Kuwait Court of Cassation principle number 3190

Loans granted by banks are commercial acts by their nature, whether or not the borrower is a trader and whether they are spent on commercial or civil activities. - Compensatory interest. Is payable on a debt owed by the debtor whose maturity date has not arrived. The debt's falling due and the debtor's failure to pay it. Its consequence. Interest accruing after maturity until payment is made. Default interest. The reason for this. - Closure of a current account. Its effect. The balance debt becomes an ordinary debt. The banking-rate interest on its individual entries during its operation does not apply; rather, the rate the parties agree to apply shall apply to it. The parties' failure to agree on that rate. Application of the statutory rate, interest being 7%. An example concerning a bank's entitlement to default interest on a loan. - 624 - Loan