Dubai has seen an over-reliance on personal guarantees and cheques
Some banks in Dubai have become “lazy” when ensuring their asset finance transactions have the necessary security in place to use in the event of a possible default.
Dubai-based lawyers speaking at Exporta’s Middle East trade finance conference in Dubai said that the emirate has seen an “over-reliance on personal guarantees and cheques,” in recent years.
One lawyer remarked that often her firm is sent a package of facility documents from banks in which only a few of the documents were filled in correctly so that they could be enforced in the event of a non-payment issue.
Typical errors include unsigned documents, an incomplete list of assets and lack of information such as correct bank accounts.
One lawyer said that it was often ‘shocking’ how little information banks had about the whereabouts of the assets they were financing.
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