Dubai: With the UAE decriminalising bounced cheques, anyone who holds a cheque, which was dishonoured or returned can now raise the issue directly with an execution judge at a UAE court, in order to claim the money owed to him or her.
As per Federal Law No. 14 of 2020 Amending Certain Provisions of the Federal Law No. (18) of 1993 Concerning the Commercial Transaction Law, cheque beneficiaries or bearers do not need to file criminal or civil cases for non-payment of cheques. They can directly approach the court's execution judge to order payment of the cheque’s value or what is remaining of it.
So, if you do have a cheque, which was returned by a bank due to insufficient funds in the account of the individual who issued the cheque, how can you now benefit from the change in the law? Here is all you need to know.
Fill out a Cheque Execution Regulations Form
The form is available on the official website of Dubai Courts – dc.gov.ae. To access the form, a user can create an account using his or her UAE Pass account. The form can be filled in by the recipient of the bounced cheque, or a representative of a company or a lawyer.
In a message on its social media channels on January 11, Dubai Courts provided the following requirements for obtaining a cheque execution service:
1. Fill out the data in the Cheque Execution Regulations form, and make sure all documents are electronic and in PDF format.
2. Documents written in a foreign language must be translated to Arabic and legally certified.
The application shall be admitted for execution only if it is filed within a period of six months from the date the cheque was bounced.
According to Dr Ibrahim Al Banna, CEO of Ibrahim Al Banna Advocates and Legal Consultants, the applicant would need to attach the following documents to the form:
1. An identity card, if the application is being filed by an individual. A Lawyer Card, if the application is being filed by a lawyer.
2. A Power of Attorney, if the application is being filed by a person on behalf of the drawee.
3. The Commercial Licence, if the applicant is a company or any other kind of establishment.
4. A copy of the cheque, accompanied by the ‘Cheque Return Memo’ indicating the reason for return.
5. The relevant documents indicating the reason for issuing the cheque.
6. An affidavit affirming the validity of the data contained in the cheque request and the fact that a claim has not been raised before any court to recover the amount stated in the bounced cheque.
7. A sheet containing relevant information relating to the parties, addresses of the parties, relief which is in accordance with the value of the cheque.
Step 1: File the application within six months
“At the outset, let it be made clear that the application shall be admitted for execution only if it is filed within a period of six months from the date the cheque was bounced,” Dr Al Banna said.
“Once the application is filed, the court shall peruse the same and the accompanying documents and shall decide whether the said application is fit to be admitted for execution,” he added.
Step 2: Make the necessary payments
If the court finds that the application is fit for execution, it will direct the applicant to pay the following amounts:
1. An amount which is not more than five per cent of the value of the amount of the bounced cheque; and
2. Dh150 as application fees
"Once the court is convinced that the application filed by the drawee is fit for execution, the court shall direct the drawer to deposit the amount mentioned in the bounced cheque to be deposited before the court. The applicant shall, upon the receipt of the amount by the court, file an application before the court by requesting the latter to release the said amount. Usually, it consumes time ranging from three till seven days to dispose the application," Dr Al Banna said.
What happens if six months have lapsed since the cheque was bounced?
“It must also be borne in mind that after the lapse of the aforementioned period, the application shall not be admitted for execution. In such a situation, as per Article 638 (1) of the Federal Law No. 18 of 1993 Concerning Commercial Transactions Law, the drawee has a period of two years to initiate a commercial claim before the Commercial Court against the drawer of the cheque [the one who had issued the cheque] which got bounced,” Dr Al Banna said.