Dubai court rejects a company's lawsuit seeking to establish ownership of a ship

The Dubai Commercial Court recently dismissed a lawsuit brought by a company attempting to claim ownership of a vessel that is currently registered under another company's name. This dismissal reaffirms a previous judicial decision that recognised another party's ownership of the vessel. The court cited the principle of "res judicata", which prevents the issue from being contested again as it has already been conclusively settled.

The origin of the case lies in the plaintiff company's assertion of ownership, arguing that it financed the construction of the vessel entirely from its own funds and accounts and later registered it under one of its subsidiaries. The company also aimed to have a previous commercial judgment declared unenforceable, arguing that it was acquired through fraud, deception, and collusion. Additionally, they requested an urgent halt to the execution of the prior judgment until the new lawsuit was resolved.

The company clarified that an earlier dispute had been brought against them by a party under whose name the vessel was registered. The plaintiff aimed to have the vessel's title deed declared fraudulent and to establish his own ownership, arguing his case based on an acknowledgment from the defendant company. In June the previous year, a judgment was delivered, recognizing the title deed as a sham, affirming the plaintiff's ownership, and granting him the right to register the vessel under one of his subsidiaries. This decision was upheld in both the appeals court and by the Court of Cassation, thus making it final.

The court emphasised that the principle of "res judicata", which asserts the finality of a judgment, prevents the re-litigation of issues already settled, as long as there is an identity of parties, subject, and cause of action. This finality also covers the fundamental issue on which the initial decision relied.

Moreover, the court elaborated that the previous judgment definitively addressed the fraudulent nature of the vessel's title deed and confirmed the other party's ownership. As such, revisiting these matters or trying to bypass the binding nature of the initial judgment by filing a new lawsuit to claim ownership or challenge the validity of that judgment is not permissible.

The Court acknowledged the separate legal identity of companies, which is distinct from their partners and managers. It highlighted that the documents submitted did not sufficiently demonstrate that the plaintiff company owned the vessel, nor did they convincingly show that the registered ownership by the company of record was nominal. As a result, the Court dismissed the case. Consequently, it found the request to stay the execution of the previous judgment irrelevant after the main action was dismissed and ruled that the plaintiff company would be responsible for all costs and legal fees.