Civil Law and UAE: Simple Restitution Concepts

1. Meaning of Restitution

Restitution means returning a benefit, money, property, or value that a person has received when there is no sufficient legal basis for keeping it.

In simple words:

Restitution = Give back what you received.

It is different from ordinary damages.

Damages generally compensate for loss.

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

Specific performance requires performance of the original obligation.

A simple formula is:

Benefit Received → Legal Basis Examined → Basis Fails/Unjustified Retention → Restoration

2. Current UAE Law on Restitution

There is an important current-law development.

Federal Decree-Law No. 25 of 2025 promulgating the Civil Transactions Law came into force on 1 June 2026 and repealed the former Federal Law No. 5 of 1985. Therefore, the 2025 Civil Transactions Law is now the principal mainland UAE civil-law framework. (LEXAI)

The new law expressly regulates unjust enrichment and receipt of the undue.

Article 274 — Unjust Enrichment

The new law provides, in substance, that:

a person cannot take another's property without lawful grounds;

property taken without lawful basis must be returned;

where property obtained without an acquisitive legal act still exists, it should be returned;

if it no longer exists, its equivalent or value may have to be restored, subject to the law. (UAE Legislation)

Article 275 — Receipt of the Undue

A person who receives something through performance when it was not actually due must generally restore it if it remains in existence, or restore its equivalent/value if it no longer exists.

There is an important qualification: restitution may not be available where the person who made the payment knew that the payment was not due, subject to the statutory exceptions. (LEXAI)

Article 276

Restitution of an undue payment may arise where:

the basis/cause of the obligation never came into existence;

the basis of an obligation ceased after initially existing; or

an obligation was performed before its due date in circumstances covered by the statutory rule. (LEXAI)

Thus, the current UAE law gives restitution an express statutory foundation rather than treating it merely as an incidental remedy.

3. Simple Types of Restitution

A. Restitution after Invalidity

If a transaction is legally ineffective and one party has already transferred money or property, restoration may be required.

Example

A pays B AED 100,000 under a transaction that is subsequently held ineffective.

The court may require B to return the AED 100,000, subject to the applicable legal rules.

B. Restitution after Termination

A contract may be terminated following legally recognised grounds.

Where the legal framework requires restoration after termination:

A returns what A received + B returns what B received.

This is sometimes called reciprocal restitution.

C. Restitution of Undue Payment

Suppose A accidentally transfers AED 50,000 to B even though B is not entitled to it.

If the statutory conditions for recovery are satisfied:

B must restore the undue payment.

This is particularly important in:

banking;

accounting;

commercial transactions;

mistaken payments;

duplicate payments.

D. Restitution of Property

If someone obtains another person's property without lawful basis, the primary objective may be to return the property itself.

If return in kind is impossible, the applicable law may require:

Equivalent property or monetary value.

Article 274 expressly addresses this distinction. (UAE Legislation)

E. Restitution of Benefits

Restitution can sometimes concern benefits or accretions associated with property.

The current Article 274 expressly provides for liability concerning benefits and accretions where property is taken without lawful ground. (UAE Legislation)

4. Restitution and Unjust Enrichment

These concepts are closely connected.

Unjust enrichment

A person receives or retains a benefit at another person's expense without sufficient legal justification.

Restitution

The legal response may require the benefit to be returned.

Therefore:

Unjust enrichment = Problem
Restitution = Possible corrective response

However, not every benefit received by another person is automatically unjust.

There must be an appropriate legal basis for restitution.

5. Restitution and Damages Are Different

Example

A pays B AED 100,000 under a transaction that is later legally undone.

Restitution: Return AED 100,000.

If A also suffered an independently recoverable loss because of B's wrongful conduct:

Damages: Additional compensation may potentially be considered, depending on the applicable legal rules and proof.

The claimant should not receive double recovery for the same loss.

6. Restitution and Specific Performance

These remedies also have different objectives.

Specific performance

“Perform what you promised.”

Restitution

“Return what you received.”

Damages

“Compensate the legally established loss.”

Example

A pays B AED 500,000 for property.

B fails to perform.

Depending on the legal circumstances, A may seek:

performance of the contract;

termination and restitution;

damages where legally recoverable.

The appropriate remedy depends on the applicable statutory and contractual framework.

7. Important Case Laws

Because the new Civil Transactions Law only became effective on 1 June 2026, there is not yet a large body of published appellate case law interpreting its new restitution provisions. Consequently, older UAE cases and DIFC authorities remain useful for understanding restitutionary principles, but their legal basis must be identified carefully. (LEXAI)

Case 1 — Damac Park Towers Company Limited v Youssef Issa Ward [2015] DIFC CA 006

This is one of the most important restitution authorities in the DIFC.

The dispute concerned payments made under a property reservation agreement.

