The Bank Is Demanding Your Company's Debt From You in DIFC

A personal guarantee demand in DIFC needs a document-led response, not a reassurance that the borrowing was the company's. Check whether you gave the obligation relied on, what it covers, whether its demand conditions were met and how the amount was calculated. If court proceedings have begun, protect the response deadlines while those questions are investigated.

Start with the complete guarantee, every amendment, the facility documents it incorporates, the demand and delivery record, the account reconciliation and any court papers. Keep your account of signing or not signing separate from what the documents presently establish. Do not acknowledge a balance or sign a replacement undertaking simply to obtain more time without understanding its effect.

This article addresses an individual confronted with a guarantee claim before, or proposed to be brought before, the DIFC Courts. It is not a statement that all guarantees use DIFC substantive law. The governing law, jurisdiction clause and actual wording must be checked for your instrument.

Does a personal guarantee demand in DIFC mean you must pay immediately?

The demand is a claim to payment, not a court determination that every requirement has been proved. But ignoring it because the principal borrower is a company is unsafe. The bank may be relying on a separate promise you made, rather than alleging that you are liable merely because you are a director or shareholder.

Read the execution block and the obligation together. Identify the named guarantor, the beneficiary and the borrower. A signature placed on behalf of a company and a signature accepting a personal obligation are not interchangeable. Nor is the label on the first page decisive if the operative wording creates a different or additional obligation. An instrument may contain guarantee and indemnity language, conditions relating to demand and provisions dealing with changes to the facility.

Make a list of the issues you genuinely dispute. Do you deny signing? Do you say the instrument covers a different facility, expires before the claimed debt or limits liability? Do you accept the obligation but challenge the figure? These positions should not be blurred into a generic denial. Your adviser needs the facts supporting each one, including documents that appear inconsistent with your recollection.

In Al Mazrouei v Bankmed [2019] DIFC CA 011, the Court of Appeal considered an individual guarantee claim and a disputed signature. The result illustrates the danger of an inadequately supported defence. It does not establish that every bank demand is valid or that the claimant is relieved of proving its case.

Key takeaway. Being a shareholder and being a guarantor are different propositions. Answer the obligation pleaded against you, rather than defending only your position within the company.

What should you extract from the guarantee and loan documents?

Create a clause schedule that identifies scope, limits, conditions and the governing law. Do not rely on a bank employee's description of the document as a formality. Equally, do not assume that a large heading stating a maximum amount answers how interest, expenses or related obligations are treated.

Record the exact facility or class of liabilities covered, whether the guarantee continues over time, the stated monetary limit, any currency provision, demand requirements and any provisions dealing with amendments or replacement facilities. Check whether the claimed lending was advanced under the identified transaction. If there were several facilities, connect the demand to the correct one instead of treating the entire banking relationship as one account.

Issue	Document to check	Question for review
Execution	Complete signed instrument and signing record	Who accepted which obligation and in what capacity?
Scope	Guarantee, facility and incorporated terms	Does this debt fall within the promise relied upon?
Demand	Demand, notice clause and delivery evidence	Were the applicable conditions satisfied?
Amount	Statements, receipts and calculation schedule	Have credits and recoveries been accounted for?
Forum	Jurisdiction and arbitration clauses	Which procedure and response obligations apply?

This is an issue list, not a catalogue of defences guaranteed to succeed. Some instruments expressly address matters that might otherwise be disputed. The effect of those terms depends on their wording and governing law. A supposed release arising from a later variation, for example, should not be asserted without reading both the variation and the original guarantee.

Ask for missing documents precisely. Request the version signed on the relevant date, its schedules and the actual amendments relied on. A request for every document the bank has ever created is less useful than identifying the missing record that prevents you from checking a defined part of the demand.

The first response should distinguish these issues instead of treating them as one general objection.

What if you say the signature is not yours?

