Debt Recovery Agency in Dubai

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1. What is debt?

1.1. Traces of the debts can be found from the ancient times of the barter system. That was when people were selling commodities and servicing other goods and services. But now comes an era when there are no exchangeable goods or services.

1.2. In such a case, what are the steps that can be taken in the event a group fails to deliver the promised services or goods? Which provides a need for debt recovery. In the ancient period, there were different ways of dealing with debts; from the death sentence to imprisonment, to the right to bring the debtor to trial according to the ruling rules.

1.3. The legal process has now become very controlled over the passing of time. Most of the claims (which are not resolved amicably between the parties) relating to debt recovery in the UAE was settled in court. The UAE courts have developed a system for dealing with the different kinds of money claims.

2. Do I need to go to court to have my money recovered?

2.1. Using the available sources and opportunities to recover once money before approaching the court of law is always a very good option. Use methods such as issuing a legal notice, making follow-up calls, and attempting to contact the debtor for restitution are always the preferable options, and have produced good results.

2.2. In cases where the creditor is unsure of the debtor's contact details, creditors can make use of a private investigation agency's services to check whether the debtor is still alive and whether there are chances of recovery.

2.3. If it is a case in which the debtor acknowledges the debt due but also confesses the financial difficulty in paying the creditor, then the next and safest option would be to give the debtor a payment plan to clear the debt. The debtor shall hereby pledge to pay the remaining in the form of fixed installments over a negotiated period of time.

2.4. Trying to negotiate with the claimant before banging the court doors is extremely important, as the judges are sure to notice the fact that the borrower attempted to settle the matter in a friendly manner before wasting the court's precious time.

2.5. Nevertheless, if the delinquent refuses to honor the payment plan and is careless in his checks, then the only option left in that situation is issuing a final notice of claim before going to court. The said notice of claim shall be sent to the debtor by email and by registered mail.

2.6. The notice of claim will clearly indicate a time limit before which the outstanding owing is to be charged, within which legal proceedings for debt collection in Dubai or UAE are to be launched. If the defendant fails to answer the final request to clear the outstanding, then there will be no other choice in that situation but to petition the court for redress.

2.7. Article 401 of the UAE Penal Code states that' Any person who draws a check in bad faith without any existing or withdrawal provision or after issuing a check withdraws all or part of the funds in order that the balance becomes insufficient to settle the amount of the check, any person who endorses or delivers it to another check payable, shall be punished with confinement or a fine.

2.8. The above is the official definition of a bounced cheque's criminal consequences in the UAE. A cheque's dishonour creates the creditor's right to initiate a criminal case against the defaulting party. In fact, it can be said that criminal penalties are to be enforced instantly and promptly as long as the debtor's account indicates insufficient funds to pay the cheque.

2.9. In addition to criminal proceedings against the defaulting party in which the defaulter is fined or forced to be held under detention, the borrower may depend on Articles 246 and 710 of the UAE Federal Law No. 5 of 1985 of the Civil Code to file a civil case against the defaulter.

Article 246

"contract must be performed in accordance with its contents, and in a manner consistent with the requirements of good faith."

Article 710

"A loan is the granting of ownership of property or fungible things to another with the condition that the other should return it like in amount, kind and description to the lender upon the expiry of the period of the loan."

2.10. Both Article 246 and Article 710 of the Civil Code lay down the defaulting party's civil liability for violating his / her contractual obligations. After receiving a judgment from the civil court, the claimant will file an execution order, an in which the judge must order the defaulter to follow the judgment of the civil court or in the alternative face incarceration until the court's reasonable time.

3. What can I do as a creditor?

3.1. As a creditor, at the time of cashing the skipped cheque, one shall receive all the correspondences from the bank that show the truth of the defaulter having insufficient funds in his account.

3.2. The creditor will contact the police station to file a criminal case against the defaulting party upon obtaining the necessary communications and documentation for the cheque dishonor. The police will refer the matter to the public prosecutor's office once the criminal investigation is complete.

3.3. Note: A police complaint can not be lodged because six months have passed since the search bounce date.  Prosecution in criminal proceedings, and their role.

3.4. Once the police transfer the file to the prosecutor's office, the public prosecutor will investigate the said cheque bounce offence. He shall investigate the specifics of the bounced checks, such as the cause for issuance and the motive behind it. A

3.5. At this stage, the public prosecutor usually examines and takes both parties' statements and post, taking into account all the circumstances, decides whether to grant or reject bail. In the event that the public prosecutor wishes to give bail to the defaulter, the defaulter must either pay a bond "Kafala" which is either the amount equivalent to the amount of the cheque, or deposit his passport or that of another guarantor. In case the public prosecutor wants to refuse the bail; the judge will sentence the defaulter to prison until the court has decided to hear the case to date.

3.6. After the case being appealed to the criminal court, the court will decide a date for hearing the case and will review the public prosecutor's report along with the charges and response of each side. After considering all of the circumstances and facts before the court, the court may order the defaulting party to be fined and/or spend time in jail.

3.7. The penalty given to the defaulting party may vary due to the circumstances of the case such as the motives for the transaction, along with the purpose and motivation for drawing the cheque. For common situations, the penalty of imprisonment ranges from one to three months in most circumstances and could go up to three years and/or fine, which typically varies from Dhs 1,000 to Dhs 30,000 depending on the amount of the cheque.

4. Execution of judgments

4.1. Until the same is definitive and approved by the court as fit for execution a judgment can not be executed. The execution process takes place in a different tribunal section. The execution courts have specially assigned judges to pass execution orders, assisted by an execution bailiff and administrative staff.

4.2. The execution judge is responsible for both the whole execution process and the opposition to it. The decision from the Court of First Instance can be executed only if both sides refuse to file the appeal within 30 days of the judgment date.

4.3. If either party files an appeal within the time frame permitted, the order is not deemed final and can not be enforced.

5. What are the forms a collective judgment can be enforced?

5.1. A local judgment can be enforced in different ways such as:

• Attaching the debtor's property or selling it.
• Shares, stocks, and bonds are attached.
• Attachment and sale of real estate.
• The debtor's incarceration is a default.

5.2. In the event that either side seeks an appeal of 30 days from the date of decision to the verdict, then the matter is appealed to the appeals court. The parties are allowed to introduce additional witnesses in the appellate court.

5.3. The Court of Appeal's decision is definitive unless the parties decide to lodge a further appeal within 30 days before the cassation court. T

he cassation court's decision is binding, and therefore the parties should be vigilant to evaluate the situation before deciding to lodge an appeal with the cassation court.

5.4. Debt is a responsibility and it is often recommended that a legal counsel be contacted before committing. In the event that the debtor has left the country, he can return after paying the dues and canceling all warrants against him.