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    • Bounced Cheques in the UAE: What You Need to Know

      In the UAE, the cheque bounce is a very frequent problem faced by people during their span in the country. It is covered under the purview of a criminal offense in the UAE, and legal implications/penalties can be financially severe and daunting. Bounced cheque issues may arise in a variety of commercial transactions, including but not limited to, companies’ exchanges, bank loans, property rents or purchases and individual transactions.

      Bounced cheque complaints and cases can be attributed to several reasons but primarily due to the debtor’s failure of paying the debt to a creditor on a specific date agreed thereon. Under the UAE Federal Law No. (3) of 1987 Promulgating the Penal Code, both criminal, as well as civil proceedings, can be initiated against the perpetrator. Therefore, it is crucial for every individual dealing with cheques in the UAE, specifically those who are not desiring to “intentionally” commit a crime and face the consequences, to know how to issue and accept cheques properly, or how to handle situations when deposited cheques returned unpaid.

      What is Cheque?

      A cheque (or check) is intended to act as a payment/negotiable instrument customarily recognized instead of money. The Federal Law No. (18) of 1993 Issuing the Commercial Transactions Law regulates issuing and circulation of cheques in the UAE. The Article (483) of the law defines a cheque as “an order issued by a person (the Drawer) to a bank (the Drawee) to pay on the date indicated therein (Date of Issuance), a specific sum of money to the order of a third person (the Payee), being the beneficiary, or the bearer thereof”.

      A duly completed and signed cheque acts as an authority to the bank to disburse the money of the drawer. The bank must pay the cheque even if the drawer objects, except when the cheque was lost or if the bearer became bankrupt. Therefore, the cheque is effectively irrevocable payment instrument.

      The cheque issuer shall be aware that according to the law a cheque needs to satisfy the conditions mentioned below.

      The Form

      As per the Article (598) of the UAE Commercial Transactions Law, cheques issued and due for payment in the UAE must be drawn on a bank. Each bank provides bank account holders with checkbooks containing specially printed highly-protected forms – blank cheques. On each cheque must be printed (a) the name of the account owner, (b) his account number and (c) the serial number of the cheque (see the picture below).

      The Particulars

      Pursuant to the Article (596) of the UAE Commercial Transactions Law, a cheque shall contain the following particulars (see the picture above for reference):

      • (1) The word "cheque" written in the text of the instrument in the language in which the text is written;
      • (2) An unconditional order to pay a specific amount of money;
      • (3) The name of the bank which is under obligation to pay (the Drawee);
      • (4) The name of the person to whom or to whose order payment should be made (the Payee);
      • (5) The place of payment;
      • (6) The date and place of issuing the cheque;
      • (7) The signature of the person who issued the cheque (the Drawer).

      There is no mention in the law that the cheque without a date will be invalid. Thus if the date on the cheque is omitted, the date of issue shall be the date of presenting the cheque for payment.

      If the place of payment is not stated on the cheque, the place indicated next to the bank name shall be deemed to be the place of payment; and if it is not indicated at all, then it shall be the bank's head office. Also, if the place of issuing is not stated, the cheque shall be deemed to be issued at the place where it was effectively signed (Article (597)).

      Availability of Funds

      Abiding by the laws and principles of good faith (Bona Fides), the drawer shall bear in mind that he cannot issue a cheque knowing that he does not have, or will not have, enough funds in his account with the drawee at the date of issuance. The drawer shall deposit sufficient funds for the full payment of the amount indicated in the cheque, as per Article (599). Failure to provide such funds, partially or fully, entitles the payee to request a statement from the drawee (the bank) to present as a means of evidence in any action he opts to initiate against the drawer.

      What is Bounced Cheque?

      A bounced cheque (also known as ‘dishonoured cheque’ or ‘bad cheque’) is a cheque presented by the payee and rejected by the drawee bank when:

      • The bank indicates that the funds available in the account of the drawer at the date of issuance are insufficient to cover the amount mentioned on the cheque, either partially or fully; the cheque is consequently rejected and marked by the bank.
      • The bank receives an order from the issuer to refrain from paying the cheque.
      • The drawer makes or signs the cheque in a manner that prevents it from being paid, like omitting or changing his signature.
      • The drawer's bank account was closed before the issued cheque is presented for payment.

      Liability

      The cheque is a payment instrument contingent to the availability of funds, through the drawee’s acceptance to pay the cheque issued by the drawer. Accordingly, the Article (632) of the UAE Commercial Transactions Law entitles the bearer of a cheque to have recourse against the drawer, endorsers and/or any other parties found liable thereon if the cheque is presented within the prescribed time limit but remained unpaid, and this fact is established by protest.

      In lieu of the protest, failure to pay may be established by a statement from the drawee bank. Refrainment from paying a cheque shall be established before the expiry of the time-limit prescribed for presentment.

