Judgment reinforces UAE’s commitment to enforcing commercial contracts in cross-border disputes.
Ras Al Khaimah, UAE: The Ras Al Khaimah Court has ruled in favour of a foreign trading company in a high-value commercial dispute, ordering a UAE-based free zone manufacturer of greases and lubricants to pay $377,304.25 (Dh1.38 million) plus interest and legal costs in connection with a failed oil supply contract.
The dispute arose from a contractual agreement under which the defendant company agreed to supply 1,365 tonnes of furnace and fuel oil valued at $522,375. The buyer paid the full amount in advance, based on preliminary invoices issued by the supplier. Despite receiving full payment, the supplier delivered only 408.65 tonnes, worth $145,070.75, and failed to supply the remaining quantity within the agreed timeframe.
After months of delay and repeated correspondence, the buyer cancelled the purchase orders and demanded a refund for the undelivered portion. When the supplier failed to comply, legal proceedings were initiated before the Ras Al Khaimah Court.
The Court-appointed expert concluded that the defendant remained indebted for $377,304.25, corresponding to the value of the undelivered goods, and that the claimant had suffered financial loss and business disruption due to non-performance.
Upon review of the evidence, the Ras Al Khaimah Court issued a final judgment ordering:
- Termination of the contract between the parties;
- Payment of $377,304.25 (AED 1,386,593.12) to the claimant;
- Legal interest of 5 per cent per annum from December 31, 2023 until full settlement; and
- Reimbursement of all court fees and attorney’s costs by the defendant.
The Court rejected the defendant’s objections and upheld the expert’s findings. In its reasoning, it reaffirmed the principles under the UAE Civil Transactions Law that contractual obligations must be performed in good faith and that payments received without performance must be refunded upon termination.
The litigation was led by UAE-based legal consultancy Kaden Boriss. The firm’s legal team demonstrated that the supplier’s failure to deliver constituted a clear breach of contract, securing a complete recovery for the client, including interest and costs.
A spokesperson for Kaden Borris said the judgment underscores the UAE judiciary’s consistent approach to enforcing commercial agreements and protecting parties affected by contractual non-performance. The ruling also highlights the strength of the UAE’s dispute resolution framework in handling complex international trade cases involving free zone entities and cross-border transactions.
He said the case reflected the firm’s commitment to strategic advocacy and meticulous case preparation. “The judgment reaffirms the UAE’s robust legal environment for enforcing commercial rights and provides confidence to international businesses operating in the region,” he added.
