SCA 34204683/2013
Type
Case
Court
Saudi Arabian Court of Appeal
Jurisdiction
Saudi Arabia
Taxonomy
Lending & Security
Copyright
LexisNexis
Decision date
16 Mar 2013
Catchwords
Judicial Powers – Loan Agreement – Partnership – Contract – Commission for Settling Banking Disputes – Jurisdiction
An individual who had defaulted on a bank loan tried to claim that the loan agreement should be considered to be a partnership agreement. This would impact the court where the dispute would be heard. The bank argued all bank contracts should be heard by the Commission for Settling Banking Disputes.
Background
An individual filed a case (Case No. 32234537 Folder No. 3462403 on 27/01/2013 the Riyadh General Court) against an agent who represented a commercial bank. He stated that the individual had agreed a loan of 13,801,667 riyals with the bank which he needed in order to trade in medical equipment and signed a bank order as a guarantee. The bank was to receive a profit of 7.5% of the loaned amount.
After eight months the individual paid the bank 2,000,000 riyals on the basis that the proper calculations would be made later. However, individual's business was not successful and he lost his capital and had to pay large penalties to the Customs Department.