DCC 215/2004
Type
Case
Court
Dubai Court of Cassation
Jurisdiction
Dubai
Taxonomy
Civil Courts, Litigation Procedure & Practice, Financial Institutions, Lending & Security, Financial Services & Activities
Copyright
LexisNexis
Decision date
27 Dec 2004
Catchwords
Current account – Closure – Mutual agreement – Account transactions – Banking facilities – Overdraft – Maximum amount – Security – Guarantor – Creditworthiness – Obligations – Bills of lading – Authority – Trial Court – Assess evidence and documents – Permissible – Breach the rule – Guarantee – Six months – Maturity
The current account ceases to exist upon closure either by mutual agreement or by one party's will or by implicitly closing it due to ending of account transactions. The bank may offer the client banking facilities in the form of an overdraft account with a specified maximum amount and term and the bank is entitled to request the client to provide security and guarantor to cover his loss of creditworthiness. If the client did not honour its obligations, the bank is entitled to retain the bills of lading. The authority of the trial court to consider the facts of the case and assess the evidence and documents. It is permissible to breach the rule whereby the sponsor loses the guarantee if the creditor does not demand the debts guaranteed within six months as of the date of maturity. The Trial Court's authority to determine the guaranteed debts and the guaranteed person and confirm the approval of the guarantor to continue.
Having reviewed the case documents, read out the summary report prepared by the Honorable “………” Judge, heard the pleading, and after the legal deliberation;
Whereas the cassation has fulfilled the requirements prescribed by law in terms of form;