Bounced Cheque Laws in Dubai
The law in the UAE has clear regulations around taking action for a dishonored cheque as it has unfortunately become a common occurrence. It is important to note that bounced cheques can lead to civil actions, criminal actions or both. However, since the execution of the UAE’s Insolvency Law it should be noted that courts have been more lenient with punishing this crime.
What is a bounced cheque?
A cheque may “bounce” if there are insufficient funds in the account of the issuer. Another reason may be if there is an error in writing the cheque or its signature. Thus, it is important for issuers to ensure the required funds are available in their account before drawing a cheque.
Cheques below AED 200,000
A bounced cheque drafted for AED 200,000 or less will be penalized with a fine that must be paid immediately. Fines may range from AED 2,000 to AED 10,000. In order to register a complaint, one must simply file a claim with the Dubai Police.
A claim can be registered at any time through the Dubai Police app or website. The swift and simple process will ensure the issuer is obliged to pay their fine.
As of recently, fines may also be paid via the Dubai Police app or website. This reflects the city’s technological evolution to a Smart Dubai.
Cheques above AED 200,000
Sums over AED 200,000 may be dealt with criminal action rather than a simple fine. A complainant may file a case for such large amounts at the Dubai Courts. The court may decide to issue an arrest order and ask the issuer to repay the fine. On occasion, the issuer may also face a deportation charge depending on the severity of the crime. If the defendant still does not complete the payment, the complainant may file another case at the civil court in order to ensure their right.
Please feel free to reach out to our office to understand more about your rights regarding dishonored cheques in the UAE.
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