Your Nominee Shareholder Will Not Transfer the Shares Back: Can the DIFC Courts Order It?

Yes, where the nominee deed is governed by DIFC law and gives the DIFC Courts jurisdiction. On 9 July 2026, in CFI 094/2024, the DIFC Court of First Instance ordered the nominee shareholder of an onshore Dubai limited liability company to transfer his remaining 25 percent to the beneficial owner within 14 days, to sign every document the transfer needed, and to hand over the certificates, licences and originals with a signed but undated instrument of transfer. The deed had been signed on 1 May 2021, when federal law still required a UAE national to hold a majority of an onshore company, and it provided for an automatic transfer once that requirement went. The Court held the deed valid and binding, held that a later notarised amendment to the company's memorandum did not replace it, and granted specific performance under Article 84 of the DIFC Contract Law and Article 39 of the DIFC Law of Damages and Remedies rather than the damages claimed in the alternative.

Three cautions. The nominee did not attend the trial, so every finding rests on evidence he never tested. The judgment is a first-instance decision, with no appeal and no Conflicts of Jurisdiction Tribunal application found at the time of writing. And the Court decided that this deed had not been shown to be void, not that nominee holdings of onshore shares are lawful in general. Lay your deed, the register entries and the Department of Economy and Tourism record side by side, as the Court did.

Each right-hand entry is a question about your own papers.

Can the DIFC Courts order a nominee to transfer shares in an onshore Dubai LLC?

They can where the parties agreed in writing to their jurisdiction, and the company's registration outside the DIFC does not stop them. The company in CFI 094/2024 was registered with the Department of Economy and Tourism with its office in Bur Dubai, and in his application contesting jurisdiction the nominee argued that disputes between partners of such a company belong to the Dubai Courts alone. The Court's jurisdiction came from Clause 19 of the deed read with Article 5(A)(2) of the Judicial Authority Law, Dubai Law No. 12 of 2004 as amended, which allowed the Court of First Instance to hear a civil or commercial claim where the parties agreed in writing to file it there, before or after the dispute arose, pursuant to specific, clear and express provisions. The judgment records that this was upheld and not challenged again.

That provision has since been replaced. Dubai Law No. 2 of 2025 superseded Dubai Law No. 12 of 2004 by Article 43(A), and the opt-in now sits in Article 14(B): the DIFC Courts have jurisdiction over civil and commercial claims where the parties expressly agree in writing to it, before or after the dispute arises, provided that the agreement is made pursuant to specific, clear and express provisions. The test is carried across in the same words. The order of 3 October 2025 dismissed the challenge on the narrower footing that an earlier judge's order had set the procedural course, so the jurisdiction finding that counts is the one in the judgment.

What must the nominee deed say for the order to follow?

Six clauses did the work. Two features mattered most. The transfer clause was tied to a change in the law rather than to a demand, so the obligation crystallised on a date provable from the statute book. And the priority and variation clauses meant that nothing signed later could displace the deed unless it said so in writing, which is what the notarised memorandum amendment failed to do. A deed that is silent on priority, or that makes the transfer depend on a request the nominee can say he never received, hands the registered holder two arguments this nominee did not have.

The cards restate what the deed achieved.

The nominee says he only signed the last page: does that matter?

Not without a recognised vitiating factor. The nominee's final position was that he had signed only the execution page and had not read pages 1 to 7. The Court held that a party who signs an integrated written agreement is bound by its terms whether or not he has read or understood them, absent fraud, misrepresentation, duress or a fundamental mistake as to the nature of the document, and that an assertion of non-reading without particulars of any such factor does not displace that principle. DIFC law does not require each page of a contract to be separately signed or initialled.

The statutory frame is short. Under the Contract Law, DIFC Law No. 6 of 2004 (Consolidated Version, March 2024), no form is required for a contract (Article 9), a contract validly entered into is binding and can only be modified or terminated in accordance with its terms, by agreement or as the Law provides (Article 10), a contract is concluded by the acceptance of an offer (Article 14), and conduct indicating assent is an acceptance (Article 19(1)). The Court also had the nominee's admission through counsel at the hearing of 17 September 2025 that he did sign the deed in wet ink and that there was no fraud, and it found that final account an unreliable and belated attempt to avoid an agreement he had already admitted signing.

