By Mohammed Elsidafy

Published: Sunday, April 18, 2010

Source:Business 24/7

The Dubai Court of Cassation has established a new legal principle that any fax message sent by a bank to its clients that contains a statement of account is evidence against the bank even if it is not signed, as long as the bank does not deny issuing the statement.

The issue came up when a client filed a lawsuit against a bank. He said he borrowed Dh10 million with the agreement that the bank's fees would not exceed five per cent, but then he was surprised to see that the rate charged was seven per cent.

Earlier, the client received a fax from the bank saying that the rate was seven per cent.

The expert verified that the client was right and obliged the bank to return some Dh5,34,000 to the client. The expert's view was approved by the Court of First Instance and the Court of Appeal.

The bank challenged the ruling at the Court of Cassation, which rejected the challenge. A bank employee challenged the expert, saying that the fax sent by the bank is not evidence that the loan agreement was modified.

The legal point on which the principle was based stipulated that it has been a banking norm that statements of account sent by the bank form evidence against the bank, although unsigned, since the statement is generated by the modern technology systems used by the bank in accordance with Article 38 of the Commercial Transactions Law.

Meanwhile, Dubai Commercial Court has adjourned to May 6 the verdict in the case filed by Mashreq bank against Saudi businessman Maan Al Sanea. The adjournment was in response to a request by Al Sanea's lawyer, Salah Al Baloushi, to study the original copy of the loan signed by the two parties.