Civil Law and UAE – Simple Restitution Claims Overview

1. Introduction

Restitution is a remedy aimed at returning a benefit, money, property, or advantage that one person has received when there is a legal basis requiring its return.

In simple language:

Restitution means “give back what you received when the law requires you to return it.”

It is different from ordinary damages.

Damages generally compensate a person for loss.

Restitution generally focuses on reversing an improper benefit or restoring what was transferred.

Under the current UAE Civil Transactions Law, Federal Decree by Law No. 25 of 2025, the law expressly addresses unjust enrichment and receipt of the undue. Article 274 provides that property taken without lawful ground must be returned, while Article 275 requires restitution where a person receives something by way of performance that was not due. (UAE Legislation)

2. Simple Meaning of a Restitution Claim

A restitution claim generally arises where:

A → transfers money/property/benefit → B → B has no sufficient legal basis to retain it → B must restore it.

Example

A accidentally transfers AED 100,000 to B's bank account.

B was not entitled to the money.

B may have an obligation to return the AED 100,000.

This is a classic restitution/undue-payment situation.

3. Current UAE Legal Framework

The current Civil Transactions Law is particularly important because the law changed from the former Federal Law No. 5 of 1985 to Federal Decree by Law No. 25 of 2025, effective from 1 June 2026.

For restitution, important provisions include:

Article 232 – Binding force

A valid and binding contract cannot ordinarily be revoked or modified except by mutual consent, litigation, or a legal provision. (UAE Legislation)

Article 233 – Mutual rescission

Parties may mutually rescind a contract, with restoration of the pre-contract position where legally possible. (UAE Legislation)

Article 234 – Judicial rescission

Where one party fails to perform a bilateral contract, the other may, after notice, seek performance or rescission, with compensation where justified. (UAE Legislation)

Article 274 – Unjust enrichment

A person cannot take another's property without lawful ground. If property is taken without such ground, it must be returned, with benefits and accretions where applicable. (UAE Legislation)

Article 275 – Receipt of the undue

A person who receives, by way of performance, something that was not due must restore it if it remains available or return its equivalent/value if it no longer exists. (UAE Legislation)

4. Two Major Types of Restitution

For exam purposes, it is useful to distinguish:

A. Contractual Restitution

This occurs because a contract has been:

rescinded;

terminated;

avoided;

invalidated; or

otherwise brought to an end in circumstances requiring restoration.

Example

A pays AED 500,000 for a property.

The contract is lawfully rescinded.

A may seek:

Return of AED 500,000

subject to the applicable legal rules.

B. Restitution for Unjust Enrichment

This arises independently of an enforceable contractual entitlement.

Example

A mistakenly transfers AED 200,000 to B.

There is no contract requiring B to receive the money.

B may have to return it because retaining it lacks lawful basis.

5. Restitution vs Damages

Example

A gives B AED 1 million under a contract that is later rescinded.

Restitution:
B returns AED 1 million.

If A also suffered an additional legally recoverable loss because of B's breach, damages may potentially be considered separately.

6. Basic Elements of a Restitution Claim

A simple restitution analysis asks:

1. Was the claimant's property or benefit transferred?

Example:

AED 500,000 was transferred.

2. Did the defendant receive a benefit?

The defendant obtained the money.

3. What was the legal basis for the transfer?

Was there:

a valid contract?

a payment obligation?

a gift?

a court order?

a statutory entitlement?

4. Is there a legal reason requiring restoration?

If the defendant had no lawful basis to retain the benefit, restitution may arise.

5. What must be returned?

Possibly:

the original property;

equivalent property;

its monetary value;

money received;

benefits/yields, where legally applicable.

7. Lawful Cause Is Extremely Important

A key question is:

Why did the defendant receive the benefit?

If there is a valid legal basis, restitution may not be available merely because the claimant later regrets the transaction.

For example:

A voluntarily pays B AED 1 million under a valid contract.

B's receipt has a lawful contractual cause.

A generally cannot simply call the payment “unjust enrichment” and recover it while ignoring the contract.

This principle was expressly recognised in UAE-law analysis by the DIFC Courts when considering Dubai Court of Cassation authorities on the former Article 318 of the UAE Civil Code. (DIFC Courts)

8. Restitution and Contract

A very important principle is:

Where a valid contract governs the relationship, contractual rights normally determine the parties' rights rather than a general unjust-enrichment claim.