      The Time Frame for Presenting a Cheque

      A cheque is due for payment on the date stated thereon as the date of the issue. It may not be presented for payment before such date (Article (617)) and shall be presented for payment within a time-limit of six months from the date stated on the cheque as the date of issue (Article (618)).

      It is important to note that the drawer shall provide the consideration for payment on the date of issue and such consideration shall continue to exist with the drawee until the expiry of the time-limit for presentment of the cheque. Otherwise, the Article (634) grants the bearer the right to have recourse against the drawer, even when the former fails to present the cheque to the drawee bank, make a protest, or take a similar action within the prescribed time limit.

      The Limitation Period

      The Article (638) states that the actions of recourse initiated by the cheque bearer against the drawer, endorsers and other obligors for the payment of its value, will not be heard after a period of two years from the expiry of the time-limit set for presentment thereof.

      In case a lawsuit is initiated, this time limit shall only apply from the day of the last action taken thereon. In addition, such time limitation shall not run if the debt is adjudicated or when it is acknowledged by a separate deed resulting in the renewal of the debt (Article (640)).

      When a cheque is deemed bounced, failure to pay may be established by a statement from the bank. The bank cannot refuse a request to issue such a statement but may request a grace period not exceeding three working days following the presentment of the cheque to contact the drawer.

      The bearer has no legal obligation to resolve the matter with the drawer through direct contact, and may rather initiate legal proceedings. Such proceedings may take the course of a criminal or a civil case.

      Criminal Case Proceedings

      I. The Police Complaint

      In order to file a case for a bounced cheque, the bearer of the cheque must formally lodge a complaint with the police of the respective emirate against the drawer. In Dubai, such complaint may be filed through the Dubai Police mobile application.

      After receiving the complaint, the police should contact the issuer of the cheque to notify him of the same and request his presence. At the police station, the drawer is allowed to settle the issue through paying the amount of the bounced cheque. In that case, no further legal proceedings will be taken.

      The issuer of the bounced cheque has the right to request some time to settle the issue. Upon such request, the issuer may be granted a reasonable period secured by the deposit of his passport at the police station. However, it highly depends on the cheque’s amount as in many cases such guarantee of depositing the passport is rejected by police officers if the amount drawn on the cheque is high (AED 1 Million and above).

      Since the bounced cheque is a criminal offence in the UAE, upon filing the complaint at the police station, a travel ban/arrest warrant on the drawer will be issued automatically. Hence, the issuer of the cheque will be banned from leaving the country and arrested if he tries to escape, or will be detained on arrival if he enters the UAE from outside. Such ban/warrant can be removed only upon settlement of the bounced cheque issue, or after serving a sentence.

      II. The Public Prosecution

      In case the opponents failed to resolve the bounced cheque dispute at the police station, the police then transfers the complaint to the public prosecution in the court, to further conduct its investigations. Thereafter, the public prosecution makes decisions in the case upon hearing the opponents.

      Based on the evidence presented in the court, the decision could be a bail either by paying the value of the bounced cheque or by depositing the passport of the defaulter or another guarantor. In case bail was denied, the public prosecutor may order the detention of the drawer until the court hears and decides on the case.

      III. The Criminal Court

      The role of the criminal court is to dive deeper into the case details, opponents’ arguments, and available evidence. The court then proceeds to examine whether the crime elements are satisfied or not. The crime elements are the material element and the mental element.

      The material element (Actus Reus) means that the perpetrator had physically committed an act which is considered a crime by law. Examples on that can be many, like failing to provide the amount of money or withdrawing it from the issuer’s account after the cheque’s date of issuance, or making mistakes with the name, amount, and/or signature in the cheque.

      Such acts shall not constitute a crime without the coexistence of material element and mental element (Mens Rea). The mental element means the perpetrator’s intention to bring financial damages to the complainant.

      Once both of the crime elements are satisfied, and by the authority vested in it in the Article (401) of the UAE Penal Code, the court may decide the sanction of the perpetrator. This can be confined to a fine assessed solely by the court, based on the conclusion reached and the amount claimed and usually ranging between AED 1,000 and AED 30,000, or more. The court may also decide the sanction of the perpetrator to be serving jail time of between one year and three years.

      Civil Case Proceedings

      The criminal court and the civil court function separately. Hence, the sentence issued by the criminal court comes only as a sanction for the act of issuing a cheque in bad faith without sufficient funds or withdrawal all or part of the funds after giving the cheque, so that the remaining balance is insufficient to cover the amount of the cheque.

      Nevertheless, the court conducting the criminal trial may transfer the civil claim to the civil court for determination. The claimant may present his case to the civil court as well to claim his right to the disputed amount.

      The civil court may be any competent judicial authority other than the courts. For example, in Dubai, the Rent Disputes Settlement Center (also known as Rental Committee) is a competent authority carrying out a settlement of all rental disputes arising between property landlords and tenants in the emirate.

