Borrower Ordered to Repay Dh919,000 After Defaulting on Murabaha Financing

The Al Ain Court for Civil, Commercial, and Administrative Claims has ordered a man to repay Dh919,199 to a bank after he defaulted on a Murabaha financing facility, having stopped repayment after the third instalment. The court also found that he breached the terms of the agreement by refusing to transfer his salary to the bank.

Court records show that the bank filed a claim seeking repayment of Dh919,199, along with annual interest at 5.75 per cent from the date of filing until full settlement, in addition to legal fees and expenses. The bank stated that the defendant had received Dh958,332 in Murabaha financing at a profit rate of 5.7 per cent but soon defaulted and failed to comply with the contractual obligations.

In response, the borrower denied the bank’s allegations, contending that the bank had no right to terminate the contract. He requested a rescheduling of the debt and the removal of compound interest, submitting documents including an installment deferment request and a car accident report.

A court-appointed financial expert confirmed that the defendant had obtained Murabaha-based personal financing and had paid only three out of 76 monthly installments of Dh12,609 each. The expert further found that the transaction adhered to banking procedures and that the bank had duly purchased the Murabaha commodity before selling it to the borrower with an agreed profit margin.

The court noted that the bank had not levied any additional charges or penalties. It ruled that the outstanding amount was Dh919,199 and held the defendant in breach of contract. He was ordered to repay the full amount, along with case fees, expert costs, and legal expenses, while all other requests were dismissed.

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