How to Recover Money from a Client After Facing Repeated Cheque Bounces in the UAE

When dealing with bounced cheques in the UAE, it's important to understand the legal remedies available to recover your money.

If a cheque issued by a client bounces due to insufficient funds, here are the steps you can take to reclaim your funds.

Legal Framework for Execution Cases

According to Article 212 of Federal Decree-Law No. 42 of 2022 on the Civil Procedures Law, you can file an execution case, also known as a 'Writ of Execution,' against the drawer. This law outlines several key points:

Compulsory Enforcement: Can only be carried out under a writ of execution for a verified, urgent, and specified right.

Writ of Execution Types:

* Judgments and orders, including penal judgments with refunds, compensation, fines, and other civil rights.

* Authenticated documents.

* Court-ratified conciliation minutes.

* Other documents granted such capacity by the law.

* Execution Process: The execution may only take place under a stamped copy of the writ of execution.

* File Closure: If no action is taken for over a year, the execution judge may order the temporary closure of the file.

* Validity Period: Writs of execution are valid for 15 years from the last executory transaction or issuance without enforcement.

Filing Execution Proceedings

Suppose you obtain an execution order in your favour. In that case, you can file execution proceedings as per Article 667 of Federal Decree-Law No. 50 of 2022 on the Commercial Transactions Law and Articles 233-238 of the UAE Civil Procedures Law.

The relevant court will notify the drawer, including details such as the cheque amount, court fees, legal costs, and other fees.

The drawer may propose to deposit part or the whole execution amount to the court’s treasury in favour of the drawee as per Article 235. If the drawer fails to pay within seven days of notification, the court may issue an arrest warrant and impose a travel ban for amounts exceeding Dh10,000.

Additional Provisions for Dishonoured Cheques

Articles 663-667 of the UAE Commercial Transactions Law outline the recourse available for dishonoured cheques, allowing the bearer to seek compensation from the drawer and endorsers. This requires presenting the cheque within the legal timeframe and proving dishonour through a protest or a statement by the drawee.

Alternative Legal Actions

For a swift resolution, you might also consider filing a commercial case before a competent court in the UAE. Start by serving a legal notice to your client. If the client fails to settle the cheque amount, you can proceed with the case, including a copy of the dishonoured cheque and other documentary evidence.

By following these legal steps, you can efficiently address the issue of bounced cheques and recover the money owed to you.