Key takeaway. A signature on the execution page of an integrated agreement is an acceptance of the whole instrument. The route out is a pleaded and particularised vitiating factor, not an assertion that the pages were never read.

He says he was misled or pressured into signing: what did the Court require?

Particulars, and there were none. The pleaded defence of misrepresentation and undue influence identified no representation, said nothing about when, by whom or in what terms any was made, and did not explain how the nominee relied on it. The Court held that a defence of that character, unsupported by particulars or evidence, cannot displace a signed, integrated written agreement. For the beneficial owner the lesson runs the other way: keep the record of how the deed came to be signed and what was said.

Was the deed void because it hid the real owner from the authorities?

The Court was not satisfied that any proper basis had been made out for treating the deed as void. The nominee pleaded that the arrangement was designed to conceal the true beneficial ownership of the shares from the UAE authorities, in circumvention of anti-money-laundering and beneficial-owner disclosure requirements and of the 51 percent national ownership requirement under Federal Law No. 2 of 2015. The Court answered that the deed was a private, bilateral contract governed by DIFC law regulating the parties' internal beneficial-ownership relationship, that Clause 1.6 anticipated a lawful transfer once, and only once, UAE law permitted full foreign ownership, consistent with the later change in federal law, and that no regulatory finding, sanction or enforcement action had been pleaded or evidenced. The disclosure assertions were unparticularised as to who was misled, when and how.

The company was incorporated on 6 October 2020 with the nominee at 51 percent, under what the judgment describes as the then mandatory requirement in Article 10 of Federal Law No. 2 of 2015 that a UAE national hold not less than 51 percent of an onshore limited liability company. Federal Decree-Law No. 26 of 2020 removed that requirement from 1 June 2021, with a grace period expiring on 26 March 2022, and the official UAE government portal describes the change as removing the 51 percent requirement for most business activities while strategic sectors still require approvals. The current statute, Federal Decree-Law No. 32 of 2021 on Commercial Companies, in force from 2 January 2022, repealed the 2015 law by Article 364, and its Article 10 lets the Cabinet define activities with a strategic impact and the competent authority set a ratio of national participation in the capital or boards of companies within its competence, so a national ownership requirement can still attach to a particular activity.

Two further instruments bear on the point. Federal Law No. 17 of 2004 on combating commercial concealment was repealed by Federal Decree-Law No. 26 of 2024 from 1 October 2024, so no federal anti-fronting statute is now in force. The beneficial-ownership regime does apply: Cabinet Decision No. 109 of 2023 requires a legal person to keep a register of its beneficial owners, the natural persons who ultimately own or control it, and its Article 10 requires the register of partners or shareholders to record any partner acting as a trustee or as a nominee board member, a term defined by acting on another person's directions, instructions or will, and the persons each represents. So the legality question is open on three points the judgment did not decide: whether a national ownership ratio still applies to your company's activity, whether the beneficial-owner register was kept true throughout, and what a court would make of a deed signed to get round a ratio that still applied. This guide gives no help with structuring a holding around those rules.

Does a later notarised amendment to the memorandum replace the nominee deed?

Not unless it says so, and in CFI 094/2024 it did not. On 10 March 2022 the partners signed a notarised sale, assignment and memorandum amendment that cut the nominee's recorded holding from 51 to 25 percent to admit three new investors. The nominee said this later notarised instrument recorded a final agreement giving him 25 percent of the shares and 20 percent of the profits. The Court gave four reasons for rejecting that. Clause 1.3 made the deed prevail in any inconsistency. Clause 18 required written variation executed by both parties, and the March 2022 documents did not purport to amend, vary or even refer to the deed: they amended a different instrument on a different legal plane, and an amendment to a constitutional document does not vary a separate private contract between two shareholders without express language. The DET receipt of 2 September 2022, showing the remaining 25 percent as To Be Cancelled, was inconsistent with March 2022 having fixed a final allocation. And the nominee's contributions to setting the company up, even at their highest, could not retrospectively vary a deed whose Clause 3.2 excluded any claim to distributions in exchange for the fixed fee.