In Sky News Arabia FZ-LLC v Kassab Media FZ (LLC), the DIFC Court referred to Dubai Court of Cassation decisions holding that where a contractual relationship governs the parties, the agreement determines their rights and obligations, leaving no ordinary room for unjust enrichment based on the same contractual subject matter. (DIFC Courts)

Simple example

A contract says:

“B must pay A AED 1 million for the services.”

B pays the AED 1 million.

A has received the money under the contract.

B cannot normally say:

“A was unjustly enriched simply because I paid.”

The contract supplies the legal basis for the payment.

9. Restitution After Rescission

Where a contract is lawfully rescinded, restoration can become important.

The basic objective is:

Put the parties, as far as legally possible, back into the position they occupied before the transaction.

Under the current UAE Civil Transactions Law, mutual rescission requires that the parties be able to return to their previous position for complete rescission of the entire subject matter. (UAE Legislation)

Example

A sells equipment to B for AED 300,000.

B pays.

The contract is subsequently rescinded.

Possible restoration:

B returns the equipment;

A returns AED 300,000.

10. Restitution in Kind

The preferred approach may be to return the actual property where it still exists and can legally be returned.

Example

A's artwork is wrongfully transferred to B.

If the artwork still exists and A has a valid restitutionary claim:

Return of the artwork

may be preferable to merely paying its monetary value.

Article 274 of the current UAE Civil Transactions Law expressly contemplates return of the property where it remains in existence, or its equivalent/value where it does not. (UAE Legislation)

11. Monetary Restitution

If the original property cannot be returned, restitution may require:

equivalent property; or

monetary value.

Example

A transfers 1,000 units of a commodity to B.

B wrongfully disposes of them.

Depending on the applicable legal rules, B may have to provide their equivalent or value.

12. Receipt of the Undue

This is one of the simplest restitution concepts.

Example

A owes B AED 10,000.

A accidentally pays B AED 100,000.

The additional AED 90,000 was not due.

The law may require B to return the undue payment.

This is directly addressed by Article 275 of the current Civil Transactions Law. (UAE Legislation)

13. Payment by Mistake

A restitution claim may arise where:

money is paid to the wrong person;

excessive payment is made;

a debt has already been paid;

a non-existent debt is paid;

an obligation is mistakenly believed to exist.

The claimant should establish the relevant facts and the absence of a legal basis for the defendant's retention.

14. Restitution and Gifts

A genuine gift can create a major defence to a restitution claim.

In Mahesh Srichand Tourani v Dusty Tourani & Duzty LLC [2018] DIFC CFI, the claimant alleged unjustified enrichment concerning a very substantial transfer of money. The court found that if the payment was a genuine gift, that would constitute a complete defence to the contractual and restitutionary claims. (DIFC Courts)

Principle

A benefit that was intentionally and validly given as a gift is not ordinarily recoverable merely because the donor later wants it back.

15. Restitution and Change of Position

A difficult issue arises where:

money was received by mistake;

the recipient acted in good faith;

the recipient changed their position because of the payment.

The older DIFC case Dagny v Dag & Company International Ltd [2011] DIFC CFI 007 considered this issue in detail. The court discussed the principles concerning mistaken payments and the defence of change of position, including circumstances where an innocent recipient has in good faith parted with the money and no longer retains the benefit. (DIFC Courts)

Simple example

A accidentally pays B AED 1 million.

B genuinely believes the payment is legitimate and, before discovering the mistake, uses the money in circumstances satisfying the applicable change-of-position defence.

The restitution analysis can become much more complicated.

16. Restitution and Property

Restitution is particularly important where the claim concerns identifiable property.

For example:

shares;

bonds;

real estate;

vehicles;

artwork;

commodities;

securities;

company assets.

The claimant may seek:

Return of the actual asset

rather than only monetary damages.

17. Important Case 1 – DAMAC Park Towers v Youssef Issa Ward [2015] DIFC CA 006

This is one of the most important UAE-based restitution authorities.

The dispute concerned payments made under a property reservation agreement.

The Court of Appeal considered whether the claimant was entitled to restitution.

The court explained that restitution under the relevant DIFC law could arise where there was unjust enrichment, but unjust enrichment required more than simply showing that the defendant had received a benefit.

