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Unpaid credit card bills in UAE: Can I be stopped from flying out of the country?

Dubai - Here is the legal protection that residents with outstanding credit card dues have

Q- When does non-payment of dues become a criminal/civil case, what is the penalty for it and can I be stopped from flying out of the UAE if I have dues to be paid?

Answer

Pursuant to your queries, it is assumed that you are a resident of Dubai and you availed credit card facilities from a bank which is based in the emirate of Dubai (the ‘Bank’). It is also assumed that the bank had collected security cheque (s) from you against the limit of the credit card facilities.

It should be noted that in the UAE, when a personal loan or a credit card facility is granted to a borrower, the banks or financial institutions may obtain from the borrower, a signed personal loan agreement or a signed application form that contains terms and conditions for it. They may also collect the cheque (s) as a security against the loan amount or credit card limit amount.

Failing to pay three consecutive instalments or six non-consecutive ones may be considered as an event of default. This is in accordance with Article 4(4) of the Personal Loan Agreement format appended to Notice No. 3692/2012 of the Central Bank of the UAE, which states, “The loan elapses and all the instalments, interests and any other fees and expenses become due and payable immediately, without having to give any notification, or any court ruling and without prejudice to any other rights of the bank according to this agreement or in accordance with the law - in the event that the borrower failed to pay three consecutive instalments or six non-consecutive instalments of the monthly instalments without the approval of the bank.”

Therefore, in case of a default, the bank may choose to deposit your security cheque(s) for collection. In case the said security cheques are dishonoured due to insufficiency of funds in your bank account, the bank may file a criminal complaint against you. Dishonour of a cheque in the UAE is considered a criminal offence pursuant to Article 401 of Federal Law No. (3) of 1987 on the issuance of Penal Code of UAE, which states “Shall be sentenced to detention or to a fine, whoever draws in bad faith a cheque without sufficient funds or who, after giving the cheque withdraws all or part of the funds, so that the remaining balance is insufficient to cover the amount of the cheque, or gives the order to the drawee to stop payment, or if he deliberately writes or signs the cheque in such a manner as to make it non-payable..”

Further, upon the filing of a criminal complaint, a travel ban may be imposed against you and in such an event you shall not be allowed to travel out of the UAE.

However, if the amount of your security cheque issued by you to the bank is less than Dh200,000, the punishment may be a penalty, which may vary between Dh2,000 and Dh10,000, depending on the cheque amount. Upon the payment of this penalty, criminal proceedings shall be closed against you and a travel ban imposed on you may be lifted. Additionally, the Bank may file a civil case against you, based on the personal loan agreement you signed, to recover the outstanding debt on the credit cards and while filing a civil case the Bank may place a request with the competent court to impose a travel ban on you, prior to the Bank obtaining a civil judgement against you based on the documents submitted by the bank to the court. If you are outside the UAE, they may file an application before the court to detain you when you re-enter the UAE.

In the event, the civil judgement is in favour of the bank, the bank may initiate to execute the civil judgement against you by filing an execution case. In the execution case, the Bank may file an application to the court to freeze your movable and immovable assets in the UAE and to issue an arrest warrant if the amount ordered by the court is not paid by you to the Bank (through the court) within fifteen (15) days of the Bank filing the execution proceedings against you based on the judgement passed in the civil suit for repayment of credit card dues.

It is recommended that you consult a legal practitioner in the UAE to obtain further professional advice.

Ashish Mehta is the founder and Managing Partner of Ashish Mehta and Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.