NO PRISON FOR DEBT

06 Nov 2023

• 
• 

NO PRISON FOR DEBT

In October 2023, the Dubai Court of Cassation issued an important and far-reaching ruling. Referring to Article 319 of the UAE Civil Procedure Code (regarding arrest of debtors) and to principles of Sharia (whereby debtors should be given time to pay), it ruled that a debtor cannot be imprisoned unless the creditor can prove that the debtor is in fact solvent or has misappropriated of the necessary funds – or has breached an agreed instalment payment plan.

This is yet another welcome step in a suite, beginning with the UAE Bankruptcy law, aligning the system in Dubai to deal pro-actively with business misfortunes. It follows the “de-criminalising” of bounced cheques where there is no fraud.

For legal advice or assistance, please click here.