Background
Our client, an individual investor, was represented by the Emirati Advocate Mrs. Awatif Al Khouri of Awatif Mohammed Shoqi Advocates and Legal Consultancy, who personally led the defense in a commercial dispute arising from an investment arrangement with a business and its management. Under that arrangement, our client committed a substantial sum to invest in the enterprise, expecting to receive agreed-upon returns on that investment over time.
The relationship was based on a contract whereby our client transferred the agreed amount for certain business activities, and in return received periodic returns. But the defendants failed to perform the agreed activities, or pay any returns, or give back the principal amount. After the demands were not fulfilled, our client, represented by Awatif Mohammed Shoqi Advocates and Legal Consultancy, filed a case for the cancellation of the agreement, recovery of the investment, and compensation.
Court of First Instance
The Court of First Instance appointed an accounting expert. The expert confirmed that our client transferred the investment amount as agreed, while the defendants failed to perform the investment activity. On these findings, the court found that the defendants had materially breached the agreement and that our client had performed their obligations. It therefore ordered the rescission of the investment contract and the parties to be restored to their precontractual position. The court also directed the defendants to pay compensation for the losses suffered due to the breach, together with the court and attorney’s fees.
Court of Appeal
The defendants appealed the judgment. Their primary position on appeal was that the arrangement between the parties constituted an ongoing partnership rather than an investment agreement of the kind the first instance court had found it to be, and they sought full reversal of the judgment.
The Court of Appeal examined the merits of the matter and dismissed the defendants’ arguments in their entirety. It confirmed the basic principles that govern bilateral contracts under UAE law, such as the right of a party that has performed to seek rescission and compensation where the counterparty has materially failed to perform its obligations. The appellate court was satisfied that the expert report had been properly relied upon and that our client had performed their obligations under the agreement and that the defendants had not proved that they had performed theirs. The appeal was rejected, and the judgment of the first instance was upheld in full.
Conclusion
This matter illustrates the importance of thorough documentary preparation and proactive engagement with court-appointed experts in commercial investment disputes before the Dubai Courts. Through the dedicated efforts of Mrs. Awatif Al Khouri of Awatif Mohammed Shoqi Advocates and Legal Consultancy, the client secured cancellation of the investment agreement, recovery of funds, and compensation for the harm suffered as a result of the defendants’ breach.