If the nominee believes the company owes him for services beyond the fee, that claim lies against the company, not against a fellow shareholder. That is also why the counterclaim failed independently of the merits: it sought 25 percent of the shares and 20 percent of the profits from a party that bore no obligation to account for the company's profits or to recognise an entitlement in its capital.

Common mistake. Treating every notarised change to the memorandum as the parties' latest word on who owns what. A memorandum amendment allocates registered shares as between the company, its partners and the authority. It varies a private nominee deed only if it says so, in the form the deed requires.

When did the duty to transfer arise, and did we need to demand first?

The duty arose when the law changed, and no demand was needed, although demands were made. On its plain meaning Clause 1.6 entitled the beneficial owner to an automatic and immediate transfer upon the change in UAE law, and the obligation arose independently of any further demand. Informal requests from around October 2022 and a formal written demand of 10 June 2024 followed, and the authority's approval of the complete transfer on 2 September 2022 confirmed that it was lawful and capable of immediate implementation. The refusal to attend the notarisation, and the continued refusal after the formal demand, was non-performance within Article 77 of the Contract Law, which covers failure to perform any obligation under the contract, including defective or late performance.

What exactly did the Court order, and what did it refuse?

Three limbs and one gap. Within 14 days of the judgment the nominee was to transfer his remaining 25 percent legal shareholding to the beneficial owner or its nominated transferee, to sign all documents the transfer required, and to deliver all certificates, licences and originals relating to the shares with a signed but undated instrument of transfer. He was ordered to pay the costs of the claim and the counterclaim, including the reserved costs of the two earlier applications. The order records the claim as partly granted without saying why. Two gaps are visible: the AED 4,750,000 claimed in the alternative was not quantified or awarded, because specific performance was the just and sufficient remedy and damages would have been an unnecessary substitute for the shares, and the declaration that the deed was valid and binding, which the claimant had also sought, is not in the operative order although the reasons find exactly that.

The remedy ran through two statutes. Article 84 of the Contract Law lets a party require performance of a non-monetary obligation unless performance is impossible in law or fact, performance or enforcement is unreasonably burdensome or expensive, performance is of an exclusively personal character, or performance is not required within a reasonable time after the aggrieved party became, or ought to have become, aware of the non-performance. None was engaged: the authority had approved the transfer, it was not impossible, it was not exclusively personal because it could be carried through the UAE authorities if the nominee defaulted, and it had been sought within a reasonable time. Under the Law of Damages and Remedies, DIFC Law No. 7 of 2005 (Consolidated Version, March 2024), Article 38 allows an injunction compelling an act within a specific period where that is just and convenient, Article 39 allows specific performance where the obligation or its subject matter is specific and damages are unquantifiable or not sufficient, with personal services excluded, and Article 40 would have allowed damages in addition or in substitution.

What if the nominee stays away from the trial?

The case still has to be proved, and the Court said so. The nominee had confirmed that he and an interpreter would attend, neither joined, and the judge waited a reasonable period before directing that the one-day virtual trial proceed in his absence. The reasons record that neither side's evidence was cross-examined and that the Court gave weight to the contemporaneous documents rather than to unsupported assertions. Counsel for the claimant conceded that a voice message mentioning a theater could not with certainty be tied to this company rather than to another entity, and the Court placed no weight on it.

What did carry weight was documentary and consistent. The nominee's own message of 3 October 2022, that he would not transfer the holding to the company until certain outstanding sums were paid, read as an acknowledged obligation to transfer conditioned on unrelated payment demands, not as a claim to shares he regarded as his own. His only written monetary claim, an email of 22 January 2024 asserting AED 480,000 without any breakdown, was never particularised and disappeared once proceedings began, replaced by a profit claim first raised in a defence filed more than three years after the events. And unchallenged evidence showed that he had transferred equivalent nominee holdings in two other group entities in full, without payment or objection, when asked. Against inconsistent positions and no documentary corroboration, the Court accepted the claimant's account.