      After reaching a conclusion based on the evidence and facts presented by the opponents, the civil court can then demand the issuer of the bounced cheque to pay a sum equal either to the value of the cheque or its outstanding balance. In case the perpetrator fails to pay the said amount, his assets may be attached, and he may be subjected to another jail term for failing to comply with the civil court decision.

      If there are no pending cases against the issuer of the bounced cheque, once the jail term is completed, he is free to leave the country after collecting his impounded passport.

      What Else You Need to Know

      Once the court concludes that the elements of crime are satisfied, it is entitled to decide by its sole discretion which sanctions to apply from the options allowed by law.

      The issuer of a cheque should be aware that if the cheque bounced for a typo mistake, but there were available funds, it can be remedied at any stage of the legal proceedings. The remedy may yet be possible after the court makes its decision, and consequently, execution will be suspended.

      The same applies if the drawer filled the cheque properly but had no available funds at that moment. The sooner a drawer manages to provide the amount he is defaulting with, the less legal proceedings will be initiated against him.

      In case of settlement, the drawer shall make sure to retrieve the bounced cheque and get a clearance paper from his debtor upon payment of the disputed amount. Henceforth, no further legal proceedings will be initiated, and travel ban/ arrest warrant will be removed.

      Furthermore, the issuer of a cheque might have done everything properly but drained his account for a sudden emergency like losing a job or facing serious health issues, leading to his default when the cheque was presented for payment. It might appear that the courts did not take into consideration the existence or nonexistence of the criminal intention and considered the drawer always to have that intent. Nevertheless, if the issuer of a cheque was able to prove an emergency and show his good faith and readiness to repay his debt, the sanction may be confined to a fine. A grace period may be granted then for the payment, to be reasonable for both, the perpetrator and the complainant.

      Also, if a tenant issued post-dated cheques to the landlord and defaulted at the date of issuance, such act shall not undergo the court system and may rather be deemed as a misdemeanoursubject to financial penalty. This does not mean that the cheque issuer is exempted from paying his debt, and a civil case could yet be filed by the landlord to claim the defaulted amount.

      Subsequently, the sanction of imprisonment and/or higher fine is more likely when it is proven to the court that the issuer of a bounced cheque was acting in bad faith (Mala Fides). This means having an intention to commit an act of fraud and cause financial harm to the claimant.

      Reasonable Care

      Unfortunately, in the UAE, chequebook holders can get in trouble for a bounced cheque even without signing one. The practical experience shows that there are cases where a person can be subject to legal liability towards a bounced cheque that he/she did not sign. Some examples that may lead to such result are:

      • the lost chequebook was found and used by a non-authorised person;
      • the cheque was signed by another person who is a joint signatory for the bank account and has access to  the chequebook;
      • the company/work chequebook was misused by non-authorised employees;
      • other examples of the same nature.

      In practice, when the cheque bounces, the drawee bank – based on the police request – extracts details of the signatories from the bank account file and forwards them back to the police. The Police Department subsequently takes the legal measures to detain such signatories without performing the investigation whether the signatory has actually committed the crime or not. Thus, a bank account signatory may be banned from leaving the country, detained for the uncommitted crime, and get rejection to be bailed by leaving his passport as a guarantee if the amount is high.

      In this case, the only way for the person to retain freedom will be to pay the full amount of the bounced cheque, and only afterwards he can object this decision and appeal it. Then, the prosecutor will forward the case to the Police Department to start the investigation procedures towards the person who have actually committed the crime, but only if they are able to identify such person. Otherwise, the signatory may never return the amount paid for the bounced cheque. And all these problems may occur just because of a lack of reasonable care in handling of the chequebook.

      Recent Developments

      To mitigate the non-payment of bounced cheques, the UAE government has recently introduced new regulations to punish such crimes with fines instead of jail term. This initiative allows the issuer of the bounced cheque to get employment opportunities or other such alternatives to be able to repay his debt instead of going to jail.

      In December 2017 a new criminal order issued by the Dubai Attorney General came into effect in the Emirate of Dubai. The core of the order is based on the idea that minor offenses shall not be put through the police and criminal courts system, but would rather be downgraded and deemed as misdemeanors punished with fines instead of jail (subject to the decision of the public prosecutor).

      According to the order, bounced cheque cases of the amount not exceeding AED 200,000 shall be punished with the following fines:

       

      Bounced cheque(s) amountFine
      less than AED 50,000AED 2,000
      AED 50,000 - 100,000AED 5,000
      AED 100,000 - 200,000AED 10,000

       

       

      Conclusion

      Bounced cheque cases are prevalent in the United Arab Emirates and can be associated with numerous reasons including illegal termination, the bankruptcy of companies, absconding of the cheque issuer, etc. In practice, when the bearer of the bounced cheque filed complaint with the police, the most viable way to resolve the issue for both parties – is to settle it at the police station amicably.

      However, if for some reason the amicable settlement was not reached, and the matter gets escalated to the next level, appointing an experienced lawyer as soon as possible would be the most practical and rational decision to prevent further negative legal implications and damages.

