Sharjah court nullifies Dh112m LPG deal, orders seller to repay Dh63.8m plus interest

The court directed the defendant to pay back Dh63,819,327.81, representing the payments it had received towards the purchase price, along with 5 per cent interest calculated from the date the lawsuit was filed until the amount is fully settled.

Contract terms and breach

The case stems from an agreement in which the seller was to provide 41,000 metric tonnes of LPG to the buyer for a total of Dh112,214,155.63. Under the deal, the buyer was to pay in stages: an advance, additional payments once the bills of lading were received in the UAE, and a final sum when the goods arrived at the delivery port.

But the seller missed the delivery deadline and also failed to supply the shipping documents needed to bring the cargo into the UAE. This prompted the buyer to seek termination of the contract and recovery of the money paid.

Legal arguments and evidence

Marwa Al Suwaidi, the lawyer for the claimant, told the court that her client had the right to cancel the agreement and claim damages because the delivery deadline was not met. In support, Al Suwaidi submitted evidence showing that the claimant had signed another sales contract with a different firm for the same type of LPG. That second contract contained a penalty clause for late delivery.

Court ruling

The court reviewed the evidence and concluded that the seller had not met its contractual duties because it neither delivered the LPG on time nor provided the necessary shipping paperwork. As a result, the court voided the contract and instructed the seller to repay all the money it had received from the buyer as part of the purchase price.

The repayment amount was fixed at Dh63,819,327.81, with 5 per cent interest running from the day the legal case was initiated until the debt is cleared.