Federal Decree Law No. 14 of 2020 was issued to amend certain provisions of the Federal Commercial Transactions Law No. 18 of 1993 and was published in the Official Gazette in Issue 687 (Supplement) issued on September 30, 2020. This law will come into force on 02 January 2022, and a number of provisions have been amended, cancelled and added to the Commercial Transactions Law No. 18 of 1993. Among the most prominent additions made by the Federal Decree-Law is Article No. 635 is that the cheque marked by the drawee as "without or insufficient balance" shall be deemed an execution deed in accordance with the Regulation to the Federal Law No. (11) of 1992, as amended, and that its bearer may request the mandatory execution, in whole or in part. The provisions and the rules identified by the said Regulation shall be followed in this regard.
Under this Article, it is clear that the cheque holder can use it as an execution deed, provided that the drawee proves that it does not have a balance or that this balance is insufficient to cover the entire value of the cheque, as Article 617 of the Commercial Transactions Law replaced by Federal Decree-Law No. (14) / 2020 obligates the drawee bank with partial payment of the value of cheques for which there is no sufficient consideration within the limits of the available balance, unless the bearer of the cheque refuses to do so. Also, this Article obligated the drawee bank to mark at the back of the cheque such partial payment, and to handover to the cheque holder the original of the cheque and a certificate of such payment, so that in case he applies to the Execution Judge to take the execution procedures based on this cheque as an execution deed, with the amount remaining of the value of the cheque if part of it was paid, or the whole value of the cheque if the drawee did not have any existing and drawable balance, or if the cheque holder refuses the partial payment. All this shall take place after the drawee bank marks the cheque and give the cheque holder a certificate to this effect.
The Central Bank also issued on 01 November 2021 a Notice No. 5014 to all banks and finance companies operating in the country, stating that it is effective from 02 January 2022, in which the text states that banks and finance companies will comply with what above stated matter and a statement of the practical implementation mechanism through the drawee bank or intermediary banks, and how to issue a partial payment certificate and that the bank keeps a copy of the chequeand a copy of the partial payment certificate. This circular also stipulates the banks' obligation to notify the Central Bank of the data of the account holder from whom the cheque bounced, in accordance with the Article 617 of aforementioned Commercial Transactions Law.
Article 75 of the Regulations of the Civil Procedures Law stipulates a description of the execution deeds based on which the execution judge must start taking execution measures, among of which those stipulated in this Article and in clause (2), paragraph (d) thereof that (- 2 The Execution Deeds shall be: ........ D– Any other papers that the law gives this designation.). One of these special papers that the law gives the status of an execution deed is the bounced cheque without paying its full value, as stipulated in Article 635 bis of the Commercial Transactions Law added according to Federal Decree Law No. 14 of 2020, as this Article gave it the executive power in accordance with the Regulations of Federal Law No. (11) of 1992 and its amendments. This makes the cheque that meets the conditions contained in this article an execution deed that its bearer may resort to an Execution Judge directly to execute its value or the remainder of it as an execution deed, without the need to file a lawsuit or take any other judicial action. In the execution of this cheque, the procedures stipulated by the regulations set forth in Articles 97 and thereafter shall be followed.
Originally published 29 November, 2021
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