UAE Commercial Transactions Law — articles 601–684

The bearer of a bill of exchange protested for non-payment may levy a precautionary attachment, without the need to submit a guarantee, at the property of the drawer, acceptor, endorser, giver of an aval or any other obl…

1. Any person having a right of recourse against other obligors under the bill of exchange may recover his right by drawing a new bill of exchange on one of his gives or an aval to be payable at sight and at the place of…

1. The drawer, an endorser or an aval guarantor may designate a person to accept or pay the bill when necessary. 2. Subject to the following Articles, an intervener may accept or pay the bill for any debtor exposed to re…

1. Acceptance by intervention may occur whenever the holder of a bill capable of acceptance has a right of recourse before maturity. 2. If the bill designates a person to accept or pay it when necessary at the place of p…

The acceptance for honor shall be conducted by writing it on the bill of exchange itself and shall be signed by the intervener. The name of the person in whose interest the intervention was made shall also be mentioned t…

1. The acceptor for honor shall have the same liability towards a bearer of a bill of exchange and subsequent endorsers of the person in whose interest the intervention was made, in the same manner of the latter. 2. The …

1. A bill may be paid by intervention whenever, at or before maturity, the holder has a right of recourse against parties liable on it. 2. Payment shall cover the entire amount that the person for whose honour interventi…

1. Where the acceptors of a bill of exchange by intervention or those who are designated for payment thereof, where necessary, have a place of residence at the place of payment, the bearer shall present the bill of excha…

Where the bearer of a bill of exchange refuses the payment by intervention, he shall lose his right of recourse against the person who would have been discharged by such payment.

1. Payment by intervention shall be established by writing a clearance on the bill of exchange, stating the name of the party in whose interest the payment was effected, otherwise, the payment by intervention shall be de…

1. The party who paid a bill of exchange by intervention shall acquire all the rights arising therefrom against the person in whose interest the payment was made and against those persons liable under the bill of exchang…

1. A bill may be drawn in several identical parts. Each part shall state the total number and its serial number; otherwise each part is treated as a separate bill. 2. A holder of a bill not stating that it was drawn as a…

1. The payment of a bill of exchange under one of its copies shall discharge liability, even if no stipulation therein that the payment shall nullify the effect of the other copies. Nevertheless, the drawee shall remain …

A person who sends a copy of the bill of exchange for acceptance shall state on the other copies the name of the person who shall hold such copies in his possession, and this latter shall surrender it to the lawful beare…

1. The holder may make copies of a bill of exchange. 2. A copy shall correspond exactly to the original and its endorsements or other written particulars, and shall indicate where reproduction of the original ends. 3. A …

1. The name of the holder of the original bill shall be written in the copy of the bill of exchange, and such holder shall hand over the original to the lawful holder of the copy. 2. If the holder of the original refuses…

If the text of a bill of exchange is altered, signatories after the alteration are bound by the altered text, while earlier signatories are bound only by the original text.

Upon denial and in the absence of a lawful excuse, the following actions shall not be heard: 1. actions arising from a bill against the acceptor after three years from maturity; 2. actions by the holder against endorsers…

Where an action is instituted, the limitation period provided for in Article (618) above shall be applicable only from the date of the last procedure conducted in respect thereof.

The limitation period stipulated in Article (618) shall not be applicable if a judgment establishing debt is rendered or if the debtor acknowledges the debt under a separate deed, which entails renewal of the debt.

The interruption of the limitation period shall only be effective vis-à-vis the person against the person in respect of whom the procedure interrupting the period was taken.

A promissory note shall contain the following particulars: 1. A stipulation of promise or the expression of (promissory or order note) written in the body of the instrument in the same language thereof. 2. An uncondition…

A note which does not contain any of the particulars stated in Article (622) above shall not be considered a promissory note, except in the following cases: 1. Where the date of maturity is not stated, the promissory not…

1. A promissory note maker shall be liable in the same manner as the acceptor of a bill of exchange. 2. A promissory note which falls due at a fixed period after sight shall be presented to the maker, within the time lim…

1. The provisions on the bill of exchange, pertaining to capacity, multiple counterparts and copies, endorsement, maturity, payment, recourse for non-payment, cases where a time limit for payment may not be granted, prec…

Subject to the provisions of this Part, the provisions of Bills of Exchange shall apply to Cheques to the extent that provisions do not conflict with the nature of Cheques.

