Lost cheque costs bank over Dh1m

Dubai: A court has found a reputed bank responsible for losing a businessman's cheque worth Dh1 million and has ordered it to pay that amount to the businessman.

The Dubai Civil Court found the Dubai-based bank liable for negligence after its staff lost the cheque. It will now have to pay Dh1 million plus five per cent interest to the Arab businessman.

The businessman's lawyer, Mohammad Abdullah Al Redha, of Al Redha and Co Advocates and Legal Consultants, said in his lawsuit that "despite repeated visits to the bank, my client discovered that the cheque's amount was not credited to his account. A few months later, the bank's management informed the businessman that the cheque had been lost by mistake... my client incurred a huge loss and damages. He could have invested that amount in different businesses and earned a profit."

The advocate claimed the Dh1 million plus compensation of Dh400,000 for his client's financial loss.

Records said the businessman had been a prominent account-holder with the bank for many years.

"The plaintiff struck a deal with a commercial company, which has an account with an international bank. The company issued a cheque and gave it to my client who deposited it with the defendant... the bank being sued was supposed to collect the Dh1 million from the international bank and credit it to my client's account.

"Several months passed and the encashment was not credited. Later, the defendant informed the claimant that the cheque was lost," Al Redha said in his lawsuit.

The company's account had funds, which were sufficient enough to cover the amount of the cheque, the lawyer explained.

"Out of inattentiveness, the defendant failed to safeguard the cheque although it was under its control and management. The bank is fully accountable for the loss and damages which my client incurred on account of its negligence... the bank must bear the consequences of losing the cheque because this is one of the risks associated with the banking sector," Al Redha argued.

The lawyer said the compensation of Dh400,000 is the amount his client could have earned in case the bank had cashed the Dh1 million and deposited it in his account.

Besides the cheque amount and compensation, Presiding Judge Nasser Al Deen Ahmad Ali ordered the bank to pay Dh1,000 in legal fees.

The primary verdict is still subject to appeal within 15 days.