DCC 65/1997

This case involved a claim for the repayment of a guaranteed loan plus interest. The key issue was whether the guarantee was time barred. There was a time bar in the civil code but the guarantors had agreed to guarantee until the full repaying of the loan.

Background

A claim was brought against three defendants ordering them to pay 60,000 AED. The claimant stated it had given the first defendant a loan guaranteed by the second and third defendants for an amount of 34,000 AED. The first defendant had failed to repay the loan so the claimant brought the claim to recover the loan amount plus interest and costs. The second and third defendants argued the claim was time-barred under the Civil Code. The court of first instance court ordered the defendants to 58,640.18 AED plus legal costs and interest. The second and third defendants appealed and the appeal court upheld the judgement. The defendants appealed by cassation arguing the guarantee was time-barred as the claimant had failed to call on the guarantee within the six month period stipulated under the Civil Code.

Decision