Debt Collection in United Arab Emirates

As a preliminary remark, please note that this guide concerns only the civil law Arabic courts of the UAE and does not deal with the common law English courts of the UAE such as the DIFC and the ADGM Courts.

There is no minimum amount required to initiate legal proceedings in the United Arab Emirates (UAE). In general, we consider a claim under €3,000.00 to be uneconomical due to the costs involved in its collection.

In the UAE the amount of the debt does not determine the procedure. However, the nature of the debt may allow the creditor to seek an accelerated procedure as explained below.

If the creditor's debt is confirmed electronically or in writing and is urgent, and the entire debt is a debt of a specified amount or a movable asset of a specified type and value, and the debt instrument is a commercial contract or commercial paper other than a cheque, the creditor can obtain a payment order from the judge after serving the debtor with a notice to pay the amount due within a period of at least five days.

The payment order is usually issued within a maximum of 3 working days from the filing of the request.

In addition, a debt arising from a bounced cheque allows the creditor to apply directly for a writ of execution.

Service of a notice on the debtor is mandatory in the UAE only for the issuance of a performance order. The law does not explicitly mention the content of the notice, but it states that the amount of the debt mentioned in the notice should be the same as the amount mentioned in the petition requesting the performance order.

Generally, the notice contains the full name and address of both the creditor and the debtor, the relationship that binds them, the amount of the debt, and a deadline of at least 5 days from the notice to pay the debt. It is recommended that the notice be delivered by a notary to the debtor's address.

Except for the order for payment, pre-judgment notices are not mandatory but are considered good practice. They can be sent directly by the creditor or through a lawyer.

• signed contracts outlining the obligations of each party, including party information such as address and email
• the creditor should verify that it is dealing with an existing business entity and request the other party's valid license/certificate of incorporation. If the entity is an individual, the creditor should request a valid identification document
• verbal evidence does not carry much weight and therefore it is advisable to record in writing all communications relevant to the transaction
• it is advisable to commence proceedings as soon as possible after default to ensure that there are assets to enforce against

Parties to litigation may appear in person or be represented by an attorney through a Power of Attorney ("POA"), which should be executed before a notary public. If the POA is executed abroad, it should be notarized at the UAE embassy in that country and then certified by the UAE Ministry of Foreign Affairs.

Usually, the appointed lawyer will draft the POA, which will give him all the necessary powers to claim and collect the debt. POAs can be revoked by the principal at any time and the UAE does not recognize irrevocable POAs.

Although the presence of a lawyer is not mandatory, we advise the appointment of a lawyer to represent the creditor in cases where the value exceeds € 3,000.00. Proceedings are conducted in Arabic and all submissions and evidence should be in Arabic. The court can provide an English-to-Arabic translator during hearings if needed.

The case is filed online and is officially registered and assigned a case number upon payment of the court fees, either online or by depositing a check at the court premises.

If the creditor is seeking a performance order, the creditor should attach to the petition documents proving the relationship between the creditor and the debtor and evidence of the value of the debt and that it is outstanding.

In the ordinary procedure of claiming a debt, the creditor should submit evidence to support his claims. Oral statements are accepted as evidence in cases where the debt does not exceed €12,873.

As there is no document discovery procedure in the UAE as in common law jurisdictions, the courts rely on court-appointed experts in the vast majority of cases to determine the facts of the case. Experts are usually entitled to take evidence from parties and other entities. Their reports are not binding but carry considerable weight in the eyes of the courts.

If the debtor denies the debt or ignores the legal notice, and the creditor has sufficient evidence to support his claim, the creditor can proceed with the case.

Once the court has issued the order for payment against the debtor, the latter may file an appeal against the order for payment, if its value is within the limits of the jurisdictional amount of the courts of first instance (€12,873), within (15) fifteen days from the date of notification of the order to the debtor and from the date of notification of the decision to the creditor. The appeal shall be heard by the competent court judge.

If the value of the order exceeds the jurisdictional amount of the courts of first instance, the debtor may appeal against the order in accordance with the procedures and time limits prescribed for appeals against judgments.

If the debt has been pursued through the ordinary procedure and the court subsequently issues a decision requiring the debtor to pay the outstanding debt, the debtor retains the right to appeal in accordance with the provisions of the applicable law.

If the debtor fails to make the required payment in accordance with the court's decision, enforcement proceedings will be initiated against the debtor only if the debtor does not file an appeal or if the decision of the appellate court is issued.

The creditor may, during the judicial proceedings or prior to their commencement, request a precautionary attachment of the debtor's property and assets in the UAE.

1. If the creditor fears losing the guarantee of his right, in any of the following cases:
• if the debtor does not have a stable residence in the State
• when the creditor fears, on the basis of serious evidence, that the debtor will abscond or smuggle or conceal his funds
• f there is a risk of the debt securities being lost.
2. If the creditor is in possession of an official or ordinary document for a debt that is payable and not subject to any condition, or if he is in possession of an unenforceable judgment if the debt established therein is of a certain amount.

In all cases, the UAE court may, before accepting the application for seizure, request any statement, evidence, or affidavit, make a brief investigation or the necessary investigations with the assistance of the competent administrative authorities, if it deems it necessary. In addition, the enforcement judge may prohibit the person against whom enforcement is sought from traveling prior to service of the enforcement order if he finds evidence that the debtor intends to leave the country.

In general, obtaining a precautionary attachment against the debtor and his assets is a challenging task because the UAE court applies the law strictly.

After obtaining a court order or decision ordering the debtor to pay the debt, the creditor starts the enforcement procedure. If, despite the commencement of the enforcement proceedings, the debtor still fails to comply with the payment obligation, the creditor may obtain a judicial declaration confirming the debtor's failure to comply with the debt repayment obligations, which may be used for tax purposes.