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Arrest Warrants: Restrictions while executing against individual debtors
Recently, the General Authority of Dubai Court of Cassation issued a new legal principle under its Decision no. 4 of 2023 (“Decision”) concerning the issuance of orders to arrest and bring an individual debtor before an execution judge during coercive execution proceedings to settle the owed debt.
Prior to this new principle, Execution Courts in Dubai have been following the practice of issuing arrest warrants against individual debtors to ensure swifter settlement of the adjudged amount and subjecting the individual debtor subject to provisionary detention upon non-payment. Nonetheless, the Decision asserts that an arrest warrant cannot be issued unless the creditor can prove that:
1) The debtor possesses the means to settle the debt but is deliberately evading repayment by concealing or illicitly moving their assets; or
2) The debtor ceases repaying scheduled debt installments without any valid justification.
Consequently, this Decision shifts the burden of proof required to issue the arrest warrant onto the creditor, as opposed to solely leaving this decision in the hands of the execution judge.
Reforming the previous arrest warrant issuance system reflects a progressive initiative consistent with the constant progress Dubai has encouraged in various sectors, particularly foreign investment. Such a Decision was imperative to reform the arrest warrant process, ensuring the protection of the rights and freedoms of individual debtors.
Thus, with the issuance of this Decision, a new principle has been established to achieve an equilibrium which safeguards the interests of both the creditor and individual debtor. Such principle would curb the misuse of the court system as a tool for arbitrary actions that could limit an individual's freedom, disrupt their daily affairs, and hinder their ability to resolve their debts efficiently.
Simultaneously, the new principle reserves the creditor’s right to ensure repayment of their debt, so long as the non-payment is intentional by the debtor.
This article was written by litigation lawyer Asim Ahmed and focuses on arrest warrants in the UAE.
BSA is a regional Law Firm in the Middle East with offices in the UAE, Oman and Saudi Arabia. As a full-service law firm our practice areas include litigation, arbitration and corporate services, including M&A, banking & finance, Intellectual Property, TMT, Fintech, employment and insurance.
Published on 1 November, 2023.
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