Cheque Limitation Periods in the UAE: Claims and Evidence

Different periods apply to holders, other liable parties, and drawee banks. The time bar must be raised by the defendant and is subject to lawful excuse and statutory exceptions.

Cheque Limitation Periods In The UAE

Article 670 sets different starting dates for holder claims and recourse between liable parties.

• Presentment: A cheque payable in the UAE must be presented for payment within 6 months from the issue date on the cheque (Article 649).
• Holder against the drawer, endorsers and others liable: Not heard after 2 years from the end of the presentment period (Article 670(1)).
• Between those liable on the cheque: Not heard after 1 year from the day the person paid or was sued for payment (Article 670(2)).
• Holder against the drawee bank: Not heard after 3 years from the end of the presentment period (Article 670(3)).
• Exceptions: The periods do not protect a drawer who provided no funds or withdrew them wholly or partly. They also exclude other liable parties who made an unlawful gain (Article 670(4)).

Before applying to court, consider settling debt outside court.

How The Time Limit Can Stop Running

The Law has three rules that stop or reset the clock.

• If a case is filed, the periods run only from the last step in it (Article 672(1)).
• The periods do not apply if a judgment is given for the debt, or the debtor acknowledges it in a separate instrument that renews the debt (Article 672(2)).
• An interruption affects only the person it was taken against (Article 672(3)).

Even after the period, a defendant can be required to confirm on oath that he has paid. His heirs can be required to swear they do not know of the debt (Article 671).

If execution has already begun, read about defending a cheque execution case.

Enforcing A Returned Cheque

A returned cheque can be enforced directly.

• A cheque on which the bank has recorded no funds or insufficient funds is an executory instrument. The holder can ask for it to be enforced in whole or part (Commercial Transactions Law, Article 667(1)).
• The enforcement application and any challenge follow the Civil Procedure Code (Article 667(2)).
• Certain bad-faith acts, including falsely declaring no funds, attract fines under the Law. The fine is at least 10% of the cheque’s value, with a minimum of AED 5,000 and a maximum of double its value.

For other claims, compare the time limits for recovering debts in Dubai.

Steps For A Cheque Holder

1. Present the cheque within six months of its issue date.
2. If it is returned, keep the bank’s notice of no or insufficient funds.
3. Apply to enforce the returned cheque as an executory instrument (Article 667).
4. If you need a claim, file it within two years of the end of the presentment period (Article 670(1)).
5. Keep any written acknowledgment of the debt, which can stop the time limit (Article 672(2)).