By Saadallah Rachawany

On November 1, 2009 His Highness Sheikh Muhammad Bin Rashid Al Maktoum issued decree no (56) of 2009 (the “Decree”) concerning the establishment of a special committee related to the bounced cheques that are connected to real estate transactions (the “Committee”).   
The Committee shall have exclusive jurisdiction over complaints of bounced cheques drawn by a property purchaser in favor of a developer or cheques issued by beneficiaries and tenants of properties with a long term lease contracts. The Committee shall consist of the following:

1. a judge from the Court of Appeal in Dubai - President
2. a judge from the Court of First Instance- Member
3. a representative of the Dubai Land Department-Member

In the course of resolving disputes related to these cheques, the Committee shall have the following authorities:

1. Cancel the bounced cheque issued in favor of the Developer in the event that the latter is not entitled to the cheque’s amount;
2. Order the purchaser to replace the cheque subject of the complaint by a new one with a new date to be determined by the Committee;
3. Refer the bounced cheque to the competent judicial authority to take the necessary legal action against the issuer in the event that the cheque amount is properly due to the Developer;
4. Collaborate with appropriate real estate experts.

According to the Decree, police departments have to forward all claims related to the above mentioned cheques to the Committee. The Decree goes further to forbid the public prosecution and the courts from investigating or looking into any dispute in relation to such cheques before it has been reviewed by the Committee. All criminal proceeding shall be stopped as well and any such matter should be referred to the Committee.
The verdicts issued by the Committee shall be final and binding with no possibility for appeal. Such verdicts are to be executed through Dubai Courts (judgment enforcement section).
Furthermore, the Committee shall exercise its authorities according to the following:

1. the laws in force in the Emirate of Dubai
2. Islamic Shariah
3. custom practice, unless it contradicts the law, public order or public ethics;
4. the natural principles of justice and the rules of right and fairness.

This Decree was followed by Decision No. 112 of 2009 issued by the public prosecutor ordering to stop any criminal proceedings in relation to such cheques and refer all existing and new cases to the Committee.
This Committee was clearly established to relieve the police department and the public prosecution who were being stormed by such cases. However, the Committee at the end of the day, and whenever it sees fit, has to refer these cases back to the police and public prosecution to take the necessary actions in accordance with the applicable laws of Dubai and the UAE.