In the UAE most popular ways to conduct a financial transaction is with a bank cheque and thus affect reason to high rate of bounced cheques in the Emirates. Cheque bounce concerns typically emerge in business transactions, rent matters, bank loans, and individual transactions, among other situations. A bounced cheque also known as dishonored cheque is still considered as a criminal offense in the UAE and those may be subject to civil litigation.

Never invest in a business you cannot understand.”

Warren Buffet

Major amendments were made to the Federal Law No. 18 of 1993 endorsing Commercial Transactions. With the Federal Decree-Law No. 14 of 2020, these changes were made to speed up  the process whilst ensuring justice is provided. A balance is created to ensure more efficient use of police resources and support a sustainable economy.

 

As per the newly amended law, UAE banks are obliged to service partial payment to the cheque holder even full amount is not present in the account. However account still holds the right to reject. This differ that as per the earlier law where account holder had to direct the bank to make this partial payment. However in current context at the time of court execution judge directly call for an order to make full payment.  The newly introduced  procedure is comparatively relax and easy to execute and  respects the rights of all concerned parties.

 

Mahmood Bin Jaber Advocates & Legal Consultants consist with specialized team of professional advocates and lawyers in obtaining execution writs, assist and provide guidance to clients in the  enforcement of such situations.

We represent our clients in all types of civil law cases that include, but are not limited to:

  • Corporate debt Recovery
  • Corporate receivable collection services
  • Debt collection services for financial products ( ex: Loans, Credit cards, etc..)

Frequently asked questions about Cheque Executions

Bounced / Dishonored cheques are cheques that a bank on which is drawn declines to pay. There are a number of reasons why a bank would refuse to honor a cheque.

 

  • with non-sufficient funds (NSF) being the most common one,
  • Non-availability of funds equal to or more than the cheque amount on the date of issue.
  • Closure of the bank account before the issued cheque is enclosed.
  • Instruction to the bank to withhold payment against the cheque.
  • Technical errors such as mismatched signatures, incorrect date, over-written text.

A jail term of at minimum 12 months and a minimum fine of AED 20,000 which not exceeding AED 100,000 would be imposed if an individual forges or counterfeits a cheque. Similarly, attributing a cheque to a third party by altering any detail falls under the same sentence.

Person who expect to file case first must fill out cheque execution regulation form with other mandatory documents. This would include obtaining the certificate of the bounced cheque form from the relevant banks. Forms are available and easily can be found in the official Dubai courts website. However if any documents not in Arabic language must be translated and certified before submission. Most importantly 06 month is the cut off time for the filling a complaint in UAE.

Once application is ready for the execution must pay 5% of the bounced cheque value and AED 150 as the application fees.

Service Area:

Need help with any legal issues?