M&CO Secures Landmark Victory For Bona Fide Villa Purchasers In Dubai Execution Proceedings

M&CO Secures Landmark Victory for Bona Fide Villa Purchasers in Dubai Execution Proceedings

The prominent boutique law firm headquartered in Dubai (DIFC) with a strong presence in the UAE and Saudi Arabia, M&CO Legal successfully represented the owners of two villas in complex, parallel legal disputes against a leading master developer in Dubai, securing full discharge of their properties from execution proceedings. This landmark victory ensures justice for bona fide purchasers and reinforces the protection of property rights under Dubai’s legislative framework.

Background of the dispute

The master developer had previously obtained an arbitration award against a sub-developer and, seeking execution, secured a court judgment invalidating a prior transfer of multiple plots of land – made by way of gift – to a third-party company. The judgment ordered the return of these lands to the general guarantee for execution.

Subsequently, the master developer initiated execution proceedings to sell the lands at public auction to recover its debts. However, the clients had already legally purchased their completed residential villas from that third-party company, paid the full purchase price, and registered their properties in the real estate register long before the execution procedures were initiated.

Procedural complexity

The complexity arose from navigating the intersection of execution of arbitral awards, Paulian actions for non-enforceability of dispositions, and the strict application of Article 302 of the UAE Civil Procedures Law regarding third-party claims for attached property.

Litigation strategy and outcome

The M&CO litigation team, led by Dr. Salman Al Tuweel (Partner) and Ahmed Elmahdy (Senior Associate), meticulously demonstrated the clients’ status as bona fide purchasers. The team argued that the absolute nullity of a previous contract could not prejudice a good-faith third party who had lawfully contracted without negligence.

Relying on the principle that real estate rights acquired in good faith based on official records cannot be stripped away, the team established that the clients had no knowledge of defects in the seller’s title and fully observed honesty and integrity in their transaction. Consequently, the prior judgment nullifying the gift could not affect their established property rights.

Conclusion

This landmark judgment reinforces the stability of Dubai’s real estate market and underscores legislative protection for good-faith investors relying on the Real Estate Register. It affirms that public interest and transactional security take precedence, ensuring that innocent purchasers are not unjustly penalized for historical title defects beyond their control.

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