Kuwait Court of Cassation principle number 476

Letter of guarantee. Its nature. The obligation arising from it is independent of the relationship between the bank and the customer and that between the latter and the beneficiary. - Issuance of a letter of guarantee at the customer’s request does not create for him a right to its value, and the amounts it represents are considered owned by the bank until they are paid to the beneficiary. The effect of this. - The sanctions which the administration has the power to impose on the contracting party if he violates the conditions of the contract. Their purpose is the operation of public services. The implication of this. Their imposition does not require proof that harm has befallen the public service. The reason for this. The court has no authority to assess those sanctions. - Current accounts:-