A cheque shall contain: 1. the word 'cheque' in the body and in the language of the instrument; 2. an unconditional order to pay a specified sum; 3. the name of the person required to pay (the drawee); 4. the person to w…

An instrument that does not contain any of the particulars mentioned in Article (627) of this Law is not deemed a Cheque except in the following cases: 1. If the Cheque does not contain the place of payment, the place in…

1. Cheques issued in the State and payable therein must be drawn on a bank. 2. Every bank that delivers to its customer a book that includes blank Cheques payable from its treasury, must write on each Cheque the name of …

1. A Cheque may not be issued unless the Drawer has money with the Drawee at the time of issuance of the Cheque that they can dispose of by virtue of a Cheque in accordance with an express or implied agreement. 2. The pe…

1. Cheques are not susceptible to acceptance. If the wording of acceptance is written on the Cheque, it shall be deemed null and void. 2. The Drawee may make an indication on the Cheque denoting their approval, and the a…

It is permissible to stipulate the fulfillment of the Cheque: 1. To a named person with or without expressly stating the condition of the order. 2. To a named person with mentioning the phrase (Not To Order) or any other…

A Cheque drawn in favor of a named person bearing the expression ('Or to Bearer') or any other expression denoting this meaning is deemed a Bearer Cheque, and if the name of the beneficiary is not indicated, the Cheque i…

A Cheque payable in the State that includes a condition (Non-Negotiable) is payable only to the person who receives it accompanied by this condition.

1. A Cheque may be drawn to the order of its own Drawer. 2. It may be drawn to the account of another person. 3. It may not be drawn against its Drawer themselves except in the case of drawings between the branches of th…

Stipulating interest in the Cheque is deemed null and void.

The Drawer guarantees the fulfillment of the Cheque, and every condition according to which the Drawer exempts themselves from this guarantee is deemed null and void.

A debt is not renewed upon the creditor's acceptance of receiving a Cheque in payment of their debt. The original debt remains valid with all its guarantees until the value of the Cheque is paid.

1. A cheque payable to a named person, whether or not it expressly states 'to order', is negotiable by endorsement, including to the drawer or another obligor, who may re-endorse it. 2. A cheque payable to a named person…

1. The Endorser does not guarantee the payment of the Cheque unless otherwise stipulated. 2. The Endorser may prohibit its re-endorsement, and in this case the Endorser shall not be required to guarantee towards those to…

An endorsement to the Drawee shall be deemed as a discharge, unless the Drawee bank has several branches and the endorsement has occurred to a branch other than the one on which the Cheque was drawn.

An endorsement written on a Bearer Cheque makes the Endorser responsible in accordance with the provisions of recourse. However, this endorsement does not result in the instrument becoming a Cheque to Order.

1. The holder of a negotiable Cheque by endorsement is deemed to be its legal Bearer when they prove that they are the owner of the right to it by uninterrupted endorsements, even if the last one is a blank endorsement. …

If a person loses possession of a Cheque, whether the Cheque is 'To Bearer' or endorsable, the person to whom the Cheque has devolved is not required to abandon it once they prove their right in the manner set forth in A…

1. An endorsement subsequent to the protest or made after the expiry of the time limit for presenting the Cheque has no effect other than the effects of the transfer of the right. 2. The dateless endorsement shall be dee…

1. Payment of the Cheque value or part thereof may be guaranteed by a backup guarantor. 2. This guarantee shall be from a third party, except for the Drawee, and it may also be from one of the signatories of the Cheque.

1. Endorsements issued by the Drawee and partial endorsements are null and void. 2. An endorsement to Bearer is deemed a blank endorsement.

1. A cheque is payable on the date stated as its issue date and may not be presented before that date. 2. If available funds are less than the cheque amount, the drawee shall make partial payment unless the holder refuse…

1. A Cheque drawn inside or outside the State and payable in the State must be presented for payment within (6) six months. 2. The deadline mentioned in Clause (1) of this Article starts from the date indicated on the Ch…

If the Cheque is drawn between two countries of different calendars, the date of its issuance shall be the corresponding day in the calendar of the country of payment.

1. The Drawee may pay the value of the Cheque even after the expiry of the deadline for its presentation. 2. Objection regarding paying a Cheque is not accepted except in the event of its loss or the bankruptcy of its Be…

If the Drawer dies, becomes incapacitated, or becomes bankrupt after giving the Cheque, this shall not affect the provisions arising therefrom.

1. If several Cheques are presented at the same time and the funds for payment are not sufficient to pay them all, the order of their drawing dates shall be observed. 2. If the presented Cheques are separated from one Ch…

1. If it is stipulated that the Cheque be paid in a country with a currency that is not circulated in it, then its sum shall be paid on the date of its presentation in the currency in circulation in the United Arab Emira…

The obligation of the guarantor to be presented in the event of the loss of the Cheque shall expire with the lapse of (6) six months if no claim or action is made during such period.

