Briefly, the facts are that an individual had, through ADIB (the financier) purchased a Nissan car which ADIB had in turn purchased from Al Masoud Car Agency under a murabaha contract. The individual insured the vehicle with Al Wathba National Insurance Company.

Nine months following the individual's purchase, the vehicle caught fire due to an electrical short circuit and was completely destroyed. The insured was paid the value of the vehicle by the insurer who then sued both Al Masaoud Agency and ADIB to recover the value of the vehicle, being AED 168,000 plus Court fees and costs. The action was based on the right of subrogation as prescribed by Article 1030 of the UAE Civil Transactions Code.

The Court of First Instance refused to entertain the action due to the purported lack of capacity to sue on behalf of Al Wathba, the Plaintiff. Similarly, the action was dismissed on appeal on the following grounds: