WATER A false signature costs 27 million dirhams to a foreign bank

The Dubai Court of Cassation upheld the decision of a first court and was upheld by the appeal, dismissing the lawsuit of a foreign bank which asked a local company to pay 27 million and 232 thousand dirhams, as guarantor of a businessman who had evaded payment.

The first court dismissed the bank’s case due to the signing of the guarantee contract by the director of the defendant company, who does not have the legal authority to borrow from banks or guarantee others on behalf of the company, which the complaining bank did not notice or cover before granting the loan.

The supporting documents indicate that the bank has provided banking facilities to a person, that is to say a loan of 27 million and 232 thousand dirhams, with the guarantee of the defendant company, and when the initial debtor has not paid the value of the loan due , the bank brought a guarantee action against the company under the guarantee contract.

The defense attorney for the defendant company, The International Center for Advocacy and Legal Consultation, filed a contradictory claim asking for the cancellation of the guarantee contract because it had been issued without any capacity.

The Court of Appeal ordered the appointment of a tripartite committee of banking experts, which concluded in its report that “the director of the company did not have the power to borrow from banks, nor to guarantee them. others on behalf of the company ”.

The court ruled on the dismissal and nullity of the surety contract which is the subject of the lawsuit, because it was executed without legal basis, since the guarantee contract on which the plaintiff bank is based is frustrated, because it is not is not enforceable in the defendant company.

Source: “Emirates Today”

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