The Dubai Civil Court ruled that a bank transfer alone does not create a debt, but Dh9.99 million in undelivered company shares was enough to prove an obligation
Dubai: A former friendship between two men ended in a multi-million dirham legal dispute after one of them demanded that the other return about Dh14.6 million, which he said were funds he had transferred to him during years of financial dealings between them.
After an expert review and consideration of the case, the court ruled that the defendant must return Dh9.99 million, the value of shares in a company that he did not transfer to his friend, while the rest of the claim was rejected due to the lack of proof of the reason for the transfers.
The details of the case go back to a previous friendship between the two parties, during which financial transactions continued between 2021 and 2024, during which the plaintiff made financial transfers to his friend, the defendant, amounting, according to the lawsuit, to 5.385 million euros.
As the claims accumulated, the plaintiff said he repeatedly asked his friend to return the money he had received, but the claims did not end in a settlement, so he resorted to the judiciary, and initially filed a lawsuit to appoint an expert to examine the accounts and financial transactions between the two parties and determine the nature of the relationship and the amounts due.
The experience showed that the total amount transferred by the plaintiff to the defendant was Dh20.8 million, while what the defendant returned did not exceed Dh180,500, bringing the net difference to Dh20,619,500.
However, the court did not treat this difference as a fully due debt, explaining that the mere existence of bank transfers is not sufficient on its own to rule on their return, but rather the reason for the transfer and the legal basis on which it was made must be proven.
It explained that the basic principle of a bank transfer is that it represents the fulfilment of a debt or an existing obligation between the two parties. It became clear to her through the documents that there was an amount of Dh9.99 million, representing the value of an agreement to sell shares in one of the companies, and that the plaintiff submitted documents proving the agreement and payment of the consideration, but he did not prove the actual transfer of the shares or the making of any amendment to the license or commercial register. The defendant, for his part, did not submit anything proving the completion of the transfer of the shares or the implementation of the obligation corresponding to the amount he received, which the court considered sufficient to prove the reason for the transfer and the existence of the obligation to return the amount.
The court affirmed that the contract imposes obligations on both parties, and that the principle is that each contracting party must adhere to what the contract requires of him, and that the implementation of the obligations must be done in accordance with what the agreement includes and in accordance with good faith.
Conversely, the court refused to compel the defendant to pay the remaining amount claimed by the plaintiff, after finding that some of the transfers lacked documentation explaining their purpose or justifying the claim for their return. The court noted that the burden of proof lies with the claimant, and that the plaintiff, with regard to this part of the claim, had not provided sufficient evidence to prove the reason for the debt or the transfer. Furthermore, the expert report itself found no supporting documentation for this aspect of the claim.
The court affirmed that the expert’s role is limited to examining the documents and data presented to him, and that the assessment of the evidentiary merits of the expert’s report falls within the sole discretion of the trial court. The court was satisfied with the expert’s conclusions, within the bounds of what was supported by the documents. In its reasoning, the court explained the difference between a financial transaction between two parties and the establishment of debt, emphasising that a bank transfer, in itself, does not necessarily mean that the amount has become a debt payable, unless the true reason for the transfer and the corresponding obligation are proven.
Accordingly, the court accepted the amount for which the reason and documentation were proven, and rejected everything else, ultimately obligating the defendant to return only Dh9.99 million, instead of the full amount claimed.
Source: Emirates 24|7