The court emphasised the need for an unjust factor.

Because DAMAC had been legally entitled to receive and retain the relevant payments under the agreement, the claimant did not establish the necessary unjust enrichment. (DIFC Courts)

Principle

Enrichment alone is insufficient; there must be a legal basis making the enrichment unjust.

This is an especially important case for understanding the difference between:

“The defendant received my money”

and

“The defendant received my money without lawful justification.”

18. Important Case 2 – Sky News Arabia FZ-LLC v Kassab Media FZ (LLC) [2018] DIFC CFI 067

This case directly considered unjust enrichment under UAE law.

The court discussed Dubai Court of Cassation decisions concerning former Article 318 of the UAE Civil Code.

The authorities established that where a contract governs the parties' relationship, the contract normally determines their rights and obligations and a separate unjust-enrichment claim cannot simply replace the contractual arrangement.

The court therefore rejected the attempt to treat contractually justified payments as unjust enrichment. (DIFC Courts)

Principle

A valid contractual basis normally prevents the same payment from being recharacterised as unjust enrichment.

19. Important Case 3 – Larmag Holding B.V. v First Abu Dhabi Bank PJSC & Others [2019] DIFC CFI 054

This is a major UAE-law restitution authority.

Larmag alleged that bonds had been transferred without lawful basis.

The court considered Articles 318 and 319 of the former UAE Civil Code and concluded that the claimant had established restitutionary claims concerning the bonds and certain proceeds.

The court ordered actual restitution of identified bonds and, where appropriate, monetary amounts representing property transferred onward. (DIFC Courts)

Principle

Restitution can involve the return of identifiable property, not merely compensation for loss.

The court also emphasised an important limitation: the claimant must have the appropriate title to, or immediate right to possess, the property in question. (DIFC Courts)

20. Important Case 4 – Dagny v Dag & Company International Ltd [2011] DIFC CFI 007

This case concerned a restitution claim relating to money allegedly paid by mistake.

The court considered:

mistake;

causation;

the recipient's entitlement;

unjust enrichment; and

change of position.

The judgment discussed the principle that an innocent recipient who receives money by mistake and, in good faith, parts with it without retaining the benefit may have a defence based on change of position. (DIFC Courts)

Principle

Restitution may be limited where an innocent recipient has materially changed position in good faith.

21. Important Case 5 – Basin Supply Corporation v Rouge LLC & Claude Barret [2018] DIFC CFI 057

The dispute involved repayment of a loan and an alternative restitutionary argument.

The court considered the UAE-law principles of unjust enrichment and referred to DAMAC Park Towers v Ward, including the requirement for:

enrichment; and

an unjust factor.

The case is useful because it demonstrates that restitution may become relevant where a contractual basis is alleged to be invalid or ineffective. (DIFC Courts)

Principle

Restitution can provide an alternative legal route where the supposed contractual basis for retaining money fails, but the requirements of unjust enrichment must still be established.

22. Important Case 6 – Ahmed Mohamed Abdel Aziz Saleh v Chartis Memsa Insurance Company [2011] DIFC CFI 021

The claimant attempted to advance a restitution/quantum meruit theory concerning additional work performed under an employment relationship.

The court held that the existing employment contract and salary arrangement were important. The claimant had not established a sufficient basis for additional restitutionary payment merely from voluntarily performing additional work without clear evidence of an agreed additional remuneration basis. (DIFC Courts)

Principle

Restitution is not a general mechanism for obtaining extra payment where an existing contract already governs the parties' obligations.

23. Important Case 7 – Lendro v Mr Lutis [2020] DIFC SCT 166

The claimant terminated an agreement under the applicable DIFC Contract Law.

The court applied the contractual restitution provision and ordered the return of a AED 142,000 deposit, restoring the claimant toward the position existing before the relevant contractual arrangement. (DIFC Courts)

Principle

Lawful termination can trigger contractual restitution and require return of amounts previously supplied.

24. Important Case 8 – Karthi Keyan Venkataramana v Ahmed Mohammad Abdul Rahman Ali [2025] DIFC CFI 110

This recent DIFC case considered an alternative unjust-enrichment claim in a dispute governed by a loan agreement.

