In the name of God, the Most Gracious, the Most Merciful

In the name of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai

Court of Cassation

In the public session held on Tuesday, July 8, 2025, at the seat of the Court of Cassation in Dubai

Presided over by Judge Ahmed Mohamed Ali Mohamed Amer, President of the Chamber

With the membership of Judge Dr. Saif Ahmed Ali Al-Haddad Al-Hazmi, Member of the Chamber

And Judge Majdi Ibrahim Abdel Samad Masoud, Member of the Chamber

First: In Appeal No. 595 of 2025 Commercial

Appellant: [Party Name]

Respondent: [Party Name]

Second: In Appeal No. 608 of 2025 Commercial

Appellant: [Party Name]

Respondent: [Party Name]

The following judgment was issued:

After reviewing the documents and hearing the summary report prepared and recited in the session by the appointed judge, Dr. Saif Al-Haddad Al-Hazmi, and after deliberation.

Whereas the two appeals have fulfilled their formal requirements.

Whereas the facts, as they appear from the appealed judgment and all other documents, are that the respondent bank in Appeal (595-2025 Commercial) filed Case No. 111 of 2024 Commercial against the appellant in the same appeal before the Dubai Court of First Instance, seeking a judgment obliging him to pay it the sum of $293,142.64 or its equivalent in Emirati Dirhams, amounting to AED 1,072,902.06, and legal interest at a rate of 9% per annum from the date of the claim until full payment.

It stated in support thereof that pursuant to the Master Murabaha Goods Agreement dated 19-03-2018, the respondent granted two financings totaling $750,000. As a result of their use, a debt accrued against him as of 13-11-2023 in the claimed amount. He refrained from payment despite being notified and requested to do so, which prompted the filing of the lawsuit.

The court appointed a banking expert. After the expert submitted his original and supplementary reports, the court ruled on 08-10-2024, obliging the appellant to pay the bank...

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...the respondent the sum of AED 590,382.73, and rejected the remainder of the claims.

The appellant challenged this judgment in Appeal No. 1963 of 2024 Commercial, and the respondent bank also appealed it in Appeal No. 2031 of 2024 Commercial. The court consolidated the second appeal with the first and appointed a tripartite committee of banking experts. After they submitted their report, the court ruled on 23-04-2025 on the merits of the appeals by amending the appealed judgment so that the amount due from the appellant to the respondent bank is $149,267.57 or its equivalent in Emirati Dirhams, and interest on this amount at a rate of 5% from the date of the judicial claim on 01-02-2024 until full payment.

Jean Claude Semaan challenged this ruling by way of cassation in Appeal No. 595 of 2025 Commercial. The respondent's lawyer submitted a memorandum of reply. Noor Bank also challenged it in the same manner in Appeal No. 608 of 2025 Commercial, and the respondent's lawyer did not submit a memorandum of reply.

As both appeals were presented to this court in chambers, it decided to consolidate Appeal 595-2025 Commercial with Appeal 608-2025 Commercial and set a hearing for them.

Whereas Appeal 595-2024 is based on three grounds, the appellant argues in the first and second grounds that the appealed judgment erred in the application of the law, had insufficient reasoning, contradicted the established facts in the documents, and violated the right of defense. He explains that he argued in his defense before the trial court that the lawsuit was inadmissible for being filed prematurely, on the grounds that the two facilities granted to him by the respondent bank were invested in shares of the Capitalisation Investment Fund, and the remaining shares after a portion was redeemed by the respondent bank are valued at $333,036.74, which exceeds the debt owed by him, making him a creditor to the respondent bank if the latter redeems the value of those shares. Furthermore, those shares are pledged to the respondent bank, which is the only party authorized to receive the value redeemed in the future, as the appellant cannot deal with the said fund regarding the remaining shares. Additionally, if the respondent bank had obtained the full value of the two facilities, the appellant would not have been able to obtain his rights from the aforementioned fund because the respondent bank is the only one who can deal with it. It also granted him an extension for the first facility until 02-04-2024 and an extension for the second facility until 10-09-2024. The expert committee confirmed all of the above in its report. Despite this, it filed its lawsuit on 01-02-2024 while the appellant had not delayed in paying the due debt, which is paid from the profits of the aforementioned shares. The respondent bank is also still receiving amounts from the said fund even after the lawsuit was filed, according to the expert committee's findings, which confirms the validity of his defense. However, the judgment countered his defense with a response that is not a valid rebuttal, by discussing the effects of pledging the shares without realizing that the debt had not yet fallen due and that the respondent bank was still receiving the value of the shares from the aforementioned fund, which makes it flawed and requires its cassation.

