Kuwait Court of Cassation principle number 172

The principle of autonomy of the will governs the relationship between banks and their customers. Its implication: the permissibility of agreeing, in contracts concluded between them, on the interest rate payable on loans granted to them. Its condition: the interest rate must not exceed the rates announced by the Central Bank and determined by its Board of Directors after the approval of the Minister of Finance. An agreement on interest exceeding those rates requires its reduction to the rates announced on the date of conclusion of the loan contract. The basis for this. - Agreement in loan contracts to authorize banks to raise the agreed interest rate without requiring the customer's approval. Permissible pursuant to Central Bank decisions amending interest rates. - Decisions issued by the Central Bank determining the interest rate charged by banks pursuant to Article 74 of Law No. 32 of 1968 concerning Currency, the Central Bank of Kuwait and the Banking Profession. They may not have any retroactive effect and do not prevent the performance of agreements - 371 - Civil Procedure concluded between banks and their customers before their issuance. The basis for this. Agreement to authorize the bank to amend the rate agreed in the contract pursuant to decisions issued by the Central Bank amending the interest rate. The bank's subsequent raising of the rate in exercise of that authorization. This does not violate the law. The judgment's contravention thereof. Requires its cassation. 2- Temporal application of the ministerial decision implementing the law:-