The cards restate the evidential points.

How did the claim run from claim form to costs?

About nineteen months, with two detours. The claim form was issued on 17 December 2024 for specific performance or, in the alternative, AED 4,750,000. An order of 13 March 2025 permitted service by email, and a default judgment was entered on 27 May 2025. The nominee applied to set it aside, alleging forgery and lodging a criminal complaint that was administratively dismissed on 10 June 2025. On 19 June 2025 the default judgment was set aside under Rule 14.2 of the Rules of the DIFC Courts because he had shown a real prospect of a defence, and he was directed to bring any jurisdiction challenge under Part 23 within 14 days.

The jurisdiction application followed on 3 July 2025 and was heard on 17 September 2025, where the forgery allegation was withdrawn. The order of 3 October 2025 dismissed it and reserved its costs to the trial judge. The defence and counterclaim came on 11 November 2025 and the case management conference on 29 January 2026. The trial was heard on 29 June 2026 and judgment given on 9 July 2026. On 20 July 2026 the Court assessed costs. The claimant had claimed AED 1,291,031.63 and asked for the indemnity basis because of the abandoned forgery allegation and the shifting defence. The Court refused, holding that the conduct was already reflected in the nominee bearing the whole costs liability and did not take the case out of the norm of contested commercial litigation, and allowed 50 percent, AED 645,515.82 on the standard basis, as reasonable and proportionate. Those are case figures and say nothing about what another claim would cost.

How does the order become a change on the company's register?

Through the documents the order compels, lodged with the authority under the federal companies law. Article 79 of Federal Decree-Law No. 32 of 2021 provides that a partner may assign his stake in accordance with the memorandum under a formal instrument duly attested, that the assignment binds the company and third parties only from the date it is recorded in the commercial register with the competent authority, and that the company may not decline to record it unless it violates the memorandum or the law. The order's demand for every form the transfer needs and a signed but undated instrument fits that mechanism: the attested instrument and the registration move the shares, and the authority had approved this transfer in September 2022.

If the nominee still refuses, two things point the way without deciding it. The Court held the obligation was not exclusively personal because the transfer could be carried through the relevant UAE authorities in default. And Article 32(A) of Dubai Law No. 2 of 2025 provides that where the object of enforcement is outside the DIFC the DIFC Courts' Enforcement Judge seeks the assistance of the Dubai Courts' enforcement judge, on conditions that include a final and executory judgment, an official Arabic translation and the executory formula. Nothing has been published after the costs order, so how this order reached the register is not on the public record.

What should the beneficial owner assemble before claiming?

The order of work follows the issues the Court listed for determination.

1. Find the signed deed and check the six clauses in the table, from legal title and the transfer trigger to priority, variation and the DIFC law and DIFC Courts clauses.
2. Fix the trigger date: the instrument and its commencement if the deed turns on a change in law, or the request, its delivery and the reply if it turns on a request.
3. Pull the register history from incorporation to today, every memorandum amendment with its date and notarisation, and the authority's own records of any approved or pending transfer.
4. Collect every written exchange with the nominee about the transfer, and note which acknowledge an obligation, which condition it on money, and which first assert an ownership or profit claim.
5. Record the nominee's conduct in any other company where he held shares on the same terms, because that pattern was treated as cogent corroboration.
6. Check the company's beneficial-ownership registers under Cabinet Decision No. 109 of 2023 and whether any national ownership ratio attaches to its activity, before pleading that the arrangement was lawful throughout.
7. Decide the relief: specific performance with signing and delivery orders, damages in the alternative on a quantified basis, and any declaration you want in the operative order itself.
8. Prepare for service and for a set-aside application, because a default judgment can be set aside on a real prospect of a defence.

What do beneficial owners in this position get wrong?

