Author : Moza Al Suwiadi
Introduction
Cheques play a significant role in financial transactions in the United Arab Emirates (UAE). Over the years, the UAE has made several changes to its cheque laws, particularly regarding dishonored cheques. As an Advocate at a leading Dubai-based law firm, I am here to explain these changes and guide you through money recovery in cheque disputes. This is when cheques bounce for reasons other than insufficient funds.
Cheque laws in the UAE
Traditionally, a bounced cheque was considered a criminal offense in the UAE, often leading to prison sentences. However, recognizing the need for economic reform and to facilitate a more business-friendly environment, the UAE has amended its laws to decriminalize bounced cheques under certain circumstances.
As per the updated amendments introduced in 2020 under Cabinet Resolution No. 57, minor cheque disputes (below AED 200,000) are generally treated as misdemeanors, attracting fines instead of jail terms. For cheques above AED 200,000, imprisonment can still be a possible punishment, but the focus is increasingly on civil remedies.
Procedure for recovering money
File a Complaint: If a cheque is dishonored, the first step is to file a complaint with the police or the public prosecutor. You must provide the original bounced cheque and any related documents.
Public Prosecution: The public prosecution will review the case and can opt to mediate between the two parties. If an agreement is reached, the case will be closed. If not, the case will be referred to the court.
Court Proceedings: If the case goes to court, a judgment will be issued based on the presented evidence. If the judgment is in your favor, the debtor may face penalties ranging from fines to imprisonment.
Enforcing Judgement: Once a favorable judgment is obtained, the court provides mechanisms to enforce the judgment, including seizing and selling the debtor’s assets to settle the debt.
Civil Lawsuit: Along with the criminal case, you may be able to recover your money. The civil courts can order the debtor to repay the bounced cheque amount, along with any incurred damages.
Navigating Recovery Procedures
Navigating recovering money from a bounced cheque can be complex. Here are some suggestions:
Legal Assistance
Seek help from a law firm experienced in UAE cheque laws. They can assist in correctly filing the case, presenting relevant evidence, and following through the court proceedings.
Prompt Action
Act as soon as a cheque is dishonored. Prompt action can facilitate faster resolution and recovery of your money.
Maintain Records
Keep a thorough record of all transactions and communications related to the cheque. This can be crucial in supporting your case.
In conclusion
The UAE’s evolving landscape of cheque laws offers more balanced and business-friendly solutions. Nevertheless, navigating these legal avenues can be challenging without professional assistance. Our law firm stands ready to guide you through this process, protecting your interests and facilitating effective resolution.
(Disclaimer: This article is provided for informational purposes only and does not constitute legal advice. We recommend that you seek the advice of a legal professional before making any decisions regarding insolvency and bankruptcy.)
