Kuwait Court of Cassation principle number 3307

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 thereof: that this rate not exceed the rates announced by the Central Bank, which are determined by the Bank's Board of Directors after approval by the Minister of Finance. Articles 102, 111 of the Commercial Code. - 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 governs it. Where the parties do not agree on this rate. The statutory rate applies, interest being 7%. - Specifying the interest rate in the facilities contract consistently with the Central Bank's decisions determining the maximum interest rate and within the discount rate it announced on the date the loan contract was concluded. Failure to include in the contract a specified interest rate on the account balance debt after its closure. Its effect. Statutory interest at 7% applies. The challenged judgment reaching this conclusion. Correct. - 558 - Commercial