Catchwords: Real property – Torrens title by registration – indefeasibility (ADGM Real Property Regulations 2024, ss 22–23) – equitable-obligation exception (s 24(f)) – constructive trust – attributed corporate knowledge – off-plan sale and purchase agreements – Al Reem Island, Abu Dhabi – rectification of the register.
| Case at a glance | |
| Citation | [2025] ADGMCFI 0013 (joined cases ADGMCFI-2023-249; ADGMCFI-2024-047; ADGMCFI-2024-154) |
| Court | ADGM Court of First Instance, Commercial & Civil Division |
| Judge | Justice Paul Heath KC |
| Hearing / decision | Tried 5–9 May 2025; judgment 4 July 2025 |
| Result | Federal’s possession and damages claims dismissed across all four units; the owners’ counterclaims for title succeeded (the damages elements of the counterclaims failed for want of evidence). The register is to be rectified to the true owners, free of encumbrances. Permission to appeal refused at first instance and on appeal; costs awarded to the owners (10 November 2025). |
In short – Registration under the ADGM Real Property Regulations 2024 confers prima facie indefeasible title (s 22), and a registered proprietor ordinarily takes free of unregistered interests (s 23). But the equitable-obligation exception in section 24(f) sets a threshold below fraud: a registered proprietor who takes property knowing it already belongs to another holds it on constructive trust and can be ordered to restore it. Here, the original off-plan buyers’ prior interests in four Al Reem Island apartments defeated a later bulk registration, and the ADGM register was ordered to be corrected in their favour.
Background – Mangrove Place, Al Reem Island
The dispute concerned four residential apartments in the 480-unit Mangrove Place Building on Al Reem Island, Abu Dhabi. The building was developed by Luxury Real Estate LLC under an arrangement with the master developer, Sorouh Real Estate PJSC (later merged into Aldar Properties PJSC), which held Plot C8. Between 2007 and 2014, Luxury sold apartments off-plan under sale and purchase agreements (SPAs), including the four units in dispute – Units 2701, 1307, 1315 and 914. At the time, no mechanism existed to register individual apartment title, so formal title was never transferred to those buyers; they held SPAs, paid, and in due course occupied.
In September 2014, Aldar transferred Plot C8 to His Highness Sheikh Tahnoon Bin Saeed Bin Shakhbout Al Nahyan for AED 82,536,731, without specifying which units, if any, remained unsold. A contemporaneous valuation by Knight Frank – instructed in October 2014 for secured-lending purposes – covered only the unsold apartments; its Appendix 2 was, in terms, a “Schedule of Unsold Apartments”. That the valuation was confined to unsold stock became central evidence that the buyer acquired only the unsold units, not the four already sold to the defendants.
In August 2021, HH Sheikh Tahnoon – by then the sole shareholder – donated the property to Federal Properties Limited. In 2022, after Federal was acquired by Mr Saad Al Aamerie, Federal registered 478 of the 480 units – including the four disputed apartments – in its own name on the Abu Dhabi land register. When ADGM jurisdiction extended to Al Reem Island, those titles migrated to the ADGM Real Property Register on 1 January 2025. Federal then sued the occupiers for possession and damages; the occupiers counterclaimed as the true owners, seeking title and rectification of the register. The three proceedings were heard together and decided in a single judgment.
The questions before the Court
The Court identified the issues as:
- whether Luxury sold the disputed units to the defendants and had the right to do so;
- whether the 2014 transfer carried all units in the building or only those Luxury had not sold;
- whether Federal knew what had been sold, and whether it was the owner or a constructive trustee of any unsold units;
- whether the title deeds for the disputed units were issued to Federal in error;
- whether ADGM law recognises indefeasibility of title, whether exceptions exist and, if so, their scope; and
- if title was issued in error, what remedy the ADGM Real Property Regulations 2024 provide.
Amount at stake
The proceedings were declaratory in form: the outcome fixed the ownership of four residential apartments on Al Reem Island, and bore more broadly on the security of long-held ownership rights across comparable stock.
Title by registration: the ADGM framework
The ADGM operates a Torrens-style “title by registration” system: a registered owner’s rights derive from the act of registration itself, not from any pre-existing interest – the feature fundamental to Torrens jurisprudence. Registration is conclusive and prima facie indefeasible (s 22), and a registered proprietor ordinarily takes free of unregistered interests (s 23). That protection is, however, subject to the exceptions in section 24 – including the equitable-obligation exception in s 24(f), which had not previously been interpreted by the ADGM Courts in a contested setting. The case therefore required the Court to decide, for the first time, how the new Regulations reconcile the certainty of the register with equity’s role in preventing unconscionable reliance on legal ownership.
