Dubai Court Orders Manager to Pay Over Dhs731,696 for Withholding Company Finances

A Dubai court has ordered the manager of a general trading company to personally pay Dhs731,696, plus 5% annual interest, after he failed to disclose the company's financial statements. This failure obstructed a final court judgment in favor of a shipping company that had provided services to the trading firm.

The dispute originated from the trading company's use of a vessel owned by the shipping company for diesel fuel supply and financing. The shipping company had previously secured a judgment for Dhs731,696 to cover the vessel's expenses and crew salaries. However, during the enforcement of this judgment, it was discovered that the general trading company had no available funds or assets.

In an attempt to enforce the judgment, the execution judge demanded a financial report from the trading company's manager. The manager claimed the company had no bank accounts, real estate, vehicles, or employees, and was not conducting any business. An expert appointed by the court later found the company had significant receivables and payables by the end of 2020, but the manager did not provide complete subsequent financial statements.

The court ruled that while a manager is not typically personally liable for a limited liability company's debts, the manager's "unjustified refusal" to disclose the financial statements was deemed an obstruction of justice. This action was classified as fraud, misrepresentation, and a legal violation, leading to the personal payment order against the manager.