Dubai’s highest judicial body, the Dubai Court of Cassation, has clarified the procedure for arrest warrants in civil cases where the debtor is unable to pay the court-ordered amount. According to the court, if a creditor wants to obtain an arrest warrant for unpaid dues, they must first prove that the debtor has sufficient funds to settle the debt.
The announcement by the Dubai Court of Cassation on October 24 aimed to avoid unnecessary claims by creditors and provide clarity on article 319 of the federal civil procedure law. The court stated that insolvency should be presumed unless proven otherwise, and it is the responsibility of the creditors to provide evidence.
Dr Hassan Elhais, a legal consultant at Awatif Mohammad Shoqi Advocates and Legal Consultants in Dubai, highlighted that debtors can be imprisoned if they fail to comply with court-ordered payments unless they can prove their insolvency. However, he emphasized that specific conditions outlined in the law may prevent claims of insolvency from being accepted. These conditions include cases where the debtor has concealed or smuggled assets to harm the creditor, making it impossible for the assets to be accessed for repayment.
Dr Elhais further explained that this also applies to situations where the debtor has failed to make one or more installment payments or has provided guarantees for someone else’s debt. The only exception is if the debtor can demonstrate significant changes in their financial circumstances that make it impossible for them to meet their repayment obligations.
It is important to note that these regulations pertain to civil cases involving real estate, commercial, family, and labor disputes, and do not apply to criminal offenses. The court stated that enforcement judges must first conduct a brief investigation with the debtor to determine solvency or uncover asset concealment before considering imprisonment.
“This landmark resolution aims to create a fairer and more balanced approach to debt-related matters in Dubai, ensuring that individuals facing financial challenges are not unduly penalized,” said Dr Elhais. He emphasized the importance of proving a debtor’s solvency before resorting to imprisonment, thereby ensuring a more equitable legal process.
The court’s announcement provides clarity and guidance for creditors and debtors alike, ensuring a fair and just resolution of civil cases involving unpaid dues. By laying out specific conditions and emphasizing the need for evidence, the court aims to prevent unnecessary claims and protect individuals from unjust imprisonment.
Updated: November 02, 2023, 11:08 AM
Imprisonment may be avoided by Dubai debtors who demonstrate their inability to repay.
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