Contracts, Expert Reports, and Judicial Discretion

Performance of Contract

Abu Dhabi Court of Cassation — Cassation Appeals Nos. 1331 and 1338 of 2025 (Judgment upheld on 12 November 2025)

This judgment sits squarely at the intersection of contractual interpretation and expert evidence. It is not concerned with the nature of the underlying business activity. The Court of Cassation was asked one precise question: when a court-appointed expert presents competing contractual calculations, how far does the trial court’s discretion extend in choosing between them?

In answering that question, the Court reaffirmed principles that govern all commercial contracts litigated before UAE courts.

The contractual dispute before the Court

The parties were bound by several commercial contracts containing detailed payment mechanisms. When the relationship broke down, each side advanced sharply different financial positions, both grounded in the same contractual texts but calculated using different methodologies.

An accounting expert appointed by the court produced a report offering alternative hypotheses:

• one based on the aggregate contractual figures;

• the other grounded in actual contractual performance, as reflected in invoices, statements of account, and reconciled payments.

The trial court adopted the second approach. Its decision was upheld on appeal on 12 November 2025, and both parties then sought cassation review.

Contract interpretation is inseparable from performance

The Court of Cassation began by restating a settled rule of UAE contract law: while a contract is binding as written, its interpretation does not occur in a vacuum.

Where contractual obligations are performed over time, courts are entitled to examine:

• how payment mechanisms were implemented,

• whether the parties adhered to the contractual process they now invoke, and

• whether their conduct reflects acceptance of a particular accounting method.

Expert calculations that disregard the documentary trail created by the parties’ own performance may legitimately be set aside.

The legal status of expert reports

At the centre of the judgment is the Court’s clear articulation of the role of experts.

An expert is an aid to the court, not a substitute for it. The trial court retains full authority to:

• assess expert reasoning,

• accept one contractual interpretation over another,

• adopt an expert opinion in part, and

• reject conclusions that conflict with contractual documents or factual reality.

The Court emphasised that there is no obligation to prefer the expert opinion that yields the higher contractual claim. What matters is coherence with the record.

Choosing between competing expert opinions

The appellant argued that the court was bound to follow the expert hypothesis aligned with the strict contractual wording. The Court of Cassation rejected this argument.

Where an expert offers multiple contractual interpretations, the court may choose the one that:

• aligns with how the contract was actually executed,

• is supported by invoices and account statements, and

• reflects the parties’ settled course of dealing.

Once such a choice is made on rational grounds, it does not amount to legal error.

Limits of cassation review

The Court drew a firm boundary around its own jurisdiction. Cassation is not a forum to re-evaluate contractual arithmetic or revisit the court’s assessment of expert evidence.

So long as the trial court’s reasoning:

• falls within its interpretive authority,

• rests on documented contractual performance, and

• is logically explained,

cassation intervention is impermissible, even if an alternative expert calculation exists.

Experts, contracts, and claims for damages

The judgment also clarifies that expert reports do not, by themselves, establish contractual liability for damages.

Under UAE law, compensation requires proof of:

• breach of contract,

• actual loss, and

• causal connection.

Expert analysis may quantify loss, but it cannot replace proof of breach or causation. Where the record supports only delay in payment, statutory interest may exhaust the claimant’s entitlement.

Why this judgment matters

This decision is a contract law precedent on how UAE courts manage expert evidence. It applies to any dispute involving:

• staged payments,

• long-term contractual performance,

• complex accounting,

• or competing expert methodologies.

The Court of Cassation’s message is deliberate and restrained: contracts are interpreted through performance, and expert reports persuade only when they reflect that performance. Where the trial court reaches that conclusion on the evidence, higher courts will not interfere.