       

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    • 6 years, 5 months ago

      Anonymous User

    • UAE Travel Ban: What You Need to Know

      The UAE travel ban may be imposed on a person on various grounds, for instance, as the result of criminal offences, unpaid loans, breach of immigration laws or family matters. Implications of such a ban can be financially severe and daunting for the affected person. This article aims to give readers a clear understanding of what is the UAE travel ban, what are the grounds and procedures for its imposition and removal, how to check if the person is banned from travelling and other related topics.

      The ban

      In the legal perspective, the ban is a legal restriction of practising a right, or a prohibition from taking a certain action; it is a mechanism used by the legislator to organise the conduct of people in certain circumstances for the protection of public or private interests.

      The travel ban

      The UAE travel (immigration) ban is a prohibition from entering or re-entering the territory of the UAE, or a prohibition from leaving the country until certain conditions are satisfied, i.e. the reason(s) for the ban cease to exist. The travel ban supposes an order issued by the UAE authorities to all the state's border crossings prohibiting the concerned person from entering or leaving the country.

      The difference between a travel ban and a labour ban

      The UAE labour ban is another ban type which is sometimes confused with a travel ban. Both types are distinct; the UAE labour ban has no connection with travel restrictions. It is related only to labour relations governed by the Ministry of Human Resources and Emiratisation (MOHRE, formerly – Ministry of Labour) in accordance with the UAE Labour Law and relevant decrees issued by the Ministry.

      So, the labour ban does not exist under other employment relationship where the approval of MOHRE is not required. This is the case, for example, when the employment is granted through any of UAE free zone companies, as such labour relations are governed by respective Free Zone Authorities, not by MOHRE.

      The person who has a labour ban – whether for six months, a year or permanent – can still enter the UAE, but prohibited to get a work permit from MOHRE until the labour ban period is elapsed. Such a person, for instance, can come to the country as a tourist, student, investor or family member. The person with a labour ban can also get a job in the UAE and work for a free zone company or government entity (as such employment doesn't require a work permit from MOHRE).

      On the contrary, those having a travel (immigration) ban cannot enter the UAE for any ground, whether it be work, tourism or any other.

      The difference between a travel ban and an arrest warrant

      People often get confused about an arrest warrant (detention order) and its relation to a travel ban the United Arab Emirates.

      The UAE arrest warrant is an order issued by the competent authority to detain:

      • individuals accused of committing criminal offences according to the articles (45-46) of the UAE Criminal Procedures Law;
      • debtors abstaining from the execution of the final judgement according to the articles (324-328) of the UAE Civil Procedures Code.

      In case of criminal offences, the arrest warrant is ordered by a member of the public prosecution against the accused individual present at the incident scene if there is sufficient evidence of his/her involvement in committing the crime. If the member of the public prosecution issued an arrest warrant against the accused who is not present at the crime scene, then the order should be enforced by one of the public authority officers.

      In case of civil procedures, the detention order may be issued by the execution judge upon the request of the party to whom the decision has been delivered, provided that the debtor is abstaining from payment, and the debt is not less than AED 10,000 (unless it is a fine, prescribed alimony or a work remuneration).

      So, the goal of the arrest warrant is different from that of the travel ban. The purpose of the former is to detain an accused person for the sake of criminal investigations or execution of the civil court judgement; while the purpose of the latter is to prohibit specific persons only from entering or leaving the country for the sake of protecting public or private interests.

      Imposing a travel ban does not mean, automatically, that the banned person will be detained and put in jail. If the ground for the travel ban is not committing a crime, then there is no arrest warrant; hence the banned person will be prohibited only from crossing the UAE border without being arrested.

      If a person is accused of committing a crime, then he or she is automatically banned from travelling, but may not be arrested unless there is an arrest warrant issued as a part of the criminal investigation procedures.

      To sum up, an arrest warrant automatically entails a travel ban but not vice versa.

      How to check whether you have a travel ban

      In the UAE, there are no official online portals or websites that provide the service of checking a travel ban. The status of the ban can be checked through the Police Department, but only via a personal visit. So, you can check the travel ban on your name in person at any UAE police station; however, there is a risk of being arrested while visiting a police station if there is an arrest warrant on you.

      Therefore, the safest option is to check a travel ban through an attorney. For that, you need to provide your attorney with a copy of your passport and the relevant power of attorney. Also, the check through an attorney is the only option if you are outside of the UAE at the moment.

      Governing laws and regulations

      There is no single legal framework governing a travel ban in the UAE, that is to say, there is no legislation governing the entire system of the UAE travel ban, clarifying the grounds for its imposition, and stipulating the conditions to be met for the removal of the ban. It is an exceptional system implemented by virtue of specific provisions introduced in different laws and regulations, as described in the next chapters.

