Dubai Court Orders Two Companies and Their Managers to Pay AED 2 Million to a Car Agent
The Dubai Commercial Court ruled that two companies and their managers are jointly liable to pay AED 2 million in compensation to an exclusive car agent, along with 5% annual interest, holding the managers personally liable.
The Dubai Commercial Court ruled in a dispute involving damage to an exclusive commercial agency for a car brand, ordering two companies and their managers to jointly and severally pay AED 2 million in compensation to the commercial agent, as reported by Gulf Today newspaper.
The court also awarded annual interest of 5% from the date the judgment becomes final until full payment, in addition to court fees, expenses, and legal costs. The plaintiff, who has held the exclusive commercial agency for the brand in the UAE since 2020 and operates a local branch in Dubai, had claimed AED 10 million in compensation for material and moral damages and loss of profits.
The court appointed a committee of experts to investigate the incident, which concluded that no import operations were registered under the names of the two companies or their managers since January 2024. However, it confirmed the sale of a 2025 model car based on conversations, invoices, and documents related to possession, inspection, and registration with the relevant authorities.
The court clarified that free zones in the country are subject to national legislation unless explicitly exempted, and that the Commercial Agencies Law prohibits importing or trading products associated with a registered commercial agency without the agent's permission. It found that the managers of both companies were directly involved in the violations, holding them personally liable jointly and severally.
What do these terms mean?
Exclusive Commercial Agency: An agreement granting a person or company the sole right to distribute or market a product in a specific market without unauthorized competition.
Joint and Several Liability: An obligation allowing the creditor to claim the full amount from any of the debtors, without dividing the shares among them.
Free Zones: Special economic zones within the country that offer customs and tax benefits, but remain subject to national laws unless explicitly exempted.
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