A Dubai court has ordered a man to repay 2 million dirhams to a friend who lent him the money under a signed IOU, ruling the document was binding proof of the debt and awarding 5% annual interest from the date the case was filed until final settlement, Gulf News reported on Monday.
The Dubai Civil Court rejected the borrower’s contention that he had only taken 1 million dirhams and had already repaid 100,000 dirhams. It also dismissed his argument that the lender was attempting to impose prohibited interest, according to the report. The court declined a separate claim by the plaintiff for 500,000 dirhams in damages, saying there was no evidence of an actual, quantifiable loss.
The plaintiff told the court he had advanced the funds in December 2024 under a written IOU in which the defendant undertook to repay within three months. After repeated demands went unanswered, he sued for the principal and additional compensation for alleged lost investment opportunities, Gulf News said.
In his defense, the borrower acknowledged receiving money but said the true amount was 1 million dirhams and that 100,000 dirhams had been repaid, leaving 900,000 dirhams outstanding. He argued the contract should be voided on the basis that the creditor was seeking usurious returns and submitted WhatsApp messages to support his position, the outlet reported.
The judge found the IOU met the requirements of binding proof under UAE evidence rules and noted the defendant did not deny his signature. On that basis, the court concluded the document was conclusive evidence of the full 2 million dirhams debt. The WhatsApp exchanges did not outweigh the signed IOU, and the allegation of prohibited interest was rejected, Gulf News said.
The court ordered the borrower to pay the 2 million dirhams, equal to about $545,000 at the UAE’s fixed exchange rate, plus 5% annual interest calculated from the date the lawsuit was filed until payment is completed. It turned down the request for 500,000 dirhams in additional damages, finding no proof that the plaintiff had suffered a specific financial loss attributable to the delay.
UAE civil courts regularly rely on signed instruments such as IOUs and acknowledgment letters as primary evidence in debt disputes, and judicial interest may be awarded to compensate for delay in payment. Claims for consequential damages typically require clear proof of causation and quantification, which the court said was lacking in this case.
The ruling underscores the weight UAE courts place on written undertakings between private parties in the absence of a formal bank loan. While electronic communications are admissible as evidence, courts can give greater probative value to a signed document when the authenticity of the signature is not challenged.
The identities of the parties were not disclosed. It was not immediately clear whether the defendant would appeal. Judgments of the Dubai Civil Court can be challenged in higher courts within the statutory period set by UAE civil procedure. Gulf News did not report further details on any enforcement steps following the ruling.
