A UAE resident has won a credit card dispute against a major bank after an Abu Dhabi court rejected the lender’s attempt to enforce updated terms and conditions imposed through routine monthly statements. The ruling, delivered by the Abu Dhabi Global Market (ADGM) Courts, establishes a significant precedent regarding consumer rights and the validity of contractual changes in the United Arab Emirates.
The case centered on Fahrudeen Karim Abubacker Syed Mohamed, who disputed unpaid dues on a credit card issued in 2004. The bank argued that updated terms and conditions, communicated via monthly statements, constituted acceptance of ADGM as the jurisdiction for dispute resolution. However, the court found that the customer had never explicitly agreed to this change.
“The court observed that no amended agreement had ever been signed, and the bank’s assertion that the original credit card application form had been destroyed in a fire was disputed,” stated a release from Ayesha Al Dhaheri Advocates and Legal Consultants, the firm representing the customer. The court determined that simply referencing updated terms in monthly statements was “insufficient to establish consent to a significant contractual change such as court jurisdiction.”
The ADGM court’s decision underscores that banks cannot unilaterally alter fundamental contract terms, including dispute resolution processes, through implied consent. The ruling explicitly states that jurisdiction cannot be established through implication, silence, or one-sided amendments. The court also referenced UAE Central Bank consumer protection rules, which mandate clear and advance notification of significant changes to terms and conditions.
The bank’s claim was dismissed, and it was ordered to cover the customer’s legal expenses. This outcome reinforces the principle that consumers must be explicitly informed and provide clear consent when their legal rights are affected by changes to banking agreements.
According to the ruling, banks cannot rely on fine print in statements or app notifications to alter the core relationship with their customers. Although acknowledging that consumers may not meticulously review every detail of terms and conditions, the court emphasized the importance of clarity, transparency, and proper consent, particularly concerning legal rights. This principle remains valid in the context of modern digital banking.
The case highlights a growing concern among UAE residents regarding the potential for banks to implement unfavorable changes to credit card and bank account terms without explicit customer agreement. The ADGM court’s decision serves as a warning to financial institutions and a reassurance to consumers that their rights will be protected.
