Debt Recovery in the UAE

Most debt matters that reach me have already been going on for a long time. There have been promises, part payments, a new deadline that passed, and a point where the person owed the money stopped replying. The question by then is not whether the debt exists. It is what can be proven and what the debtor still has.

I advise businesses and individuals on debt recovery in the UAE, from assessing whether a claim is worth bringing through to the enforcement stage.

Proving the debt is the whole problem

When someone tells me the other side admitted the debt, my next question is usually what can be shown after that admission. An acknowledgement made in a meeting is worth very little. An acknowledgement in writing, signed and dated, referring to a specific amount, is a different matter entirely.

The strongest position is a debt evidenced in a written document, for a definite amount, that has already fallen due. That is what the law is built around, and a claim that cannot be put in those terms is harder and slower regardless of how obvious the underlying facts appear.

The sequence matters more than people expect

There is a fast route and a slow route, and which one is open depends on what the debt sits on.

The Civil Procedure Law, Federal Decree-Law No. 42 of 2022, provides a payment order procedure for debts evidenced in writing, whether on paper or electronically, for a specific sum that has matured. It requires a formal payment notice to the debtor first, and it produces an order from a judge without the full course of ordinary proceedings.

Cheques sit outside that procedure because they no longer need it. Under Federal Decree-Law No. 50 of 2022 on Commercial Transactions, in force since January 2023, a cheque returned for insufficient funds is treated as an executive instrument. The holder can go directly to execution rather than bringing a civil claim first. That was a significant change and a good deal of advice still circulating predates it.

The same reform moved bounced cheques away from being an automatic criminal matter. Criminal liability has not disappeared entirely for certain conduct around cheques, but the default position is now civil enforcement, and people on both sides of these disputes are often working from the older understanding.

Where a debtor is a company

A debtor company that cancels its trade licence while the debt is outstanding creates a different problem from a company that simply refuses to pay. So does a debt owed by a free zone entity, or one where the person who gave the assurances was not the person who signed.

These questions are worth answering before filing rather than after, because the answer sometimes changes who the claim should be against.

Winning and being paid are two different things

This is the part that is consistently underestimated. A judgment is a document. Converting it into money requires execution, and execution requires something to execute against.

Attachment of bank accounts, movables, shares and real property is available, but each depends on identifying an asset that exists and is reachable. A debtor who has moved money, closed the company or left the country can leave a creditor holding a judgment that costs more to enforce than it will ever return.

So before starting, the question I ask is not only whether the claim can be won. It is whether, if it is won, there is anything left to enforce against. That question is cheaper to answer at the beginning than at the end.