Case Explained: Dubai Court Ruling Frees Falcon City Plots from Auction, Secures Buyers’ Ownership – Legal Perspective

Court records showed that the purchasers had acquired their plots under registered sale agreements in 2021 and obtained official title deeds issued by the Dubai Land Department after paying the full purchase prices.

However, precautionary attachments were later recorded on the properties as part of enforcement actions arising from developer-related arbitration claims — despite the purchasers not being parties to those disputes.

The buyers subsequently filed multiple cases challenging the seizures, arguing that ownership had legally transferred prior to the attachments and that enforcement measures could not extend to properties owned by third-party purchasers who had lawfully acquired and registered their land.

In its reasoning, the judicial committee stressed established principles under UAE law, noting that attachment measures are valid only when imposed on assets owned by the debtor at the time of seizure. The committee also reaffirmed that civil judgments are binding solely on parties involved in the original litigation.

Because the purchasers were not parties to earlier lawsuits that invalidated certain inter-company land transfers, the committee ruled that those judgments could not be enforced against buyers who had already acquired and registered ownership prior to the seizure.

The ruling relied on provisions of the Civil Procedures Law allowing third parties to challenge execution measures and claim entitlement to attached real estate where ownership is supported by documentary evidence.

Dubailand LLC was ordered to bear court costs and legal fees in the cases.

Court clears way for auction of 424 plots in Dh1.8 billion dispute

The enforcement actions stem from a wider legal battle involving the Falcon City of Wonders project within Dubai’s Dubailand master development, covering roughly 278 square kilometres.

A Dubai court has ruled that the transfer of 424 land plots within the Falcon City of Wonders project cannot be enforced against Dubai Land, allowing the properties to be pursued in enforcement proceedings linked to a massive arbitration verdict which valued at more than Dh1.8 billion including interest.

The Dubai Court of First Instance issued the ruling on October 26, 2021, finding that Falcon City of Wonders transferred hundreds of plots by way of gift after a debt had already arisen in favour of Dubai Land.

The dispute dates back to a 2005 development agreement under Dubai’s Dubailand master project, covering 41 million square feet of land sold for Dh10,330,773 — about two fils per square foot — in exchange for Dubai Land receiving 50 per cent of project profits.

An arbitration committee in June 2020 ordered Falcon City to pay Dh749,030,716.74, together with compound annual interest at the rate 2 per cent , accruing from September 7, 2005, until full settlement of the debt.

Court records show enforcement collections reached Dh1,385,382,493.29, with accumulated interest pushing total liabilities to roughly Dh1.8 billion.

Dubai court appointed expert later discovered that 830 plots, estimated to be worth about Dh3 billion, had been transferred between 2018 and 2020, including 424 plots gifted to another company.

The court ruled that the transfers stripped the debtor of assets needed to satisfy creditors and therefore were legally ineffective against Dubai Land. The plots were ordered returned to the debtor’s asset pool, allowing authorities to proceed with auction sales.

Defendants were also ordered to pay court costs and legal fees.