Dubai Court Orders Major UAE Bank to Compensate Company Over Unauthorised Transfers After Negligence Ruling

A Dubai court has ruled against a major UAE bank in a significant banking negligence case, ordering it to compensate a corporate customer for losses arising from unauthorised electronic transfers after the bank failed to act on urgent account security instructions.

The case involved a UAE-based maritime services and port management company that maintained multiple currency accounts with the bank. According to court records, the company had formally instructed the bank to remove a former authorised signatory and revoke that individual’s electronic banking access after concerns emerged over possible misuse of company funds.

The company submitted the required mandate amendment forms and supporting corporate documents in line with the bank’s internal procedures. However, the bank failed to implement the changes within a reasonable timeframe, allowing the former signatory to retain access to the company’s electronic banking platform.

During that period, several unauthorised transfers were carried out from the company’s accounts, causing what the court described as substantial financial losses.

The individual accused of carrying out the transfers was later convicted in a separate criminal case, with a final judgment confirming the unlawful nature of the transactions.

The civil proceedings focused on whether the bank had breached its professional duty of care by failing to promptly execute clear customer instructions related to account security.

A court-appointed banking expert examined the timeline of events and concluded that the bank had delayed acting on the company’s requests. The expert report also verified the total amount transferred without authorisation.

The court rejected the bank’s defence and held that financial institutions are under a strict obligation to safeguard customer accounts and implement valid instructions without delay, particularly where electronic banking access is concerned.

In its ruling, the court found that the bank’s failure to remove the former signatory and restrict access constituted a direct error that caused financial harm to the claimant. It ordered the bank to pay the full value of the unauthorised transfers, along with legal interest and court costs.

UAE-based legal consultancy Kaden Boriss, which led the litigation, said the judgment reinforces the principle that banks in the UAE are subject to a high standard of professional accountability and may be held liable for operational failures that expose customers to financial loss.

Legal experts said the ruling could have wider implications for banking compliance and risk management, particularly in cases involving signatory changes and digital banking access controls.

 
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