Background

A bank filed a claim with the First Instance Commercial Court against a company and against an individual claiming the individual had issued a guarantee letter following an order from the bank worth 1,729,500 USD for the insurance of good execution of the preparation of 30,000 tons of cooking oil but the holding company had failed to honour the commitment. The company which was meant to benefit from the deal, confiscated the guarantee letter following a court ruling and requested the bank to pay the said amount.

The bank filed a claim to request the holding company and the person jointly pay the amount and legal fees, costs, and lawyers' fees.

The Court examined the case and said that the bank was correct to file the claim under Article 292 of the Trade Law because the bank had paid the beneficiary the money and could seek compensation from the individual because he was the guarantor of the holding company under Article 1008 of the Civil Law.