Special court sits to hear bad-cheque cases

Large instances of guilty being jailed spark renewed calls from experts for legal reforms and decriminalising of non-payment.

Judge Ahmed Saif, the chief justice of the Dubai Criminal Courts, says, "A cheque is protected by criminal law because it is viewed as a bond."

DUBAI // A new circuit has opened within Dubai's courts to handle the large number of cases involving bad cheques, a move that has sparked renewed calls for changes to the law. No fewer than 100 cases are heard during the after-hours weekly sessions, covering personal and commercial defaulters, according to Judge Ahmed Saif, chief justice of the Dubai Criminal Courts.
The news has prompted fresh calls from legal experts for an overhaul of the way such cases are prosecuted. Most defendants are jailed - and not fined - for writing cheques that bounce. "People have to sign blank cheques to rent, borrow, purchase and do business in Dubai. If conditions make it the only method of [doing] business, the courts must not criminalise non-payment," said criminal lawyer Harun Tahlak.
"Article 401 of the UAE penal code needs to be changed or dropped," he said. "Article 401 states that one who defaults on a cheque with criminal intention can be jailed or fined. But the courts routinely sentence people to jail." He said the matters also could be settled in civil court or arbitrated to reach settlements, as is the case in other nations. However, Judge Saif said: "A cheque is protected by criminal law because it is viewed as a bond. A criminal judge is not concerned about what circumstances the cheque was issued under. It is not for him to review this - the judgement is made based solely on the fact that you have presented a bond which was not honoured."
Still, Ali Musabah, an Emirati lawyer from PanGlobe Advocates and Legal Consultants, said: "The first and foremost motive of the courts is to protect the rights of the plaintiff - but not at the jeopardy of defendants' rights. "The court rarely issues fines in cheque cases and when it does, it does so under very tight conditions," he said. "I believe the courts should issue fines for first-time offenders [owing] small amounts. If a person was unable to repay his credit card or bank loan for good reason, he should be fined not jailed."
Mr Musabah said jail terms are acceptable, but for only repeat or serial offenders. He said a suggestion was made, before the economic crisis, to fully resolve cheque issues at police stations. "This would have significantly reduced cheque cases in the courts, but when the global crisis hit this idea was put aside," he said. The Minister of Justice, Dr Hadef al Daheri, announced in October last year a committee had been set up to consider the issue and make recommendations for change.
"The Federal Government will review the recommendations and will be the final decision-makers on what changes will be applied," he said at the time. The only change made thus far was the introduction of a law in December preventing property-related cheque cases from being pursued as criminal acts. Instead, such cases must now be submitted to a judicial committee.
That is not to say that those jailed since have been judged under the new legislation. One investor, who has been in Dubai for 14 years, was recently sentenced to a year in jail for defaulting on a Dh750,000 cheque to mortgage provider Tamweel. The 55-year-old Briton Kevin Draper was featured in a BBC documentary about his situation. Draper, who arrived in Dubai in 1996, owned and operated The Image Works, one of the largest exhibitions stand and outdoor advertising companies in the Middle East and North Africa.
After investing £11 million (Dh64 million) in the company, Draper was arrested, tried and sentenced after failing to reach a settlement and repayment plan with Tamweel. His woes did not end there. "I was sentenced to two months in jail for resisting arrest while trying to protect my nine-year-old daughter," he said. The Image Works, launched with Dh400,000 in capital, was to be sold to a Swiss firm for Dh100 million in 2008. But a warehouse venture Draper launched with funds from Tamweel went sour in the economic downturn.
"In 2009, tenants started moving out of the warehouses," Draper said. "I received a lot of pressure from Tamweel. As result, the [Swiss] takeover of The Image Works had to be put on hold. "After renegotiating with my creditors, business looked to be back. Then the Tamweel case was filed due to a failure in negotiations." More cases are now being filed against him because of the jail sentence and the subsequent lull in business, he said.
"Dubai built a fantastic reputation in the past 10 years and my wife and I want to be part of the success story," he said from his prison cell. "But there is a huge gap between the modern city and its outdated laws." A prison source, speaking on condition of anonymity, said: "There must be more multimillionaires locked up together in the Dubai Central Prison than anywhere else in the world." @Email:[e-mail]