The court observed that it was difficult to see how an unjust-enrichment claim could operate where a contract already governed the parties' relationship and contained express contractual obligations. (DIFC Courts)

Principle

A claimant should not ordinarily use unjust enrichment to bypass an existing contractual allocation of rights and obligations.

25. Case-Law Revision Table

Important jurisdictional note: these are predominantly DIFC Court authorities applying DIFC or, in some cases, UAE mainland law. DIFC judgments are not automatically binding precedents on mainland UAE courts. The current mainland statutory starting point is now Federal Decree by Law No. 25 of 2025.

26. Restitution Under the Current Article 274

Article 274 of the current Civil Transactions Law is particularly important.

It essentially establishes three ideas:

First

A person cannot take another person's property without lawful ground.

Second

If property is taken without lawful ground, it must be returned, including relevant benefits/accretions.

Third

Where property was acquired without an acquisitive juridical act, the recipient must return it if it remains available, or its equivalent/value where it no longer exists, subject to statutory exceptions. (UAE Legislation)

27. Article 275 – Undue Payment

Article 275 deals specifically with receipt of something that was not due.

Example

A bank mistakenly transfers:

AED 50,000

to B.

B had no entitlement to it.

B receives something that was undue.

The law requires restitution according to the statutory conditions. (UAE Legislation)

28. Restitution After Invalid Contract

Suppose:

A and B enter into an arrangement.

Later, the agreement is determined to be legally invalid.

A has already transferred AED 1 million.

The court may have to determine:

what each party received;

whether the transfer can be reversed;

whether property can be returned;

whether money/value must be substituted;

whether third-party rights intervene;

whether benefits or profits must also be accounted for.

Thus:

Invalidity can create a restitution problem even where ordinary contractual enforcement is unavailable.

29. Restitution and Unjust Enrichment

A useful conceptual formula is:

Enrichment + corresponding deprivation + absence of lawful basis + applicable legal conditions = possible restitution

But do not treat this as an automatic formula.

The precise requirements depend on the applicable UAE legislation and jurisdiction.

DAMAC v Ward demonstrates why the mere existence of enrichment does not automatically establish a restitutionary claim. (DIFC Courts)

30. Restitution and Double Recovery

A claimant cannot normally recover twice for the same benefit/loss.

For example:

A claims:

return of the property; and

full monetary damages representing the same property.

The court must prevent double recovery.

In Larmag, the court expressly recognised that if the claimant received damages for the same wrongful deprivation, it could not also obtain a second recovery representing the same bonds. (DIFC Courts)

31. Restitution and Profits

Restitution may sometimes extend beyond the original property to:

benefits;

proceeds;

yields;

identifiable profits,

where the applicable law permits.

The current Article 274 expressly refers to benefits and accretions in connection with property taken without lawful ground. (UAE Legislation)

The Larmag litigation also demonstrates how restitution can extend to identifiable proceeds derived from transferred assets. (DIFC Courts)

32. Restitution in Property Disputes

Suppose:

A owns 10,000 shares.

B wrongfully obtains the shares.

If the shares remain identifiable, A may seek:

Return of the shares.

If they have been sold:

Tracing/proceeds/value issues may arise.

This is why restitution can be more powerful than ordinary damages in some property disputes.

33. Restitution in Real Estate

Possible examples include:

failed property purchase;

rescinded reservation agreement;

cancelled development transaction;

deposit paid under a terminated agreement;

invalid transfer;

mistaken payment.

However, real-estate restitution must be analysed alongside:

registration law;

property legislation;

contractual terms;

third-party rights;

mortgage rights;

possession;

court orders.

34. Restitution in Banking

Common examples include:

mistaken bank transfers;

duplicate payments;

unauthorised transfers;

payment of a debt twice;

mistaken beneficiary payments;

recovery following invalid transactions.

The claimant should preserve:

bank statements;

payment instructions;

transaction IDs;

correspondence;

account records;

proof of mistake.

35. Restitution in Commercial Disputes

Commercial restitution claims can involve:

advance payments;

deposits;

securities;

shares;

bonds;

inventory;

intellectual property;

loan proceeds;

mistaken payments;

invalid transactions.

The first question should always be:

What is the legal basis on which the defendant received the benefit?

36. Practical Example

Facts

Company A pays Company B AED 2 million as an advance for machinery.