The DIFC Court of Appeal explained that restitution under the applicable DIFC legislation required consideration of unjust enrichment and an unjust factor.

Although Damac had received money, the court concluded that the payments had been made voluntarily under the agreement and that there was no sufficient unjust factor requiring restitution.

The Court therefore rejected the restitution claim. (DIFC Courts)

Principle

Receiving a benefit does not automatically mean that restitution is owed.

There must be a proper legal basis for treating the enrichment as unjust.

8. Case 2 — Youssef Issa Ward v DAMAC Park Towers Company Limited [2014] DIFC CFI 001

This was the first-instance decision in the same dispute.

The court found that the developer had wrongfully terminated the reservation arrangement and had failed to issue the required Agreement of Sale.

It ordered repayment of approximately AED 2.626 million in restitution. (DIFC Courts)

Principle

Where a contract has been wrongfully terminated and the recipient has no proper basis to retain payments, restitution may restore the parties toward their pre-contractual position.

Important point

The later Court of Appeal decision changed the result. Therefore, the 2015 Court of Appeal judgment should be treated as the controlling DIFC authority for the appellate outcome, rather than the original CFI reasoning.

9. Case 3 — Amit Dattani, Nitin Jobanputra, Masood ur Rahman & Shemhon Iftakhar v DAMAC Park Towers Company Limited [2012] DIFC CFI 034

The claimants had terminated property sale arrangements and sought repayment.

The DIFC Court considered Article 90 of the DIFC Contract Law, which provided for restitution following qualifying termination.

The court held that the claimants were entitled to restitution of sums they had paid. It also explained the relationship between restitution and interest: restitution seeks to restore the parties to their earlier position rather than provide a contractual benefit that would go beyond restoration. (DIFC Courts)

Principle

Restitution is primarily concerned with restoring the parties after valid termination.

10. Case 4 — Dattani v DAMAC Park Towers [2014] DIFC CA 007

The DIFC Court of Appeal considered the consequences of termination and Article 90 of the DIFC Contract Law.

The court examined the contractual mechanism under which restitution could follow termination and considered the reciprocal nature of restoring what each party had supplied. (DIFC Courts)

Principle

Restitution after termination is connected to the legal right to terminate and the reciprocal restoration of benefits.

11. Case 5 — Lendro v Mr Lutis [2020] DIFC SCT 166

This case is a simple example of practical restitution.

The claimant terminated a contractual arrangement under the applicable DIFC Contract Law because the defendants could not proceed with the agreed transfer.

The court concluded that the claimant was entitled to restoration of the original position and ordered repayment of a AED 142,000 deposit. (DIFC Courts)

Principle

Where valid termination occurs and the legal requirements for restitution are satisfied, a payment made under the contract may have to be returned.

12. Case 6 — Gjurd v Gizella (DIFC) Limited [2016] DIFC SCT 081

This case concerned a mistake relating to the product purchased.

The court held that the contract was void because of the relevant mistake and considered Article 47 of the DIFC Contract Law.

It described restitution as putting the affected party into the position it would have occupied had the contract not been concluded.

The claimant had invested USD 80,000. The court deducted amounts already received and awarded the remaining amount in restitution. It rejected the separate claim for hypothetical lost profits because those profits would not have been obtained had the transaction never occurred. (DIFC Courts)

Principle

Restitution normally restores the pre-transaction position; it is not simply another method of recovering expected profits.

13. Case 7 — Dagny v Dag & Company International Limited [2011] DIFC CFI 007

The court considered a restitution claim based on unjust enrichment and mistaken payment.

The court examined principles concerning a recipient who received money by mistake and subsequently changed position in good faith.

The case illustrates that restitutionary claims may require examination not only of the original payment but also of what happened to the benefit afterwards. (DIFC Courts)

Principle

The circumstances surrounding receipt, retention and subsequent change of position can affect restitution.

14. Case 8 — Basin Supply Corporation v Rouge LLC & Claude Barret [2018] DIFC CFI 057

The dispute involved a loan and alternative arguments concerning repayment and restitution.

The court considered Article 48 of the DIFC Damages and Remedies Law, which recognised restitution where the remedy was expressly available or where one party had been unjustly enriched at another's expense without a subsequent change of position making restoration unjust. (DIFC Courts)

Principle

Restitution can operate as an alternative remedy where unjust enrichment provides the legal foundation.

15. Simple Elements of a Restitution Claim

For exam purposes, use this formula:

B-L-B-R

B — Benefit

Did the defendant receive money, property or another benefit?

L — Legal Basis

Was there a valid legal reason for receiving or retaining it?

B — Breakdown of Basis

Did the legal basis fail, disappear, or never exist?

R — Restoration

What must be returned—property, money, equivalent or value?

16. Example: Mistaken Bank Transfer

Suppose:

A intends to transfer AED 10,000 to C.

A accidentally transfers AED 10,000 to B.

