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 Magdy Ibrahim Abdel Samad Masoud, Member of the Chamber

First: In Appeal No. 595 of 2025 Commercial Cassation

Appellant: [Party Name]

Respondent: [Party Name]

Second: In Appeal No. 608 of 2025 Commercial Cassation

Appellant: [Party Name]

Respondent: [Party Name]

The following judgment was issued

After reviewing the papers 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 evident from the challenged judgment and all other documents - establish that the respondent bank in appeal (595-2025 Commercial) filed a lawsuit against the appellant in the same appeal, registered as Case No. 111 of 2024 (Commercial Banks), before the Dubai Court of First Instance, seeking a judgment ordering him to pay an amount of $293,142.64 or its equivalent in Emirati Dirhams of AED 1,072,902.06, and legal interest at a rate of 9% annually from the date of the claim until full payment.

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

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

the respondent an amount 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 joined the second appeal to the first, and appointed a tripartite committee of banking experts. After they submitted their report, it ruled on 23-04-2025 on the subject of both appeals by amending the appealed judgment so that the amount due from the appellant to the respondent bank is $149,267.57 or its Emirati Dirham equivalent, 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 Chammoun) challenged this judgment by way of cassation in Appeal No. 595 of 2025 Commercial. The respondent's lawyer submitted a reply memorandum. (Noor Bank) also challenged it by the same means in Appeal No. 608 of 2025 Commercial, and the respondent's lawyer did not submit a reply memorandum.

As both appeals were presented to this court in chambers, it decided to join Appeal 595-2025 Commercial to Appeal 608-2025 Commercial and scheduled a session for their hearing.

Whereas Appeal 595-2024 was based on three grounds, the appellant argues in the first and second grounds against the challenged judgment for error in applying the law, deficient reasoning, violation of the ثابت (established facts) in the documents, and infringement of the right to defense. In their explanation, they state that they argued before the trial court that the lawsuit was inadmissible for being filed prematurely, based on the fact that the two facilities granted to him by the respondent bank were invested in shares of the Rasamala Investment Fund, and the remaining shares, after a portion was redeemed by the respondent bank, amount to a value of $333,036.74, which exceeds the debt due from him, making him a creditor to the respondent bank if the latter redeems the value of those shares. Moreover, those shares are pledged to the respondent bank, which is the sole authorized party to receive the value that is redeemed in the future, as the appellant cannot approach the said fund regarding the remaining shares. Furthermore, had the respondent bank obtained the full value of the two facilities, the appellant would not have been able to obtain his rights from the said fund because the respondent bank is the only one who can communicate with it. He was also granted 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 foregoing in its report. Despite this, the bank filed its lawsuit on 01-02-2024 while the appellant was not in default of paying the due debt, which is paid from the profits of the aforementioned shares. The respondent bank is still receiving sums from the said fund even after the lawsuit was filed, according to the expert committee's findings, which confirms the validity of the defense raised by him. However, the judgment confronted his defense with a response that is not a valid refutation, by discussing the effects of the share pledge without realizing that the debt's maturity had not arrived and that the respondent bank was still receiving the value of the shares from the said fund, which renders it defective and requires its cassation.

Whereas this challenge is unfounded.

It is established in the jurisprudence of the Court of Cassation that, according to Article 246 of the Civil Transactions Law, a contract must be performed by both parties 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 what is appurtenant to it according to law, custom, and the nature of the transaction. The trial court has full authority to ascertain and understand the reality of the case, to examine and evaluate the evidence and documents submitted, to weigh them, and to adopt what it is convinced of and disregard the rest. It also has the authority to assess the work of experts, considering it as an element...

of evidence in the lawsuit and is subject to its absolute authority to adopt it when it is satisfied and finds it convincing and consistent with what it has determined to be the truth in the case. If it decides to adopt it based on its reasons and refers to it, it is considered part of the reasons for its judgment without the need to support it with additional reasons or to respond independently to the challenges directed at it. It is also not obligated to discuss every non-legal presumption presented by the litigants, 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 its evidence constitutes an implicit dismissal of those statements, arguments, and requests. And if it has based its judgment on sound reasons that have support in the case documents and are sufficient to carry it.

