Dubai store loses bid to end tenancy contract after citing losses due to pandemic

Sohaila Ahmed, Staff Reporter

A holding company has won its legal dispute against a convenience store that sought to terminate a Dh1.3m-lease-contract citing financial losses due to coronavirus.

A claim filed by the supermarket on July 20 last year with the Dubai Rental Disputes Centre requested to terminate a five-year contract that expires this coming July.

It also requested that the holding company repays an insurance deposit of Dh62,000, grants a permission to obtain a no-liability letter from Dubai Electricity and Water Authority, and to hand over a Dh1.3m-cheque in rent covering the contract’s fifth year.

“The supermarket remained operational during closures enforced by the outbreak and its business wasn’t affected like other outlets,” said International Partner Litigation and Dispute Resolution at Charles Russel Speechlys law firm Ghassan El Daye who represents the holding company.

Following Ghassan’s argument during the online hearing, an arbitrator was tasked by Dubai’s Rental Disputes Centre to assess the supermarket’s business.

The arbitrator’s findings proved the supermarket - part of a chain - was not affected by government ordered closures that were issued to stem the spread of the virus.

“The judicial bench’s members decided the pandemic could not be considered an ‘uncommon circumstance that inflicted losses on the claimant,” said El Daye.

“Their case was dismissed and demands rejected following which they filed an appeal.”

Appeal Chief Judge Abdul Kader Moussa, was told the contract can only be terminated based on an agreement or amicable settlement between the litigants.

“This is because their claim is unfounded since no orders were issued by authorities forcing the supermarket to shut down,” said El Daye.

On Feb.9, the appeal was dismissed making the verdict final.