If you are one of those hundreds of borrowers who once fled the UAE for failing to settle mounting loans, the doors are still open for you to come back and start your expatriate life again – without landing behind bars.
According to legal experts in the UAE, there are still ways to secure another employment opportunity in the emirate, even if you’ve once been a runaway.
The risk of getting arrested at the airport, however, is high – especially if there is still a police case pending in court or an arrest warrant is waiting - so it’s better to plan your return.
Back in 2009, when the global economy fell into a recession, a significant number of expatriates who racked up huge debts running into several hundreds and thousands of dirhams, absconded without repaying their banks or lenders. A lot of these expatriates now want to return to the UAE, to seek employment opportunities.
Returning Dubai expats who think they have a police case filed against them are strongly advised to do some research before traveling to Dubai, or even passing through the airport.
“If an expat has an ongoing police complaint against them, there is a risk they will be arrested and detained upon arrival in the UAE, even if only transferring flights,” noted Paul Hughes, legal director of commercial litigation at Addleshaw Goddard Middle East.
Even if you have secured a tourist visa to Dubai, it doesn’t guarantee you free entry into UAE, either. “If the former resident was able to secure a visit visa to UAE, it does not follow that he has no pending criminal or police case,” added Barney Almazar, director at the corporate-commercial department of Gulf Law Middle East, Philippines and United Kingdom.
“The authorities will be more than happy to grant him a UAE visa, so he can voluntarily ‘surrender’ when he enters the country. A visa will be denied if the applicant with a pending police case is inside the country. But if the applicant is outside the country, it will be approved.”
The main goal of the absconding expat is to have all police complaints lifted first. This can be achieved by getting in touch with their respective lenders.
According to Hughes, any expat may be able to negotiate a settlement with their creditor in exchange for the withdrawal of a police complaint. In most cases, the bank or lender will ask the borrower to pay the outstanding balance/s in full. Making the bank agree to an instalment plan could also be an option.
“If an agreement can be reached, we would recommend entering into a formal settlement agreement which, among other things, directs the creditor to withdraw its police complaint once the debt has been satisfied,” said Hughes.
“Any debtor would be advised to await a written confirmation that the arrest warrant/police case has been withdrawn before traveling.
If it’s not possible to negotiate with the bank while you’re outside the country, hiring the services of a lawyer in the UAE would be a good option.
Hughes recalled a case of an expat who had sought their assistance over bad loans.The Indian national had left the country with a trail of unpaid debts. His creditors had filed complaints at three police stations and a standing warrant of arrest had been issued.
"We were instructed to meet with the creditor at each of the police stations to satisfy the debt in full. In return, each creditor withdrew their complaint and the arrest warrant was lifted within 24 hours. That individual subsequently returned to Dubai and started working again,” Hughes told Gulf News.
Almazar said it is actually easier to arrange for “waiver of interests and penalties” if the borrower is outside the UAE because there is no “immediate threat of imprisonment.”
“They can appoint a representative in the UAE who can negotiate a settlement with the bank. The representative can likewise clear their names with the police and immigration once the clearance and release documents have been issued by the bank,” Almazar advised.
“A settlement agreement under the letterhead of the bank, stamped and signed by the bank’s officer is a must before making any payment. This will ensure that the bank has authorized the waiver of penalties or reduction of outstanding balance.”
Those who fail to negotiate with the bank may request for the Central Bank assistance.
Settling debts shouldn’t just be the concern of returning expats. Even if you choose not to go back to the UAE, it is still a good idea to clear all your debt, because the long arm of the law can still reach you.
Almazar said that banks can still pursue the claim in the expat’s home country or in places where the borrower has assets to cover for the unpaid liability.
“Once the UAE court has issued the decision, the UAE police may only execute the decision within the country. Thus, the bank will have to request the debtor’s home country court to recognize the decision of the UAE court.”
“This procedure is known as the recognition of foreign judgment. Once the local court has recognized the foreign decision, the local police will be able to execute the decision against the debtor.”
Hughes said that if a very large amount is involved, banks or lenders will find ways to go after the concerned borrower outside the UAE. Creditors can obtain a “money judgment” from the Dubai International Financial Centre (DIFC) courts that can be enforced overseas. This is applicable to countries that have forged a memorandum of understanding with the DIFC courts for “mutual recognition and enforcement of monetary judgments.” These jurisdictions include England and Wales, Singapore, New South Wales (Australia) and China, according to Hughes.
“A judgment from the UAE Courts for a debt may also be enforceable in a debtor's home country depending on that country's approach to enforcing foreign judgments and whether any bilateral treaties are in place with the UAE for the enforcement of judgments.”
Tips for loan absconders who want to return to Dubai:
- Check if there is a police complaint or arrest warrant against you. You can instruct a lawyer or representative in UAE to do this.
- Don’t travel to or make a quick stopover at Dubai airport. Passengers with flight connections to UAE face the risk of getting arrested if there’s been a case against them.
- Negotiate with the bank/lender in order to lift any police complaint or arrest warrant.
- If it’s difficult to get in touch with the creditor, find a representative in UAE who can negotiate a settlement with the bank. If the bank is uncooperative, seek the Central Bank assistance.
- If a police complaint has been filed, the authorised representative will then meet with the bank at the concerned police station to satisfy the debt in full.
- Ensure that the creditor will issue a settlement agreement: printed on paper with the letterhead of the bank, stamped and signed by the bank’s officer. One lawyer advised that this document is ready before making any payment because this will attest that your creditor has waived the penalties or reduced/cleared your debt.