      However, the Federal Law No. (6) of 1973 Concerning Immigration and Residence and its Executive Regulations as amended by the Ministerial Decree No. (83) of 2002, provide an approximate list of categories of foreigners who are not allowed to enter or leave the territory of the UAE.

      According to the article (94) of the Executive Regulations, the following categories of foreigners are prohibited from entering the territory of the UAE:

      1) Persons who were engaged in criminal activities;

      2) Individuals who were subject to deportation orders by the competent authorities, e.g. courts and/or Ministry of Interior;

      3) Individuals with activities reported by the Interpol;

      4) Individuals suffering from one or more of the diseases considered by the Ministry of Health to constitute a threat to the public health, e.g. HIV;

      5) Individuals who have been deported from any of the GCC countries on criminal grounds.

      According to the same article, the following categories of foreigners are prohibited from leaving the territory of the UAE:

      1) Individuals subject to travel ban issued by the public prosecutor or any of his representatives due to current investigations on criminal offences;

      2) Individuals banned by the competent court due to a pending case(s) before courts;

      3) Individuals defaulting on debts with the UAE government, and in this case, the ban shall be issued by the Minister.

       

      Possible grounds for a travel ban

      There are various grounds or reasons for the imposition of the UAE travel (immigration) ban on a person; however, the majority of them can be categorised into four groups:

      1) Criminal offences,

      2) Unpaid debts,

      3) Breach of immigration laws,

      4) Family matters (personal affairs).

      1. Criminal offences

      The UAE travel ban is automatically issued, by virtue of the article (94) of the Executive Regulations of the Federal Law No. (6) of 1973 Concerning Immigration and Residence, if the person is under investigations for committing a violation of criminal laws such as theft, drug abuse, carrying a weapon, murder, rape, forgery and cohabitation.

      The travel ban can also be issued as a consequence of civil or commercial transactions which entail a criminal penalty, like bounced cheque cases.

      2. Unpaid debts

      The UAE travel ban can be issued in accordance with provisions of the articles (329) and (330) of the UAE Civil Procedures Code. These articles allow the creditor to request from the authorised judge the issuance of an order prohibiting the debtor from travelling, as a sort of interim measures necessary to guarantee the right of the creditor. Therefore, such a ban order follows a claim to recover the unpaid debt.

      This ban expires when the reasons for it cease to exist, i.e. the debt is repaid.

      3. Breach of immigration laws

      The UAE immigration ban can be imposed on grounds such as:

      • engaging in employment relationships without getting the required work permit,
      • staying in the UAE after the end of the visa, i.e. overstaying the visa duration,
      • entering the country via illegal means,
      • leaving the job without informing the employer and staying within the UAE or leaving the country without the proper cancellation of the employer’s sponsorship (absconding).

      The duration of this ban can extend to lifetime.

      4. Family matters (personal affairs)

      The UAE travel ban can be imposed by the court to prohibit the travel of a child if the guardian or the fosterer opposed taking the child out of the UAE. Pursuant to the articles (149-151) of the Federal Law No. (28) of 2005 on Personal Status, the fosterer may not travel with the fostered child outside the UAE except with the written approval of his tutor/guardian and vice versa.

      If such prior approval could not be obtained for any reason, and the party willing to accompany the child abroad has justification for doing so, then he/she should present an application to the competent court to decide on the matter according to the circumstances and the interest of the child.

      Procedures for the imposition and removal of a travel ban

      The UAE travel ban is imposed automatically with the force of law if the ban aims to protect the public interest, or it may be imposed upon the request of a concerned party if the purpose of the ban is to protect a private interest.

      The travel ban based on criminal offences

      The travel ban on suspects who are accused of committing criminal offences is instituted automatically during criminal investigations and is enforced through the order issued by the police, public prosecution or the court. Once issued, such a ban stays enforceable until the end of the investigations, trial or the term of the sentence.

      It should be noted, that some crimes require a complaint to the police by the concerned party. For example, in bounced cheque crimes, the cheque's beneficiary should file a police complaint, so that the investigations start, and the travel ban on the cheque's drawer is issued.

      The banned person may apply to remove the ban by submitting an application to the court and requesting a bail order.

      The travel ban based on unpaid debts

      This type of ban may be imposed on the debtor based on a written application of the creditor to the competent court. Pursuant to the article (329) of the Civil Procedures Code, and unless it’s an established alimony case, the court may issue the travel ban order upon the satisfaction of the following conditions:

      • The creditor should prove the existence of a reasonable fear that the debtor may run away without paying the debt;
      • The debt amount should be AED 10,000 (ten thousand UAE dirhams) or more;
      • The debt should be definite and due, i.e. unconditionally payable;
      • If the debt’s amount is not clearly defined, then the judge is entitled to make an interim estimation as long as:
        a) the debt is based on written evidence, and
        b) the creditor submits a bail sufficient to cover the damages attached to the debtor due to the travel ban if the creditor fails to win the case.

      The debtor is entitled to object the travel ban imposed on him/her by filing a complaint with the competent higher court.

