Court Dismisses Dh100,000 Claim, Rules Cheque Was Issued Only as Guarantee

The Abu Dhabi Civil, Family and Administrative Court has thrown out a lawsuit filed by a farm seller who sought Dh100,000 from a buyer, after finding that the cheque at the centre of the dispute had been issued as a guarantee and not as a payment instrument.

The court held that the cheque in question was a security instrument and could not be encashed once the purpose for which it was issued had already been satisfied.


The claimant had asked the court to order the defendant to pay Dh100,000, representing the cheque amount, along with Dh15,000 in compensation for alleged financial and moral harm arising from non-payment. He also sought legal interest on the amount from the date the case was filed, in addition to fees and litigation costs.

The claimant maintained that the defendant had issued the cheque for the stated sum, but when it was presented to the bank, payment was declined because the cheque had been drawn and signed in a way that prevented it from being processed.


A criminal court had earlier found the defendant guilty of issuing a cheque in bad faith and imposed a fine, with that ruling becoming final. The defendant, however, filed a defence memorandum seeking dismissal of the civil claim.

In its reasoning, the court noted that documentary evidence showed the cheque had been explicitly marked on the reverse as a “guarantee cheque”, confirming it was not intended as a payment tool but rather as security linked to the farm purchase.

The defendant also submitted proof that the full purchase price of Dh700,000 had already been settled, supported by receipts and WhatsApp exchanges between the parties confirming completion of the transaction.

The court observed that once the obligation secured by the cheque had been fulfilled, there was no legal basis for retaining or presenting it, and holding onto it after completion of the deal ran contrary to the parties’ agreement.


It further clarified that the earlier criminal proceedings were confined to assessing the elements of a criminal offence and did not extend to determining the civil relationship between the parties or the purpose behind issuing the cheque.

The civil court therefore retained jurisdiction to examine the underlying intent of the cheque and decide whether it functioned as a payment instrument or merely as a guarantee.

In light of the evidence showing the purchase amount had been fully paid and the purpose of the guarantee exhausted, the court ruled that the defendant bore no further liability in relation to the cheque and that it could not be used as a valid basis to claim payment again.

The court accordingly dismissed the case and directed the claimant to bear the legal costs and expenses.

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