In a high-value share dispute before the Dubai Court of First Instance, our team secured a landmark judgment for our Clients. The Court dismissed a claim of AED 141.5 million in its entirety, ordered all costs against the Plaintiff, and upheld every ground of defence put forward by our team.
BACKGROUND
In 2013, the Plaintiff and Defendant No. 2 agreed to establish a company (our Client Company) operating in maritime services, including vessel leasing, customs clearance, cargo handling, and maritime agency services. The Plaintiff was to manage the company given his technical and administrative expertise, with a duration of 10 years and a capital of AED 300,000. Since UAE law at the time required a UAE national shareholder for a limited liability company, our Client No. 2 was nominated as the local partner, holding shares on behalf of Defendant No. 2.
THE DISPUTE
Defendant No. 2 later proposed dissolving the partnership in our Client Company while retaining joint ventures in other overseas companies. In mid-2022, both parties engaged an auditing firm to audit the company’s financial records and assess each partner’s entitlements. A memorandum of understanding was signed, covering the valuation of seven jointly owned vessels and specifying what each party would retain, with Defendant No. 2 agreeing to pay the Plaintiff USD 11.15 million, receipt of which the Plaintiff later acknowledged before the court-appointed expert committee.
In late 2022, the Plaintiff executed a notarised share sale agreement transferring his shares in our Client Company to Defendants No. 2, No. 3, and the Intervening Party for a total consideration of AED 100,001, with his signature on the contract constituting acknowledgement of full receipt of the purchase price.
The Plaintiff subsequently alleged that the sale contract was fictitious, claiming that the true agreement was that payment would follow a full valuation process, and sought judgment against all Defendants jointly for AED 141.5 million, representing his assessed share value in the company.
However, the evidence told a different story:
- The Plaintiff signed a formally authenticated deed before a notary expressly acknowledging receipt of the full purchase price.
- He separately admitted under oath before a court-appointed expert committee that he had received USD 11.15 million under a prior memorandum of understanding.
OUR DEFENCE STRATEGY
Our litigation team advanced a three-layered defence:
- Standing Objection
Neither our Client Company nor its shareholder (our Client No. 2) was a party to the share sale agreement. We argued that the claim was wrongly directed against them. The Court agreed and dismissed the case against our Clients for lack of locus standi.
- Limitation Defence
The claim was filed outside the applicable prescription period under UAE law, providing an independent basis for dismissal.
- Merits Defence
UAE commercial law requires written counter-evidence to challenge a notarised partnership deed. The Plaintiff produced none. His own admissions before the notary and before the expert committee conclusively established that full consideration had been received.
COURT RULING
- The claim was dismissed in full against the Clients.
- All three defence grounds were upheld by the Court.
- Full court costs and lawyers’ fees were awarded against the Plaintiff.
The matter was handled by Reda Hegazy, Partner and Head of the Litigation Practice Group at Alsuwaidi & Company.