DCC 282/2005

This case involved a guarantor of a debt who had died during litigation and whether and for how much his heir's were liable for the amount. A key question was whether these heirs had taken out the guarantee in their own right when the debt was rescheduled.

Background Facts

A bank, brought proceedings before the Dubai Court of First Instance under roll (250/2003) against five Defendants. The First Defendant as a facility user of the bank, the remaining four were their guarantors.

During the course of proceedings, the second Defendant died, and the Plaintiff requested that the heirs of the second Defendant be adjoined to the proceedings. The Bank alleges that the heirs had also entered into separate agreements, after their father's death, to guarantee the First Defendant.

The Court of First Instance ruled in favour of the bank but granted it limited interest: and found that the heirs' liability should be limited only to their share in their father's inheritance.

The Plaintiff proceeded to appeal the decision, and so did the heirs, under roll (939/2004). The Court of Appeal decided to limit the liability of the heirs and dismissed the Bank's appeal.