The UAE’s Federal Supreme Court has dismissed an appeal filed by a bank customer, confirming a lower court ruling that allows a bank to enforce a cheque valued at Dh2.3 million issued in connection with a personal loan.
The dispute arose after the customer challenged an enforcement order placed on the cheque, arguing that it should not be used to recover the loan amount. He claimed the bank had approved the loan despite his limited income and without securing adequate guarantees, allegedly in violation of regulations governing personal borrowing.
Court records showed that at the time of the loan application, the customer’s monthly salary did not exceed Dh25,000. He argued that this breached a 1995 directive designed to prevent excessive personal debt by requiring banks to ensure that loans are proportionate to income and supported by sufficient guarantees.
A court of first instance appointed an expert to review the case and ultimately rejected the challenge on its merits. The Court of Appeal upheld that decision, prompting the customer to escalate the case to the Federal Supreme Court.
In its judgment, the Federal Supreme Court explained that compliance with the 1995 borrowing regulations is a factual issue to be assessed by trial courts, as long as their conclusions are reasonable and supported by evidence. While acknowledging that the customer had raised concerns about income and guarantees, the court found no legal error in how the lower courts evaluated those arguments.
The Supreme Court therefore upheld the enforcement order, confirming that the cheque remains valid for recovery of the loan amount and rejecting the customer’s request to cancel the enforcement formula.
