Upholding a ruling requiring a company to pay 4.9 million dirhams to a person

The Fujairah Federal Court of Appeal upheld a ruling obligating a company and its partners to pay an amount of four million and 943 thousand and 188 dirhams to a person, after it failed to pay the rest of the value of an agreement assigning a commercial license and the right to usufruct a plot of industrial land in the emirate, with the interest stipulated being adjusted from 12% to 5% from the date of the claim until payment, provided that it does not exceed the principal of the debt.

The details of the dispute go back to a lawsuit filed by a person, in which he demanded that the defendants be obligated to pay the remaining amount of the value of a concession agreed upon in exchange for one million and 633 thousand US dollars to be paid in installments, in exchange for surrendering the license and the right to use a plot of industrial land with an area of ​​9,688 square meters in an industrial area in the emirate.

The case papers indicated that the company paid the first installment, then stopped making the rest of the payments, despite the plaintiff transferring the license and assignment to a local authority, including the usufruct right associated with the plot of land.

On the other hand, the third, fourth and fifth defendants filed a cross-suit in which they demanded that the agreement be annulled and invalidated, and that the plaintiff be obligated to pay the amount of one million and 199 thousand dirhams, in addition to 200 thousand dirhams in compensation, on the basis that he does not own the land that is the subject of the agreement, but rather has the usufruct right only, and that ownership of the land belongs to a local entity in the emirate.

The court of first instance ruled that the third, fourth, and fifth defendants were jointly obligated to pay the claimed amount, with 12% interest, and not to accept the lawsuit against the first and second defendants due to the lack of their capacity. It also rejected the counterclaim.

Following the appeal by both parties, the Court of Appeal decided to join the two appeals and appoint a tripartite expert committee, whose report concluded that the appellants had breached their contractual obligations by not paying the remainder of the transfer value, and that the plaintiff fulfilled his obligations and transferred the license and usufruct, in accordance with the approved procedures.

Before deciding on the subject of the two appeals, the court decided to include them in the liaison, and ruled to assign a tripartite expert committee to undertake the task set out in the ruling, to examine the contractual relationship between the two parties, and the extent of each of them’s commitment to the terms of the agreement in question.

The committee proceeded with its mission and submitted its report in which it concluded that the appellants in the original case had breached their contractual obligations by not paying the rest of the value of the agreed-upon assignment, and that the first respondent had fulfilled his obligations in full and transferred ownership of the license and the usufruct right to a local authority in the emirate, and that he had the right to demand compensation for this breach.

After submitting the report, each party adhered to its requests, as the appellants originally requested to appoint another expert committee, and to oblige the second and third appellees to submit the original contract to challenge it. However, the court decided to reserve the two appeals for judgment.

She confirmed that the expert committee’s report was clear in stating the relationship between the two parties in place and cause, and in determining their mutual obligations, explaining that it follows the court of first instance in its ruling in all its elements, starting with the rejection of the claim of invalidity of the agreement contract on the grounds that they did not know that the first respondent does not own ownership of the land but rather the right to usufruct, or that the sale price is not appropriate compared to the market value, all the way to ruling that the first and second defendants lacked the status of not being parties to the contract in question.

The court also concluded that the appellants had failed to pay the remainder of the waiver value, after it was proven that the first respondent had fulfilled his obligations, stressing that what was stated in the reasons for the initial ruling and the conclusions of the expert report are considered a sufficient response to the reasons for the two appeals, and only what is related to the interest rate is affected by them.

The court ruled to amend the res judicata interest to 5% from the date of the claim until payment, provided that it does not exceed the principal of the debt, pointing out that challenging the forgery contract is not legally valid, after the appellants discussed the contract in question and had previously argued that it was invalid due to deception and fraud.

The court ended up rejecting the two appeals with the exception of amending the interest rate, while obliging each appellant to pay the expenses of his appeal.

• The company paid the first installment and then stopped making the rest of the payments, despite the plaintiff transferring the license and assignment to a local authority, including the usufruct right associated with the plot of land.