Dubai court orders man to repay Dhs7.4m in forged customs declaration case

Dubai Civil Court has ordered a man to return Dhs7.4 million that he misappropriated from a company and to pay an additional Dhs500,000 in compensation for the harms it had befallen after being convicted of forging an electronic customs declaration, which he used to facilitate a fictitious transaction involving the import of computer servers.

Meanwhile, the court declined to hold the defendant’s company liable for the funds or the compensation as there was no evidence that the money had entered the company’s own financial accounts.

Earlier, the company filed a lawsuit in which it requested the court to obligate a man and a company he owned to jointly return Dhs7.4 million in addition to Dhs1 million in compensation for material harms and loss of profit.

The claim was based on the company having been defrauded through documents presented to it, which falsely suggested the existence of a transaction to import computer servers.

The company pleaded that the first defendant used a forged customs declaration purportedly issued by Dubai Customs to lend an air of legitimacy to the fictitious transaction, which prompted the plaintiff to transfer $2.04 million (equivalent to Dhs7.4 million) via three bank transfers.

Earlier, the Criminal Court sentenced the man to one year in jail to be followed by deportation and fined him Dhs150,000 in addition to a fine of Dhs7.4 million, this being the funds involved in the crime. The court also ordered the forged data to be erased. The Court of Appeal upheld the verdict, rendering it final and conclusive.

The defendants argued that the claim was inadmissible due to an arbitration clause in the contract. The court, however, rejected this argument, clarifying that the claim was based on tort liability arising from a wrongful act, rather than on a dispute concerning the performance or termination of the contract.

The court clarified that the documents proved that the funds had been transferred to a company account in an Asian country, while the criminal judgment concluded that the first defendant had misappropriated these funds, thereby obligating him to return them.

Furthermore, the court found that the plaintiff had sustained material harms as a result of being deprived of the use of its funds and the loss of investment opportunities. It assessed the compensation for these harms at Dhs500,000.

Conversely, the court rejected the liability of the second defendant, affirming that it possessed a legal personality and a financial estate independent of its partner and no evidence was presented to show that the funds in dispute had entered its own assets.

The court ordered the first defendant to bear the legal charges, expenses and lawyer’s fees and dismissed all other claims.