Dubai Civil Court Orders Borrower to Repay Loan With Interest for Default

Dubai Civil Court has ordered a borrower from an Eastern European country to repay a personal loan worth $200,000 -- approximately Dh730,000 -- to a compatriot after failing to honour the agreed repayment terms.

According to court records, the lender transferred the funds to the borrower’s account at a UAE-based bank under a written and duly signed loan agreement. The agreement clearly stated that the amount was provided as a personal loan and was to be repaid in full within a specified period.

When the borrower failed to repay the amount by the due date, the lender initiated legal proceedings. The court ruled in favour of the claimant, directing the defendant to repay $200,000 or its equivalent in UAE dirhams. The judgment also imposed statutory interest at 5 per cent per year, calculated from the date the case was filed until full settlement, in addition to court fees, expenses and legal costs, including lawyers’ fees.

The case file showed that the lender had complied with pre-litigation requirements by issuing a formal legal notice demanding repayment. The borrower did not respond, prompting the registration of the case before the competent civil court.

In its reasoning, the court held that the loan relationship was clearly established and that all legal conditions for a valid loan contract had been satisfied. It noted that a loan contract is completed once the funds are delivered, and failure to repay within the agreed time constitutes a breach giving rise to civil liability.

The court further observed that the documents submitted -- particularly the loan agreement and bank transfer receipt -- were sufficient to prove the outstanding financial obligation. It added that statutory interest is awarded as compensation for the delay in settling a confirmed debt.

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