Dubai Court of Cassation Dismisses AED 248.5 Million Claim Against Real Estate Developer

A final judgment confirming that a contractually restricted assignment of rights cannot bind a debtor who never consented to it.

Dubai, UAE: Horizons & Co has secured a final judgment before the Dubai Court of Cassation dismissing all claims brought against its client, a major real estate developer, in proceedings where a commercial bank sought to recover AED 248,550,000 directly from the project owner.

The bank's case rested on an alleged assignment of the contractor's rights and receivables under a large-scale construction project. Its position was that the assignment entitled it to step into the contractor's shoes and pursue the developer for outstanding sums. The defence, built and led by the Horizons & Co litigation team, dismantled that position at every level.

The construction contract expressly prohibited the contractor from assigning its receivables without the owner's prior written approval. That approval was never sought. It was never given.

The team, led by Managing Partner Ali Al Zarooni and Head of Litigation Refat Zidan with the support of Senior Associate Tania Antoun, demonstrated that no express or implied acceptance had ever been communicated by the developer, and that neither the partial payments made in the ordinary course of the project nor the developer's silence could be read as consent. Critically, the team also challenged the legal standing of a notification that had been addressed to the project consultant rather than the owner, establishing that the consultant lacked the authority to receive or accept an assignment on the developer's behalf. The bank's attempt to rely on a prior judgment in related proceedings was similarly rejected, as that judgment had addressed the arbitration question only and said nothing about the validity or enforceability of the assignment itself.

The Court of Cassation confirmed that an assignment restricted by contract does not take effect against the debtor in the absence of that party's consent, and that silence, general knowledge of the assignment, or subsequent dealings are not sufficient to establish implied acceptance.

Ali Al Zarooni concluded “The judgment is a meaningful contribution to the body of law governing assignments in the construction sector and serves as a clear reminder to developers, lenders and financiers alike that consent provisions in construction contracts carry real legal weight.”