Business

Reflections in the UAE: What the amended law means for defaulters

Dubai: The new amendment to the UAE’s Commercial Transactions Act gives the court the power to suspend the trading license of a defaulting company for six months.

As issues with reflections occur under different circumstances, such as personal or individual transactions, purchases, commercial transactions, bank loans, rent, etc., the new amendments will preserve the rights of the check keeper by considering the check as an executive deed, which the track collection quickly. process by the civil court.

Last year, the UAE cabinet passed certain provisions of federal law no. 18 of 1993, amended the Commercial Transactions Act, including those relating to refusal control.

As part of reducing the delay of the check beneficiary and issuing fines against the issuer of the refusal control, the new amendment gives the right the power to order the suspension of the case of the juristic person for a maximum of six months, and in case of repetition. , cancellation of trade license and insolvency.

Wageh Amin Abdelaziz, senior legal adviser at World Center Advocates and Legal Consultants, told Gulf News that section 644 bis 1 of the amendment provides that if the issuance of the refusal contract is in the name or in favor of a corporate person, the person in charge of the actual administration is not punishable unless it appears that such person was aware of the crime or that the person committed the crime for the benefit of himself or third parties.

EMIRATI TODAY - Emirati News, the UAE Daily News

Where the liability of the natural person is not clear, the juristic person is subject to a fine of at least twice the statutory penalty for this crime and not more than five times the same penalty.

“The court may order the suspension of the business of the juristic person for a maximum of six months, and in case of recurrence, the cancellation of the commercial license and the insolvency of the juristic person,” Abdelaziz said.

In addition, the court ordered the publication of judgment at the expense of the juristic person in two widely circulated dailies in the UAE or in two e-publication media, one in Arabic and one in English.

This will be determined by the Ministry of Justice.

According to Abdelaziz, the changes will have a significant effect on financial institutions that are heavily dependent on checks as a guarantee.

“The long-awaited reform of the refusal control will play a major role in strengthening business confidence between individuals and businesses, as it will promote further investment and the confidence of a business to promote the checks in the UAE,” Abdelaziz added. .

According to the amendment, the court can order any other penalties that are legally applicable.

The provisions of the second paragraph of this section do not apply to licensed financial institutions that are subject to the Federal Resolution Act no. (14) of 2018.