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Dubai’s cheque law: Should it be changed?

Dubai’s cheque law: Should it be changed?

A new court opened this week to deal specifically with cheque crime. Once again it has prompted calls for Dubai’s stringent cheque law to be changed.

August 24, 2010 12:11 by

Should the law in Dubai governing the use of cheques be overhauled? That’s the major question doing the rounds of Dubai media this week, after a new court circuit opened in Dubai to handle the large number of cases related to bad cheques.

According to Judge Ahmed Saif, chief justice of the Dubai Criminal Courts, more than 100 cases are heard during the after hours weekly sessions, which cover both personal and commercial defaulters. The National reports that the new system “has sparked renewed calls for changes to the law,” with advocates for change saying offenders should be fined and not jailed.

“People have to sign blank cheques to rent, borrow, purchase and do business in Dubai. If conditions make it the only method of [doing] business, the courts must not criminalise non-payment,” criminal lawyer Harun Tahlak told the paper.

“Article 401 of the UAE penal code needs to be changed or dropped,” he said. “Article 401 states that one who defaults on a cheque with criminal intention can be jailed or fined. But the courts routinely sentence people to jail.” He advocated arbitration or civil court proceedings. Such a move would surely lessen the burden on the criminal system.

But Judge Saif responded: “A cheque is protected by criminal law because it is viewed as a bond. A criminal judge is not concerned about what circumstances the cheque was issued under. It is not for him to review this – the judgement is made based solely on the fact that you have presented a bond which was not honoured.”

Emirati lawyer Ali Musabah said, “The court rarely issues fines in cheque cases and when it does, it does so under very tight conditions,” he said. “I believe the courts should issue fines for first-time offenders [owing] small amounts. If a person was unable to repay his credit card or bank loan for good reason, he should be fined not jailed.”

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  1. zoher on August 25, 2010 8:14 am

    I do agree that imprisonment for cheque default serves no one. The major loophole in the system is poor employees traped while signing corporate cheques as part of their Job description.

  2. ali fakha on August 25, 2010 8:15 am

    if all of us check who is behind all these problems for boun ced cheques, it ie very simple the BANKS themselves. they give every one so much credit cards high limits, loans etc… without looking for any background . The salesman getting his commission no matter what is going to happens after few months .
    If all of us remember before few years how banks was chasing every one to give him card and loans and now when any of us need a loan to close such cards , no bank willing to give loans, so can any one tell me how this problem will finish?
    it will not finish as much as the banks not cooperating properly and not helping people now when they need the help. the other choice and this what many doing is leaving the country with all banks problems behind him.
    why, if you check the other issue is court putting the borrower in jail, so can any one tell me , how he will pay as any company will ofcourse fire this employee and then his family will be finished also as no income , so how he will pay back.
    what you think he or she will do in such situation other than leaving the country.
    such rules should be changed and government should force the banks to easy the repayment plan and stop threatening every one with more than 50 calls daily using different names and numbers and lawyers and so on.

  3. Abdullah Dakroub on August 25, 2010 10:00 am

    I totaly agree with the fining as along as it is proved that there are no bad intentions when issuing a cheque. Everything you have to pay for in the UAE now requires a cheque, and whenever you issue a cheque you are frightened to do so not knowing your fate. Knowing that jobs are never secure, because again by law your employer could terminate you in one month time.

    Looking at the persons who fled the country leaving their cars behind, and knowing many of those have fled because of their car loans.

    Finally, all banks charge a AED 200+ fine for bounced cheques. These fines should go to the central bank and not to the bank collecting this fine.

    I believe if the UAE has strict laws on employment/banking, alot of these issues will decrease. This is offocurse on personal issues and not criminal.

  4. Andrew on August 25, 2010 10:35 am

    Central Bank creates a credit rating agency and/or framework + banks use it = dumping checks and using a proper DD system.

    Issue solved, assuming the CB pulls its finger out.

  5. SJH on August 25, 2010 11:22 am

    Agreed, Banks do not co-operate either professionslly or personally, My case, requesting bank for settling my card and now for 18 months paying penalties, reason one bank policy differs from the other, Where are those guidlines set for BANKS…anyone ?


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