Supreme Court decision: powers of attorneys submitted to banks
In a recent and unusual Supreme Court decision, it was held that where several powers of attorneys (giving authority to different individuals) are submitted to a bank at different times, the last power of attorney submitted to the bank would automatically revoke all previous powers of attorneys regardless of whether or not the bank was notified of the revocation. This decision is considered controversial particularly as the Civil Code provides that the principal’s express notification to the agent or third party is required to revoke a power of attorney.
The Bank (the First Defendant) in this case was held liable for unauthorized transactions and was ordered to pay damages in the amount of AED 3.2 million (the Claim amount was AED 8.3 million) representing the loss suffered as a result of the unauthorized transactions. The Bank’s alleged error was that it allowed the Second Defendant (an individual) to unilaterally withdraw funds from the account despite the existence of the last power of attorney requiring the joint signatures of the Claimant and the Third Defendant (another individual) to manage the account…
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Corruption has a detrimental effect on any economy. It creates unfair advantages, anti-competitive practices and a generally unfavorable business environment.
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