Whereas this argument is unfounded.

It is established in the jurisprudence of the Court of Cassation that, according to Article 246 of the Civil Transactions Law, both parties to a contract must perform it in accordance with its contents and in a manner consistent with the requirements of good faith. The scope of the contract is not limited to what is stated therein but also includes its requirements according to the law, custom, and the nature of the transaction. The trial court has full authority to ascertain and understand the facts of the case, examine and evaluate the evidence and documents submitted, weigh them, and accept what it is convinced of and disregard the rest. It can also assess the work of experts, as it is...

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...an element of evidence in the lawsuit and is subject to its absolute authority to adopt it when it is reassured by it and finds in it what it is convinced of and what aligns with what it has deemed to be the truth in the case. If it decides to adopt it based on its reasoning and refers to it, it is considered part of its judgment's reasoning without the need to support it with further reasons or to respond independently to the arguments against it. It is also not obligated to address every non-legal piece of evidence presented by the litigant, nor to follow them in their various statements, arguments, and requests and respond to them, as long as the establishment of the truth it was convinced of and for which it provided evidence implicitly refutes those statements, arguments, and requests, and it has based its judgment on sound reasons supported by the case documents, sufficient to carry it.

This being the case, and as the appealed judgment, within its discretionary authority, based its ruling obliging the appellant to pay the adjudicated amount on what it concluded from the case documents and the report of the expert committee appointed before the Court of Appeal, which concluded that the respondent bank granted the appellant two Murabaha facilities compliant with Islamic Sharia for the purpose of investing in the purchase of shares in a trade finance fund, and the purchased shares were pledged in favor of the respondent bank. The appellant submitted a request to the said fund to redeem the value of the shares, where a portion of their value was redeemed and received by the respondent bank, and the value of the remaining shares that were not redeemed amounted to $3,200,861.16. Upon settlement of the account between the parties after deducting the amounts recovered from the said fund and received by the respondent bank, a debt of $149,267.57 remains owed by the appellant, which has not been paid. The judgment based its aforementioned ruling on this, and what the judgment concluded was sound, supported by the documents, and sufficient to carry its ruling, and it implicitly refutes anything to the contrary, especially since the appellant did not provide any evidence to the contrary. What the appellant raises about the lawsuit being filed prematurely because he obtained an extension for the two Murabaha facilities in question to dates subsequent to the filing of the lawsuit does not change this, as it would only achieve a purely theoretical interest for him from which he would derive no benefit, given that the due date for payment occurred during the proceedings before the court of first instance and before it was decided, and despite that, he did not pay the due debt. What the appellant also raises about the respondent bank still receiving the value of the shares from the said fund does not change this, as he did not provide evidence of this, and the appellant's challenge that after the respondent bank obtains the full value of the two Murabaha facilities, he will not be able to obtain his rights from the said fund is of no avail, as the respondent bank is merely an authorized agent of the appellant in dealing with the said fund, and there is nothing preventing the latter from claiming his rights from it. The pledge on the shares invested with the said fund will be extinguished upon full payment of the secured debt. Therefore, the argument against the appealed judgment on these two grounds is merely a substantive debate on the trial court's authority to understand the facts of the case, evaluate the evidence and documents submitted, and assess the work of the expert, which is not permissible to raise before the Court of Cassation.

Whereas Appeal 608-2025 Commercial is based on one ground, in which the appellant bank argues that the appealed judgment violated the law, erred in its application and interpretation, and had insufficient reasoning. It states that the judgment did not award all of its claims and rejected its defense of the inadmissibility of holding it responsible for the absence of a purchase notification, based on the expert committee's report, which concluded that it did not submit the documents for each Murabaha. It argues that this responsibility falls on the Back Office company, the respondent's agent, according to the agency agreement dated 19-03-2018 between them. The respondent is also bound by the actions of the said company as its agent, and the purchase offer issued by that company is in fact issued by the respondent, which makes it impermissible to hold the appellant bank responsible or liable for any loss for not obtaining permission from the respondent to complete each Murabaha transaction. The judgment also overlooked responding to its objections to the expert committee's report regarding the amount of the claimed debt, as the established debt from its records and the submitted account statement shows that the debt owed by the respondent exceeds the amount concluded by the expert committee in its report, which makes it flawed and requires its cassation.

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Whereas this argument is unfounded.

