Dubai court orders three to pay entity cheque value of Dhs2.09m for breaching a settlement deal

Three men breached a settlement agreement requiring the payment of Dhs2.098 million in return for an entity’s waiving a criminal complaint, after the latter fulfilled its obligation and submitted the waiver to the Public Prosecution, while the three refrained from handing over an agreed-upon cheque or paying its value, so the Dubai Civil Court ordered them to jointly pay the amount, with 5% legal interest from the date the lawsuit was filed until full payment.

The details of the case date back to a time when an entity filed a criminal lawsuit against the first defendant accusing him of fraud, breach of trust, and forgery.

During the hearing of the case, the parties conducted negotiations which ended in the conclusion of a settlement agreement in April 2026, under which the defendants committed jointly to pay the amount of Dhs2.09 million by a cheque drawn on Emirates NBD, in exchange for the entity waiving the complaint, the report, and the criminal case.

The case papers proved that the claimant entity fulfilled its obligation and submitted the waiver to the Public Prosecution on the same day, and it was attached to the case file and accepted, however, the defendants did not hand over the original cheque or pay its value despite repeated demands.

When the claimant entity demanded the delivery of the original cheque, it was informed that it was deposited in the criminal case file, so it applied to the Public Prosecution to receive it or cash its value, but the Prosecution informed them that the deposited amount was not for its benefit, but rather a financial guarantee related to the procedures for lifting the travel ban on the first defendant.

The defendants pleaded the lack of jurisdiction of Dubai courts to hear the lawsuit, and requested its referral to the Rental Dispute Settlement Centre, they also requested a suspend the lawsuit until the criminal case was decided, however, the court rejected both pleas, affirming that the dispute does not relate to a lease contract or a rental right or obligation, but rather to the implementation of an independent settlement agreement which includes a financial obligation, and that the adjudication of the civil lawsuit does not depend on the outcome of the criminal case, given that the source of the obligation is the settlement agreement.

The court also affirmed that the settlement contract is binding on its parties, and that it was established from the papers that the claimant implemented what it committed to in terms of waiver, while it was not proved that the defendants implemented their obligation to pay the amount or hand over the agreed-upon cheque which proved their breach of their contractual obligation. So the court issued the aforementioned ruling.