Dubai Court Dismisses Dh169M Ownership Claim in Major Corporate Legal Dispute

A Dubai court has dismissed a commercial dispute involving claims exceeding Dh169 million after ruling that the claimant’s recorded ownership in several companies, including an advertising and publicity firm, was purely nominal and intended for sponsorship purposes rather than reflecting a genuine partnership.

The Dubai Court of First Instance upheld a counterclaim by the defendants and concluded that the claimant’s registered 51 per cent shareholding, along with ownership of related business establishments, did not represent the true legal or financial arrangement between the parties. The court ordered him to pay court costs and Dh1,000 in legal fees.

The case stemmed from extensive financial claims filed by the claimant, who sought Dh79.5 million in alleged profit shares, Dh32.7 million in company funds linked to the advertising business, and Dh36.9 million from associated establishments. He also claimed Dh196,200 allegedly transferred without justification, in addition to Dh20 million in compensation for material, moral and reputational damages.

The claimant argued that he owned a magazine and related commercial licences through a sole proprietorship established in 2000, and that he held a majority stake in the advertising company. He accused the defendants of mismanagement, financial irregularities and diversion of funds, which he said led to operational and financial losses.

The defendants rejected the allegations, arguing that the claimant was never the true owner and had acted only as a registered sponsor. They maintained that the businesses were placed in his name for regulatory and sponsorship purposes, with no financial contribution or genuine involvement in ownership or management.

The court relied on documentary evidence presented by the defence, including written declarations signed by the claimant acknowledging that he had not paid for the shares registered in his name and had made no financial contribution to the companies. The records indicated that share capital had been provided by other parties. The court also reviewed an irrevocable power of attorney and receipts describing payments as sponsorship fees.

After examining the case file and an expert report, the court concluded that the evidence supported the existence of a sponsorship arrangement rather than a true ownership structure. It held that the claimant therefore lacked legal standing to claim profits, recover company funds, or bring claims on behalf of the businesses.

The court also rejected an alternative claim of Dh15.46 million, which the claimant said he had personally spent to settle corporate liabilities, including debts, labour claims and banking obligations. Judges found the evidence insufficient, citing the absence of detailed creditor records, lack of audited accounts after 2018, and no bank documentation proving personal payment. The expert report also could not confirm whether some liabilities had already been settled.

In addition, the court dismissed the Dh20 million compensation claim, ruling that no wrongful act had been proven and that the legal requirements for damages—fault, loss and causation—had not been established.

With all principal claims rejected, the court upheld the counterclaim, confirmed the disputed ownership structure, and dismissed the case in full.

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