B has no contractual right to the money.

Analysis

Benefit: B received AED 10,000.

Legal basis: No valid entitlement appears to exist.

Unjustified receipt: The payment was not due to B.

Restitution: B may be required to return the amount under the applicable rules on undue receipt.

This is closely connected with current Article 275. (UAE Legislation)

17. Example: Property

A transfers property to B under a transaction that is subsequently legally invalidated.

Possible restitution

If the property still exists:

Return the property.

If it cannot be returned:

Restore the equivalent or value where the law requires it.

This approach corresponds closely with Article 274 of the current Civil Transactions Law. (UAE Legislation)

18. Example: Failed Contract

A pays B AED 200,000 for goods.

B never supplies the goods and the contract is lawfully terminated.

Possible consequences may include:

termination;

return of AED 200,000;

return of anything else received;

potentially damages for separately established loss, where legally available.

The precise remedy depends on the contract, applicable statutory provisions, proof and circumstances.

19. Restitution vs Compensation: Exam Table

20. Important Limitations

Restitution is not automatic merely because someone has received money.

The court may need to consider:

Was the payment actually due?

Was there a valid contract?

Was the payment voluntary?

Did the legal basis fail?

Was there a mistake?

Was the contract validly terminated?

Has the property changed or disappeared?

Has the recipient changed position?

Is there a statutory exception?

Would the requested relief create double recovery?

The current Article 275 specifically illustrates this by limiting recovery where the payer knowingly made a payment that was not due, subject to statutory exceptions. (LEXAI)

21. Restitution and Unjust Enrichment: Simple Distinction

Unjust enrichment

A has a benefit + B suffers corresponding deprivation + there is insufficient legal justification.

Restitution

The benefit/value should be restored.

A simple conceptual formula is:

Enrichment → Unjustification → Causal Connection → Restoration

But the exact requirements depend on the statutory cause of action and the applicable legal regime.

22. Mainland UAE vs DIFC

This distinction is extremely important.

Mainland UAE

The current statutory framework is the Federal Decree-Law No. 25 of 2025 Civil Transactions Law, effective from 1 June 2026.

Articles 274–276 are particularly important for unjust enrichment and undue receipt. (UAE Legislation)

DIFC

DIFC has its own contractual and remedies legislation, and the cases above—such as Damac v Ward, Gjurd, Lendro and Dagny—apply the DIFC legal framework.

Therefore:

DIFC restitution cases are persuasive/illustrative for comparative study but are not automatically binding on mainland UAE courts.

This distinction should always be stated when using DIFC cases in a mainland UAE civil-law answer.

23. Practical Restitution Checklist

Before claiming restitution, ask:

What benefit was received?

Who received it?

Who provided it?

Was it legally due?

What was the legal basis for the transfer?

Did that basis fail or disappear?

Was there a valid termination or avoidance?

Does the property still exist?

If not, what is its equivalent/value?

Has the recipient changed position?

Is there a statutory exception?

Would restitution duplicate another remedy?

24. Short Exam Answer

Restitution in UAE civil law means restoration of money, property or benefits received without sufficient legal basis or where the applicable law requires restoration following the failure or termination of a legal relationship. Under the current Civil Transactions Law, Articles 274–276 expressly regulate unjust enrichment and receipt of undue payments. Article 274 requires restoration of property obtained without lawful ground, while Article 275 deals with undue performance and Article 276 identifies circumstances in which restitution of undue performance is permitted. Restitution differs from damages because restitution primarily focuses on reversing an unjustified benefit, whereas damages focus on compensating legally recognised loss. Important DIFC authorities include Damac v Ward, Dattani v DAMAC, Lendro v Lutis, Gjurd v Gizella, Dagny v Dag & Co., and Basin Supply v Rouge. These DIFC decisions should be distinguished from current mainland UAE law. (UAE Legislation)

25. Quick Revision

Remember:

Restitution = Return the Benefit

Main current UAE provisions:

Article 274 — unjust enrichment/property obtained without lawful ground

Article 275 — receipt of undue payment

Article 276 — circumstances permitting restitution of the undue (UAE Legislation)

Main concepts:

Invalid transaction → Restore

Undue payment → Return

Unjust enrichment → Correct unjustified benefit

Property received without lawful basis → Return property/value

Qualifying termination → Reciprocal restoration

Six key cases to remember:

Damac Park Towers v Ward [2015] DIFC CA 006

Dattani v DAMAC [2012] DIFC CFI 034

Dattani v DAMAC [2014] DIFC CA 007

Lendro v Lutis [2020] DIFC SCT 166

Gjurd v Gizella [2016] DIFC SCT 081

Dagny v Dag & Co [2011] DIFC CFI 007

Core principle:

Restitution seeks to restore what was transferred or unjustifiably retained, rather than simply compensating every form of loss.