🇦🇪 UAE Court Rules: Total Interest Cannot Exceed Original Loan Value! ⚖️

• Landmark Decision: The UAE Federal Supreme Court has reaffirmed a major ruling prohibiting financial institutions from charging interest on accumulated or compound interest. • Key Cap: The ruling establishes that the total interest payable on any loan must not exceed the original value of the loan principal. • Case Impact: This decision overturned a judgment requiring a borrower to pay AED 1.553 million on an original loan of AED 700,000. The court noted the accrued interest (AED 860,147) violated the principal cap. • Interest Type: The court clarified that only simple interest is allowed on outstanding balances after account closure. Crucially, delay interest (compensation for late payment) must also not cause the total debt to exceed the original principal. • Significance: This sets a powerful legal precedent for limiting debt exposure related to interest charges for borrowers across the UAE.