Legal View

Help! My company in UAE is refusing to repay loan taken in my name

Ashish Mehta/Dubai
Filed on November 20, 2019 | Last updated on November 20, 2019 at 07.26 am
UAE laws, uae fines, dubai laws


Can I fight this case?

I came to the UAE 16 years ago and have been working as a manager in a construction company. The firm's owner used my passport to take two bank loans worth Dh350,000. He had agreed verbally that he would pay the monthly mortgage. Now the company has run into debts because of pending payments and he has gone back to his home country after handing over the company to a friend of his. The new owner is refusing to pay the loan amount as it is in my name. I don't have anything in writing, but the till date, the amount was being repaid from my previous boss's account. Can I fight this case?

It may be pertinent to note that if you have signed all the documents to avail of the loan, then you will be held responsible for its non-repayment. However, if you are in a position to prove that the loan amount was disbursed into the company's bank account or after availing this loan, you transferred the amount to the company's bank account, then you may be in the position to make valid claims against the company in the courts of the UAE. This is as laid down in the provisions of Federal Law No. (10) of 1992 on the evidence in civil and commercial transactions (the 'law of evidence in civil and commercial transactions').

As per the provisions of this law, a party may make a request to the court to compel an opponent party in a litigation to present any written document which may be pertaining to the litigation and that may be in the opponent party's possession. This is in accordance with Article 18 (1) of the law, which states: "A party to the litigation may request the court to compel his opponent to submit any useful written document or paper that may be in his possession, in the following instances:

a) If the law allows him to ask for their submission or delivery.

b) If the document is joint between him and his opponent. A document is particularly considered joint when it is for the benefit of both parties to the litigation or evidencing their mutual obligations and rights.

c) If the opponent based his claim on it in any stage of the lawsuit."

It may therefore be noted that you may request the court to direct the company to furnish any documents which may substantiate that the loan amount which was availed in your name was transferred into the company's bank account.

However, you must bear in mind that the lender of the loan will initiate legal recovery proceedings against you and then you may have to initiate separate legal proceedings against your company to re-pay back to you the amount you paid to the company.

Further, it is recommended that you consult a legal practitioner in the UAE to avail further counsel on this matter.

Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: Readers may e-mail their questions to: or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.

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