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ARTICLE · 27 SEPTEMBER 2024

Potential Objection(s) Against Bounced Cheque(s) Considered Executive Bond(s): Grounds For Cancellation

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Cheques are widely used in UAE as a form of immediate or adjourned payment and are governed by specific legal provisions under Federal Decree-Law No. 50 of 2022 "the Commercial Transaction Law".

United Arab EmiratesLitigation, Mediation & Arbitration
Hassan El Agawani
Hassan El Agawani
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Cheques are widely used in UAE as a form of immediate or adjourned payment and are governed by specific legal provisions under Federal Decree-Law No. 50 of 2022 "the Commercial Transaction Law". According to the provisions of Article 667 of said Federal Decree-Law, when a cheque is bounced by the bank for insufficient funds it is considered a writ of execution, based on which, immediate enforcement procedures can be initiated by the creditor without the need to follow the usual legal route of filing a claim and obtain a final judgment subject to execution. However, there are circumstances where the value of the cheque may not be rightfully owed, and the issuer has the right to object against ongoing enforcement proceedings requesting these be halted.

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