On 8 July 2025, the Dubai Court of Cassation questioned the enforceability of late payment compensation in Islamic finance. Unlike default interest, such compensation is not retained by financiers but donated to charity. The ruling may affect market practices, though its broader impact remains uncertain under UAE law.
Author
Avni Priyadarshi
BrowsingAvni is an associate based in the Dubai office with experience in the UAE, KSA and UK in advising on both conventional and Islamic financing transactions.