Out-of-Date and Expired Cheques in Dubai, UAE
By Khalil Asayesh – Iranian Lawyer in Dubai, UAE, Lawyer in Tehran, Lawyer in Iran
Introduction
In the commercial system of the United Arab Emirates, cheques are considered one of the most important payment instruments.
With the amendments to the Federal Commercial Transactions Law under Federal Decree-Law No. 14 of 2020, effective from January 2022,
the legal framework governing cheques has changed significantly.
1. Time Limit for Presenting a Cheque
According to the UAE Commercial Transactions Law:
- A cheque must be presented to the bank for payment within six months from the date stated on it.
- After this period, the bank may refuse payment and record the return with an “out of date” code.
As per Khalil Asayesh, Iranian lawyer in Dubai, this time frame is binding in practice,
even though legally the bank could still pay after expiry.
2. Criminal and Civil Effects of Out-of-Date Cheques
2.1 Removal of Criminal Liability
Under Article 641 bis 2, only forgery or unlawful stop-payment instructions remain criminal.
Issuing a cheque without funds is no longer a crime in Dubai or the UAE.
2.2 Civil Use of Cheques
Whether an expired cheque retains commercial nature or becomes a civil debt obligation
should be clarified by consulting a lawyer in Tehran or lawyer in Iran with UAE expertise.
3. Time Limits for Filing a Lawsuit
- Article 670: Claims against the issuer or endorsers expire two years after the presentment deadline.
- Article 336: Civil debt claims can be filed within three years from awareness, and within fifteen years overall.
Conclusion: After two years, cheques serve only as evidence of debt, without direct enforcement.
4. New Enforcement Measures under UAE Law
- On-time dishonoured cheques serve as “executive instruments.”
- Banks must provide partial payment unless refused by the payee.
- Returned cheques are reported to the Central Bank, creating restrictions.
These benefits do not apply to expired cheques, which need a standard civil claim.
5. Court Practice in Out-of-Date Cheque Cases
- File a civil lawsuit for debt recovery with the help of a lawyer in Tehran or Iranian lawyer in Dubai.
- The burden of proof lies with the claimant.
- Evidence may include contracts, correspondence, and judicial oath.
- Once judgment is obtained, asset and account seizure is possible.
6. Practical Advice from Khalil Asayesh
- Timely Presentment: Present cheques within six months to benefit from enforcement.
- Prompt Civil Action: File a civil claim quickly after expiry.
- Diversify Payments: Use bank transfers or promissory notes alongside cheques.
Final Note
An out-of-date cheque in Dubai, despite losing criminal and enforcement advantages,
remains a valid civil debt instrument. According to Khalil Asayesh,
understanding deadlines and remedies is crucial for success in UAE commercial disputes.
