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January 10, 2022|
The United Arab Emirates has enacted the federal degree number 14 of 2020 which has amended and added new articles to the UAE commercial transaction law no. 18 of 1993. The new changes will be in force from January 2022 onwards and impose new rules governing commercial cheques in the UAE. One of the significant changes being made concerns the limited scope of criminalization in instances of returned cheques on account of insufficient funds. The instances in which criminality will still apply are the instances wherein bad faith exists on account of the issuer of the cheque or other specific criminal actions as included in the new changes.
Further, the courts may issue an order against the issuer of the cheque to pay the entire cheque amount or the remaining balance due on the cheque.Article (635) Bis states that A cheque, which bears the drawee's stamp as non-paid for the unavailable or insufficient fund, shall constitute an executive instrument as per the Executive Regulation of the Federal Law No. (11) of 1992, and its bearer shall have the right to demand the coercive enforcement, wholly or partially. With respect to its enforcement and dispute related to it, provisions, procedures and rules provided for in the said Executive Regulation should apply.’
The new amendment has revised the penalties and imposes the following:
The new changes have thus been effected to strengthen the rights of both the cheque drawer and drawee and also to ensure that a cheque collection process is made more effective. The new changes are well aligned with the international best practice and endeavors to bring fairer commercial practices at both individual and institutional levels.
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