Debt collectors target Dubai expats for overseas debts

Debt collection agencies have begun pursuing debtors in Dubai who have absconded to the emirate and left debts unpaid back in countries overseas, Arabian Business has learnt.

In July, Arabian Business reported that UAE lenders have begun hiring British debt collectors to chase defaulters who have fled back to the UK without settling their Dubai debts. A global debt collection agency now reports that overseas lenders have also begun chasing expats who have absconded to Dubai.

“I have actually done a case, which is ongoing, where [the debtor] absconded from Australia to Dubai and left a debt with a personal guarantee in Australia and currently is being pursued within the UAE,” said Gareth Thomas, managing director of International Credit Enforcement, which has offices in Dubai.

“If you get a judgment in Australia you can then get that executed in Dubai and do it that way,” he added.

This sentiment was echoed by Michael Collyer, general manager at Global Credit Solutions, which operates in 87 countries around the world.

“From a debt collection point of view, a debt is payable anywhere in the world, wherever it has arisen. Just because a debtor moves country does not remove the responsibility for the debt.

“Action can be taken in court in most countries and assets of the debtor no matter where they are can be seized though often a further action in the country where the assets are may be required,” he said.

However, the legalities of the process in the UAE is not 100 percent clear. “You need a court order to do just about everything in the UAE, including chasing debt incurred in a foreign country,” said Reema Ashraf, an associate at Hadef and Partners in Dubai.

“A court judgment in the country of origin of the debt is not automatically enforceable in the UAE unless there is a bi-lateral reciprocal treaty permitting exactly that. If there is no such treaty, then you would essentially need to litigate from scratch in the UAE and bring a claim for unpaid debt. The UAE Courts would have jurisdiction simply by virtue of the fact that the debtor is resident here,” she added.

The Dubai-based debtor’s assets can be seized if the court rules against them. However, Ashraf pointed out that if the debtor has no assets and no ability to repay the debt then it can be an issue.

“If a debtor has fled to the UAE but has no assets here, although a UAE Court judgment is obtainable obviously it is going to be difficult to enforce the judgment,” she added.