The Abu Dhabi Global Market (ADGM) Courts have issued a significant ruling against ADCB bank, confirming that banks and financial institutions cannot rely on implied consent or amended terms and conditions to introduce major contractual changes such as jurisdiction clauses. The case, managed by our office, Ayesha Aldhaheri Advocates and Legal Consultants, reinforces that, financial institutions must uphold transparency and cannot rely on hidden amendments to override consumer rights.
A Long-Term Credit Card Relationship Put to the Test
The decision arose from a dispute between Abu Dhabi Commercial Bank (ADCB) and Mr. Fahrudeen Karim Abubacker Syed Mohamed, in which ADCB sought to recover credit card dues by filing a claim before the ADGM Small Claims Division. The bank argued that ADGM Courts had jurisdiction based on updated terms and conditions referenced in monthly statements.
However, the original agreement between the parties was dated back in the year 2004, long before the establishment of ADGM, and the bank was unable to produce the signed contract. ADCB instead relied on implied consent, stating that the customer had accepted the amended terms by continuing to use the credit card.
The defendant challenged the ADGM’s jurisdiction, asserting that no written jurisdiction agreement existed. It was argued that the credit card had been issued in 2004, prior to the establishment of the Abu Dhabi Global Market, and that all related transactions occurred in Dubai.
Court Rejects Implied Consent Arguments
The court firmly rejected the bank’s argument that silence or continued credit card usage could be interpreted as consent to a fundamental contractual amendment. The court found no evidence of any clear, written agreement by the consumer approving the revised jurisdiction clause.
The court further found that the “terms and conditions” in electronic monthly statements were insufficient to establish consent to a significant contractual change such as court jurisdiction. It could be seen more as a routine reminder rather than a clear notification of amendments.
The Court accepted several key points, including:
- No written agreement existed between the parties granting ADGM jurisdiction, as required under Article 13(8) of the ADGM Founding Law, which mandates a clear and express written agreement for jurisdiction to be valid.
- Routine references such as “Terms and Conditions apply” in monthly statements were insufficient to impose a new jurisdiction clause or fundamentally alter the original contract.
- ADGM, being a special jurisdiction, requires explicit and informed consent from both parties before it can assume authority over a dispute.
Limits on Unilateral Contract Amendments
In its reasoning, the court emphasised that banks cannot unilaterally amend core contractual terms that directly affect consumer rights. Provisions related to dispute resolution, jurisdiction, or legal remedies are considered fundamental contractual terms.
The court held that such changes require prior notice and explicit acceptance from the consumer. Simply embedding amendments within monthly statements or other fine-print communications, without obtaining clear acknowledgment from the cardholder, is legally insufficient.
Alignment with UAE Banking and Consumer Protection Principles
The ruling reflects broader regulatory principles established under UAE Central Bank regulations, which emphasise transparency, fairness, and informed consent in consumer banking relationships. Financial institutions are expected to clearly communicate any material contractual changes and obtain affirmative agreement from customers rather than relying on implied acceptance.
What This Means for UAE Residents
For UAE residents, this judgment reinforces important consumer protections. It confirms that banks cannot quietly alter major contractual terms, and that continued card usage alone does not amount to consent to new legal conditions. Consumers retain the right to challenge unfair, unclear, or hidden contractual amendments imposed by financial institutions.
Implications for Banks and Financial Institutions
For banks and financial institutions operating within UAE, the decision underscores the need for proper compliance with transparency requirements. Contractual amendments must be clearly communicated, properly documented, and expressly accepted by customers. Failure to do so can weaken the enforceability of such changes and may expose institutions to legal costs, reputational risks, and regulatory scrutiny.
The case was successfully handled by our office, Ayesha Aldhaheri Advocates and Legal Consultants, underscores the UAE judiciary’s commitment to consumer protection and contractual fairness. The ruling serves as a clear reminder that transparency and informed consent are not mere formalities but essential legal requirements in financial relationships between banks and their customers.