Starting January 2, 2022, bounced cheques will be decriminalized across the UAE, except those issued in bad faith. The Federal Decree-Law No. 14 of 2020 presented major amendments to Federal Law No. 18 of 1993 promulgating Commercial Transactions with the aim to achieve faster and easier procedures while maintaining justice and supporting a sustainable economy.
The new version of the law obliges banks to make partial payments by releasing any available funds in the bank account unless the holder disagrees. For tenants, for example, this means that if an account fell short for a rent installment, the bank is obliged to fill in the rest from the tenant’s account, unless the tenant refuses to.
Previously, banks only made partial payments at the holder’s request.
While previously, beneficiaries of bounced cheques needed to make a police report, the new law enables them to directly approach the court’s execution judge to order payment of the full – or remaining – cheque’s value in an accelerated and easy procedure that reserves the rights of all parties.
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