Question: I received a cheque from somebody and I submitted it to my bank within six months of receiving it. However, it has been returned due to insufficient funds. I know that I could file a criminal or commercial case but is there a time limit when it comes to filing such cases?
Answer: You have the right to file a criminal case within five years from the date of receiving the cheque. This is per article no 20 of the Criminal Procedures Law of 1992 and its amendments. But, unfortunately, you do not have the same amount of time to file a commercial case as that would have to be filed within two years against the person who signed and delivered you the cheque, in accordance with article no 638/1 of the Commercial Transactions Law of 1993 and its amendments. There are also some factors that could reduce the period of time a case can be filed within, depending on the case, so it is wise to evaluate your options with your lawyer.
UPDATE: In 2020, the United Arab Emirates issued Federal Decree Number 14 of 2020 (Issued on 27 Sep 2020) which amended and added new articles to the UAE Commercial Transaction Law No. 18 of 1993 and the UAE Penal Code. The new changes have come into force from January 2022 onwards and one of the most significant changes introduced is the limited scope of criminalization for returned cheques on account of insufficient funds.
Narrowed Criminality: The new amendments bring in narrowed criminality in matters concerning cheques. The provision related to criminal sanctions for insufficiency of funds in the UAE Penal Code has been deleted, effectively meaning that there will be no criminal liability if the cheque has bounced because of insufficiency of funds. Pursuant to the new changes, only specified actions will invite criminal action, including but not limited to the following:
Reference: Federal Decree Number 14 of 2020 amending the UAE Commercial Transaction Law No. 18 of 1993.
Issue Date: 27 Sep 2020
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