State the position clearly and preserve evidence immediately. Distinguish an actual denial of execution from saying that you did not understand the document, did not read it or did not know the bank still held it. Those are different factual cases and cannot safely be exchanged as litigation tactics.

Al Mazrouei shows why the distinction matters. At paragraphs 24 to 35, the Court examined the ambiguity and development of the appellant's position. At paragraphs 38 to 46, it addressed the absence of supporting material and the mistaken expectation that the Court would obtain the evidence for him. The appeal against immediate judgment was dismissed. The reasoning was tied to the record and conduct in that case.

Importantly, paragraph 38 did not insist that every person alleging forgery must already have proved it conclusively. The Court discussed the need for some proper basis supporting the contention and recognised that a sufficiently explained statement might matter. Do not turn the decision into a mechanical rule that a handwriting report is invariably mandatory. Nor should it be used to reverse the claimant's obligation to establish its claim.

Practical preservation may include requesting inspection of the original, retaining earlier genuine signature samples, preserving relevant signing correspondence and identifying who was present. Keep electronic versions and their transmission history where applicable. Do not mark up an original or send the only copy away without a record. Ask the adviser whether specialist evidence is appropriate and what procedural permission is needed.

Under RDC 31.3 to 31.7 and 31.12 to 31.15, an expert's duty is to the Court, the opinion must be independent, and permission is required to put expert evidence before it. Commissioning a supportive opinion and properly deploying admissible expert evidence are different steps.

Can the bank obtain judgment before a full trial?

Yes, if the immediate judgment test is satisfied. RDC 24.1 requires the relevant claim or defence to have no real prospect of success and no other compelling reason for trial. The application can concern all or part of the claim or a particular issue. It is not decided simply by asking whether the bank has a larger bundle.

The practical question is whether your response identifies a realistic issue with a proper evidential basis. If your case is that a payment was omitted, produce the receipt and explain how it should affect the claimed balance. If a material document is missing, identify it and explain why it could change the outcome. A request for time that does not say what evidence is being sought or why it matters is much less informative.

Al Mazrouei, particularly paragraphs 38 and 39, distinguishes the applicant's burden under the test from the respondent's need to answer it properly. You are not required to conduct the whole trial on paper. But a serious allegation does not become a reason for trial merely because it is serious. The court considers the material supporting it and the evidence reasonably expected to be available.

Check the application and directions for the actual response timetable. Do not confuse the time for a defence, evidence responding to an application and an appeal. If you cannot obtain a necessary record in time, seek advice about a supported application rather than assuming a document request pauses the case. Keep a single deadlines sheet, with the source order or rule alongside each entry.

How do you check the demand amount without admitting it?

Ask for a reproducible calculation, then distinguish the arithmetic review from your legal position on liability. The starting figure, contractual interest, default interest, charges, payments and realisations should be visible separately. A total copied from a demand does not show how it was reached.

Build a reconciliation that records each disputed item and its reason. Where the bank says security was realised, ask how proceeds were applied. Where payments were made by the borrower or another person, locate the receipt and allocation. If the demand uses several currencies, identify the contractual basis and dates of any conversions. Do not invent an exchange rate simply to make your own schedule match the demand.

Check the relationship between the calculation and the guarantee limit. It is possible for the argument to concern what falls inside a limit rather than the arithmetic of the borrowing itself. The guarantee may define covered liabilities in detail. Your adviser should review that wording instead of assuming every cap operates identically.

Communicate disputed figures carefully. A useful working table can state that it is prepared to identify issues and is not an admission of liability, but labels do not undo an actual admission elsewhere. Keep the substantive position consistent across emails, witness statements and proposed settlement documents. If an amount is genuinely undisputed, ask for advice on how to record that position accurately while preserving distinct objections.

Common mistake. Writing a long denial of the facility while leaving the guarantee, execution evidence and bank's calculation substantially unanswered. Each document may have a different role in the claim.

What changes if the demand comes with DIFC court papers?

