Cheques in the UAE after Law No. 50 of 2022: What payees and issuers need to know

Cheques are still a core payment tool in the UAE, but the legal landscape has shifted. The latest Commercial Transactions Law recognizes certain dishonoured cheques as directly enforceable, speeds up recovery options, and sets clear deadlines that every business should track.

Key takeaways

• A cheque is payable on the date shown on it and must be presented within 6 months from that date. Presentment before the date shown is not allowed. 

• If the bank confirms there are no funds or insufficient funds, the cheque becomes an “executive instrument,” and the beneficiary can go straight to the Execution Court without a full lawsuit. Partial payment by the bank is mandated when possible. 

• Time limits matter. Recourse claims on the cheque itself are not heard after 2 years from the end of the 6 month presentment window. Separate limitation periods apply if you sue on the underlying debt.

• For the underlying debt: commercial claims generally have a 5 year limitation period, while civil contractual claims generally have 15 years. 

How a valid cheque works now

1. Date and presentmentThe cheque falls due on the date written on it. It must be presented within 6 months from that date. Banks should not honor it before the date shown. 

2. Partial payment ruleIf the account does not hold the full amount, the bank must pay what is available and note partial payment on the reverse, issuing a certificate. The bearer may then execute for the balance.

3. Dishonour and direct executionWhen the bank states there is no balance or an insufficient balance, the cheque is treated as an executive instrument. The beneficiary can apply directly to the Execution Court to enforce it. This route is faster than a full civil case. 

Deadlines you must track

• Presentment: within 6 months from the cheque date.

• Payment order on the instrument: You may request a payment order if the cheque was not presented to the bank on its maturity date or within the six-month presentment period. The application must be filed within 2 years from the maturity date, then followed by an execution order.

• Underlying debt if you miss the cheque deadlines:

  • Commercial transactions: generally 5 years.

  • Civil contractual claims: generally 15 years. 

Two enforcement paths in practice

Path A: Execution Court on the cheque

Use this when the bank’s return memo states no funds or insufficient funds. File for execution with the original cheque and the bank’s statement. This is the quickest route and avoids a full merits case. 

Path B: Sue on the underlying debt

If cheque timelines lapse or facts fall outside direct execution, you can pursue a normal civil or commercial claim for the debt evidenced by the cheque and related documents. Limitation periods differ by the nature of the deal, as above. For strategy, many firms confirm Path A first, then use Path B if needed.

What to prepare before you file

• Original cheque and any partial payment endorsements

• Bank return memo or statement confirming insufficient funds

FAQs

Is a postdated cheque treated differently for timing?The law treats the cheque as due on the date written on it, and the 6 month presentment period runs from that date. Do not present before the date shown. 

Do I still need a “payment order” from court before execution?Not if the bank’s return states no or insufficient funds. In that event, the cheque itself is an executive instrument that you can take straight to execution. A payment order can still be used in other written-debt scenarios, but it is not required for this case.

What if the bank pays only part of the cheque?The bank must pay the available amount and endorse it. You can execute for the balance with the marked original cheque and the bank certificate.