pay $1.2 million, or its equivalent in UAE dirhams, to owner of 3 companies, along with 5% annual legal interest from the date of the judicial claim until payment, in addition to expenses and legal fees after a dispute arose due to an agreement to transfer ownership of businesses and trade licences.
The details of the case date back to the time when a man filed a lawsuit to claim the remaining amount from the sale agreement of the three companies and their trade licences to an investor.
The appellant said he had fulfilled his obligations by transferring ownership and assets, while the other party failed to pay the full agreed-upon price.
According to what was established to the court, the two parties concluded an agreement in May 2024 for the sale of three companies, including all movable and fixed assets, inventories, customer contracts, and permits related to the commercial activity, for $1.6 million, of which a down payment of $400,000 was to be paid in as a first batch, with the remaining amount of $1.2 million to be paid in monthly installments.
Documents showed that the investor paid the first installment via financial transfers, and the ownership of the companies, trade licences, and associated assets were transferred to his name, placing them under his management and control, but he stopped paying the remaining installments despite repeated demands for payment.
The investor requested the dismissal of the lawsuit based on the presence of an arbitration clause in the agreement. He also argued that Dubai courts lacked jurisdiction to hear the dispute and requested the delay of lawsuit until a resolution of a criminal case before the courts of another emirate would be issued. However, the court found that the arbitration clause in the agreement was optional, allowing recourse to it without preventing litigation before the courts.
The court also determined that part of the agreement was executed in Dubai due to its connection with a company based in the emirate, thus establishing the jurisdiction of Dubai courts. The court then rejected the request to delay the lawsuit, as the aforementioned criminal case was still under investigation and the resolution of the civil dispute does not depend on its result.
The court concluded that the company owner fully fulfilled his contractual obligations by transferring ownership and assets, while the investor failed to provide proof of payment for the remaining agreed-upon price, so he was proved to be indebted to the company owner for the remaining amount of the deal, $1.2 million or its equivalent in UAE dirhams. Based on this, the court ordered him to pay the amount.
