A Dubai court has ordered a conglomerate to pay more than Dh55 million, or around Rs 140 crore, in a commercial dispute involving diamond sets and gold jewellery supplied under a consignment agreement.
The Dubai Court of First Instance also directed the company to pay legal interest of 5% per year from the date the lawsuit was filed until full payment is made, along with court fees and Dh1,000 in legal costs.
The dispute involved a Fujairah-based gold trading company, acting as the claimant, which had supplied diamond and gold jewellery to the defendant for resale.
Under a consignment arrangement, the receiving party is required to sell the goods and pass on the proceeds, or return the unsold items within a fixed period.
According to court records, goods worth over Dh55 million were delivered to the defendant. However, the company neither paid for the goods nor returned them, despite repeated follow-ups.
The claimant submitted delivery notes and communication records to show that the goods had been received by the defendant.
A court-appointed expert confirmed that the defendant continued to hold the goods and had not provided any proof of sale, return, or payment. Based on this, the court held the company liable for the full value of the goods.
The defendant argued that the jewellery was given as security for a separate transaction. The court rejected this claim, noting that the alleged transaction was unrelated to the present case and did not cancel the company’s obligations.
The court also dismissed claims against the company’s directors, stating that there was no evidence that they had personally received the goods or provided guarantees.
This reinforced the legal principle that a company is separate from its directors unless personal liability is clearly established.
In addition to the principal amount, the court ordered the defendant to pay interest at 5% per year from the date the case was filed until full payment is completed.
The company has also been asked to bear court fees and Dh1,000 in legal expenses.
Legal expert Vishal Tinani said the judgment highlights the importance of documentation in commercial transactions.
“This judgment represents a textbook application of UAE commercial law principles to the realities of the jewellery trade. The court correctly enforced the consignment obligation on the strength of objective, contemporaneous delivery documentation,” he said.
He added that the ruling sends a clear message to businesses that consignment deals must be treated as formal contracts, backed by proper records.