Ask the law in UAE: Can I file a civil case against both the borrower and guarantor for a bounced cheque?

court, law, judgement — UAE federal law in dealing with bounced cheque cases is clearly delineated. Image Credit: Pixabay

Bounced guarantee cheque

Question: A year ago, I gave someone a loan. In return, another person wrote a cheque as a guarantor against the loan. Two months ago, the borrower paid part of the value of the cheque and in return he asked me to sign an undertaking that I had waived off my legal right in the eventuality of the guarantee cheque being dishonoured by the bank due to insufficient balance. This effectively meant that I could only claim my right before the civil court, in case the cheque bounced. A month ago, I presented the cheque to the bank and it was returned due to insufficient funds. My questions are: 1) Do I have the right to open a criminal case against the drawer of the check despite having issued an udertaking that I would not use the cheque to open a criminal case? 2) If a civil lawsuit is filed, will it be against both the borrower and the guarantor? Kindly advise.

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Regarding your first question, Article 401 of the Federal Law No 3 of 1987 of UAE Penal Code, as amended by Federal Law No 34, dated 24/12/2005, states: “The penal action shall be precluded in case of payment or its withdrawal subsequent to the perpetration of the crime, but prior to the settlement of the case by a decisive judgement. Otherwise, stay of execution shall be ordered.”

Dubai Higher Court decided that “the decision of the expiry of the criminal case by withdrawal of giving a cheque without balance in accordance with the text of Article 401 Penalties, is a right decision”. According to cassation No 333/2014 Penal, “it is permissible for the victim to waive the criminal case arising from the crime of issuing a cheque without balance” as per cassation No 542/2016 Penal.

Withdrawal of the case or its settlement is an issue over which the court adjudicates because it is not correct to make assumptions on withdrawal or settlement or by way of any kind of conjecture, but it must be established by evidence. This is according to cassation No 2010/468 Penal.

Regarding your second question, you may file the case against the principal of the cheque and / or the surety. Article 1078 of Federal Law No (5) of 1985 on the Civil Transactions Law of the United Arab Emirates under Section III states: The Effects of Suretyship states: “1. The creditor may have a claim against the principal and / or the surety. 2. If the surety has a guarantor, the creditor may have a claim against any of them at his choice. 3. His claim against any of them shall not forfeit his claim against the others.

It is important to recognise that the guarantee of the surety is not sustainable, but restricted with a limited time as per Article (1092) of the same Civil law.”

When the debt matures, the creditor must claim it within six months from the maturity date otherwise the surety shall be considered not concerned with the suretyship.”

Dubai higher Court assures that “sometimes the cheque is not a fulfilment instrument, but rather a guarantee instrument, whereby the drawer guarantees the fulfilment of someone else’s debt if the latter does not pay it to the creditor. In this case, the cheque loses its nature and becomes a surety that rotates in existence and null with the guaranteed debt and is then subject to the provisions of the surety, including what was stipulated in Article 1092 of the Civil Transactions Law regarding the exit of the guarantor from the surety if the creditor does not claim his debt within six months from the date of its maturity. In cassation No 2005/372 Commercial and 2005/403 Commercial.

Abusing a public servant at work

Question: If someone abuses one who is in charge of a public service during his duty hours, as per UAE Law, what punishment can be handed out to him or her?

I would like to advise the questioner that according to the UAE Federal Penal Code No 3 of 1987 and as amended in chapter six thereof, in case of crimes against reputation (libel and abuse), Article 373 of the Penal Code clearly states: “Detention for a period not exceeding one year or a fine not exceeding Dh10,000 shall be imposed upon anyone who, by any means of publicity, disgraces the honour or the modesty of another person without attributing any particular act to the defamed party. Detention for a period not exceeding two years and a fine not exceeding Dh20,000 or either of these two, shall apply if a public official or one who is in charge of a public service has been abused during, because of, or on the occasion of performing his duty or public service, if the abuse affects the honour or injures the reputation of the family, or it is noticed that the abuse is intended to achieve an illegal purpose. However, if the abuse is published in any newspaper or printed media, it shall be considered an aggravated case.”

Article 374 of the same code also states: “Punishment by detention for a period not exceeding six months or by a fine not exceeding Dh5,000 shall apply if slander or abuse is transmitted by telephone, or face to face with the victim and in the presence of a third party. Punishment by a fine not exceeding Dh5,000 shall be imposed if slander or abuse occurs face to face with the victim, without the presence of a third party or is sent to him by a message. It shall be considered an aggravated case if libel or abuse is committed in any of the cases mentioned in the preceding two paragraphs, against a public official or one who is in charge of a public service during, because of or on the occasion of performing the duty or public service, and if it affects the honour or injures the reputation of the family or if it is noticed that it has achieved an illicit purpose.”