The procedural response becomes urgent. Preserve the complete papers, the envelope or electronic delivery record and the date they reached you. Have the claim type, service position and applicable directions reviewed without waiting for the relationship manager to answer your commercial proposal.

If you intend to challenge jurisdiction, RDC 12.2 to 12.5 require particular attention. The defendant first files an acknowledgment of service, which does not itself surrender the right to contest jurisdiction. An application under Part 12 must be supported by evidence and made within 14 days after filing the acknowledgment. Failure to follow the rule has consequences stated in RDC 12.5. This is not a universal deadline running from receipt of every kind of document.

A forum objection and a defence to the guarantee are separate. Decide the procedural route before filing substantive material that may affect the position. If an arbitration clause is relied on, it also needs a specific analysis rather than an assumption that the facility and guarantee necessarily share the same dispute clause.

Organise the immediate work in this order:

1. Record service and identify every existing court deadline.
2. Obtain the complete guarantee, facility, demand and calculation.
3. Decide and preserve any jurisdiction or arbitration objection through the proper procedure.
4. Prepare a consistent response to execution, scope, demand and amount, supported by the available evidence.
5. Seek any necessary procedural directions with reasons, while evaluating a documented settlement.

Should you offer a settlement or ask the borrower to deal with it?

Consider both, but do not let either replace your own review of a personal claim. The borrower may hold important documents and may be able to pay. Its commercial interests and your individual position may nevertheless differ, particularly when signing, allocation of payments or responsibility for the default is disputed.

Before accepting a common response prepared for several defendants, identify any factual disagreement or conflict of interest. A company may wish to acknowledge facilities and seek time while an individual disputes execution of a guarantee. Those positions require careful handling. The fact that everyone previously used the same adviser does not itself resolve the issue.

A settlement should say what is being paid, by whom, whether the guarantee is released, when the release takes effect and what happens on default. Ask whether related guarantees, security or proceedings remain alive. Do not assume a lender's agreement to suspend action against the company automatically releases the individual, or that a payment by one obligor automatically settles every claim in the manner you expect.

A useful review habit is to put the proposed settlement beside the original guarantee and mark every obligation that would change. That exposes a new admission, wider promise or replacement security before signature. It also helps distinguish a genuine release from an agreement merely to wait. The objective is to resolve the actual personal exposure, not just obtain a quieter week of correspondence.

Frequently Asked Questions

Am I liable only because I own shares in the borrower? A guarantee claim relies on a separate alleged obligation. Review that instrument rather than assuming share ownership either creates or defeats the bank's claim.

I signed only for the company. What should I check? Examine the complete document, signature block, capacity and operative promise. Preserve the signing correspondence and obtain advice on what the instrument actually records.

Is saying that the signature is forged enough? Not necessarily. Al Mazrouei illustrates why a clear, timely position with supporting grounds matters. The court does not ordinarily assemble a party's evidence for it.

Must every disputed signature have a handwriting report? No universal requirement follows from Al Mazrouei. Appropriate evidence depends on the dispute, and putting expert evidence before the Court requires permission under Part 31.

Can the court decide the claim without a trial? It can if RDC 24.1 is satisfied. A respondent should explain the real issue and evidence supporting it, not rely on an unsupported general denial.

Does asking the bank for documents extend my response deadline? Do not assume that it does. Check the court's directions and obtain an effective extension or other order through the appropriate process if needed.

Does the amount stated in the demand settle what I owe? No. Review the legal basis and calculation, including payments and credits, the covered debt and any limits in the guarantee.

Will a settlement with the company release my guarantee? That must be checked in the settlement and guarantee terms. Require the intended treatment of your personal obligation to be addressed expressly.

Research checked on 28 September 2026. This article is for general informational purposes only and does not constitute legal advice. Consult a qualified advocate for advice on your specific situation.

Related Guides

Our DIFC commercial contracts page covers payment, suspension, termination, guarantees and shareholder disputes under DIFC-law agreements.

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