A cheque returned because the account is frozen or suspended is not an execution title; a closed account is

The principle

To be enforced directly, a cheque must be sufficient in itself as an execution title and the right it embodies must be certain, liquidated, due, not seriously disputed and not conditional. Under Article 667 of the Commercial Transactions Law, read with the December 2023 decision of the Federal and Local Judicial Principles Unification Authority, a cheque returned for no funds, insufficient funds or a closed account qualifies. A frozen or suspended account is different: it is stopped temporarily and resumes when the cause ends, so a cheque returned for that reason is not an execution title.

The case and the decision

The holders of a cheque for AED 225,000, given for the use of property under an investment contract, placed the executory formula on it after it was returned unpaid on 23 April 2024 with the bank's note that the account was 'frozen or suspended'. The drawer objected, arguing that there was no execution title and that the cheque was not due because she had been unable to use the property owing to a municipal ban on transactions. The execution court cancelled all execution measures and closed the file, and the Court of Appeal upheld that ruling. The holders appealed in cassation, arguing that a frozen or suspended account, like a closed account, means that the cheque cannot be paid and should be treated as lack of funds, as the Federal and Local Judicial Principles Unification Authority had decided in Request No. 1 of 2023.

The Court of Cassation dismissed the appeal. A cheque used as an execution title must be sufficient on its own, and the right must be certain, liquidated, due, free of serious dispute and not subject to a condition or term. Article 667 of Federal Decree-Law No. 50 of 2022 makes a cheque marked by the drawee as unpaid for lack or insufficiency of funds an execution title, and the Unification Authority's decision of 21 December 2023 treats 'account closed' as equivalent. Closure means ending the account permanently, stopping all operations and liquidating it to fix a final balance. Freezing or suspension means stopping its operation temporarily or for a set period, after which it resumes; a frozen account is not closed. Although freezing also prevents payment of a cheque during that period, the Unification Authority's principle on closed accounts does not extend to frozen or suspended accounts. The cheque was therefore not an execution title.

Laws applied

In the court’s words

“أما تجميد الحساب أو وقفه فيقصد به وقف تشغيله بصورة مؤقتة أو لمدة محددة على أن يستأنف الحساب نشاطه بعد زوال أسباب الوقف”

Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.

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