Sheikh Mohammed bin Rashid, Dubai’s Ruler and the UAE’s Vice President, issued a decree dissolving a tribunal that was set up to deal with cheque disputes arising from property transactions.
Following Decree No. (11) of 2021, the Special Tribunal for the Settlement of Cheque Disputes Relating to Real Estate Transactions was formally disbanded, the Dubai Media Office said in a statement on Sunday.
This special tribunal was formed following the issuance of Decree No. (56) of 2009.
All complaints, claims, lawsuits and appeals being reviewed by the Special Tribunal that have not received a final judgement will now be referred to the judicial entity concerned, the statement said, without specifying the name of the organisation.
The decree is active from its date of issuance and will be published in the Official Gazette.
"The process for the enforcement of a cheque seems to have been facilitated for developers, who are now able to submit their cases directly before the competent courts [including but not limited to criminal courts] without the need for the matter to be considered by a Special Committee in accordance with the strict elements outlined in Article 4 Decree No. 56 of 2009 [such as the developer's entitlement to the cheque]," Michael Kortbawi, partner at BSA Ahmad Bin Hezeem & Associates, told The National.
“However, in light of the recent changes that have occurred to the regime applicable to bounced cheques in the UAE, the dissolution of the committee may effectively result in developers having less leverage over investors/buyers in relation to bounced cheques, seeing as the latter are now able, following the payment of a fine, to avoid a jail sentence [as may be applicable]. A developer/seller is then able to pursue its rights before local courts by filing a civil claim before the competent court.”
The tribunal had an exclusive jurisdiction to settle complaints related to dishonoured cheques, which were issued by a property purchaser and made payable to a real estate developer, or those cheques issued by those with usufruct rights or with long-term leasehold rights.
The tribunal comprised a judge from the Court of Appeal, Dubai Courts, as president; a judge from the Court of First Instance, Dubai Courts, and a representative from the Dubai Land Department as members.
Judicial police officers, including the police, were directed to refer all cheque-related complaints that fall under the scope of this decree to the tribunal.
The process for the enforcement of a cheque seems to have been facilitated for developers, who are now able to submit their cases directly before the competent courts
The public prosecution and the Courts were also not allowed to investigate dishonoured cheques that fell under the scope of the earlier decree or settle any dispute related to such cheques before such disputes were referred to and considered by the tribunal.
The judgement rendered by the tribunal was final, irrevocable and not subject to appeal, and was executed by the execution department of Dubai Courts.
The latest ruling comes as the UAE streamlines its regulations in an effort to attract foreign investors.
Dubai issued a new law in December last year governing unfinished and cancelled property projects in the emirate.
Under the law, a special tribunal will be set up to oversee the liquidation of unfinished and cancelled projects as well as the settling of related claims. It replaces an existing committee set up in 2013 that oversees claims related to cancelled projects.
The new body will have jurisdiction over all property disputes in the emirate relating to unfinished or cancelled projects, meaning cases over stalled projects cannot be filed at the Dubai International Financial Centre Courts.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
