Abu Dhabi Court of Cassation (General Assembly), Request No. 4 of 2023 (Commercial), decision of 30 October 2023
Article 667(1) of the Commercial Transactions Law makes a cheque that the bank has marked as unpaid for lack or insufficiency of funds an execution title that the holder may enforce directly. Because this departs from the rule that a returned cheque needs a court order before enforcement, it is construed strictly and limited to those two cases; other reasons for return, such as a closed account, do not qualify. The collection notes that the federal and local judicial principles unification body later reversed this, treating account closure as equivalent to no funds.
The Second Commercial Chamber asked the General Assembly to resolve conflicting rulings on when a returned cheque counts as an execution title (سند تنفيذي) that can be enforced directly through the execution judge. Article 667(1) of Federal Decree-Law No. 50 of 2022 provides that a cheque on which the drawee bank has recorded that there are no funds or insufficient funds is an execution title, and the holder may enforce it wholly or partly by compulsory means. Article 682 adds that criminal proceedings against the drawer do not affect the cheque's enforceability or the holder's right to compensation. Some judgments (appeals 173, 301 and 333 of 2023) confined the execution-title route to those two grounds of return; another (appeal 460 of 2023) treated return because the account was closed as equivalent to lack of funds, so that a drawer could not escape the cheque by deliberately closing his account.
The General Assembly reasoned that, under Article 212(1) of the Civil Procedure Law, compulsory execution requires an execution title for a certain, liquidated and due debt, and that a returned cheque is not, as a rule, an execution title until the holder obtains a court order. Article 667 is an exception, introduced to shorten recovery where the cheque value is usually due. Exceptions are not extended by analogy, to protect the debtor from being surprised by execution before the dispute is decided and to keep the execution system free of disputes that belong before the trial courts. It therefore adopted the principle that the executory formula may be placed on a cheque only where it was returned for no funds or insufficient funds.
A note in the official collection records that this principle was abrogated by the decision of the Federal and Local Judicial Principles Unification Authority in Request No. 1 of 2023 on 21 December 2023, which held that closure of the account is equivalent to lack or insufficiency of funds, so that the cheque is an execution title in any of those cases.
Direct enforcement of bounced cheques through the execution judge has been the main recovery tool since cheque crimes were largely decriminalised. This Abu Dhabi ruling narrowed that route to returns for no or insufficient funds, but the official collection itself flags that the national principles-unification body reversed it within weeks, so a cheque returned because the drawer closed the account is now also directly enforceable. The decision is useful mainly to show how that point was settled.
| Articles 667(1) and 682 of Federal Decree-Law No. 50 of 2022 (Commercial Transactions Law) — text of articles 667, 682 |
| Article 212(1) of Federal Decree-Law No. 42 of 2022 (Civil Procedure Law) — text of article 212 |
| Articles 10(1) and 10 bis (1) to (3) of Abu Dhabi Law No. 23 of 2006 on the Abu Dhabi Judicial Department, as amended |
“الاعتداد بالمبدأ القضائي بقصر وضع الصيغة التنفيذية على حالتي الشيك بدون رصيد أو عدم كفاية الرصيد فقط”Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.
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