The section 24(f) equitable-obligation exception
Unlike many Torrens statutes, which generally require fraud to displace a registered title, the ADGM provision uses the broader language of “equitable obligation” – deliberately setting the threshold below dishonesty. The Court held that s 24(f) is engaged where the registered proprietor’s conduct – whether innocent or deliberate – operates contrary to a known equitable interest of another so as to give rise to a trust. Drawing on Lord Briggs’s analysis in Byers v Saudi National Bank [2023] UKSC 51 – applied through the ADGM Application of English Law Regulations 2015 – a person who acquires property knowing it belongs to another holds it as a constructive trustee. The mere existence of an earlier unregistered agreement is not, by itself, enough; what is decisive is the proprietor’s actual knowledge of the prior interest and conduct inconsistent with it.
Attributed knowledge: fixing a company with its donor’s knowledge
The Court found that Federal had actual knowledge, at the time of registration, that the four units had already been sold by Luxury and so were not within the 2014 transfer. The Knight Frank valuation was the most cogent evidence that the 2014 purchaser knew he was acquiring only unsold stock. That knowledge – of HH Sheikh Tahnoon, the donor and then-sole shareholder – was attributed to Federal under the attribution principles applicable to closely held and sole-shareholder companies (Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 3 NZLR 7; [1995] 2 AC 500). Federal therefore registered the units with knowledge of the prior sales and held them as constructive trustee for the defendants. The point is of wider significance for intra-group and gift transfers: a company cannot treat a donor’s or controller’s knowledge as someone else’s problem.
No need to prove payment to the original developer
Federal argued that the buyers should be required to prove payment to Luxury before any title passed. The Court rejected that as a precondition. Because the units never validly passed to the 2014 purchaser as “unsold” stock, any dispute about an unpaid purchase price was a matter between the buyers and Luxury Real Estate; Federal had no standing to make proof of payment a condition of transferring title. In any event, the Court indicated it would have found payment proven in each case, supported by independent evidence – including ledger evidence for Unit 2701 and an Abu Dhabi court-appointed expert’s report for Unit 914.
The decision, unit by unit
All three of Federal’s claims for possession and damages were dismissed, and the register is to be corrected in favour of the true owners:
- Unit 2701 (ADGMCFI-2023-249): title to be transferred into the owners’ names, free of encumbrances.
- Units 1307 and 1315 (ADGMCFI-2024-047): title transferred to the owner, free of encumbrances; an additional counterclaim for compensation failed for want of evidence.
- Unit 914 (ADGMCFI-2024-154): the same relief; the damages element again failed for want of evidence.
The owners remain liable for any properly incurred service and utility charges. The Court held that Federal held the units on constructive trust for the owners and ordered it to take the steps necessary to rectify the register.
Procedural history: appeals refused, costs to the owners
Federal sought permission to appeal twice – first before the Court of First Instance and then before the ADGM Court of Appeal – and both applications were refused, rendering the judgment final. A follow-on judgment addressed the mechanics of correcting the register where the registered owner holds as constructive trustee, confirming the Registrar’s statutory power of correction rather than a conventional transfer. Costs were awarded to the successful owners by a joint costs judgment dated 10 November 2025. (The neutral citations and exact dates for the permission-to-appeal refusals and the follow-on and costs judgments are to be confirmed against the ADGM Courts record – see editorial notes.)
Why the case is legally important
This is the first occasion on which the ADGM Court has interpreted sections 22, 23 and 24(f) of the Real Property Regulations 2024 in a contested dispute, and it is now the authoritative statement of how the ADGM’s title-by-registration system works. Three points carry precedent weight: the register is ordinarily conclusive and immune from challenge save in the narrow, statutorily defined circumstances in s 24; the s 24(f) equitable exception operates below the fraud threshold, so knowledge and conduct – not dishonesty – can displace a registered title; and an unregistered SPA, standing alone, does not generate an overriding interest, but combined with the registered proprietor’s knowledge it can. The decision draws a careful line between the Torrens objectives of certainty and finality and equity’s function in preventing unconscionable reliance on legal ownership.