The contract is subsequently lawfully rescinded.

B does not deliver the machinery.

Possible analysis

Step 1: A paid AED 2 million.

Step 2: B received the money.

Step 3: The contract is rescinded.

Step 4: The legal basis for B retaining the advance may disappear or be altered by the rescission.

Step 5: A seeks restitution of AED 2 million.

Step 6: The court examines the contract, rescission, payments, performance and any applicable deductions or counterclaims.

Possible result

Return of the advance, subject to the applicable legal rules.

37. Practical Example – Mistaken Payment

A owes B:

AED 10,000

but A accidentally transfers:

AED 100,000.

The excess is:

AED 90,000

If B had no entitlement to the excess, Article 275 provides the statutory basis for analysing restitution of the undue amount. (UAE Legislation)

38. Practical Example – Unjust Enrichment Without Contract

A's property is mistakenly transferred to B.

There is:

no contract;

no gift;

no sale;

no statutory entitlement.

B nevertheless retains the property.

A can potentially rely upon the statutory unjust-enrichment framework, subject to proving the required elements.

Article 274 of the current Civil Transactions Law provides the starting point. (UAE Legislation)

39. Common Defences to Restitution

A defendant may argue:

1. Lawful cause

“I received the money under a valid contract.”

2. Gift

“The claimant intentionally gave it to me as a gift.”

3. Performance was due

“I was legally entitled to receive the payment.”

4. Change of position

“I relied on the payment in good faith and materially changed my position.”

5. No enrichment

“I did not obtain the alleged benefit.”

6. No corresponding deprivation

“The claimant did not suffer the corresponding transfer alleged.”

7. Lack of title

“The claimant does not have the necessary legal entitlement to the property.”

8. Double recovery

“The claimant is seeking the same recovery twice.”

40. Restitution vs Compensation vs Specific Performance

A single dispute can potentially involve more than one remedy, but the court must avoid inconsistent or duplicated recovery.

41. Simple Restitution Checklist

When analysing a UAE restitution claim, ask:

Step 1

What did the defendant receive?

Step 2

Who owned or was entitled to it?

Step 3

How was it transferred?

Step 4

Was there a contract?

Step 5

Was the payment/property actually due?

Step 6

Was the contract rescinded or terminated?

Step 7

Was the transfer made by mistake?

Step 8

Was there a lawful cause?

Step 9

Does Article 274 or Article 275 apply?

Step 10

Can the original property be returned?

Step 11

If not, what is the appropriate equivalent/value?

Step 12

Has the defendant changed position?

Step 13

Are third-party rights involved?

Step 14

Would the proposed recovery result in double recovery?

42. Exam-Ready Definition

A restitution claim under UAE civil law is a claim seeking restoration of money, property, or another benefit received by a person where the applicable law requires its return, particularly where the benefit was obtained without lawful ground, was unduly received, or must be restored following lawful rescission or termination of a contract.

The current Article 274 provides the principal statutory framework for unjust enrichment, while Article 275 specifically addresses receipt of the undue. Contractual rescission and restoration are dealt with separately under the provisions governing dissolution of contracts. (UAE Legislation)

43. Quick Revision Formula

Remember:

RECEIVED → LEGAL BASIS? → ENRICHMENT → UNJUST? → RESTORE

Or:

Benefit + No/Lost Legal Basis + Corresponding Entitlement + No Applicable Defence = Restitution

Most important cases for revision

DAMAC Park Towers v Ward [2015] – enrichment requires an unjust factor.

Sky News Arabia v Kassab [2018] – contract normally governs instead of unjust enrichment.

Larmag v First Abu Dhabi Bank [2019] – actual property and proceeds can be subject to restitution.

Dagny v Dag [2011] – mistaken payment and change of position.

Basin Supply v Rouge [2018] – restitution where contractual basis is challenged.

Saleh v Chartis [2011] – existing contract limits restitutionary claims.

Lendro v Lutis [2020] – termination and return of deposit.

Venkataramana v Ali [2025] – unjust enrichment generally cannot bypass contractual obligations.

Core idea:

Restitution is about restoring an unjustly retained benefit, not simply compensating every loss. Under the current UAE Civil Transactions Law, the starting provisions are Article 274 on unjust enrichment and Article 275 on receipt of the undue. (UAE Legislation)