DCC 348/2007

This case involved a claim by a bank for payment of credit facilities. A customers argued they had refused to do so because the bank had refused to issue a promised letter of credit and caused them loss. The bank had authority to decide if it wished to issue a letter of credit.

Background

The Plaintiff, a bank, filed proceedings before the Dubai Court of First Instance under Case No. (628/2006) seeking compensation for money awarded to three defendants in the form of credit facilities.

The three Defendants were clients of the bank who had defaulted on repaying credit facilities that had been previously issued to them by the bank.

During the engagement between the bank and the Defendants, the defendants had applied to a letter of credit to facilitate a business engagement they had planned. However, the bank never issued this and the defendants stated that they refused to pay facilities as a result.

The Court of First Instance refused the Defendants defence and allowed the Plaintiff's claim. The Defendants' proceeded to appeal the decision to the Dubai Court of Appeal under Appeal No. (483/2007): which also failed.

Proceedings