The DIFC Court of Appeal has allowed the appeal in Khaled Al Mheiri v John Cameron [CA 008/2025], setting aside the dismissal of Mr Al Mheiri’s claim under a contractual indemnity, and giving authoritative guidance on the findings a court must make before a contract can be cancelled for deceit under Articles 185 to 187 of the UAE Civil Code. The question whether the indemnity can be set aside for deceit or mistake will now be retried before a differently constituted Court of First Instance.

Background

Mr Al Mheiri, a prominent Emirati businessman, was one of a group of investors in two Gulf industrial companies. His co-investors included Mr Cameron, as well as a member of the ruling family of Qatar and Ali Sharif Al Emadi, Qatar’s then Minister of Finance and chairman of Qatar National Bank (QNB). The dispute arose out of the restructuring of almost US$100 million of lending by HSBC to the two companies.

Under the restructuring, two special purpose vehicles, funded by a US$25 million loan from QNB taken out by Mr Al Mheiri personally, purchased the companies’ debt, and HSBC released the investors from their personal guarantees. With Mr Al Mheiri shouldering the entire QNB borrowing, Mr Cameron executed an indemnity in his favour in August 2015 in respect of that liability. When the QNB loan was called and Mr Al Mheiri’s liability established, he sued on the indemnity in the DIFC Court of First Instance.

By a judgment dated 16 June 2025, H.E. Justice Lord Angus Glennie dismissed the claim, upholding Mr Cameron’s defence that the indemnity had been procured by misrepresentation under Articles 185 to 187 of the UAE Civil Code. Mr Cameron said he had signed the indemnity on the strength of assurances that Mr Emadi would give a similar indemnity, that he would receive shares in the special purpose vehicles, and that the QNB borrowing would be repaid from rent payable under equipment leases; none of which came to pass. Those representations were found to have been made not by Mr Al Mheiri but by a third party involved in negotiating the restructuring. The judge attributed them to Mr Al Mheiri, while expressly declining to find that Mr Al Mheiri knew that any false representation was being made.

The appeal

The Court of Appeal (H.E. Chief Justice Wayne Martin, H.E. Justice Robert French and H.E. Justice Sir Peter Gross) held that the trial judge had made none of the key findings that a defence of deceit requires. Deceit under Article 185 requires more than a statement that proves untrue: it requires knowledge of falsity and an intention to mislead, and there is a fundamental distinction between an untrue statement and a lie. The judge made no finding that anyone knew the representations to be false when they were made. Nor, in relation to representations about future conduct, did the judge identify whose intention was the subject of each representation, or find that the intention was not in fact held at the time. And where, as here, the representations were made by a third party rather than the contracting party himself, the judge had expressly declined to make any finding of knowledge against Mr Al Mheiri, and his reasons did not correspond with the principles of UAE law on ostensible authority that had been cited to him. Whether Article 190, under which a contract may be cancelled where the contracting party is proved to have known of a misrepresentation made by another, provides the only route by which a contracting party can be made responsible for such a misrepresentation was left open for the retrial, as was the question whether a principal is answerable for the fraud of an agent acting with ostensible authority only. Without those findings, the defence of deceit could not stand, and the claim ought not to have been dismissed. The Court ordered a retrial before a differently constituted Court of First Instance, confined to whether Mr Cameron was entitled to set aside the indemnity for deceit or mistake, and directed him to serve particulars setting out the facts, the principles of UAE law and the legal reasoning on which that case rests. It also set aside the costs order made against Mr Al Mheiri on the first permission application, stayed the trial costs order pending the retrial, and ordered Mr Cameron to pay 85% of Mr Al Mheiri’s costs of the appeal and of both applications for permission to appeal.

Why the decision matters

The decision is significant guidance on deceit and misrepresentation under the UAE Civil Code as applied in the DIFC Courts: the distinction between a statement that proves untrue and a deceitful one; the findings of knowledge and intention a court must make before a contract may be cancelled under Articles 185 and 187; and the ways in which a statement about future conduct may carry an implied representation of present fact. It also underscores the appellate consequences of a first instance judgment that does not make the findings of fact necessary to support its conclusion. The Court also made clear that it will only exceptionally have regard to observations made by a trial judge when refusing permission to appeal, and that an appellate court should be slow to make findings of fact not made at trial, particularly in cases of fraud; it declined to make the findings which the trial judge had declined to make.

Maria Mulla, leading Sajid Suleman of Outer Temple Chambers, acted for the successful Appellant, instructed by Dr. Mahmood Hussain and Tariq Khan of M&CO Legal.

 

Read the judgment in full: Khaled Salem Musabeh Humad Al Mheiri v John Cameron [2025] DIFC CA 008