A new UAE court ruling has stopped the acceptance of ‘security’ cheques submitted by banks as a criminal tool against debt defaulters. The court ruling is only applicable to security cheques and any bounced cheques submitted to cover monthly, quarterly and other fixed-term payments, can be used to file a criminal case.
According to Jassim Bu Aseeba, Director of the Judicial Inspection Division at the Ministry of Justice, “all federal courts in the UAE have started to enforce the presidential instructions to stop accepting cheques presented by banks as criminal tools against expatriates as is the case with Emirati defaulters”.
The instructions, which at first only benefited Emirati defaulters, have now been extended to expatriate debtors as well. The banks have intimated that federal courts would now not accept cheques presented to them by expatriates against a loan. While these cheques by debtors would still help to prove rights of financial firms, they can no longer be used to arrest and convict a defaulter. As a result of the ruling, several people have been released from the jails.
The move is being viewed as an attempt to promote justice for all residents of the Emiratis and expatriates. Through consistent application of rules, discrimination against expatriates has also been removed and the system made fairer for all people living in the emirate. Expatriates, who form about 80 percent of the UAE population, often complain that Emiratis are given a preferential treatment in several civil matters.
Banking sources state that the financial institutions have stopped using security cheques as a criminal tool, but are now requesting them to be submitted as part of documentation for loans. They believe that their rights would not be compromised as they may still head to civil courts for recovery of dues.