A bounced cheque is a cheque presented by the payee and rejected by the drawee bank.
In most countries around the world, bounced cheque is a civil offense but this is not the case in UAE as outlined by Best Lawyers of Dubai in many articles concerning cheque bounce. If for any reason the cheque issued by you bounces or dishonored by the concerned bank, it is a criminal offense according to Article 401 of UAE penal law. Article 401 states that A punishment of confinement shall be inflicted on any person who, in bad faith draws a cheque without no existing or drawable provision, or who, after issuing the cheque, withdraws all or part of the fund to that the balance becomes insufficient to settle the amount of the cheque, who orders the drawee not to paycheque, or deliberately makes or signs the cheque in such a manner as to prevent it from being paid.
The after-effects of your bounced cheque!
In UAE, before issuing a loan or a credit card the bank collects a security check, which a chunk of the loan you’re taking out. And when you default or your check bounces the bank or company will try and contact you for the payment of the EMI. If the cheque amount is less than Dh200,000, the punishment may be by fine and the fine may vary between Dh2,000 and Dh10,000 depending on the cheque amount but if it's less than that amount then you can even pay you're fine online without having to visit a police station or court. However, paying the fine does not completely absolve the debtor of the responsibility, the complainant, in this case, the person who received the cheque can still file a case with the court. The criminal court may convict the issuer and give him or her two options – pay the money or go to jail. There could be a scenario where even after facing a jail term the issuer of the check may not be able to pay up the amount due, in that case, the complainant produces the evidence and relevant documents in civil court and then the judge will issue an order which would leave the issuer with two options; either pay up or face a sentence again.
What happens when a corporate cheque bounces?
In companies or partnership firms, not all partners or stakeholders can be held liable in the event of a cheque being issued without sufficient funds to pay it off. Only the partner who has his or her signature on the cheque will be liable or the manager of the company, if the cheque bears his signature. Other people’s private funds have no bearing on the value of the cheque. And in paying up the debt, only the company’s assets shall be utilized but if the cheque has bounced due to some fraud for which a partner is responsible then the recourse will be different and that individual’s personal assets may be utilized.
What is the full list of fines for money laundering in the UAE? Dr. Hassan Elhais
The UAE Ministry of Economy has announced the list of penalties for violations of the laws relating to money-laundering and terrorism financing.
Can I Appeal Against an Arbitration Award?
Arbitration is best described as a cost-effective alternate dispute resolution process, which assists in smoother business relationships without incurring the rigidity of court proceedings. To address many of the pitfalls of the arbitration process and to bring the UAE arbitration process in tune with the best international standards, the UAE enacted Federal Law No. 6 of 2018 on ‘Arbitration’ and its amendments (“Arbitration Law”).
Commercial leasing and breach of contract punishments
In legal terms, a lease agreement can be defined as ‘a contract by which one party conveys land, property, services, etc. to another for a specified time, usually in return for a periodic payment’. A ‘commercial lease agreement’ constitutes a written lease agreement whereby a landlord agrees to lease his commercial property to another person or entity for a given business purpose and specified time period.
