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January 26, 2023

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Change to Interest Rates Applied by the Courts in Dubai

The General Assembly of the Dubai Court of Cassation issued Resolution No. 1 of 2021 on 9 June 2021.This binding resolution reversed the court’s previous ruling regarding interest rate calculations for the awarded amount of debt in the absence of a written agreement between parties.  

The interest rate is now set at five percent annually until full payment of the debt is made. This is a significant reduction from the previously applied rate of nine percent. As such, parties can now expect the court to award a five percent interest rate on outstanding debt effective from the date of issuance of the resolution. This change is applicable to all ongoing cases before Dubai onshore courts and will apply to all judgments issued going forward.  

The resolution provides that the previous calculation was no longer appropriate for the current circumstances of the United Arab Emirates and the prevailing interest rates for banks operating in it. It was felt necessary to reconsider the interest rate in a manner that suits these circumstances and leads to revitalizing the market and achieving justice in transactions for individuals and institutions.

Copyright 2023 K & L GatesNational Law Review, Volume XI, Number 168

About this Author

Jonathan Sutcliffe International Arbitration Attorney K&L Gates Dubai

Jonathan Sutcliffe is a partner in the firm’s Dubai office where he is a member of the international arbitration practice group. Jonathan has significant experience in international arbitration and dispute resolution and has acted for numerous clients on a diverse range of international commercial arbitration, ADR, and litigation matters in the energy, construction, hospitality, real estate, defence, insurance, international joint venture, and film sectors, and on investor-state disputes.

Jonathan also sits regularly as an arbitrator, including under the rules of arbitration of the...

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Mohammad Rwashdeh Commercial Attorney K&L Gates Law Firm

Mohammad Rwashdeh is counsel in the dispute resolution team of the firm’s Dubai office, based in the Dubai International Financial Centre (DIFC). Mr. Rwashdeh regularly advises and represents both UAE-based and international clients in a wide range of commercial, intellectual property, civil and criminal disputes.

Mr. Rwashdeh has full rights of audience before the Courts of Jordan. He is also licensed as a legal consultant by the Dubai Department of Legal Affairs and works closely with local counsel in respect of litigation pending before the UAE Courts.

Mr. Rwashdeh has...

Sr Paralegal

Kulsum Rehman is a senior paralegal in the dispute resolution team of the firm’s Dubai office, based in the Dubai International Financial Centre (DIFC). Having recently joined the firm, Ms. Rehman will be assisting the Dubai team on several of their ongoing matters.

Before joining K&L Gates, Ms. Rehman worked as a paralegal at CMS’s Dubai office, working predominately in the disputes team, assisting on contentious and non-contentious matters for the office, including various disputes in the construction and energy sectors.

Prior to that, she has worked as a senior...

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