Dubai Civil Court orders AED5.5m repayment for deliberately voided cheque
A Dubai court has ruled that a borrower must repay AED5.5 million after he signed a cheque in a way that deliberately blocked payment. Legal interest at 5% per year was also awarded.
Dubai borrower ordered to repay AED5.5m after cheque was rendered uncashable
The Dubai Civil Court of First Instance has ordered a man to pay AED5.5 million to a lender after finding he deliberately signed a cheque in a manner that prevented it from being honoured, emirates247.com reports.
The dispute arose from a business arrangement in which the defendant requested a loan from the claimant. The total amount — AED5.5 million — was transferred in 11 separate instalments.
When the claimant sought repayment, the defendant issued a cheque for the full sum, drawn on a local bank. The bank subsequently refused to cash it, stating the cheque had been written and signed in a way that blocked payment.
A criminal case followed, resulting in a fine against the defendant and the confiscation of his cheque book. That conviction was upheld on appeal and became final.
The claimant then filed a civil lawsuit seeking recovery of the AED5.5 million, legal interest, and an additional AED500,000 in compensation for material and moral damages as well as loss of profits.
The court noted that the defendant did not appear before it and provided no evidence that the debt had been settled. Relying on the final criminal conviction, the court found that the defendant had acted deliberately to prevent the cheque from being honoured.
In its ruling, the court described a cheque as a fundamental payment instrument functioning as a substitute for cash, intended to settle a due debt unless the issuer proves otherwise.
The court ordered the defendant to pay the full AED5.5 million, along with legal interest at 5 per cent per year calculated from the cheque's due date until full settlement. Court fees, expenses, and AED1,000 in legal fees were also awarded.
However, the court rejected the claimant's request for the additional AED500,000 in compensation, ruling that the case file contained no evidence of damage beyond that already addressed by the principal repayment order and accrued interest. The proven harm, the court stated, was the non-payment of the cheque amount — a matter fully covered by the primary judgment.
Source: Google News UAE — Dubai