1. If the Bearer Cheque is lost or destroyed, its owner may object to the Drawee to pay its value. The objection must include the number of the Cheque, its sum, the name of its Drawer, and every other particular that hel…

1. The holder of the Cheque referred to in Article (656) of this Law may not dispute with the Drawee regarding the objection. The Drawee must receive the Cheque from them against a receipt, then notify the objector of th…

1. If (6) six months have elapsed from the date of the objection stipulated in Article (656) of this Law without the holder of the Cheque submitting a claim for payment, the objector may, within the following month, file…

1. The drawer or holder may cross a cheque, with the effects set out in Article 660. 2. Crossing is made by two parallel lines on the face. 3. It may be general or special. 4. It is general if nothing, 'bank' or an equiv…

1. The Drawee may not pay a Cheque which bears a general crossing except to one of their clients or to a bank. 2. The Drawee may not pay a Cheque which bears a specific crossing except to the bank whose name is written b…

1. The Drawer or Bearer of the Cheque may stipulate that it is not to be paid in cash by writing the phrase (To be Credited to the Account) or any other phrase denoting this meaning. In this case, the Drawee may only set…

Subject to the provisions of Articles (659), (660) and (661) of this Law, the Cheque shall remain negotiable and have all the other characteristics of a Cheque.

1. The holder may have recourse against the drawer, endorsers and other obligors if the cheque was presented within the legal period, was unpaid and refusal was established by protest or, instead, by a dated statement wr…

Refusal to pay must be established in the manner stipulated in Clause (1) of Article (663) of this Law before the deadline for submission expires. If the submission takes place on the last day of such deadline, refusal t…

The Bearer of the Cheque reserves the right to have recourse against the Drawer even if they did not present the Cheque to the Drawee or did not make a protest or did not take an action to the same effect within the lega…

1. If a force majeure prevented the presentation of the Cheque or the making of the protest or taking an action to the same effect within the prescribed deadlines, such deadlines shall be extended. 2. The Bearer of the C…

1. A Cheque bearing a statement by the Drawee denoting that it was not paid due to insufficient or lack of balance is deemed an executive document, and its Bearer has the right to request its execution, in whole or in pa…

1. The drawee alone bears damage from paying a cheque on which the drawer's signature was forged or the text altered, unless gross fault by the named drawer caused the forgery or alteration; any contrary term is void. 2.…

1. With the exception of Bearer Cheques, a Cheque may be drawn from multiple identical copies if it is drawn in the United Arab Emirates and payable in a foreign country, or vice versa. 2. If several copies of a Cheque a…

In the case of denial and lack of a lawful excuse, the following actions shall be barred: 1. Actions of recourse by the Cheque Bearer against the Drawer, the Endorsers and others who are required to pay its value after t…

1. Even if the limitation of action period expires, the defendants shall confirm by taking oath that they are debt-free if they are asked to take it. 2. Their heirs or other successors must take an oath that they had no …

1. If an action is filed, the limitation period stipulated in Article (670) of this Law shall only apply from the day on which the last procedure thereof was taken. 2. The limitation period shall not apply if a judgment …

A fine of at least 10% of the cheque amount, subject to a minimum of AED 5,000 and a maximum of twice the cheque amount, applies to anyone who: 1. intentionally and falsely states that funds are absent or insufficient; 2…

1. Shall be punished with a fine of no less than (10%) of the value of the Cheque in question and a minimum sum of (1000) one thousand dirhams, but not exceeding double the value of the said Cheque, any person who endors…

1. Shall be punished by imprisonment for a period of no less than (6) six months, but not exceeding (2) two years, and/or a fine of no less than (10%) of the value of the Cheque in question with a minimum sum of (5000) f…

Shall be punished by imprisonment for a period of no less than one year and a fine of no less than (20,000) twenty thousand dirhams, but not exceeding (100,000) one hundred thousand dirhams any person who commits one of …

Without prejudice to any harsher penalty stipulated in any other law, life imprisonment and a fine of no less than (500,000) five hundred thousand dirhams, but not exceeding (1,000,000) one million dirhams shall be impos…

1. If the court hands down a convicting judgment in one of the crimes stipulated in Articles (674) through (676) of this Law, it may order the publication of a summary of such judgment at the expense of the convict in tw…

1. If the court passes a judgment of conviction in one of the crimes stipulated in Articles (674) and (675) of this Law, it may order the withdrawal of the Cheque Book from the convict and prevent them from receiving new…

1. If the court hands down a convicting judgment in one of the crimes stipulated in Article (676) of this Law, it must order the confiscation of the seized items that were obtained from the crime or that were used in com…

1. If the court hands down a convicting judgment in one of the crimes stipulated in Articles (673) to (677) of this Law, it may order that the convict be prohibited from practicing a commercial or professional activity f…

If a criminal action is instituted against the Drawer for one of the Cheque crimes provided for in this Law, this shall not prejudice the fact the Cheque can be compulsorily executed or taking judicial measures in accord…

1. In the cases in which one of the crimes stipulated in this Chapter is committed, in the name and account of a legal person, the person responsible for the actual management thereof shall not be punished unless it is e…

The criminal case for the crimes stipulated in Articles (674) and (675) of this Law shall be extinguished if the full or the remainder of the value of the Cheque is paid before commencing the compulsory execution procedu…