It is established in the jurisprudence of the Court of Cassation that the plaintiff is responsible for proving his claim and presenting evidence that supports what he claims. The trial court has full authority to ascertain and understand the facts of the case, examine and evaluate the evidence and documents submitted, weigh them, and accept what it is reassured by and disregard the rest. It can also interpret contracts, acknowledgments, and all other documents in a way it deems best reflects the intention of the contracting parties or the parties involved, and assess the work of experts as an element of evidence in the lawsuit, subject to its absolute authority to adopt it when it is reassured by it and finds in it what it is convinced of and what aligns with what it has deemed to be the truth in the case. If it decides to adopt it based on its reasoning and refers to it, it is considered part of its judgment's reasoning without the need to support it with further reasons or to respond independently to the arguments against it, or to reassign the mission to the expert or appoint another to carry it out. It is also not obligated to address every non-legal piece of evidence presented by the litigant, nor to follow them in their various statements, arguments, and requests and respond to them, as long as the establishment of the truth it was convinced of and for which it provided evidence implicitly refutes those statements, arguments, and requests, and it has based its judgment on sound reasons supported by the case documents, sufficient to carry it. An expert is not obliged to perform his work in a specific manner; it is sufficient for him to perform what he was assigned to do in the way he deems achieves the purpose of his assignment, as long as his work is ultimately subject to the assessment of the trial court.

This being the case, and as the appealed judgment, within its discretionary authority, concluded in its ruling that the respondent bank is only entitled to the adjudicated amount based on what it concluded and was reassured by from the case documents and the report of the expert committee appointed before the Court of Appeal, which, after addressing the litigants' objections, concluded that after settling the account between the parties, the debt due to the appellant bank and owed by the respondent for the two facilities in question amounts to $149,267.57. This was after it excluded the profits calculated by the appellant bank on the rollover operations it conducted more than once on the two Murabaha facilities in question through new Murabaha procedures, based on the fact that it did not submit the documents for each subsequent Murabaha conducted on the (Trade Flow) platform of the Dubai Multi Commodities Centre, especially the purchase requests supposed to be submitted to it by the respondent, which the bank must deliver to the Back Office company to issue an undertaking to purchase for the purpose of executing those Murabahas. It also did not submit the agreement on the specific profit amount to be added to the purchase cost to determine the total deferred sale price of the Murabaha, especially since, according to the terms and conditions of the Murabaha agreement in question, the appellant bank must obtain the respondent's approval for each new Murabaha regarding the rollover process and the purchase notification before undertaking it. The judgment based its aforementioned ruling on this, and what the judgment concluded was sound, supported by the documents, and sufficient to carry its ruling, and it implicitly refutes anything to the contrary, especially since the appellant bank did not provide evidence to the contrary. What the appellant bank raises about its non-responsibility for the purchase notification regarding the rollover operations it conducted through new Murabahas and that the responsible party is the Back Office company as the respondent's agent does not change this, as the import of clause (2-1) of the Murabaha agreement in question indicates that the client's entry into a Murabaha contract can only be through a complete official purchase notification sent to the bank. Clause (3-1) of the agency agreement dated 19-03-2018 between the respondent and the Back Office company, titled "Roles of the Agent," states that the company is authorized in several matters on behalf of the client, which do not include issuing the purchase notification. This is confirmed by clause (3-2) titled "Procedures," which indicates that upon the company receiving a copy of the executed purchase notification as per the regulations and issued by the client to the bank, it shall issue an undertaking to purchase on behalf of the client to the bank, meaning it is not entrusted with issuing the purchase notification. Therefore, the argument against the appealed judgment on the grounds of the appeal is merely a substantive debate regarding the trial court's discretionary authority, which is not permissible to raise before the Court of Cassation, thus requiring the rejection of the appeal.

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Whereas the appellant argues in the third ground of Appeal 595-2025 that the appealed judgment erred in the application of the law, had insufficient reasoning, flawed inference, and contradicted what is established in the documents. He states that it ordered him to pay legal interest on the adjudicated amount, although that amount represents the value of the debt arising from two Murabaha facilities under the Islamic system, which makes it impermissible to award interest that contradicts that system, in application of Article 473 of the Commercial Transactions Law, which prohibits financial institutions from borrowing or lending with interest or any benefit, which flaws the judgment and requires its cassation.

Whereas this argument is, in its essence, sound.

