Cheques continue to serve as a common trusted payment method in the UAE, but bounced cheques remain a frequent and often serious potential criminal matter. To effectively resolve such issues, parties should retain specialized legal assistance in Dispute Resolution and Commercial Litigation to protect their interests and achieve the best possible outcome.

In this article, we analyse the key legal issues surrounding bounced cheques and the recently revised amendments under the new cheque bounce law in the UAE. We will also touch on the legal methods available for cheque enforcement UAE, which are essential to protect payees’ rights and enforce the ensuing financial obligation.

Bounced Cheques in the UAE: What You Need to Know

A cheque will usually bounce or be dishonored when the bank refuses to honor the cheque upon its presentment. If this happens, the payee will not be able to withdraw the stated sum as the bank did not honor the cheque.

The legal and financial ramifications of a bounced cheque UAE 2025 have continued to be the source of significant concern throughout the country.

Some of the usual causes of dishonoured cheques include the following:

• There were not enough funds to cover the payee’s request for withdrawal in the drawer’s account. 
• The drawer had closed the account, meaning that they no longer have an account with the bank. 
• The drawer instructed the bank to stop the payment of the cheque. 
• The cheque has defects, such as an incorrect signature, overwriting, and so on.

Understanding what causes a cheque to be dishonoured can guide you in your responses that are fair and legitimate remedies under UAE law.

In addition, parties trying to enforce their amounts that arise from dishonoured cheques, must know the procedures by which enforcement procedures affect dishonored cheque UAE 2025; as these procedures will affect the ability of parties to enforce their rights to recover their amounts, to the fullest potential.

Understanding Deadlines for Legal Action in the UAE

The time period for the initiation of legal proceedings will be calculated from the date of the cheque. If the payee wishes to commence a case in the Execution Division of the Courts, that payee has two years from the date the cheque was not presented within the time provided by the cheque.

So, if a payee wishes to recover the debt, this is paramount in debt recovery Dubai, or any debt recovery action if it exceeds this period, that payee may lose the right to enforce the cheque through the judicial process.

What Happens When a Cheque is Bounced? A Guide to Cheque Enforcement UAE

If the bank dishonours a cheque, it must promptly prepare and deliver to the payee a return memo indicating the reason for the dishonour; furthermore, it returns the original cheque so the payee can have it in their records.

Key Legal Considerations for Bounced Cheques

As mentioned below, the payee can both bring a civil lawsuit and even initiate criminal proceedings against the drawer in the UAE.

It is worth noting that cheque bounce in UAE used to be a serious criminal offence in the UAE until the amendments were made in the new cheque bounce law in the UAE, which has since decriminalised bounced cheques under certain conditions.

In addition, the payee can file a civil suit for the amount on the cheque. This can be accomplished through efficient cheque enforcement UAE vehicles.

Conclusion 

Cheques are still a popular and trusted payment instrument in the UAE and many other jurisdictions. However, bounced cheques can create significant legal and financial hurdles. 

Recently amended cheque bounce legislation in the UAE has decriminalised bounced cheques in certain circumstances, but there are still enforcement avenues available to the payee, who retains strong civil actions to recover amounts through the Cheque enforcement UAE processes. 

The most crucial aspect of recovering your debt is understanding the general reasons for cheque dishonour and acting within the strict legal timelines, one of those timelines being the limit of two years in which to bring cases for review in the Execution Division.

The payee does receive a return memo from the bank that was refusing the cheque, which explains the reasons for refusal, and this saves the payee from searching high and low for cases leading to dishonour. 

Consulting with a qualified and experienced firm such as Khairallah Law Firm, known as amongst the Best Lawyers in Dubai, will help you navigate these complex legal processes and protect your interests when it comes to your financial interests and decisions.

Legal Criteria acting as barrier-free as possible will provide you the best outcome for cheque bounce and related to debt recovery. 

Having said that, contact Khairallah Advocates & Legal Consultants and benefit from our free 30-min legal consultation.

*Disclaimer: our blogs, law updates, and FAQ’s are freely distributed for educational purposes and to showcase recent updates and regulations in the UAE’s framework.

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