Dubai Civil Court Orders Two Defendants to Repay Dh20.7 Million for Investment Fraud

The Dubai Civil Court of First Instance has ordered two defendants to jointly repay Dh20,726,390 ($5.636 million) to a company after fraudulently obtaining its capital through fictitious investment claims, Emirates 24|7 reported. The court also ordered the defendants to pay Dh3.5 million in compensation for material damage resulting from depriving the company of the use of its funds for over two years, along with 5 percent annual legal interest from the date the lawsuit was filed until full settlement.

According to the lawsuit, the defendants induced the company into transferring capital under an agreement to acquire shares in another firm, falsely presenting substantial investment portfolios and large expected returns. An expert accounting report submitted in the civil proceedings revealed that the second defendant signed an agreement to transfer 60 percent of the target company's shares, but only 51 percent was ever registered to the claimant. The report found that 34 percent remained registered under the second defendant's name, including the 9 percent shortfall owed to the plaintiff.

The civil claim was initiated following final criminal proceedings against the defendants. In the criminal case, Dubai courts sentenced each defendant to two years in prison, ordered their deportation from the UAE, and imposed a joint fine that was subsequently increased by the Court of Appeal to $5.636 million to match the full value of the seized assets. The criminal conviction became final after subsequent appeals lapsed or were dismissed.

In its civil judgment, the court affirmed that under UAE law, a final criminal verdict is legally binding on civil courts regarding the occurrence of the crime, its legal characterisation, and the attribution of fault to the perpetrators. Consequently, the court held both defendants jointly liable for direct financial losses and lost investment returns suffered by the claimant.