A recent judgment of the Dubai Court of Cassation provides useful guidance on cross-border commodity transactions concluded through email correspondence, invoices, payment transfers and shipping documents.
The judgment confirms that Dubai Courts may have jurisdiction over a foreign defendant where a contract is concluded remotely and the offeror becomes aware of the counterparty’s acceptance in Dubai. It also reinforces a wider commercial point: courts will look at the substance of the transaction record when deciding whether a party acted as purchaser or merely as intermediary.
This case note concerns proceedings in which HAZ Law represented the successful respondent before the Dubai Court of Cassation.
Background
The dispute arose from a cross-border sale involving approximately 5,000 metric tons of petroleum product cargo for delivery to Dakar, Senegal.
The claimant alleged that the defendant agreed to purchase the cargo, paid only half of the invoice value, and failed to pay the outstanding balance of USD 2.7 million.
The defendant resisted the claim on two main grounds. First, it argued that Dubai Courts lacked jurisdiction because it was a foreign company with no branch, assets or business presence in the UAE, and because the transaction was performed outside the UAE. Second, it argued that it was not the purchaser of the cargo, but only an intermediary or representative involved in arranging an onward sale.
The Dubai Court of First Instance upheld the claim. The Dubai Court of Appeal affirmed that judgment. The Dubai Court of Cassation dismissed the cassation appeal, leaving in place the judgment for USD 2.7 million, or its UAE dirham equivalent, together with 5% annual interest from the date of the judicial claim until payment, plus costs.
Contract formation by email
The central jurisdictional issue was whether the contract had been concluded in Dubai.
The claimant issued from Dubai a sales invoice which the courts treated as the offer. The invoice identified the cargo, quantity, price and delivery arrangements. The defendant accepted the transaction by email correspondence and made a bank transfer for part of the price. The claimant became aware of that acceptance at its office in Dubai.
The Court of Cassation confirmed that, under UAE law, a contract concluded between parties who are not physically present in the same place is treated as concluded at the time and place where the offeror becomes aware of the acceptance, unless the parties agree otherwise or a specific legal provision provides differently.
On that basis, the Court held that the contract was formed in Dubai. That was sufficient to establish Dubai Courts’ jurisdiction, notwithstanding the foreign elements of the transaction.
Foreign performance did not prevent Dubai jurisdiction
The defendant argued that the cargo was destined for a foreign port and that the transaction was performed outside the UAE. The Court rejected that argument.
The judgment confirms that, in commercial matters, jurisdiction is not determined only by the location of the goods, the place of discharge, or the defendant’s place of incorporation. The place where the contract is formed may itself provide a sufficient jurisdictional connection.
The Court also rejected a treaty-based jurisdiction objection, holding that the relevant bilateral judicial cooperation provisions did not displace the UAE jurisdiction rules applied by the Dubai Courts.
For Dubai-based trading companies, this is a significant point. Where offers, acceptances, invoices and payment arrangements are handled through Dubai, Dubai Courts may have jurisdiction even if the counterparty is foreign and the goods are delivered abroad.
Buyer or intermediary?
The second key issue was whether the defendant was liable as purchaser or whether it had acted only as an intermediary.
The Court upheld the finding that the defendant was the buyer. In reaching that conclusion, the courts relied on the commercial record, including the sales invoice issued to the defendant, the defendant’s payment of half of the invoice value, email correspondence concerning the vessel’s movement to Dakar and payment arrangements, and the shipping documents identifying the defendant as consignee.
The defendant relied on events in Dakar and argued that the cargo had been affected by disputes involving third parties. The Court did not consider this sufficient to prove that the defendant was merely an intermediary in its relationship with the claimant. Those events were treated as arising from subsequent dealings or disputes involving other parties, rather than as proof that the defendant had not purchased the cargo from the claimant.
The judgment therefore underlines the importance of substance over labels. A party described as an agent, representative or intermediary may still be treated as purchaser if the transaction documents and conduct point to a direct sale.
Practical significance
The decision is relevant to commodity traders, shipping companies, brokers, agents and UAE-based businesses involved in international sales.
It confirms that ordinary transaction documents can have significant legal consequences. A sales invoice may evidence the offer and the identity of the contracting party. Email correspondence may evidence acceptance. Payment transfers may evidence contractual commitment. Shipping documents may support the court’s assessment of who received or controlled the cargo.
For parties who genuinely intend to act only as intermediaries, that role should be clearly documented from the outset. The principal should be identified, the intermediary’s authority should be defined, and the payment structure should be consistent with an agency or brokerage relationship rather than a buyer-seller relationship.
The judgment also highlights the importance of clear dispute-resolution provisions in cross-border transactions. Where parties want certainty over where disputes will be heard, that should be addressed expressly in the transaction documents.
Limits of cassation review
The Court of Cassation also reaffirmed that cassation is not a rehearing of the facts.
The defendant’s remaining arguments largely challenged the lower courts’ assessment of the evidence, including the interpretation of correspondence, the expert evidence and the characterisation of the defendant’s role. The Court declined to revisit those factual findings, holding that the assessment of evidence and the characterisation of the parties’ relationship fall within the trial court’s discretion where the reasoning is supported by the record and is legally sound.
Conclusion
The Dubai Court of Cassation’s judgment confirms an important commercial principle: in cross-border transactions concluded by correspondence, Dubai Courts may have jurisdiction where acceptance becomes known to the offeror in Dubai.
The judgment also shows that courts will examine the full commercial record when determining whether a party acted as purchaser or intermediary. In international trade, liability may ultimately be determined by the way the transaction was recorded at the time — in emails, invoices, payment transfers and shipping documents.
For businesses using Dubai as a platform for international commodity trading, the decision is a timely reminder that jurisdiction and liability can be shaped at the earliest stages of a transaction, often before any formal dispute arises.
Disclaimer
This publication is for general information only. It does not constitute legal advice and should not be relied upon as such. The outcome of any matter depends on its specific facts, documents and applicable law. Specific legal advice should be obtained before taking or refraining from taking any action.