Dubai Court Orders Firm To Pay Over Dh55 Million In Diamond, Gold Dispute

(MENAFN- Khaleej Times) The Dubai Court of First Instance has ordered a company to pay more than Dh55 million in a commercial dispute involving diamond sets and gold jewellery supplied under a consignment agreement.

The court also directed the company to pay legal interest of 5 per cent per annum from the date the lawsuit was filed until full payment is made, along with court fees and Dh1,000 in legal expenses.

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However, claims filed against the company's two individual directors were dismissed, with the court ruling that they could not be held personally liable in the absence of proof they had personally received the goods or issued guarantees.

According to court documents, the case number stemmed from a 2025 transaction in which the company requested diamond and gold jewellery from a supplier for resale under a sale-on-commission arrangement, a common practice in the UAE jewellery market.

Under such agreements, the recipient is allowed to sell the goods and later transfer the proceeds to the supplier or return any unsold items within an agreed period.

The supplier, a sole proprietorship, submitted signed delivery notes confirming that goods worth more than Dh55 million had been handed over. The claim was further supported by WhatsApp communications and legal notices sent after repeated requests for payment or return of the items went unanswered.

A court-appointed expert reviewed the evidence and concluded that the goods had been delivered and remained unaccounted for, with no proof they had been sold, returned or settled financially.

The company argued that the jewellery had been provided as security for a separate solitaire ring transaction. However, the court rejected that defence, stating that the alleged matter was the subject of separate legal proceedings and did not affect the company's obligations in the current case.

In its ruling, the three-judge panel reaffirmed several established principles of UAE commercial law, including:

The claimant must prove the existence of a debt, while the debtor must prove payment or discharge.

Consignment agreements are binding commercial contracts.

A company has a separate legal identity from its directors or shareholders.

Legal interest may be awarded to compensate for delayed payment.

The ruling is seen as reinforcing Dubai's reputation as a reliable jurisdiction for resolving complex commercial disputes, particularly in sectors such as gold, diamonds and precious metals, where trust and documentation are critical.

Commenting on the judgment, legal expert Vishal Tinani said the ruling highlighted the importance of proper documentation in high-value commercial transactions.

“This judgment reflects a clear application of UAE commercial law principles to the jewellery trade. It reinforces that commercial agreements are binding and that suppliers and consignees must maintain strong records to avoid costly disputes,” he said.

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