Sharjah Court Orders Full Refund After Woman Discovers Luxury Car Was Stolen

Sharjah’s Civil Court of First Instance (Commercial Circuit) has ordered a used-car dealership to refund Dh345,000 to a woman who unknowingly purchased a stolen luxury vehicle, ruling that the sale contract is legally invalid. The judgment also requires the company to pay Dh15,000 in material and moral damages, as well as 5 per cent legal interest from the date the case was filed until full settlement.

 

According to court documents, the woman -- an Arab national -- purchased the high-end vehicle from a used-car dealer and proceeded to register it with the relevant authorities. During the registration process, she was informed that the vehicle had been flagged as stolen, rendering it impossible to register under her name.

 

After learning of the vehicle’s status, she immediately contacted the dealership to request cancellation of the sale and a refund. The company refused, prompting her to file a police report. The matter was then referred to the Public Prosecution before reaching the Civil Court.

 

Why the Court Ruled in Her Favour: Key UAE Laws

 

The court’s decision is rooted in several principles under UAE law that protect buyers from fraudulent or invalid transactions, especially in the sale of movable assets such as vehicles:

 

1. UAE Civil Transactions Law (Federal Law No. 5 of 1985)
    

Under Articles 246–247 and 258, a contract must be based on lawful subject matter and free from fraud or misrepresentation.

• A sale involving stolen property is considered null and void, as the seller does not have legal ownership or the right to transfer ownership.
• When a contract is void, both parties must be restored to their original financial positions -- meaning the buyer gets a full refund.
   

1. Liability for Hidden Defects – Article 544 onwards
    

Even if the dealer was unaware the vehicle was stolen, the law holds the seller responsible for defects that prevent lawful use of the item, including legal defects such as inability to register the vehicle.

This supports the court’s decision to terminate the contract and order compensation.
 

1. UAE Consumer Protection Law (Federal Law No. 15 of 2020)
    

The law obligates sellers to ensure that products are:

• safe,
• compliant with standards,
• and fit for their intended purpose.

Selling a stolen vehicle violates the consumer’s right to transparency and fairness, exposing the dealer to financial and legal liability.
 

1. Commercial Agency and Transaction Principles
    

Dealers are expected to exercise due diligence in verifying the authenticity and ownership of vehicles. Failure to do so constitutes negligence, strengthening the buyer’s claim for damages.
 

Compensation and Costs Awarded
 

In addition to refunding the full purchase price, the court ordered:

• Dh15,000 for material and moral damages,
• 5% legal interest from the claim’s filing date until the refund is completed,
• all court fees and legal costs, payable by the dealership.

The ruling emphasises that UAE courts take fraudulent or invalid vehicle sales seriously and will uphold the rights of buyers who fall victim to such transactions.

 

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