Commercial Transactions Law · Federal Decree-Law 50 of 2022
Article 87
Book Two: Commercial Obligations and Contracts > Part One: Commercial Obligations
English translation
1. A creditor may claim complementary compensation to be added to the delay interest if he proves that the damages in excess of said interest is caused by the debtor's deception or serious error.
2. Where the creditor, when claiming this right, causes, in bad faith, the prolongation of the dispute period, the court may reduce the interest or it may not judge any interest at all for the period of the unjustified prolongation.
Official translation, as published by the portal.
Official Arabic text
.1 يجوز للدائن أن يطالب بتعويض تكميلي يضاف إلى فوائد التأخير إذا أثبت أن الضرر الذي يجاوز هذه الفوائد قد تسبب فيه المدين بغش منه أو بخطأ جسيم.
.2 إذا تسبب الدائن وهو يطالب بحقه في إطالة أمد النزاع بسوء نية، فللمحكمة أن تخفض الفوائد أو ألا تقضي بها إطلاقاً عن المدة التي طال فيها النزاع بلا مبرر.
What it means when you sign
This article lets a creditor ask for extra compensation on top of delay interest, but only where the creditor proves that the loss beyond that interest was caused by the debtor's deception or serious error. It also deals with the creditor's own conduct. If the creditor, while pursuing the claim, drags out the dispute in bad faith, the court may reduce the interest or award no interest at all for the period of unjustified delay.
When you are about to sign a contract, this article means that delay interest is the starting point, and that anything more depends on proof tied to deception or serious error. A clause that gives the creditor additional compensation beyond delay interest, whatever the cause, may run into this article. It also shows that interest is not untouchable: bad-faith prolonging of a dispute can reduce or remove it for that period. The clauses to read are the late-payment interest clause and any wording about additional damages or compensation for delay.
Not yet cited in a Fahm report; shown because it sits in the same chapter as one that is.
Related articles
- Article 86This article deals with interest on late payment of commercial debts.
- Article 88Cited in Fahm reportsThis article bars a creditor from claiming compound interest, meaning interest charged on interest that has already built up and remains unpaid.
- Article 89This article covers instruments for paying money or delivering goods.
- Article 107This article deals with goods that, once delivered, turn out to differ from what was agreed in quantity or type, or to be defective.
- Article 108Cited in Fahm reportsThis article sets time limits for a buyer who finds that delivered goods differ from the agreement or are defective.
- Article 109This article allows a seller of goods protected by a registered trademark to agree with the buyer that the buyer will not resell below a certain price.