Abu Dhabi Court of Cassation Judgment on Investment Contract Characterization and Compensation for Improvements

Judgment summary

The Abu Dhabi Court of Cassation ruled on cross-appeals regarding a dispute arising from a commercial property investment and lease agreement. The lessor argued that the Commercial Court lacked subject-matter jurisdiction, contending the dispute fell under the jurisdiction of the Rental Dispute Settlement Committee. The investor/lessee appealed the quantum of damages, seeking lost future profits and goodwill damages following their eviction. The Court of Cassation dismissed both appeals, affirming that substantial permanent structural improvements characterized the contract as an investment agreement subject to civil and commercial court jurisdiction. The Court confirmed that under Article 768 of the Civil Transactions Law, the lessor must compensate the lessee for beneficial permanent additions (AED 925,700), while rejecting claims for lost investment profits and commercial goodwill since the eviction resulted from the lessee's non-payment of rent.