When it comes to commercial transactions, the process of recovering debts that are owed by companies may require assistance from the legal system. The Federal Decree-Law No. 42/2022 on Civil Procedure Law outlines the specific procedures that must be followed in order to issue execution orders against debt companies. In order for creditors to successfully enforce their rights within the limitations of the law, it is essential for them to have a solid understanding of these procedures.  

According to Article 319 of the UAE civil procedure law states that the execution judge has the authority to issue an order to imprison the debtor of a debt company upon the request of the prevailing party, provided that the debtor has abstained from enforcing any writ of execution. Notably, insolvency claims of debtors may not be accepted if certain conditions are met, such as evidence of smuggling or concealing assets with the intent to defraud creditors.

Furthermore, Article 320 stipulates that before issuing a detention order, the execution judge may conduct a summary investigation if the supporting documents provided are deemed insufficient. 

If specific requirements and assurances are fulfilled, the judge may also grant debtors a grace period to settle their debts or arrange instalment payments. However, Article 321 may prohibit the issuance of detention orders under certain circumstances, defines the exceptions to detention orders and provides a list of those exceptions. For example, detention may not apply to those who are elderly, a minor, or suffering with specific medical conditions. Moreover, in situations like pregnancy or unexpected illness, the judge may delay issuing a detention order.

According to Article 322 of the civil procedure law, if the legal representatives or other individuals personally liable for the company’s debts are found to be responsible for abstaining from execution, the debtor, a business entity, may be subjected to detention orders.

When debtors are potentially at risk of leaving the country in order to escape their responsibilities, creditors can request a travel ban in addition to detention orders. The specific conditions for issuing such travel bans, including requirements for written evidence and guarantees to protect the debtor’s interests in the event that the creditor’s claims are deemed invalid, and the judge may conduct investigations before issuing the ban, which is described under Article 324.

Article 325 outlines the guidelines and duration of travel ban orders, stating that prohibitions last until the debtor’s obligations are fulfilled or specific requirements are no longer fulfilled. Travel bans may be lifted by the judge in various kinds of situations, such as when the parties agree or the debtor provides sufficient guarantees.

In the event that debtors violate orders or provide any indication that they are attempting to avoid their responsibilities, the courts are granted the authority to take additional preventative action. In order to protect creditors’ interests, they can be maintained through the application of these actions, which may include requesting attendance or payment guarantees, which is stipulated by Article 327.

Therefore, the guidelines for issuing execution orders against debt companies, as per civil procedure law, aim to establish a compromise between the rights of creditors and debtors. Recognizing these processes helps creditors guarantee the execution of their rights in line with the legal ideas of equality and equity.