Sheikh Mohammed issues decree to dissolve tribunal that deals with property-related cheque disputes

Sheikh Mohammed bin Rashid, Dubai’s Ruler and the UAE’s Vice President, issued a decree dissolving a tribunal that was set up to deal with cheque disputes arising from property transactions.

Following Decree No. (11) of 2021, the Special Tribunal for the Settlement of Cheque Disputes Relating to Real Estate Transactions was formally disbanded, the Dubai Media Office said in a statement on Sunday.

This special tribunal was formed following the issuance of Decree No. (56) of 2009.

All complaints, claims, lawsuits and appeals being reviewed by the Special Tribunal that have not received a final judgement will now be referred to the judicial entity concerned, the statement said, without specifying the name of the organisation.

The decree is active from its date of issuance and will be published in the Official Gazette.

"The process for the enforcement of a cheque seems to have been facilitated for developers, who are now able to submit their cases directly before the competent courts [including but not limited to criminal courts] without the need for the matter to be considered by a Special Committee in accordance with the strict elements outlined in Article 4 Decree No. 56 of 2009 [such as the developer's entitlement to the cheque]," Michael Kortbawi, partner at BSA Ahmad Bin Hezeem & Associates, told The National.

“However, in light of the recent changes that have occurred to the regime applicable to bounced cheques in the UAE, the dissolution of the committee may effectively result in developers having less leverage over investors/buyers in relation to bounced cheques, seeing as the latter are now able, following the payment of a fine, to avoid a jail sentence [as may be applicable]. A developer/seller is then able to pursue its rights before local courts by filing a civil claim before the competent court.”

The tribunal had an exclusive jurisdiction to settle complaints related to dishonoured cheques, which were issued by a property purchaser and made payable to a real estate developer, or those cheques issued by those with usufruct rights or with long-term leasehold rights.

The tribunal comprised a judge from the Court of Appeal, Dubai Courts, as president; a judge from the Court of First Instance, Dubai Courts, and a representative from the Dubai Land Department as members.

Judicial police officers, including the police, were directed to refer all cheque-related complaints that fall under the scope of this decree to the tribunal.

The public prosecution and the Courts were also not allowed to investigate dishonoured cheques that fell under the scope of the earlier decree or settle any dispute related to such cheques before such disputes were referred to and considered by the tribunal.

The judgement rendered by the tribunal was final, irrevocable and not subject to appeal, and was executed by the execution department of Dubai Courts.

The latest ruling comes as the UAE streamlines its regulations in an effort to attract foreign investors.

Dubai issued a new law in December last year governing unfinished and cancelled property projects in the emirate.

Under the law, a special tribunal will be set up to oversee the liquidation of unfinished and cancelled projects as well as the settling of related claims. It replaces an existing committee set up in 2013 that oversees claims related to cancelled projects.

The new body will have jurisdiction over all property disputes in the emirate relating to unfinished or cancelled projects, meaning cases over stalled projects cannot be filed at the Dubai International Financial Centre Courts.