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22 Apr 2020

Debt recovery: How to avoid protracted Court proceedings


Stephenson Harwood’s Middle East team provide top tips on how to quickly recover debt in the UAE.


The strategy we set out in this bulletin is intended to crystallise the debt in the eyes of the national courts of the UAE making recovery of the debt quicker than it otherwise might be.

Issue letters of demand

Firstly, creditors should always issue letters of demand attested and notarised by the Notary Public in dual English and Arabic (for additional guidance on notarising and executing documents remotely please see our note on ‘Notarising documents remotely in Dubai’). This will make starting proceedings in the UAE Courts much easier. Please note, a letter of demand not sent via the Notary Public, even if issued on a law firm’s letterhead, does not have the same authority as a letter issued via the Notary Public. The letter should specify the outstanding payable debt, the nature of the transaction from which debt arose and the number of days by which payment should be made.

Obtain post-dated cheques

Assuming a creditor responds favourably to a demand letter, creditors should ask the debtor to pay using a post-dated cheque or, if splitting the debt across many weeks/months, a series of post-dated cheques. Cheques crystallise the debt and the obligation to pay the debt making enforcement easier. Also, bounced cheques attract criminal prosecution in the UAE and so the enforcement of bounced cheques is also quicker and easier.

Sign settlement agreements

If post-dated cheques cannot be obtained, the creditor should try and negotiate terms for payment of the debt with the debtor. If terms can be agreed, the agreement should be recorded in a formal settlement agreement.

The creditor should ask the debtor to agree to the settlement agreement being attested and notarised by a Notary Public, as this will formally crystallise the debt and the obligation to pay.

If the debtor will not agree to the notarisation of the settlement agreement, it is still preferable to have a settlement agreement in place. Simple agreements by email or letter should always be avoided.


It is important that creditors engage with debtors as soon as possible otherwise creditors may fall behind other creditors seeking payment. Also, creditors must retain all underlying documentation related to the debt claimed.

For further information relating to recent legislation and stimulus packages introduced in response to the COVID-19 outbreak, which will impact both creditors and debtors, please see our special edition of ‘Going Concerns’ on ‘Surviving the lockdown’.  This comparative guide provides an overview of the measures available in the UAE, Singapore, the People’s Republic of China, Hong Kong, and the United Kingdom.


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