Two things, both about sequence. The first is suing on the deed before the register and the authority's record have been read against it, so that the defence arrives built on a notarised document the claimant itself signed. In CFI 094/2024 the March 2022 documents were the nominee's strongest card, answered by the deed's priority and variation clauses and the authority's receipt showing the holding as awaiting cancellation. The second is treating the change in the ownership law as a complete answer on legality. The judgment decided that an unparticularised public-policy defence failed against a deed that anticipated a lawful transfer, and nothing more. The judgment is a first-instance decision given after a trial the defendant did not attend, the only published later item in the claim is the costs order of 20 July 2026, the judgment records unchallenged evidence that any onshore Dubai Courts proceedings the nominee had started have concluded, and the searches of the Court of Appeal listing and the Conflicts of Jurisdiction Tribunal at the time of writing are bounded searches of published material, not a certificate of the court file. Every federal provision cited is read from the official English text, which the portal serves subject to its statement that the Arabic prevails, and the 2015 and 2020 instruments are described as the judgment and the official portal describe them, not from their own texts.

Frequently Asked Questions

Does the DIFC Court need the company to be registered in the DIFC? No. The company in CFI 094/2024 was a Department of Economy and Tourism company with its office in Bur Dubai. Jurisdiction came from the parties' written agreement in the deed, under the opt-in provision then in Article 5(A)(2) of the Judicial Authority Law and now in Article 14(B) of Dubai Law No. 2 of 2025, which requires an express written agreement made pursuant to specific, clear and express provisions.

Does a DIFC Courts clause in the memorandum of association help? The claimant pointed to one at the jurisdiction hearing, but the judgment rests on Clause 19 of the deed and the statutory opt-in. A clause in the memorandum is a second string, not a substitute for a clear jurisdiction clause in the nominee deed itself.

My nominee says the deed is forged. What happens to that allegation? It has to be proved, and in CFI 094/2024 it was withdrawn. The nominee alleged forgery when applying to set aside the default judgment and lodged a criminal complaint that was administratively dismissed on 10 June 2025. At the hearing of 17 September 2025 he conceded through counsel that he had signed in wet ink and that there was no fraud, and the Court later treated the sequence of forgery, admission and last-page account as an unreliable attempt to avoid the agreement.

Can I take damages instead of the shares? You can plead them in the alternative, as the claimant did at AED 4,750,000, but the Court will give specific performance where it is the just and sufficient remedy. Article 39 of the Law of Damages and Remedies conditions specific performance on damages being unquantifiable or not sufficient, and Article 40 allows damages in addition or in substitution, a power the Court declined to use because the shares themselves were the relief the claimant was entitled to.

The nominee says he earned the shares through his work for the company. Does that give him a share? Not under a deed like this one. The Court held that contributions to setting up and running the company, even taken at their highest, could not retrospectively vary a deed whose Clause 3.2 excluded any claim to dividends, distributions or other benefits in exchange for a fixed annual fee, and that any claim for remuneration would lie against the company, not against a fellow shareholder.

Is a nominee arrangement over onshore LLC shares lawful today? The judgment does not decide that question in general. It held that this deed, which anticipated a lawful transfer once the law permitted full foreign ownership, had not been shown to be void. The 51 percent requirement was removed for most activities from 2021, the 2004 commercial concealment law was repealed from 1 October 2024, the beneficial-ownership registers under Cabinet Decision No. 109 of 2023 must still be kept, and Article 10 of the 2021 companies law still allows national ownership ratios for strategic activities. Where your company's activity carries such a ratio, the question is open.

How long did the claim take? From the claim form on 17 December 2024 to judgment on 9 July 2026, about nineteen months, which included service by email, a default judgment set aside on 19 June 2025, a jurisdiction application dismissed on 3 October 2025, a case management conference in January 2026 and a one-day virtual trial on 29 June 2026. Costs were assessed on 20 July 2026. Another claim would run to its own timetable.

Has the judgment been appealed? Nothing has been published. At the time of writing the DIFC Courts' first-instance and Court of Appeal listings showed the judgment, the three orders described above and no permission application, and the Conflicts of Jurisdiction Tribunal's published decisions contained no application about this claim. Those are searches of published material, and the judgment remains a first-instance decision given in the defendant's absence.

This article is for general informational purposes only and does not constitute legal advice. Consult a qualified advocate for advice on your specific situation.

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