22 Apr 2022
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If you are a creditor with substantial evidence in support of your claims, then you would be relieved to know that you can now successfully and speedily recover your debts without having to go through the regular civil litigation procedures, by the virtue of the provision of payment order as specified in articles 62 to 68 of the Cabinet Decision Number 57 of 2018 on the Implementing Regulation of Federal Law Number 11 of 1992 on the Civil Procedure Law (the Civil Law). In the year 2018, with the introduction of the Cabinet Resolution, Number 57 of 2018 issued by the United Arab Emirates (UAE) government, the provisions of the Civil Law experienced several significant changes in the manner of upgrading and expediting the litigation procedures.
The Cabinet Resolution Number 57 of 2018 was further amended by the recent Cabinet Resolution Number 33 of 2020, to widen the efficiency of the judicial process and extend the scope of available remedies and include additional benefits. Some of the prominent changes brought forth by the above mention cabinet resolutions were with regards to the service of process, registration of cases, case management office, assessment of case value, the conduct of proceedings, penalties for malicious defense or prosecution, enforcement of foreign judgements and awards and the payment orders.
This article will focus on expounding on the procedure involved in filing for a payment order by the creditor. The concept of the payment order is included in the Cabinet Resolution Number 57 of 2018 in order to facilitate a creditor with full proof evidence of the debts to be recovered, to initiate summary proceedings to promptly enforce his right to obtain the proven claims of the debts. Summary proceedings are adopted in circumstances where the case is clear-cut and already established with strong evidence proving the claims of the applicant beyond doubts.
Prior to the introduction of the Cabinet Resolution Number 57 of 2018, as amended by Cabinet Resolution Number 33 of 2020, the claim for payment order was restricted to only debt claims on financial instruments of a specified amount, as opposed to now where the scope of the claim is broadened to include even the claims on movables or any other such written acknowledgement of debts which are not financial instruments, as long as such claims are corroborated with proper evidence. Article 62 of the Cabinet Resolution Number 57 of 2018 expressly states that this provision shall be applicable to a creditor whose claims with respect to a debt of a particular amount or movables of a specified type and amount, which is proven, either in writing or through any electronic means (for instance emails). The essential requisite to avail of this provision is the establishment of the evidence proving the claim of the creditor’s right and such evidence can be produced either in writing or by any electronic means of communication.
Further, the recent amendment to the payment order provisions allows the creditor to claim for the enforcement of a commercial contract or demand the payment of the claims arising out of such commercial agreements.
Procedure to Initiate Proceedings of Payment Order:
Article 63 of the Cabinet Resolution Number 57 of 2018 lays down the process involved in payment order proceedings as follows:
Before proceeding with filing a petition to the competent court, the creditor is required to serve a legal notice to the debtor as to claim the payment of the amount due unto the creditor to be paid within a period of five (5) days, from the date when the legal notice has been duly served upon the debtor.
The competent court for this purpose can be the court located in:
- the place where the debtor resides;
- the place where such agreement has been entered into or has been partly or wholly implemented;
- the place where the agreement is supposed to be implemented.
The notice shall be served in the manner and include all the details as prescribed by the provisions of the Civil Law and also as provided by the Cabinet Resolution Number 57 of 2018, lest the notice be invalid if served in any other manner which is not provided by the law. It is recommended that such notice be served via the notary public. Subsequent to complying with the step of serving the legal notice to the debtor, the creditor can file a petition seeking the order of payment and such petition shall be attached with relevant proofs of the debt claims along with the evidence of a notice served to the debtor. Such a petition can be filed either electronically or in writing, as required by the circumstances of the case.
The Petition shall contain all the information, similar to the details mentioned in the statement of claim as provided in article 16 of this resolution. It is pertinent to note that, the amount specified in the legal notice shall be the same amount mentioned in the petition filed for the issuance of the payment order. Thereafter, within a period of three (3) days, the payment order shall be issued, clearly stating the amount to be paid by the debtor. As per article 17 (8) of the Cabinet Resolution, Number 57 of 2018, the claim of the payment order can be submitted to the case management office, thereupon, the case management office presents the received claim of payment order to the supervising judge, who will further refer the issued payment order to the competent judge to decide on the order passed by the supervising judge on the claim of payment order within the stipulated period of time, which is three (3) days as stated in the above line.
The decision passed by the referred competent judge shall be non-appealable. However, filing the petition alone is not a guarantee to obtain the successful issuance of a payment order from the court, as the judge is at discretion to either accept or reject the petition either wholly or partly. Where the judge has rejected the petition, he is required to provide the reasons for such rejection of the petition of order for payment.
Article 65 of the Cabinet Resolution Number 57 of 2018 states that, the issued order of payment against the debtor shall be duly notified to him within a period of three (3) months from the date when such order has been issued by the court, as failure to comply with this provision can result in void-ab-initio of such order of payment. This means the payment order shall become invalid from the outset.
Appeal by the Debtor against whom such Order of Payment was Issued:
Article 66 of the Cabinet Resolution Number 57 of 2018 lays down the time period and manner, within which the debtor can appeal the performance order of the payment issued against him. The debtor can now file an appeal within a period of fifteen (15) days from the date when the debtor has been notified of the order of payment or from the date when such order was issued in favour of the creditor, as opposed to the previous unamended provisions of the Civil Law, where the time period of appeal was within thirty (30) days. Thereafter, the court is required to decide on the appeal in the council chamber within a period of one (1) week from the date when such appeal has been announced.
Further, the court is not allowed to return the claim to the Court of First Instance. Despite the availability of the appeal window, the payment orders are entitled to be executed expediently even before the lapse of the time period available for appeal as sanctioned by the provisions of the Cabinet Resolution 2018. However, the party filing a petition for the order of payment is not restricted from obtaining the provisional reliefs provided by the provisions of the Civil Law.
One of the most relevant changes made to payment order by the virtue of the recent cabinet resolutions is: Legal interest on the outstanding debt and the damages incurred can also be now claimed along with the payment order petition. Payment order turns out to be very handy for creditors who have their claims established with proper evidence. As long as there is proper written evidence or electronic evidence establishing the claims of the debts due unto them, one can be confident to approach the court seeking for issuance of the payment order in their favour.