Dr. HAYTHAM ABDALLA
May 29, 2024Unprecedentedly, Dubai Court of Appeal (DCA[1]( Orders the Enforcement...
Read MoreDr. HAYTHAM ABDALLA
Mar 04, 2024Court of Cassation Establish the Divisibility of the Arbitration Award. Judgment Parti...
Read MoreDr. HAYTHAM ABDALLA
Mar 04, 2024Abu Dhabi Court of Cassation Endorse the Judgment Rendered by the Court of Appeal Obliging a Former Owner of...
Read MoreDr. Abdulwahab Abdool
Mar 03, 2024Former Chief Justice Comments on UAE Tax Laws Between September 2016 and Se...
Read MoreDr. HAYTHAM ABDALLA
May 29, 2024Unprecedentedly, Dubai Court of Appeal (DCA[1]( Orders the Enforcement...
Read MoreDr. HAYTHAM ABDALLA
Mar 04, 2024Court of Cassation Establish the Divisibility of the Arbitration Award. Judgment Parti...
Read MoreDr. HAYTHAM ABDALLA
Mar 04, 2024Abu Dhabi Court of Cassation Endorse the Judgment Rendered by the Court of Appeal Obliging a Former Owner of...
Read MoreDr. Abdulwahab Abdool
Mar 03, 2024Former Chief Justice Comments on UAE Tax Laws Between September 2016 and Se...
Read MoreDr. Haytham Abdalla
Jan 01, 1970Abu Dhabi Court of Cassation Endorse the Judgment Rendered by the Court of Appeal Obliging a Former Owner of a Private Commercial Establishment with the Debts and Liabilities in solidum with the New Owner thereof, Three Years After Having Passed the Establishment Title.
Grounds:
The Claimant, acted for by our Law Firm, “BIN NAKHIRA & PARTNERS”, filed a case petitioning the court to oblige the Private Commercial Establishment and its current and former owners to pay the Claimant an amount of USD 2,260,133 (AED 8,294,688) for the goods it received in favor of the Establishment, on the grounds that the Private Commercial Establishment does not duly have a legal personality that is independent of the personality of its owner and is deemed one of the components of its owner’s financial liability. The Federal Commercial Transactions Law has set forth certain procedures to be followed until the person to whom the Commercial Establishment title has passed is discharged from the debts prior to the disposal of the Commercial Establishment, which procedures were not followed by the Second and Third Defendants.
The Second Defendant, “the new Establishment owner”, argued that the Establishment Sale Contract Agreement stipulated that he [the Second Defendant] was not deemed liable for any rights or obligations prior to the Title Transfer Date in October 2017. Therefore, the former owner is deemed liable for refunding the Claim Amount.
The Third Defendant, “the former Establishment owner”, also argued that the new owner was not deemed liable for the Establishment’s liabilities so long as its title was passed thereto and it was registered in the official registry. He [the Third Defendant] also argued that the Establishment was invested by another party, which party was requested to be impleaded as a Fourth Defendant to be obliged with any judgment to be rendered thereagainst.
The Court of First Instance ruled to oblige the Establishment and its former and current owners to pay the Claim Amount. The Defendants challenged the judgment before the Court of Appeal, which decided to endorse the judgment rendered by the Court of First Instance.
The former owner challenged the judgment under Commercial Cassation Appeal No. 105/2021. The grounds for the challenge were:
The current owner also challenged the judgment under Commercial Cassation Appeal No. 111/2021, whereas he stated in the grounds for challenge, that:
The Court of Cassation decided to join both appeals to have a single judgment rendered therefor.
The Respondent, “our Client”, responded to the grounds for appeal submitted by the former owner under Commercial Cassation Appeal No. 105/2021 as follows:
The Respondent also responded to the grounds for appeal submitted by the former owner under Commercial Cassation Appeal No. 111/2021 as follows:
Judgment Rendered by the Court of Cassation
The grounds for the judgment stated that: The Legislator imposed upon the person to whom the title to the commercial concern has passed, some procedures set forth in Article (47/1) of the Commercial Transactions Law, to fix a date for the creditors to submit a statement of their debts in order to settle them, provided that such date is to be published in two daily papers issued in the State. The date fixed to the creditors may not be less than ninety (90) days, and the law has a specific effect on such procedures regarding the extent of the Disposed Party’s liability to the debts prior to the disposal, and conducting title transfer of the commercial concern to the Disposing Party shall not dispense with such procedures. Accordingly, whereas as it is established from the papers that the Petitioner in Commercial Cassation Appeal 111/2021 did not take the procedures of calling the creditors precedent to title-transferring disposal, nor did he notify the creditors that the sale contract includes an agreement that the seller bears all the debts prior to the title transfer of the Commercial Establishment before recording in the Commercial Register, as such previous debts are payable thereby.
Building on the foregoing, and whereas the Appealed Judgment ruled on its grounds that, “the documents submitted in the case did not comprise evidence that the procedures set forth in Articles 42-45 of the Commercial Transactions Law were followed, and this entails the liability of both the former and the new owner for the debts incurred by the Establishment. The conclusion inferred in the trial court judgment in both instances were reasonable and consistent with the proper application of the law. Therefore, what was stated in the grounds for both appeals was inapposite.
The court ruled to dismiss both appeals.
Conclusion:
Bin Nakhira & Partners
Dr. Haytham Abdalla