Debt Collection- Litigation
(Part 3)

In our previous articles we have covered the steps that need to be taken while pursuing a debt and how to settle a debt amicably via extra-judicial methods. Every now and then, we come across debtors that just do not want to pay you back. Now, what can a creditor do, if the debtor is not ready to budge and clearly displaying unwillingness to settle the matter and honour the debt?

Well, having exhausted all our means, as a last and final resort we can simply drag them to court. In our experience, most people/businesses are hesitant to approach the court under the impression that they may have to spend way more than they are subject to recover. But this is not the case. In our experience, if you have followed the golden rules, set out in Part 1/3 of this series, litigation would be a breeze; further, with the advent of amendments of old laws, recovering a debt has become a quick process.

You have a variety of options for how to recover your deserved payments. In this blog, we will explore all those options and how to go about with it.

As we discussed in our earlier editions, having proper documentation and maintaining a record of all payments and invoices is crucial in proving your claim. When proceeding with litigation, we will have to differ between the object of debt, ie, bounced cheques and outstanding invoices.

A. Outstanding Invoices

In the case of outstanding invoices, you have the option of proceeding either of the following ways;
Dispute claims and Commercial claims.

To proceed under these claims, your appointed attorney will file for a dispute case for any matter wherein the claim amount is less than AED 500,000. For any matter beyond AED 500,000 the matter shall come under the jurisdiction of commercial claims. Your matter will go through the three degrees of courts, namely, first instance, appeal and execution. You can file for dispute and commercial claims if you do not have records of certified invoices.

Payment Order

In case you have all certified invoices for the outstanding, the procedure for recovering the debt becomes quick and easy, recoverable within merely 7 days. This method can also be used in case of bounced cheques wherein the reason for return is anything other than “insufficient funds”.

The court serves a notice upon the counterparty and thereafter proceeds with the execution step.

B. Bounced Cheques

As we discussed hereinabove you can proceed with payment order in case of bounced cheques for any other reason in besides “insufficient funds”, however, if the reason for return is “insufficient funds” your recovery is fast-tracked by The Federal Law No. (14) of 2020 Amending certain provisions of the Federal Law No. (18) of 1993 concerning the Commercial Transactions Law.

Cheque Execution

Under the cheque execution procedure, you can simply file an application for and e-register the execution until the application is approved and proceeding immediately with investigation of the debtor’s assets with the concerned authorities such as the Central Bank, the Roads and Transport Authority, the Land Department, the Economic Department, and the Financial markets; after carrying out such investigation, the assets of the debtor can be attached by precautionary attachment by order to freeze and/or auction the debtor’s assets and thereafter with the following executionary procedures and settlement.