29 Sep 2014

HEIRS & ASSIGNMENT OF PROPERTY

Authored by: Tarik El Bakri and Mohammed AQ Al Salti

HEIRS & ASSIGNMENT OF PROPERTY

Hadef & Partners has an active role in the UAE Courts having a number of in-house Emirati advocates who guide clients throughout all stages of the court process. Throughout the year, we deal with many matters that ultimately provide outcomes with important legal principles. In this article Mohammed AQ Al Salti, Senior Legal Consultant & Tarik El-Bakri, Partner & Head of Commercial, Employment and IP practices in Abu Dhabi, discuss a recent judgment from the Abu Dhabi Court of Cassation regarding the validity of assignment of property among heirs.
 
Abu Dhabi Court of Cassation Case No. 111/2013- Civil Cassation/Inheritance
 
In this matter, our client was a joint heir to a property located in Al Ain.  He agreed to assign his share in the property to his brother (the defendant and counter party in the Cassation action) who managed the property until he sold it in 2007. On selling the property the brother refused to give our client his share of the proceeds. Our client filed an action arguing that the assignment of his share in the property was conditional on his mother continuing to occupy the property, and with the passing away of their mother, the assignment had ceased to be effective.  In addition, the assignment was void, having been made without consideration in violation of the inheritance rules.
 
The Court of First Instance and the Court of Appeal had previously found against our client on the basis that, inter alia, the court had already established the validity of the assignment agreement in an earlier action, leading it to apply the principle of double jeopardy. Both courts had also found the assignment agreement to be final, and not conditional, as we had pleaded.
 
We continued to argue that the case under consideration had a different subject matter.  The earlier action merely documented the existence of the assignment agreement, whereas the later action now before the court was to challenge the validity of the assignment agreement.  We also argued that the assignment agreement was a “suspended” (mawquf) contract within the meaning found in Article 213 of the Civil Code.
 
The Court of Cassation, agreed with our reasoning and further agreed with our description of the assignment agreement as a contract whose performance is encumbered by a third party’s right (the mother’s right to reside in the property) according to Article 213 of the Civil Code. They continued that with the death of the mother, the agreement was no longer valid. The Court also acknowledged and agreed, that the agreement was void because it was made without consideration, which is a requirement for a valid assignment among heirs.  Furthermore, because the assignment was invalid, it led to the defendant acquiring a larger share than he was entitled to under the rules of inheritance, making this a violation of Article 361 of the Personal Status Law which deems void all attempts at circumventing the inheritance laws of the UAE. To rule otherwise would mean denying an heir his rightful share of his inheritance. 
 
Summary
 
To conclude from the above judgment, the Abu Dhabi Court of Cassation ruled in our client’s favour, clarifying that an assignment among heirs without consideration is voidable and is a violation of Article 361 of the Personal Status Law.
 
Furthermore, the Court stated that a conditional assignment of an inherited property is only deemed to be a temporary assignment which ceases upon the conclusion of the condition. The property must then revert back to the heir.

 

This article, including any advice, commentary or recommendation herein, is provided on a complimentary basis without consideration of any specific objectives, circumstances or facts. It reflects the views of the writer which may, in some cases, differ from those of the firm, especially in the develop jurisdiction of the UAE