      Under the article (330) of the Civil Procedures Code, the travel ban shall stay in effect until the debtor’s commitment to his creditor shall have been expired for any reason whatsoever.

      The ban can also be removed by the competent judge in the following instances:

      • If any of the conditions required for the travel ban have been extinguished;
      • If the creditor gives written approval to remove the ban;
      • If the debtor has submitted a bank bail or solvent bondsman approved by the judge;
      • If the debtor has deposited in the court’s case a sum of money equal to the debt and the expenditures and has allotted it for the payment to the right of the creditor who requested the travel ban;
      • If the creditor has not provided to the judge what proves the prosecution of the action of the debt within eight days from the issuance of the travel ban, or has not started the execution of the final decision to his benefit within 30 days from the date of its issuance.

      The travel ban based on the violation of immigration laws

      This kind of ban is instituted automatically with the force of law and is enforced through a decision by the competent authorities, and it is usually a lifetime ban.

      In some instances, the immigration ban may be imposed upon a request of the concerned party, for example, when an employee leaves the job (absconds) without informing the employer/sponsor. In this case, they can declare such an employee as absconding and request the imposition of the permanent travel ban on him/her.

      The travel ban based on family matters

      In family matters, a travel ban on the child may be imposed upon submission of the application/motion by the concerned party to the judge at the competent civil court. There are expedited procedures to decide on such applications, and usually, the decision is issued within 24 hours.

      If the judge issues a travel ban, then the other party should be notified of the decision, and the child will not be able to leave the country unless the court orders otherwise. Usually, the judge will not issue a ban unless the applicant clarifies and proves the fear that the child may not be brought back to the UAE again.

      The concerned party can apply to remove the travel ban on a child to the court or relevant authority that ordered it, either personally or through an attorney. The court, however, usually will not approve such a motion unless the applicant convinces the court that:

      • there is a justification for accompanying the child out of the UAE, and
      • the child will be brought back again, so the other party will not be harmed by taking the child out of the country for a while.

      The travel ban and the deportation order

      Sometimes, there may be a conflict between the imposed travel ban and deportation order issued by the competent authorities when a foreigner constitutes a threat to the public order or public health in the UAE. For example, if the person subject to the deportation has an unpaid debt and the creditor applies for a travel ban on the debtor, then there is a conflict between these two orders.

      In such a case, according to the article (329) of the Civil Procedures Code, a special committee headed by a competent judge is formed to settle the conflict.

      Conclusion

      If you suspect that a travel ban might have been imposed on you in the UAE, it is highly recommended to check that before travelling. Otherwise, such a ban may result in wasting your time, money, efforts, and also may have other serious implications such as losing your job contract, or even freedom.

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    • Wills for Non-Muslims in Dubai and Ras Al Khaimah

      In 2016, Dubai introduced an exceptionally unique solution to entertain basic asset protection needs to Foreign Investors and Expat Residents living in Dubai. They can now be 100% sure their assets are fully protected against any problems that may arise because of the forced heirship system applied by the Sharia Regulations in the United Arab Emirates, or any other conflict between the religious laws of succession between the person and the state where he lives and invests.

      DIFC Wills

      Dubai became the first civil law based jurisdiction in the Middle East where non-Muslims can make and register a Will under the internationally recognised Common Law principles within the Dubai International Financial Centre (DIFC).

      DIFC has three independent bodies enable and support the growth and development of businesses in the Centre:

      • Dubai International Financial Centre Authority (DIFCA) - the central entity established to oversee the strategic development, operational management and administration of the Dubai International Financial Centre;
      • Dubai Financial Services Authority (DFSA) - the central independent regulator that grants licenses and supervises the activities of all financial and non-financial institutions in DIFC; and
      • Dispute Resolution Authority (DRA) - who is responsible for the independent administration and enforcement of justice in DIFC. The DRA incorporates DIFC Courts, DIFC Wills Service (formerly DIFC Wills & Probate Registry) which provides administrative support to the DIFC Courts Wills Registry for Non-Muslims, and the Arbitration Centre.

      DIFC Wills Service (WS) is currently providing the first service of its kind in the Middle East. It is a simple opt-in mechanism that gives to non-Muslim expatriates the legal certainty that their Dubai- and Ras Al Khaimah-based assets will be transferred to their loved ones upon death according to their own wishes and not according to the forced heirship system as per the UAE Law that is influenced by the Islamic Sharia regulations.

      The rules governing the DIFC Wills Service gives non-Muslim expatriates in Dubai the ability to choose an English-language system that provides familiarity, transparency, trust for inheritance and freedom to dispose of their property upon death as they see fit, and in accordance with the laws of their home country. This Will can be made and registered with the DIFC Wills Service and upon the death of the person it will be recognised with all its terms and the DIFC Courts will confirm and pass the subject to the Dubai Courts for execution only, avoiding any other path.

