From Conflict To Consensus: Bounced And Returned Cheque As A Direct Execution Deed Due To Bank Account's Closure

The UAE legislator has approved cheques, as a mechanism to provide exceptional protection which other commercial tools do not benefit from. However, it comes with strict conditions, in order to preserve its value and importance as a payment mechanism. For this reason, the UAE legislator stipulated in the Federal Commercial Transactions Law that a returned cheque should be considered a direct execution deed where the reason for the return is "lack of balance in the account or insufficient balance." Accordingly, the holder of the cheque can - in this case - directly approach the execution judge to initiate obligatory enforcement procedures to collect the cheque's value, in the same manner as enforcement of final judgments issued by the UAE courts, however without the need to follow full course of litigation proceedings for obtaining a judicial judgment.