This definition was approved by the Dubai Supreme Court (decision no. 154 dated 3 January 1995) when it stated that the pledge restricts the rights of the borrower in disposing of the pledged assets, but keeps the pledged assets under ownership of the borrower[1].

[1] Dubai Supreme Court, no. 154 dated January 3rd, 1995

Such possession and security also entails a prohibition by the pledgee to directly acquire the pledged assets in the event of default of the pledgor, except through court proceedings[1].

[2] Article 176 of the Commercial Transactions Code

If this is the case, how does the pledge of a banking deposit qualify? Such a pledge raises the complex issues of ownership of the deposited funds and the acquisition by the pledgee of the funds in the event of default.

Ownership of funds