DOMBO BEHEER B.V. v. THE NETHERLANDS JUDGMENT 4 extension to take over the commercial operations of a certain limited liability company, O., which had gone bankrupt; action was needed urgently. This oral agreement was to be formalised later; at this point, however, Mr van Reijendam did agree in writing to stand surety himself for Dombo and its subsidiaries to the amount of NLG 350,000. Following this alteration of the agreement of 11 August 1980 Dombo opened an account with the Bank earmarked for its activities in connection with the O. takeover and the Bank provided letters of credit on a number of occasions. (b) In early January 1981 Dombo was offered the opportunity to take over two other limited liability companies, T. and D., which had run into financial difficulties. To finance these takeovers Dombo required another extension of the credit limit; this was discussed between Mr van Reijendam and Mr van W. Following these discussions the Bank made Dombo an offer in writing dated 22 January 1981 to raise the maximum credit to NLG 5,000,000. In anticipation of this extension, the Bank paid out NLG 350,000 in connection with the takeover of T. and D. and subsequently agreed to a withdrawal by Mr van Reijendam of another NLG 100,000 for the same purpose. Mr van W. required security for these sums in the form of a mortgage and made Mr van Reijendam sign a blank power of attorney. The Bank made use of that document to have a deed drawn up by a notary mortgaging all immovable property belonging to Dombo, its subsidiaries and Mr van Reijendam personally. This mortgage was surety for a credit of NLG 1,600,000, i.e. it further secured the extension of the credit referred to in sub-paragraph (a) above. (c) On 28 January 1981 the Bank, through Mr van W., unexpectedly and inexplicably withdrew its confidence in Mr van Reijendam, called on him to resign and froze all Dombo’s accounts without warning, this in spite of the fact that its total debit balance was then NLG 783,436.06 and therefore well within the agreed limit of NLG 2,100,000. 11. The Bank’s rendering of the facts may be summarised as follows. (a) The Bank acknowledged that Dombo had asked for a higher credit limit in connection with the takeover of the commercial activities of the company O. It had agreed in principle but had required certain additional information to be provided by Dombo, including its annual statement for the previous year (1979); these had never been received and an agreement to raise the existing credit facilities as claimed by Dombo had therefore never been reached. However, in connection with the takeover of the activities of the O. company (which it approved of in principle) and the urgent need for funds, the Bank had been prepared to enable Dombo to act in anticipation of the extension of the credit facilities by providing letters of credit on a number of occasions. Mr van Reijendam had been asked to stand surety for these himself to the amount of NLG 350,000. By the end of January 1981 the sum for which the Bank had bound itself amounted to NLG 848,000. The Bank pointed out that there was a difference between a letter of credit