It is established in the jurisprudence of the Court of Cassation that when a text is clear and unambiguous, it is conclusive in indicating its intended meaning, and it is not permissible to depart from it or override the wording of the text by deviating from the legislator's intent. The text of Article 468 of the Commercial Transactions Law issued by Federal Decree-Law No. 50 of 2022, which has been in effect since 02-01-2023, located in the first chapter "General Provisions" of the sixth part of the third book, states that "1- The provisions of this part shall apply to commercial transactions and contracts to which Islamic financial institutions are a party. 2- For the purposes of applying the provisions of this part, 'Islamic financial institutions' means any institution whose articles of association or founding contract state that it conducts its business and activities in accordance with the provisions of Islamic Sharia, and includes financial institutions that conduct some of their business in accordance with the provisions of Islamic Sharia, by license from the competent authorities, with respect to these businesses." The text of Article 472 of the same law states that "The following transactions shall be considered commercial transactions subject to the provisions of Islamic Sharia when conducted through an Islamic financial institution: 1- Deposits. 2- Investment accounts. 3- Takaful insurance. 4- Financing formulas. 5- Investments. 6- Any transaction for which any applicable legislation stipulates its subjection to the provisions of Islamic Sharia." The text of Article 473 of the same law states that "1- Islamic financial institutions may not borrow or lend with interest or benefit, in any way, nor may they impose or demand interest or benefit on any amount of debt that is delayed in payment, including delay interest, even by way of compensation, and any agreement to the contrary shall be void. 2- For the purpose of this article, 'borrowing' means transferring ownership of money or a fungible thing to another with the obligation to return its equivalent in quantity, type, and description to the lender at the end of the loan period, without stipulating a benefit for the lender or an increase on the loaned amount, explicitly or implicitly." The text of Article 481 of the same law states that "Murabaha is a contract whereby the seller sells an asset to the buyer after the seller has acquired and possessed it, in fact or constructively, based on a financing request from the buyer, and the sale is at cost plus a fixed, specified profit margin in the contract, and their total constitutes the Murabaha sale price." This indicates that the provisions of this part apply to commercial transactions and contracts entered into by Islamic institutions, including Murabaha contracts, and that the intended institutions are those whose articles of association or founding contract state that they conduct their business and activities in accordance with the provisions of Islamic Sharia, or that conduct some of their business in accordance with those provisions by license from the competent authorities. Transactions involving deposits, investment accounts, Takaful insurance, financing formulas, investments, Murabaha contracts, and any transaction for which any applicable legislation stipulates its subjection to the provisions of Islamic Sharia, are considered commercial transactions subject to the provisions of Islamic Sharia when conducted through an Islamic financial institution. The aforementioned institutions may not borrow or lend with interest or benefit in any way, nor may they impose or demand interest or benefit on any debt whose payment is delayed by its debtor, including delay interest, even by way of compensation, and any agreement to the contrary is void.

This being the case, and as it is evident from the documents, the report of the appointed expert before the court of first instance, and the Murabaha agreement in question, that the respondent bank is one of the licensed and operating banks in the United Arab Emirates, which operates under the Islamic banking system in accordance with the laws and regulations in force in the state, and that the appellant expressed his desire to obtain its banking services represented in the Murabaha agreement for the purchase of goods...

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...consistent with the principles and provisions of Islamic Sharia. The Murabaha is a common financing mechanism used by Islamic financing banks in the current era. This implies that the respondent bank is considered an Islamic financial institution and the transaction it conducted with the appellant is considered a commercial transaction subject to the provisions of Islamic Sharia. Therefore, it is not permissible for it to claim interest or benefit on any debt that the appellant delays in paying, including delay interest, even by way of compensation. As the appealed judgment contravened this view and ruled to oblige the appellant to pay interest on the adjudicated amount at a rate of 5% from the date of the judicial claim on 01-02-2024 until full payment, it is flawed for violating the law and erring in its application, which necessitates its partial cassation regarding what it ruled on the interest.

Whereas the case is ready for a ruling on its merits, and for the foregoing reasons.

For these reasons, the Court has ruled:

First: In Appeal No. 608-2025 Commercial, to reject it and to order the appellant to pay the expenses and confiscate the insurance amount.

Second: In Appeal No. 595-2025 Commercial, to partially quash the appealed judgment regarding its ruling on the interest on the awarded amount at a rate of 5% from the date of the judicial claim on 01-02-2024 until full payment, and to order the respondent to pay the appropriate expenses and a sum of two thousand dirhams for attorney's fees, with confiscation of the insurance. In the merits of Appeal No. 2031-2024 Commercial, regarding the quashed part, to uphold the appealed judgment in its ruling to reject the claim for interest, with the appellant being ordered to pay the appropriate expenses and one thousand dirhams for attorney's fees, and with confiscation of the insurance.

Signatures

Judge / Ahmed Mohamed Ali Mohamed Amer

Judge / Dr. Saif Ahmed Ali Al-Haddad Al-Hazmi

Judge / Majdi Ibrahim Abdel Samad Masoud

The panel indicated at the beginning of this judgment is the one that heard the argument, reserved the case for judgment, issued the judgment, and signed it. The panel that pronounced it is the one constituted according to the minutes of the pronouncement session.