Letter of guarantee issued by a credit institution – enforceable title only if it guarantees a credit agreement
The High Court of Cassation and Justice’s Committee for the resolution of certain questions of law ruled, at the request of the Bucharest Court, on the enforceability of the bank guarantee letter.
Thus, on 7 June 2021, the High Court ruled that a letter of guarantee issued by a credit institution is enforceable only if it is issued to guarantee a credit agreement.
This interpretation is to address the ambiguous regulation regarding the enforceability of this personal guarantee, determined both by the current form of the Emergency Ordinance No 99/2006 („GEO 99/2006„) which repealed Law No 58/1998 on banking activity („Law no. 58/1998„) and by the provisions of the Civil Code on personal guarantees.
In this context, the letter of guarantee issued by a credit institution shall constitute an enforceable title only if it is issued to guarantee a credit agreement, the solution of the High Court being useful under several perspectives.
On one hand, this interpretation is a necessary reference point in relation to the uneven practice in this area, generated by the uncertainty concerning the character of the bank guarantee letter as an enforceable title and, on the other hand, it establishes the object of the guarantee for the letter to constitute an enforceable title, which is the credit agreements.
Although this decision is binding on the court that requested the decision from the date of its ruling, of real interest are the considerations of the High Court, contained in the reasoning to be published no later than 30 days from the date of the ruling.
Thus, the decision will become binding from the date of publication in the Official Journal, no later than 15 days as of the date of the reasoning.
Source:
Decision of the High Court of Cassation and Justice no. 43 in Case no. 643/1/2021,
Law no. 287/2009 on the Civil Code, GEO no. 99/2006 on credit institutions and capital adequacy,
Law no. 58/1998 on banking activity