Dubai: The amendment to the UAE’s Commercial Transaction Law has introduced several penalties to narrow the scope of writing bad cheques by individuals and corporates.
In the UAE, a country which aspires to be a global trade hub with a fast-growing economy, cheque is one of the common forms of payment — whether people paying rent, buying a car or any form of purchases and transactions, as it is used as a form of security.
In a step to boost the power of cheques, the UAE Cabinet has amended certain provisions of Federal Law No 18 of 1993, the Commercial Transactions Law, including those related to bounced cheques.
As part of reducing time and effort of cheque beneficiary and issuing penalties against the issuer of a bounced cheque or obliging banks to partially pay the amount after deducting the total amount available to the beneficiary, the new amendment gives the power to the court to withdraw the existing chequebook from the convicted defendant and prevent him or her from obtaining any further chequebooks for up to five years.
Wageh Amin Abdelaziz, senior legal adviser at World Center Advocates and Legal Consultants, told Gulf News that the new changes will boost the trust between people in commercial transactions using cheques. “Article 643 of the law provides for a strong and new punishment as the court will have the power to order the withdrawal of the chequebook from the convicted defendant and prevent him from obtaining chequebooks for up to five years,” said Abdelaziz. “A convicted defendant, who doesn’t surrender his existing chequebooks to respective banks within 15 days of him being notified to do so, shall be sentenced to a penalty of no less than Dh50,000 and no more than Dh100,000.”
According to the same article, any bank which violates the court’s order, shall be sentenced to a penalty between Dh100,000 to Dh200,000.
“Article 642 of the law gives the power to the court to publish briefing of the judgement against the convicted person in two daily local newspapers [an English and an Arabic paper] or online, including the name of the convicted person, his residence and occupation. Additionally, the convicted person should pay the cost of publishing,” Abdelaziz added.