Wider significance for Al Reem Island and ADGM-registered real estate
The case lands at a pivotal moment for Al Reem Island. Following UAE Cabinet Resolution No. 41 of 2023, ADGM’s jurisdiction was extended to the whole of Al Reem Island, and on 1 January 2025 the island’s real-estate register transferred from the Abu Dhabi Municipality to the ADGM Registration Authority. Al Reem property interests – and the mortgages over them – are now governed by the common-law ADGM Real Property Regulations 2024 rather than the onshore Abu Dhabi regime, and Federal Properties v Ibrahim & Ors is the first authoritative guidance on how title actually works for Al Reem Island owners under that new framework. ATB Legal’s guide to the transition of Al Reem Island real estate to the ADGM sets out the register migration and the transitional arrangements in detail.
Beyond the parties, the judgment gives the first authoritative confirmation that the ADGM Real Property Regulations operate a Torrens-style indefeasibility system, while showing that the framework can accommodate limited equitable exceptions in a principled way. For owners and investors on Al Reem Island and across ADGM-registered real estate, that combination – a reliable register, with a narrow safety valve against knowing dispossession – supports confidence, market stability and Abu Dhabi’s positioning as a secure, rules-based jurisdiction. It also signals that bulk registration following an intra-group or gift transfer is not a route to defeat earlier, known off-plan sales – a point of real practical importance as historic Al Reem Island transactions are reconciled against the new ADGM register.
Where the case turned
With no allegation of fraud and no ADGM precedent on the equitable-obligation exception, the s 24(f) analysis turned on a comparative reading of Torrens authority from England, Australia and New Zealand. That comparative line supported the proposition that conduct falling short of dishonesty, but operating contrary to another’s equitable interest, falls within s 24(f) – the approach the Court ultimately accepted. On the facts, the contemporaneous Knight Frank “Schedule of Unsold Apartments” proved decisive on what the 2014 purchaser had, and had not, acquired, and the attribution of the donor’s knowledge to the registered company supplied the remaining element of the constructive trust.
Why it matters (at a glance)
- The ADGM’s indefeasibility threshold is lower than many Torrens systems: knowledge, not fraud, can engage s 24(f).
- A company can be fixed with the knowledge of its controlling shareholder or donor – intra-group and gift transfers need genuine due diligence.
- Off-plan purchasers holding a valid SPA, with evidence of purchase and occupation, may secure title against a later registered owner who knew of the sale – even after years unregistered.
- A registered owner cannot withhold title by demanding proof of payment made to a third-party vendor.
- Contemporaneous valuation and due-diligence records – here, a schedule of unsold units – can be decisive evidence of what was, and was not, transferred.
Frequently asked questions
Is registered title under the ADGM Real Property Regulations 2024 indefeasible?
Prima facie, yes – section 22 makes the register conclusive and a registered proprietor takes free of unregistered interests (section 23). But section 24 sets out exceptions, including the section 24(f) equitable-obligation exception applied in this case.
Does the ADGM section 24(f) exception require fraud?
No. The threshold sits below fraud: registering property with actual knowledge that it belongs to another, and acting contrary to that interest, can be enough to impose a constructive trust – even without dishonesty.
Can an off-plan buyer on Al Reem Island defeat a later registered owner of the same apartment?
Where the buyer holds a valid SPA with evidence of purchase and occupation, and the later registered owner registered with knowledge that the unit had already been sold, the prior interest can prevail and the register can be corrected – as it was here.
Can an ADGM company be fixed with the knowledge of its shareholder or donor?
Yes. The knowledge of the donor and sole shareholder was attributed to the registered company under ordinary corporate-attribution principles, so the company registered “with knowledge” of the prior sales.
Can a registered owner require proof of payment to the original developer before transferring title?
Not where the property never validly passed to the registered owner’s predecessor. Any dispute over an unpaid price lies between the original buyer and the developer, not the later registered owner.
How is the ADGM register corrected where the registered owner holds on constructive trust?
Through the Registrar’s statutory power of correction, confirmed in a follow-on judgment, rather than a conventional transfer – the register is rectified to reflect the true ownership, free of encumbrances.
About this note
Written by Asha Treesa Bejoy, ATB Legal. ATB Legal acted for the defendants in ADGMCFI-2024-047 (Units 1307 and 1315) and ADGMCFI-2024-154 (Unit 914), and for all four defendants on the appeal applications. The full judgment is published on the ADGM Courts website. This note is general information about a reported, public judgment; it is not legal advice and does not create a lawyer–client relationship. ADGM rules and case law develop over time, so obtain advice on your specific circumstances.
Part of ATB Legal’s Dispute Resolution practice.