The Dubai Civil Court of First Instance ruled that a man must return AED2 million that he borrowed from a woman under an interest-free personal loan agreement for one month. The court found that he failed to repay the amount on the agreed date, despite acknowledging in writing that he had received it and undertaking to repay it in a single lump sum.
The plaintiff stated that she had entered into an agreement with the defendant under which she agreed to provide him with financial assistance on an amicable basis and founded on mutual trust, without charging any interest or additional financing fees. The agreement was subject to the laws of the UAE and the exclusive jurisdiction of the Dubai courts.
She said that she had fulfilled her obligation under the agreement and transferred the full loan amount of AED2 million to the defendant. She noted that he had acknowledged receiving the full amount without reservation and had committed to repaying it in one lump sum within a period not exceeding one month during the same year.
She added that the defendant failed to comply with the agreement between them. She contacted him several times in an attempt to settle the debt amicably, but he refused to pay despite the agreed repayment deadline having passed, prompting her to file a legal claim.
The plaintiff attached the loan agreement to the case file. The defendant did not appear before the court despite being legally notified and did not provide any evidence to prove repayment of the amount or discharge of the debt.
In its ruling, the court noted that the burden of proving a claim rests with the plaintiff, in accordance with the Law of Evidence in Civil and Commercial Transactions. It also stated that a customary document is deemed to have been issued by its signatory and constitutes evidence against them, in accordance with Article 28 of the same law.
According to Article 710 of the Civil Transactions Law, a loan involves transferring ownership of money or a similar asset to another person, provided that the same amount and quality are returned to the lender at the end of the loan term. Article 718 of the same law obliges the borrower to repay the loan upon the expiry of the agreed term, even if they do not benefit from it.
The court pointed out that the loan agreement signed by the defendant contained clear acknowledgements of the loan relationship. Article 3 stipulated that the lender disbursed AED2 million to the borrower on February 10, 2026, and that he acknowledged receiving the full amount. Article 4 stipulated that he was required to repay the loan in full in a single payment no later than March 10, 2026.
The court added that the agreement also stated that the borrower would be considered in breach of his obligations if he failed to repay the full loan amount on the specified date. His signature made him bound by the declarations and obligations contained in the agreement.
The court confirmed that the plaintiff had provided evidence of the debt through the loan agreement bearing the defendant's signature. It noted that the defendant, despite being legally notified, did not submit any document showing payment or settlement of the debt, which satisfied the court that the debt remained outstanding and that he remained liable for the full amount claimed.
The court noted that default interest represents compensation to a creditor for damage caused by a debtor’s delay in repaying a debt after it becomes due. It noted that when a debt is fixed in amount and not subject to the court's discretion, interest becomes payable from the date the legal claim is filed until full payment is made. The court added that judicial practice has set this rate at 5%.
The court ruled that the defendant must pay the plaintiff AED2 million, together with legal interest at 5% from the date the lawsuit was filed until full payment is made, as well as court fees, expenses and legal costs.
