DCC 290/2010
Type
Case
Court
Dubai Court of Cassation
Jurisdiction
Dubai, United Arab Emirates
Taxonomy
Mortgages, Civil Evidence, Payment & Payment Systems, Sale of Goods
Copyright
LexisNexis
Decision date
2 Jan 2010
Catchwords
Banking – Credit – Documentary credit – Opening of documentary credit – Conditions of opening documentary credit – Mortgage – Mortgage on the goods – State of goods – Perished goods – Bounced cheques – Bill of Lading – Evidence – Expert
This case involved rights under a documentary credit. Key issues included that steps had not been taken to ensure the safe keeping of the mortgaged items so the bank did not have the right to claim back the value of the mortgaged items when they perished.
Key Legal Questions in the Judgment
1. The documentary credit.
2. Obligations of the person ordering the opening of documentary credit.
3. Customer's failure to pay to the bank the value of the bills of lading conforming with the conditions of the opening of the credit
Background Facts
The Appellant (a bank) granted banking facilities of 4.7 million AED to the first respondent (a single person company owned by the second respondent). The guarantor of these facilities was the second and third respondents.
On 18/6/2009 a criminal decision was rendered imprisoning the third respondent for seven months for providing seven cheques to the Appellant and having insufficient funds in their account to cover them.