Under Kuwaiti law a cheque is an instrument of payment that stands in place of cash, which is why the legislator surrounded it with criminal protection. This guide explains when the offence actually arises, when it does not, and which defences may be raised.
Contents
1) The Legal Nature of a Cheque
The Kuwaiti Commercial Code treats a cheque as an instrument of payment due on sight, not an instrument of credit. That characterisation has a fundamental consequence: as a general rule, side agreements to postpone presentation carry no weight, because a cheque falls due the moment it is presented.
2) Elements of the Offence
- Material element: issuing a cheque that satisfies the formal requirements, followed by the absence of available funds when it is presented.
- Mental element: criminal intent, that is the drawer's knowledge that funds were insufficient at issuance or at maturity, and the direction of their will to that outcome.
- Subject matter: a document containing the legal particulars of a cheque; the absence of an essential particular may strip it of that character.
3) Forms of the Offence
- Issuing a cheque with no existing, withdrawable funds behind it.
- Withdrawing the funds wholly or partly after issuance so that the cheque can no longer be cashed.
- Instructing the bank to stop payment outside the cases permitted by law.
- Drawing or signing the cheque in a manner deliberately designed to prevent it from being honoured.
4) The Penalty
The offence is a misdemeanor, punishable by imprisonment, a fine, or one of the two, depending on the applicable provision, the circumstances, and the court's assessment. A criminal judgment does not prevent the beneficiary from pursuing the value of the cheque through the civil courts.
5) Civil Track vs Criminal Track
Criminal track
Begins with a complaint before the competent authority, accompanied by the original cheque and the bank's certificate of non-payment. Its object is to impose a penalty on the drawer.
Civil track
A claim for the value of the cheque together with interest and costs. It may be pursued independently or alongside the criminal case as a civil claimant.
6) Effect of Waiver and Settlement
Payment and settlement have a decisive practical effect in cheque cases. A waiver by the beneficiary after their right has been satisfied bears on the course of the case and on the court's assessment of the penalty, and may bring the case to an end or mitigate it depending on the stage reached and the applicable provision.
7) Principal Defences
- Absence of criminal intent: for example proving funds existed at issuance, or the drawer's good faith.
- Failure of a formal requirement: a missing essential particular that deprives the document of the character of a cheque.
- Cheque given as security, not payment: a precise defence requiring strong evidence and documents; its assessment rests with the court.
- Extinction of the case: through waiver, settlement, or lapse of time under the applicable rules.
- Absence of capacity: where the signature is attributed to another, or was made by someone without signing authority.
- Nullity of procedure: such as material defects in service or investigation.
8) Practical Scenarios
Scenario: a cheque drawn as security
- Gather everything establishing the nature of the relationship: the contract, correspondence, account statements.
- Show that the cheque was not delivered in settlement of a debt then due.
- Remember this is a defence on the merits, assessed by the court, so it must rest on evidence rather than assertion.
Scenario: a judgment rendered in absentia
- Verify that the judgment was validly served.
- File the objection within its time limit.
- If that period has lapsed, move to appeal where the judgment is open to it.