This being the case, and as the challenged judgment, within its discretionary authority, based its decision to obligate the appellant to pay the adjudicated amount on what it concluded from the case documents, records, and the report of the expert committee appointed before the Court of Appeal, which found that the respondent bank granted the appellant two Sharia-compliant Murabaha facilities for investment in purchasing shares in the Rasamala 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 unredeemed shares is $320,861.16. By settling the account between the parties after deducting the amounts redeemed 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 decision on this finding. This conclusion by the judgment is sound, has its basis in the documents, is sufficient to carry its decision, and contains an implicit response that dismisses anything to the contrary, especially since the appellant has not presented any evidence to refute it. What the appellant raises in this regard is nothing but a substantive argument concerning the trial court's authority in understanding the reality of the case, evaluating the evidence and documents submitted, and assessing the work of the expert, which is not permissible to be raised before the Court of Cassation.

Whereas appeal 608 - Commercial 2025 is based on one ground, in which the appellant bank challenges the judgment for violating the law, error in its application and interpretation, and deficiency in reasoning. It states that the judgment did not award all of its claims and rejected its defense of not being responsible for the absence of a purchase notification, based on the expert committee's report and its reasons, which concluded that it did not provide the documents for each Murabaha transaction. This responsibility falls on the Back Office company, the respondent's agent, according to the agency agreement dated 19-3-2018 between them. The respondent is bound by the actions of the said company as it is his agent, and the purchase offer issued by that company is in reality issued by the respondent. Therefore, the appellant bank cannot be held responsible or bear any losses for not obtaining permission from the respondent to complete each Murabaha transaction. The judgment also failed to respond to its objections to the expert committee's report regarding the amount of the claimed debt, as it is established from its records and the submitted account statement that the debt owed by the respondent exceeds the amount determined by the expert committee in its report, which renders it defective and requires its cassation.

Whereas this challenge is unfounded.

It is established in the jurisprudence of the Court of Cassation that the plaintiff is responsible for proving their claim and presenting the evidence that supports what they allege. The trial court has full authority to ascertain and understand the reality of the case, to examine and evaluate the evidence and documents submitted, to weigh them, to adopt what it is convinced of and disregard the rest, and to interpret contracts, acknowledgments, and other documents in a way it deems most consistent with the intention of their parties or signatories. It also has the authority to assess the work of an expert, considering it an element of evidence in the lawsuit, and it is subject to its absolute authority to adopt it when it is satisfied and finds it convincing and consistent with what it has determined to be the truth in the case. If it decides to adopt it based on its reasons and refers to it, it is considered part of the reasons for its judgment without the need to support it with additional reasons, or to respond independently to the challenges directed at it, or to remand the matter to the expert or appoint another to undertake it. It is also not obligated to discuss every non-legal presumption presented by the litigants, 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 its evidence constitutes an implicit dismissal of those statements, arguments, and requests, and it has based its judgment on sound reasons that have support in the case documents and are sufficient to carry it. Furthermore, the expert is not obligated to perform their work in a specific manner; it is sufficient for them to perform the task they were appointed for in the way they see fit to achieve the purpose of their appointment, as long as their work is ultimately subject to the assessment of the trial court.

This being the case, and as the challenged judgment, within its discretionary authority, concluded in its ruling that the respondent bank is only entitled to the adjudicated amount based on what it found and was convinced of from the case documents, records, and the report of the expert committee appointed before the Court of Appeal. After confronting the parties' objections, the committee 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 is $149,267.57. This was after excluding the profits calculated by the appellant bank on the rescheduling 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 provide the documents for each subsequent Murabaha transaction 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 a purchase undertaking for the purpose of executing those Murabaha transactions. It also did not provide the agreement on the specific profit amount to be added to the purchase cost to determine the total deferred sale price of the Murabaha. This is especially so 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 transaction regarding the rescheduling process and on the purchase notification before proceeding. The judgment based its aforementioned decision on this finding. This conclusion by the judgment is sound, has its basis in the documents, and is sufficient to carry its decision, and contains an implicit dismissal of anything to the contrary, especially since the appellant bank did not provide any evidence to refute it. The appellant bank's argument that it is not responsible for the purchase notification regarding the rescheduling operations it conducted through new Murabaha transactions and that the responsible party is the Back Office company as the respondent's agent is not altered by this. This is because the text of clause (2-1) of the Murabaha agreement in question indicates that the client's conclusion of a Murabaha contract is only through a formal purchase notification sent to the bank. Also, clause (3-1) of the agency agreement dated 19-3-2018 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, none of which 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 notice, duly issued by the client to the bank, it shall issue a purchase undertaking on behalf of the client to the bank, meaning it is not entrusted with issuing the purchase notification. Therefore, the challenge against the appealed judgment on this ground amounts to a substantive dispute regarding the trial court's authority of assessment, which is not permissible to be raised before the Court of Cassation, thus requiring the rejection of the appeal.

