Grosvenor loses high roller case

jetset

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Feb 22, 2001
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BAD NEWS FOR GROSVENOR CASINOS

Land gaming group loses 7 million court claim


Grosvenor Casinos has lost its court case against a high rolling Arab client who racked up 7 million in bounced cheques (see previous InfoPowa report)

The gambling group, which owns the Clermont Club, took the National Bank of Abu Dhabi to court to recover monies owed by high roller Ahmed al-Reyaysa, a regular on Londons gambling circuit who is said to have gambled 99 million in 18 months, The Times reports.

But this week the courts found that the bank was not liable for debts to Grosvenor Casinos.
Al-Reyaysa wrote two cheques for 3.07 million and 3.6 million from his NBAD account to buy betting chips at the Clermont Club, an exclusive casino in London's Berkeley Square, between December 1999 and February 2000. He lost the money playing roulette and the cheques later bounced.

Grosvenor initially sued Al-Reyaysa himself and won a repayment order against him, but could not enforce it as he is now beyond the jurisdiction of British courts in the United Arab Emirates.

The casino then sued NBAD, claiming that it only cashed Al-Reyaysas cheque after an NBAD employee had told Grosvenor's bank, NatWest, in a telephone call that it would honour the cheque. Grosvenor argued that NBAD had acted fraudulently and was therefore liable for the debt.

But a judge at the High Court in London this week dismissed Grosvenors claim, saying that the telephone conversation between NBAD and NatWest resulted in a confusion or misunderstanding rather than dishonesty.

In a written judgement, Mr Justice Flaux said: It seems to me inherently improbable that [the NBAD employee] was lying . . . it is much more likely that he meant something slightly different from what [the NatWest employee] meant and understood.

A second claim, that NBAD was liable for the debt under international banking standards, was also rejected. Grosvenor had argued that even though there was no written contract there was an implied obligation under banking regulations to honour the debt. The judge disagreed.

Jonathan Kelly of law firm Simmons & Simmons, acting for NBAD, said: This is an important result for international banking practice. Grosvenors claim that a contract existed between NBAD and the casino would have left banks vulnerable to unintended contractual exposure to a range of third parties.
 

winbig

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Serves them right. If they're dealing with millions of dollars then they should have gotten confirmation in writing, not over the phone. It only takes a few minutes to send a fax.

I think it all boils down to an over-zealous host that wanted to please their whale and wanted to allow him to write the checks and gamble by any means necessary. I think he was just trying to cover his ass by having a scapegoat (the bank) when he made that call, but it backfired...

I seriously doubt they'd be in this situation if they had faxed papers over to the bank asking point blank if the checks would be honored or not.
 

jetset

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I agree, and it's a horrendously expensive flaw in their system which I bet they have tightened up now!
 

aodat2

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I doubt that after this fiesco, any banks that would cofirm a payment of a cheque by phone would do it anymore.

If I were a bank manager or something, I would have told ALL my staff to NEVER (not in their life) to confirm a payment of a cheque. They will never get a confirmation from me even if my life depended on it.

Either they trust the cheque writer or they don't take it. Either or, I won't care if they do call me up or something. Any bank would be STUPID to just say YES even if the money is in there.

Today I write a cheque, even if it goes to my bank and etc, it would take at least 2 or 3 days but in order for me to fly back home, it takes less than 24 hours and it takes less than a few minute for me to close my bank account regardless of the amount of money that I have in it.

So, to say YES to honor a cheque would be a dumb and stupid move to make.
 

winbig

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Mar 10, 2005
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I doubt that after this fiesco, any banks that would cofirm a payment of a cheque by phone would do it anymore.

If I were a bank manager or something, I would have told ALL my staff to NEVER (not in their life) to confirm a payment of a cheque. They will never get a confirmation from me even if my life depended on it.

Either they trust the cheque writer or they don't take it. Either or, I won't care if they do call me up or something. Any bank would be STUPID to just say YES even if the money is in there.

Today I write a cheque, even if it goes to my bank and etc, it would take at least 2 or 3 days but in order for me to fly back home, it takes less than 24 hours and it takes less than a few minute for me to close my bank account regardless of the amount of money that I have in it.

So, to say YES to honor a cheque would be a dumb and stupid move to make.

I have a STRONG feeling that the casino host that made the call is the cause of this, NOT the bank. I believe that he beat around the bush with the person at the bank, asking ambiguous questions just to get the answer that they wanted. I seriously doubt that the casino host came right out and asked the bank teller/whatever if there were funds in the account to cover those checks.

It'd really be interesting to find out what happened to the casino employee that started this whole mess. I'd lay good odds that they're now looking for another job.
 
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