The Dubai Commercial Court has ordered two companies and their managers to pay Dh2 million in compensation to an authorised car agent for infringing its exclusive commercial agency rights. The defendants must also pay annual interest of 5% from the date the judgment becomes final until full settlement, in addition to court fees, expenses and legal costs.
The claimant, which has held the exclusive commercial agency for the car brand in the UAE since 2020 and operates a branch in Dubai, had sought Dh10 million in compensation for material and moral damages and lost profits. The lawsuit alleged that the two companies had promoted new vehicles bearing the same brand through social media, offering competitive prices, bank financing and free vehicle registration.
An expert committee appointed by the court examined the allegations and found no recorded import transactions in the names of the companies or their managers since January 2024. However, it confirmed the sale of a new 2025-model vehicle based on conversations, invoices and documents relating to possession, inspection and registration with the relevant authorities.
The investigation also uncovered earlier online advertisements promoting vehicles for sale in the UAE, including details of financing options, registration procedures and vehicle specifications. No comparable online activity was identified for the second company during the inspection. The committee further established that the vehicle had entered the local market through a separate company.
The court rejected objections relating to the electronic evidence, invoices and timing of the advertisements. It found that the confirmed sale, supported by promotional material, was sufficient to establish an infringement of the agent’s exclusive rights. The subsequent removal of the advertisements did not undermine their evidentiary value for the period in which they had been available online.
The court also reaffirmed that UAE legislation applies to free zones unless a specific exemption provides otherwise. Under the Commercial Agencies Law, products covered by a registered commercial agency cannot be imported or traded without authorisation from the designated agent or its consent.
In assessing the compensation, the court found that the infringement had caused substantial harm to the authorised agent, including lost business opportunities, a reduction in market share, reputational damage and expenses associated with restoring customer confidence. Although the claimant had demanded Dh10 million, the court considered Dh2 million appropriate in the circumstances.
The court further held that the managers of both companies had been directly involved in the violations and were personally liable for their actions. It ordered them, together with the companies, to pay the compensation jointly and severally. All other claims were dismissed.
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