      The Will registered with the DIFC WS can only cover assets in Dubai and Ras Al Khaimah (RAK). However, with a simple Dubai or RAK structure “Offshore or Free Zone Company that is 100% owned by the testator” holding the non-Dubai/RAK assets, the protection can simply be extended to assets anywhere in the world. It is worth noting that most of the Civil Law based jurisdictions enforce forced heirship laws and not only in Arabic or Islamic Countries. Other European and Non-Muslim countries endorse the forced heirship laws as well, like France, Italy, Spain, Switzerland and Japan.

      Who will be able to benefit from the Registration of the Will?

      Non-Muslims, who are over the age of 21 years and have any kind of assets in Dubai and/or Ras Al Khaimah. It is also applicable to parents who may require a guardianship provision to be included in the Will. Whoever has minors in Dubai or RAK can decide on the interim and permanent guardian for his minor children.

      What are the steps to register a Will?

      The first step is to have the Will drafted. The Will is an important document that should be prepared by qualified and licensed legal practitioners and in compliance with current legislation. All lawyers advising on the drafting and registration of DIFC Wills must be registered with the DIFC Wills Service. So, the draft of the Will must be prepared by one of the approved Wills Draftsmen to the DIFC WS.

      Each client can choose a Wills Draftsman from the Register of Wills Draftsmen available on DIFC WS website. All the professionals mentioned there are highly qualified, some of them are also registered with the DIFC Courts and Dubai Legal Affairs Department as legal consultants who are able to provide sound legal advice.

      The second step is to contact the DIFC Wills Service Centre for an appointment to review the drafted document and present related personal information and documents for the testator and other key personnel in the Will. The presence of some of the key personnel mentioned in the Will might be necessary as in the case of a Witness, the appointed guardian (if applicable) or a copy of their Witness Statement on behalf of a guardian, by which they confirm to accept their appointment and that they undertake to assume parental responsibility for the children in accordance with WS Rules and DIFC law.

      What kind of information is needed from a testator to draft his Will?

      The Legal Consultant/Wills Draftsman have to meet together with the testator to see exactly what his perspective is and how he would like to divide his Dubai assets. In parallel to this, the testator should mention any other Will ever drafted before and where is it registered to make sure there would be no conflict between the previous and the new Will.

      To draft the Will, the Wills Draftsman needs the following:

      • the personal details of the testator (supported by his passport copy);
      • his family tree (family members and dependents);
      • his declaration of Religion;
      • his mental capacity;
      • if he has another Will concerning the Dubai/RAK assets (if yes – where it was registered and if he wants to revoke that Will or not);
      • details of Real Estate Properties in Dubai/RAK (supported by the Title Deeds copies);
      • details of his Bank Accounts;
      • details of the other assets: cars, boats, shares in companies, etc.

      Once the Wills Draftsman knows all details about the testator and his assets, he would need details about the beneficiaries of the testator and the way how they will inherit.

      If the testator has minor child/children – being lineal descendants or adopted (in the UAE minor is considered a person under the age of 21), the Wills Draftsman would need all of their details.

      If the minors are living with the testator in Dubai or Ras Al Khaimah, he would need to appoint a Guardian for them. The Testator can choose more than one Guardian, but in this situation, it is mandatory to mention if they will act jointly or separately or each for a specific task.

      If the appointed Guardians live outside Dubai, the testator can appoint an interim guardian who will act until the permanent guardian arrives in Dubai/RAK.

      The Guardian is the one who cares for all of the minor's affairs including: guarding, protecting, raising, educating, and supervising; directing their life, raising them in the best standards. This includes representation of the minor in front of all Dubai and UAE authorities and the right of signature on behalf of the minor.

      The Guardian also safeguard the minor’s financial interests, managing and investing the inheritance of and all other assets belonging to the minor until the minor reaches the age of majority under the UAE laws. This may include guardianship of the minor’s property, including the care for all matters relating to the minor's property, its preservation, management and investment.

      The Guardian shall have the right, with the Court’s permission, to disburse from the minor’s money to the extent granted to him through the Will by the testator. Guardianship shall also include custodianship.

      The testator also needs to appoint an Executor who will be responsible for administering the estates and distributing the assets to the beneficiaries listed in the Will. The Wills Draftsman would need all details about the Executor, supported by his passport copy and Emirates ID copy. The testator can appoint one or more executors. If he chooses to appoint more executors, it will be mandatory to mention if they will act jointly or separately.

      Can the Will be changed or updated after its registration with the DIFC Wills Service?

      Yes. The Testator can change or update the Will. For example, in case of:

      • the birth or adoption of a child (in Dubai or abroad) whom the testator wishes to include in his Will as a beneficiary;
      • adding/changing guardian for the minors;
      • changing the beneficiaries;
      • significant changes in the financial status impacting one's assets in Dubai/RAK;
      • changes of laws in the testator's home country, impacting the testator’s assets in Dubai/RAK;
      • death or incapacity of a named executor or trustee;
      • changes in assets in Dubai/RAK (e.g. the testator sold an asset, or he gifted it to someone else, etc.).

