Court Orders Three to Pay Dh2.09M Over Breach of Settlement Agreement

The Dubai Civil Court has ordered three men to jointly pay Dh2.09 million after finding that they breached a settlement agreement requiring them to make the payment in exchange for an entity withdrawing a criminal complaint.

 

The court also ordered the defendants to pay 5% legal interest on the amount from the date the lawsuit was filed until full payment.

 

The case arose after an entity filed a criminal complaint against the first defendant, accusing him of fraud, breach of trust and forgery.

 

During the proceedings, the parties entered into negotiations that resulted in a settlement agreement in April 2026. Under the agreement, the three defendants jointly undertook to pay Dh2.09 million by a cheque drawn on Emirates NBD.

 

In return, the claimant agreed to waive the complaint, the report and the criminal case against the first defendant.

 

The court found that the claimant had fulfilled its obligation by submitting the waiver to the Public Prosecution on the same day the settlement was concluded. The waiver was subsequently attached to the criminal case file and accepted.

 

The defendants, however, neither handed over the original cheque nor paid the agreed amount despite repeated demands from the claimant.

 

When the claimant sought delivery of the original cheque, it was told that the cheque or related amount had been deposited in the criminal case file. The claimant then approached the Public Prosecution seeking to recover the amount or have it released for payment.

 

The prosecution informed the claimant that the deposited amount was not held for its benefit, but constituted a financial guarantee connected with procedures to lift a travel ban imposed on the first defendant.

 

The defendants challenged the jurisdiction of the Dubai courts and asked for the dispute to be referred to the Rental Dispute Settlement Centre. They also sought a stay of the civil proceedings until the criminal case was finally decided.

 

The court rejected both arguments, finding that the dispute did not concern a lease contract or any rental-related right or obligation. Instead, it arose from an independent settlement agreement containing a specific financial obligation.

 

The court also held that deciding the civil claim did not depend on the outcome of the criminal proceedings because the defendants' payment obligation arose directly from the settlement agreement.

 

In its ruling, the court stressed that a settlement agreement is binding on the parties once concluded. The documents showed that the claimant had carried out its obligation by submitting the agreed waiver, while there was no evidence that the defendants had fulfilled their corresponding obligation to pay Dh2.09 million or deliver the agreed cheque.

 

The court therefore found that the defendants had breached their contractual undertaking and ordered them jointly to pay the Dh2.09 million, together with 5% legal interest from the date of filing the lawsuit until full payment.