Changes to help avoid lawsuits, encourage reconciliation

The UAE Cabinet has issued a decree amending the Commercial Transactions Law, including those related to bounced cheques. The amended law comes into force in 2022. The changes will create mechanisms that will ensure the collection of payments through cheques, such as obliging banks to partially pay the amount after deducting the total amount available to the beneficiary. The decree also makes bounced cheques an executive document to be executed directly by an appropriate judge in court.

Main condition

The changes also aimed at avoiding criminal lawsuits through encouraging reconciliation and urging the payment of the value of the original cheque as the main condition for the dropping of a criminal lawsuit.

The amendments introduce penalties, including cancellation of the cheque books and preventing the defaulters from obtaining new ones for a maximum period of five years. Additional penalties will be introduced, including the. suspension of licenses to practice economic activities. for six months. With regard to joint accounts the bank must, in case of one of the joint account holders dies or loses legal control, from the date of notification, limit the ability to withdraw from the joint account within a party’s share of the account balance on the day of death or loss of eligibility.

News Courtesy : Gulf News

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