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ARTICLE · 25 JUNE 2021

Important Change To Interest Rate By Dubai Court

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The General Assembly of the Dubai Court of Cassation issued the Resolution No. 1/2021 (the "Resolution") very recently.

United Arab EmiratesLitigation, Mediation & Arbitration
Musab Iftikhar
Musab Iftikhar
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The General Assembly of the Dubai Court of Cassation issued the Resolution No. 1/2021 (the "Resolution") very recently.

The Resolution which was passed unanimously has now changed the previous judicial practice regarding interest rate calculations for the awarded amount of debt in the absence of a mutually agreed rate of interest in a loan agreement.

Article 76 of Federal Law No. 18/1993, as amended (the "Commercial Code") states as follows:

"A creditor is entitled to receive interest on a commercial loan as per the rate of interest stipulated in the contract. If such rate is not stated in the contract, it shall be calculated according to the rate of interest current in the market at the time of dealing, provided that it shall not exceed 12% until full settlement."

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