When Time Runs Out: How a Dh7.4M Cheque-bounce Case Collapsed in Dubai

The Dubai Court of Appeal has overturned a one-year prison sentence issued against a man accused of issuing several dishonoured cheques totalling Dh 7.4 million, ruling that the criminal case was time-barred as the legal limitation period had already expired.

 

The case involved cheques issued to an investor—who later passed away -- linked to a bank account that had reportedly been closed for several years. Despite a conviction by the Court of Misdemeanours earlier this year, the appellate court ruled that the criminal proceedings were initiated long after the statutory deadline for cheque-related misdemeanours.

 

Court records show that the 48-year-old defendant had provided several undated cheques as security for an investment agreement beginning in 2014. The funds -- amounting to Dh 7.4 million—were invested in the defendant’s medical facility without any formal written contract or agreed profit-sharing structure.

 

A financial expert appointed by the court confirmed that the cheques had been handed over undated and were later assigned dates by one of the investor’s heirs after the investor’s death. The expert also highlighted that the cheques were issued as a guarantee for the invested capital rather than as payment for a commercial transaction.

 

The defendant’s lawyer, Dr Alaa Nasr, argued that under UAE law, the limitation period for misdemeanours involving cheques begins from the date the cheque is delivered, not the date written on the cheque nor the date it is submitted to the bank. Since the handover occurred between 2014 and 2015, the five-year limitation period had lapsed well before the heirs attempted to redate and present the cheques in late 2024.

 

The Court of Appeal accepted this argument and found that the criminal case could not proceed, concluding that the statutory deadline had expired.

 

Wider Legal Context
 

The ruling comes at a time when the UAE has significantly revised its cheque laws, moving towards a more civil-focused enforcement model.

 

Under Federal Decree-Law No. 50 of 2022, many cheque-bounce cases are no longer criminal matters unless fraud, forgery, or intentional misconduct is involved. Actions such as closing an account before presenting a cheque, deliberately preventing payment, or issuing a cheque with fraudulent intent still remain criminal offences.

 

One of the biggest changes is the treatment of cheques as an executive instrument, meaning a bounced cheque can now be enforced directly through civil procedures, without opening a criminal file. Banks are also required in certain cases to make partial payments if funds are insufficient, reducing the likelihood of criminal escalation.

 

Despite the reforms, some core principles remain unchanged. Most importantly, the statute of limitations for cheque-related misdemeanours remains five years from the date of cheque delivery. This principle formed the basis of the appellate court’s decision in the present case.

 

Why This Case Matters
 

This judgment highlights the importance of understanding the legal effect of undated cheques, informal investment arrangements, and the strict application of limitation periods in the UAE. It also underscores the shift in the country’s legal landscape -- from criminalising bounced cheques to encouraging civil resolution and enforcing financial rights through the courts.

 

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