- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 04:25 05:43 12:19 15:46 18:50 20:09
Salaries in investment banks are mostly handsome, but they do come with their scars and moles. (File)
The Dubai Court of Cassation has ruled that banks are within their legal rights to recover the total interest due on loans, even if this is more than the principal amount of the loan.
The court also ruled that if the debtor fails to repay a loan and the bank agrees to re-structure the payment at another rate of interest, the client has to commit to meeting the conditions of this agreement.
The court established these legal principles when hearing a case where the plaintiff filed a lawsuit against a bank contesting the accumulation of the interest on a loan she had taken, even after she claimed the principal amount was paid.
According to legal documents the woman took a loan from the bank of Dh250,000. She then restructured her payment of the loan.
According to the new deal, her monthly installments were reduced. She continued to pay, but was surprised to find that the total amount she was asked to clear had increased to Dh296,000.
The bank also filed a lawsuit against her demanding Dh320,000 as a total settlement over non-payment of dues.
The Court of First Instance ruled that the debtor has to pay the amount of Dh296,000, and legal dues from the date of the claims.
The lady then appealed to the Court of Appeals, which upheld the ruling.
She then moved the Court of Cassation, which also upheld the verdict.
The Court based its verdict on Articles 76, 77, 409 and 410 of the Code of Commercial Transactions.
The court said in its ruling it was clear from the documents of the case that the plaintiff breached its promise to paying in accordance with the agreement reached with the bank and the bank is entitled to claim the outstanding with due interest.
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