Article 599 of UAE Commercial Transactions Law (No 18 of 1993) prohibits cheque issuance unless drawer or individual issuing cheque has sufficient funds with the drawee or bank wherein the drawee may dispose money pursuant to an implicit agreement between two parties. Under the UAE legislation, a criminal offense is established when the drawer/cheque issuer is unable to honor its financial obligations. .
A cheque may also ‘bounce’ or be considered as ‘dishonored’ or ‘returned’ for other reasons such as:
- A technical error e.g. signatures don’t match with bank or drawee’s previous records
- Closure of the bank account before cheque encashment
- Bank receives order from issuer to refrain from making the payment
Bounced Cheques: Consequences in UAE
Bounced cheque cases are serious legal matters and there are consequences, including jail sentences, travel bans, and fines. The cheque bounce lawyers of HHS Lawyers have an in-depth knowledge and extensive experience in dealing with such cases in accordance to UAE legislation on Commercial Transactions.
Conviction of cheque issuer
Our legal consultants can guide a recipient of a bounced cheque in filing a complaint against the issuer, and have the case forwarded for public prosecution by the criminal court. The court may convict cheque issuer based on the evidence that we provide on your behalf as the complainant. A convicted issuer may be given two options: release owed funds or serve prison sentence.
In the event that the amount owed is still not cleared despite imprisonment, we can help the complainant in presenting the case to UAE civil court along with sufficient documentation as evidence. If the debt is not settled after jail sentence completion, the person will be asked to leave UAE after getting back the impounded passport.
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For Corporate Cheques: who is liable?
For companies and partnership firms, partners and stakeholders are not held liable when cheques issued are not cleared due to insufficient funds. Criminal liability is borne by the authorized signatory, which is often a co-owner, partner or manager. Private funds of other parties have no bearing as to the cheque’s value; however, the value may be realized through disposal of company assets.
In the event that the cheque bounce is proved to be a direct result of fraud committed by partners or owners, it is likely for a case to be filed against company directors.
If you’ve been wrongfully accused, our qualified lawyers and legal consultants specializing in Commercial Transactions will strive in defending you. Our cheque bounce lawyers can press all efforts in utilizing legal loopholes to mitigate legal situations regardless of whether accusations are true or there’s substantial relevant evidence against you.
At HHS Lawyers,we have a complete understanding on changing UAE legislation, which is supported by the successful handling of thousands of settlements and cases. Our attorneys are committed in staying abreast of new and existing legislation concerning cheques and other financial vehicles. Cases are also presented professionally, intelligently, and successfully.
Other reasons to trust our professionals:
With over three decades of mediation and litigation experience, the firm is qualified in reviewing every document relevant to the case and providing support in debt collection, prosecution, and/or defense.
We take pride in striving to develop a working client-lawyer relationship as we understand that it is the key in arriving to favorable outcomes. In addition, we take time in understanding your specific situation and what you plan on achieving during consultation sessions.
Although cases are better settled outside of proper courts, the firm can professionally and aggressively pursue claims or exhaust all options and resources to fight for your rights.
We provide updates on all stages of the process to keep you informed regarding your case’s status. You’ll have direct communication lines with your assigned attorney and make sure all emails and calls are returned promptly.
For legal assistance on matters related to bounced checks, call us today!