UAE Court Dismisses Bank's Dh950,000 Loan Claim

Feb 27, 2026

49 min

Feb 27, 2026 05:30

UAE: Bank loses Dh950,000 claim after failing to secure loan guarantees

## Court Ruling on Loan Guarantee Breach

An Abu Dhabi court has dismissed a bank's claim to recover nearly Dh950,000 from a borrower and her guarantor. The court found that the bank failed to adhere to central bank regulations requiring adequate loan guarantees.

## Details of the Case

The Abu Dhabi Commercial Court of First Instance ruled against the bank, which sought repayment of Dh949,938, plus interest and court fees. The bank had not secured sufficient guarantees or the necessary post-dated cheques before granting the loan.

## Legal Framework

The court cited Article 150 of Federal Decree Law No. 6 of 2025, which mandates financial institutions to obtain proper guarantees for credit facilities. The law prohibits courts from accepting claims if these requirements are not met.

## Court's Decision

The judges concluded that the bank violated central bank instructions by not obtaining guarantees from the borrower or guarantor. Consequently, the claim was deemed inadmissible, and the bank was ordered to cover legal costs.

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