Bounced Cheque Cases & Cheque Execution in Dubai as per the New Law

Many individuals & companies have bounced cheque issues in the United Arab Emirates. As per the new rules, what shall we do once we have a bounced cheque?

One of the most important questions arose recently, particularly after changing cheque case rules in the UAE. Once you go to the bank to encash the cheque and the teller tells you that the cheque has bounced, please review (cheque return Memo) and see the reason for which the cheque has been bounced the reasons shall be as follows:

1- Insufficient funds:

(a) if the cheque bounced due to insufficient funds, accordingly you can hire a lawyer and in this case, the lawyer will file a quick procedure called (cheque execution case). Once he files this case he will impose a travel ban against the person who issued the cheque, knowing that court fees will be 2% out of cheque value.

(b) if the bounced cheque is issued by a company and signed by a person in his capacity as company Manager accordingly the cheque execution case will be filed against the company and that Manager jointly.

2- Account closure (closed account):

In this case, you need to hire a lawyer to take two procedures those procedures are as follows:

(a) file a penal complaint against the person who issued the cheque. This complaint is called (cheque issuance in bad faith) and a travel ban will be issued against the person who issued the cheque.

(b) the second procedure if the account is closed is filing a payment order ( Amr Adaa - أمر أداء). The payment order is a fast procedure that shall enable you to get a decision obligating the defendant with paying the cheque amount within 24 hours after that you can ask your lawyer to file execution to recover your adjudged monies.

In general, the cheque criminalization has not been totally canceled but it is still applicable if the cheque is bounced due to account closure. The civil procedure which is related to cheque cases, namely cheque execution, is very fast and helpful to enable you to recover your debt whether the debt is owed by a company or an individual.

Written by:

Bashar Abdalla Al Masayba | Bashar Al Masayba Advocates & Legal Consultants