Whereas the appellant argues in the third ground of appeal 595-2025 against the challenged judgment for error in applying the law, deficiency in reasoning, corruption in evidence, and violation of the established facts in the documents. In his explanation, he states that it ordered him to pay legal interest on the adjudicated amount, despite that amount representing the value of the debt arising from two Murabaha facilities according to the Islamic system, which makes it impermissible to award interest that contravenes 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 in any way, which renders the judgment defective and requires its cassation.

Whereas this challenge is, in its essence, well-founded.

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 adopt a contrary interpretation or to override the text's wording, as this would deviate from the legislator's intent. The text of Article 468 of the Commercial Transactions Law, issued by Federal Decree-Law No. 50 of 2022, effective from 02-01-2023, located in Chapter One "General Provisions" of Part Six of Book Three, states that "1- The provisions stipulated in this Part shall apply to commercial transactions and contracts to which Islamic financial institutions are a party. 2- For the application of the provisions of this Part, 'Islamic financial institutions' means any institution whose articles of association or memorandum of association stipulate that it conducts its business and activities in accordance with the provisions of Islamic Shari'a, including a financial institution that conducts some of its business in accordance with the provisions of Islamic Shari'a, licensed by the competent authorities, with respect to such business." The text of Article 472 of the same law states that "The following transactions shall be deemed commercial transactions subject to the provisions of Islamic Shari'a when conducted through an Islamic financial institution: 1- Deposit. 2- Investment Account. 3- Takaful Insurance. 4- Financing Formulas. 5- Investments. 6- Any transaction that any effective legislation provides is subject to the provisions of Islamic Shari'a." 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 purposes of this Article, 'borrowing' means the transfer of ownership of money or a fungible thing to another with the obligation to return its like in quantity, type, and description to the lender at the end of the loan term, without requiring any 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, actually or constructively, based on a financing request from the buyer, and the sale is at cost plus a fixed and specified profit amount in the contract, the total of which is the Murabaha sale price." This indicates that the provisions of this Part apply to commercial transactions and contracts concluded by Islamic institutions, including Murabaha contracts, and that Islamic institutions are those whose articles of association or memorandum of association stipulate that they conduct their business and activities in accordance with the provisions of Islamic Shari'a, or those that conduct some of their business in accordance with those provisions with a license from the competent authorities. Transactions involving deposits, investment accounts, Takaful insurance, financing formulas, investments, Murabaha contracts, and any transaction that any effective legislation provides is subject to the provisions of Islamic Shari'a are considered commercial transactions subject to the provisions of Islamic Shari'a when conducted through an Islamic financial institution. And that 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 debtor is delayed in paying, including delay interest even by way of compensation, and any agreement to the contrary is void.

This being the case, and as is evident from the documents, from the expert's report appointed before the court of first instance, and the Murabaha agreement in question, 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.

consistent with the principles and provisions of Islamic Shari'a, and Murabaha is considered a common financing mechanism used by Islamic financing banks in the current era. This means 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 Shari'a. Therefore, it is not permissible for it to claim interest or benefit on any amount of debt that the appellant is late in paying, including delay interest even by way of compensation. As the challenged judgment diverged from this view and ordered 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 deemed to be flawed by violating the law and erring in its application, which requires its partial cassation regarding what it ruled on the matter of interest.

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

For These Reasons

The Court has ruled:

First: In appeal 608-2025 Commercial, to dismiss it and to order the appellant to pay the expenses and confiscate the security deposit.

Second: In appeal 595-2025 Commercial, to partially overturn the challenged judgment regarding what it ruled 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 an amount of two thousand dirhams for attorney's fees, and to confiscate the security deposit. In the matter of appeal 2031-2024 Commercial regarding the overturned part, to uphold the appealed judgment in its ruling to reject the claim for interest, and to order the appellant to pay the appropriate expenses and one thousand dirhams for attorney's fees, and to confiscate the security deposit.

Signatures

Judge / Ahmed Mohamed Ali Mohamed Amer

Judge / Dr. Saif Ahmed Ali Al Haddad Al Hazmi

Judge / Magdy Ibrahim Abdel Samad Masoud

The panel stated in the preamble of this judgment is the one that heard the oral argument, reserved the case for judgment, issued the judgment, and signed it. The panel that pronounced it is the one constituted according to the record of the pronouncement session.

Unofficial digital copy