Ask Atty. Barney: On bouncing cheques, importance of will, and resignation during probation

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Payment of bounced cheques fine will not erase a debt

Atty. Barney, my bank filed a bouncing cheque case against me. The amount of the cheque that bounced was AED 150,000. Last month, the court rendered a judgment ordering me to pay AED 10,000 fine. I already paid the fine and was able to get my passport back. I was told by the person at the Dubai Court that the case is already “finished.” Since the case is already “finished,” does that mean that my debt with the bank was already erased? – Michelle

 It is a common misconception that serving the prison term or paying the fine imposed for bounced cheque will operate to erase one’s debts, leaving the bank with no other recourse to collect from the debtor. This is absolutely wrong.

The prison term or fine is the penalty for the criminal act of issuing a worthless cheque. It has nothing to do with the payment or extinguishment of one’s financial obligation, which is civil in nature.  Banks are interested in getting back their money from the debtor, and they will not earn anything when the debtor pays the fine or is imprisoned.

As such, to collect the amount owed, banks will subsequently file a civil case for collection pursuant to Articles 246 and 710 of the United Arab Emirates Civil Code, obliging the debtor to pay his creditor as per the terms of the loan contract The civil case will be assigned to an execution judge who would compel the debtor to pay up the cheque or risk being jailed. In a civil case for collection, most banks would demand from the debtor full payment of the debt, together with damages and cost of suit.

Importance of Writing a Will in the UAE

Atty. Barney, my husband and I are living in Dubai for almost 15 years. Through the years, we acquired properties such as a flat in Deira, motor vehicles and bank accounts. My husband is also a shareholder in a Dubai based company. We jointly owned the properties including the bank accounts. We have a son and 2 daughters. We are Catholics and do not want Sharia law to apply in the distribution of properties among our children. Please advise what we can do to protect these hard earned properties. – Mylene

As early as now, I recommend that you and your husband prepare a last will and testament specifically stating that you do not wish Sharia law to apply. Non-Muslim Filipinos can have their last will and testament recognized by the UAE courts following the inheritance laws of the Philippines. If you do not have a last will and testament, your son will get twice as much share as your daughters. The last will and testament can be notarized at the Philippine Consulate or before the Dubai Notary. Properties will be put on hold and even joint accounts will be frozen until the liabilities of the deceased are settled and the issue of inheritance is determined by the court. There is no automatic transfer of ownership even if the property is owned jointly.

Resignation during Probation Period

Atty. Barney, I am currently working as a secretary under a limited contract. If I resign during my probation period, what are the charges that the company can impose on me? Will I be liable to pay anything? – Gina

 Since you are under a limited contract and you resign during your probation period, an automatic 1 year labor ban will be imposed on you. Meaning, you cannot work for UAE private companies within 1 year.

Furthermore, the company can also ask that you pay them as compensation for damages an amount equivalent to 45 days of your total salary. This will be deducted from your final pay. Finally, should you decide to go back to the Philippines after you resign, any expenses for your repatriation will no longer be on the account of your employer.

 Atty. Barney is a Director at the Commercial Department of Gulf Law in the Middle East, Philippines and United Kingdom. Readers can visit www.gulflaw.info or call +971 55 8650 248 for further information.