Dubai Court Orders Company to Pay Dh5M in Compensation to Investors

The Dubai Civil Court of First Instance has ordered a company to pay Dh5 million in compensation to investors, along with legal interest of 5 per cent per year from the date the judgment becomes final until full settlement.

 

The court also directed the company to cover all incurred expenses and Dh3,000 in legal fees.

 

The ruling follows a case in which investors partnered with the company on multiple projects after signing investment agreements designed to generate agreed returns. It later emerged that actions taken by the company’s owner caused substantial financial harm and obstructed the investors’ ability to recover their dues.

 

The dispute dates back to 2008, when investors injected funds into projects through the company. Total investments amounted to Dh40 million, with agreements obliging the firm to manage the funds and deliver specific returns. More than Dh29 million was paid under these agreements.

 

After the company breached its obligations, the investors turned to the courts and obtained final rulings ordering payment of their financial entitlements. However, only a small portion of the awarded sums was recovered, while most remained unpaid after the company allegedly took steps that led to the diversion of its funds and the evasion of its liabilities.

 

Court documents and expert reports showed that the company later entered into settlements and financial arrangements with third parties, relinquishing assets and financial rights in exchange for real estate units valued at about Dh27 million. These transactions were carried out without informing the investors or allocating any value towards settling their outstanding claims.

 

The court clarified that the judgment was not intended to refund the original investment amounts, but to compensate the investors for the damage caused by fraudulent conduct that prevented them from recovering their money or benefiting from it for many years.

 

It concluded that all elements of legal liability were established and assessed compensation at Dh5 million, in addition to legal interest and costs.

 

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