      Also, changing the address or the personal details (contacts) of existing parties to the Will, namely of executors or guardians, do not necessitate a modification to the Will; they are dealt with, as an administrative update to the existing case file, but such changes should be communicated to the Wills Service as soon as they occur, allowing the DIFC Courts Wills Registry to update the file.

      How about the cost of registration?

      The administrative fees, which a testator needs to pay, on the registration day of his Will or his Guardianship, to the DIFC Wills Service, are as follows:

      • Registration of a DIFC Will before a registry officer – AED 10,000 (approx. USD 2,720) + 5% VAT;
      • Registration of a DIFC Guardianship Will before a registry officer – AED 5,000 (approx. USD 1,360) + 5% VAT.

      If the testator prefers to register a Will or a Guardianship, together with his/her wife/husband, the administrative fees will be the following:

      • Simultaneous registration of two Mirror DIFC Wills (by spouses) before a registry officer – AED 15,000 (approx. USD 4,080) + 5% VAT;
      • Simultaneous registration of two Mirror DIFC Guardianship Wills (by spouses) before a registry officer –AED 7,500 (approx. USD 2,040) + 5% VAT.

      If the testator prefers to withdraw his Will, the DIFC Wills Service will not charge any fee for this.

      The administrative fees are payable in United Arab Emirates Dirhams (AED) and are subject to Value Added Tax (5%). The fees can be paid online in whole when booking the appointment at the DIFC Wills Service, or only the booking deposit may be paid online, and the remaining fees can be paid at the time of registration by credit card, cash or cheque. Booking deposit fees are non-refundable.

      Conclusion

      We advise and recommend everyone with assets and minors in Dubai and/or Ras Al Khaimah to register a DIFC Will. It is the best way to have peace of mind about the future of their loved ones and about the distribution of their assets based on their Will, instead of a forced regulation. It can be very difficult for their families to go on during the time of sorrow with all the alternative routes to get hold of the succession assets and to decide who will take care of their children in the short term and later on for the long term.

      Without a Will, it is more likely that the Dubai Courts – at least at the court of the first instance – will apply general provisions of the forced heirship regulations as per the Sharia rules to everyone in case of death as long as the assets are in Dubai. It is worth noting that the Dubai Courts would not recognize Wills registered or notarized outside of the United Arab Emirates.

      Under its Sharia-based legislative framework, inheritance in the UAE is subject to a forced heirship regime, which means that the distribution of the deceased person’s assets is fixed to certain members of the wider family. Families have to navigate complicated and time-consuming procedures to transfer their loved ones’ assets after death. Other than this uncertainty they will face the risk of lengthy and costly probate battles.

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    • Is a Barter Gratuity Possible in the UAE?

      Issue: An employee resigned from the job after working for 5 years, and signs a letter addressed to the employer that he wants his gratuity to be paid only after his customer pays the employer. Therefore, has the employer defaulted for End of Service (EOS) payment under the UAE Labour Law?

      Under the UAE Labour Law, end of service gratuity is calculated as follows.

      Severance pay/Gratuity - If Terminated by the Employer

      As per Article (132) of the UAE Labour Law, the employee who has completed one year or more in the continuous service is entitled to the end of service remuneration at the end of his service. Days of absence from work without pay are not included in computing the period of service, and the remuneration is to be calculated as follows:

      • 21 days' remuneration for each year of the first 5 years of service;
      • 30 days' remuneration for each additional year of service, provided that the aggregate amount of severance pay shall not exceed 2 years’ remuneration.

      Severance pay/Gratuity - Resignation by the Employee

      As per Article (137) of the UAE Labour Law:

      • Where an employee who is bound by a contract of unlimited duration leaves the work at his own accord after continuous service of not less than one year and not more than three years, he shall be entitled to one-third of the severance pay provided for as per Article 132;
      • Where the continuous period of service exceeds three years but does not exceed five years, he shall be entitled to two-thirds of such severance pay;
      • Where the continuous period of service exceeds five years, he shall be entitled to the full severance pay.

      Under the UAE labour law, all employees must be paid their full salary and benefits for the duration of the contractual notice period until their termination date (payable on the last working day). Gratuity is an entitlement of the employee under the UAE labour law.

      The employment relation is direct between the Company and the employee for gratuity. While for the debt, the relation is between the debtor and the company, i.e. the privity of contract is between the employer and the customer which does not entitle a third party to claim or be sued. The employee is the agent of the principal (Employer) and is a third party to the business transaction.

      Even if the employee is responsible to arrange the collection of the same, it cannot be settled or set-off with his gratuity or his gratuity payment cannot be placed on hold. Thereby even if the employee signed a letter to be paid later, i.e. when the customer pays the Company, the Court will view it as purely as duress and order the employer to pay the end of service entitlement immediately.

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