Taking it easy: UAE passes draft law on relaxing prison punishment for debt defaulters
The Federal National Council on Tuesday passed a draft law granting relaxation to debt defaulters on humanitarian grounds.
Under the bill, which requires final endorsement into law by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, pregnant women, terminally ill patients, seniors, and minors under the age of 18 won’t go to jail for defaulting on debts.
The relaxation comes as part of changes suggested by the Government in the UAE Civil Procedure Code to match best internationally recognised standards, the House was told.
The legislation will stop the imprisonment of both Emirati and foreign senior people who are above 70 years old, minors below 18 years of age, terminally sick people with an incurable or irreversible illness and pregnant women until they give birth and the baby is one year old.
The draft law says a defaulter would no longer risk a jail term if he or she has a child younger than 15 years, his or her spouse is dead — or jailed — for any reason.
“No prison term will be given to a defaulter if he or she is married to the creditor or a kin thereof, unless the debt is a maintenance or an allowance paid under a court order by one spouse to another,” the draft law suggests.
The changes in the Civil Procedure Code were prompted by the UAE’s low ranking in resolving insolvency and enforcing contracts as shown by the World Bank Doing Business 2014, according to a report made by the FNC Legislative Affairs Committee.
Globally, the UAE stands at 101 in the ranking of 189 economies on the ease of resolving insolvency and it ranks 100 on the ease of enforcing contracts, according to the World Bank’s report.
In many countries, defaulters don’t go to prison or are held criminally liable for money owed — as long as the debt is not the result of some criminal scheme or owed as restitution for injuries or damages caused by a crime committed by the person.
The legislation also suggests that a debtor does not risk a jail term if he or she presents a collateral agreement to answer for the debt, or presents a surety which assumes legal responsibility for the fulfilment of the debt.
The draft law would also prohibit the jailing of defaulters for debts less than Dh10,000 ($27000) — unless the debt is a fine or a maintenance paid by a court order.
The draft law also provides that a creditor may request the court to impose precautionary attachment on the movable property of the other party in the event that the creditor fears he may lose his rights due to the debtor not having a permanent residence in the UAE, or where the creditor fears that the debtor may abscond, smuggle or conceal his money, or where security over the debt is at risk.
Precautionary attachment differs from executive attachment in that precautionary attachment can be made without taking the preliminary steps of execution that are required by law in executive attachments. Executive attachment must be preceded by an execution bond requesting the plaintiff to make payment. Under executive attachment, the creditor must have an executive bond covering the sale of the attached property, whereas precautionary attachment can be made where the attachment applicant does not have an executive bond because it is simply a precautionary measure aimed at preventing the debtor from smuggling money or disposing of it in a way that harms the rights of the attachment applicant.
New case management system approved
Members of the Federal National Council yesterday approved a legislation setting up a new case management system to be deployed at federal courts across the country.
The new system, part of changes in the UAE Civil Procedure Code, is designed to make the UAE courts more efficient, transparent and modern. Cases will be dealt with electronically, before registering the case for the court verdict, according to a report made by an ad-hoc committee of the council.
The new system will enable registering a case electronically, to be sent as a complete file to the judge where it will be available to all judicial parties involved in the case.
The system uses modern technology on a par with the best court systems in the world to ensure that case information is protected, accessible to authorised users and readily available to the judges and the relevant court staff.
Ali Eisa Al Nuaimi, a member from Ajman, put a question to Dr Hadef Bin Jua’an Al Daheri, Minister of Justice, about the lack of access to statistics related to crime, criminal justice and other social problems such as rates of divorce, separation and marriage to foreigners.
Al Nuaimi suggested the shortage of statistics or lack of accessibility hampers efforts to address these problems in a timely manner.
The Minister of Justice pledged that the ministry will post statistics and other information approved by higher authorities on its portal.
Al Nuaimi put another question to Humaid Al Qutami, Minister of Education, on the negative impact of various curricula adopted by private schools. He suggested uniform criteria for quality education that matches the Arab and Islamic identity of the UAE be applied to private schools. The Minister of Education apologised for being unable to make it and the issue was put off to a next meeting of the House.