The UAE’s Law of Civil Procedure has stipulated all the modalities regarding detaining debtors on account of a failure to adhere to payment in compliance with court orders. Article 319.3 establishes, in regard to the behavior of the debtor, the actual times and cases a detention would occur, coupled with the limitation enforced by the law. This involves the breakdown of detention periods with the relevant extensions.
Detention Periods Key and their Extension
1. Renewable One-Month
A debtor can be detained for a period of one (1) month, extendable by the following reasons:
- The debtor transfers or hides assets to deliberately deprive the creditor.
- The debtor or their guarantor was granted an installment plan but stopped paying without proving insolvency.
Limitation: If the debtor is not considered a flight risk and has an established residence, the total detention period, including renewals, cannot exceed six (6) months.
2. Renewal of Detention After 90 Days
If the detention period has expired and a period of more than 90 days has lapsed, the detention of a debtor may be renewed if:
- The debtor refuses to pay even though he is capable of paying.
Limitation: The total detention period shall not exceed thirty-six (36) months, even if the debtor owes more than one debt for different creditors.
3. Extended Detention for Financial Crimes
A debtor may be given an extended detention period not in excess of sixty (60) months if:
- The debt is originated by an intentional financial crime by the debtor.
Conclusion
Understanding the legal limitations and extensions of detention periods under Article 319 is crucial both for creditors desiring enforcement and for debtors in financial dispute settlement. Inasmuch as the law offers creditors mechanisms to detain debtors who refuse to pay, so does it also set clear limitations on the maximum duration of detention, ensuring that enforcement measures will be proportionate.
The consultation of legal professionals will help businesses and individuals who are facing enforcement actions to navigate these provisions effectively, hence complying with UAE law while protecting financial interests.
