Kuwait Court of Cassation principle number 3184

Interest on a commercial loan is 7% where its rate is not specified in the contract. The contracting parties may agree on another interest rate. The condition therefor: this rate must not exceed the rates announced by the Central Bank, which are determined by the Bank’s Board of Directors following approval by the Minister of Finance. Articles 102, 111 of the Commercial Law. - Closing a current account. Its effect. The balance debt becomes an ordinary debt. The bank-rate interest applicable to its individual entries while it was operating does not apply; rather, the rate the parties agree to apply governs it. Absence of agreement between the parties on this rate. Application of the statutory rate, with interest being 7%. - Specifying the interest rate in the facilities agreement in accordance with the Central Bank’s decisions determining the maximum interest rate and within the discount rate announced by it on the date the loan agreement was concluded. The contract’s failure to specify an interest rate on the account balance debt after closure. Its effect. Statutory interest applies at 7%. The challenged judgment reaching this conclusion. Correct.