Dubai Court of Cassation (General Assembly), Appeal No. 5 of 2023, judgment of 31 January 2024
The Civil Procedure Code distinguishes temporary enforcement disputes, which seek only a stay or continuation of enforcement without touching the right and are decided by the execution judge subject to a final grievance (Articles 209 and 239), from substantive enforcement disputes, which seek a decision on the right being enforced. Article 175(3), making appeal judgments 'in execution proceedings' not open to cassation, covers only judgments on pure enforcement steps. Appeal judgments deciding substantive enforcement disputes, such as a challenge to a cheque enforced as an executory instrument, may be challenged in cassation. The Assembly departed from judgments allowing cassation in enforcement disputes only on jurisdiction or the admissibility of the objection.
A company and its manager brought a substantive enforcement dispute against the holder of a AED 30 million cheque being enforced against them. They argued that the cheque had been handed over blank to the company's former finance manager, who passed it to the holder after both had misappropriated company funds, for which they had been convicted, and that the manager was not liable for the company's debts. The court of first instance, after an expert report, rejected the dispute, and the Court of Appeal upheld that decision. On their cassation appeal, the holder argued that appeal judgments in execution proceedings are not open to cassation under Article 175(3) of the Civil Procedure Code.
The chamber referred the appeal to the General Assembly because some judgments allowed cassation in enforcement disputes only on jurisdiction or the admissibility of the objection, while others allowed it in substantive disputes. The Assembly analysed Article 239: a temporary objection is referred to the execution judge, who decides whether to stay or continue enforcement; his decision may be challenged by grievance under Article 209(1) before the court president or his delegate within seven working days, and that decision is final; if the objection is in truth a substantive dispute, he authorises its registration within seven working days. A substantive dispute seeks a judgment settling the right being enforced. Article 175(3) therefore excludes cassation only for judgments on pure enforcement steps; judgments settling the right to enforce may be challenged. The Assembly adopted that principle by the required majority and held the appeal admissible.
On the merits, the Court of Appeal had relied on the presumption that a cheque is a payment instrument carrying its own cause, and on the drawers' failure to prove that it reached the holder unlawfully, without addressing their evidence, including a consultant's report and messages, that the blank cheque had been taken by the former finance manager, or allowing them to prove forgery. Its reasoning was inadequate. The Assembly quashed the judgment and remitted the case to the Court of Appeal.
Cheques are directly enforceable in the UAE, and disputes over them often run through enforcement proceedings. Companies resisting enforcement of cheques they say were misused can take their substantive objections to the Court of Cassation, and courts must engage with evidence that a cheque left the drawer's control unlawfully.
| Articles 175(3), 209(1) and 239 of Federal Decree-Law No. 42 of 2022 (Civil Procedure Code) — text of articles 175, 209, 239 |
| Article 20 of Dubai Law No. 13 of 2016 on the Judicial Authority in the Emirate of Dubai (referral to and majority of the General Assembly) |
“الأحكام الصادرة في إجراءات التنفيذ التي تكون فيها المنازعة منصبه على إجراء من إجراءات التنفيذ البحتة هي التي لا تقبل الطعن بالتمييز”Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.
A debtor's only home cannot be sold in execution on the ground that it exceeds his housing needs
Under Article 106(2) of the Civil Procedure Regulation (Cabinet Resolution No. 57 of 2018), the house used as a residence by the debtor and the dependants living with him…
A cheque bearing the executory formula can still be contested as a security cheque in a substantive execution dispute
A cheque is a means of payment that carries in itself the presumption of the cause for which it was handed to the payee, but the drawer may rebut that presumption, disput…
A grievance against a payment order must be heard by a judge other than the one who issued it
Under Article 147(1) of the Civil Procedure Code, a party may file a grievance against a payment order whose value is within the final jurisdiction of the first-instance …
A bounced cheque is an execution title only when returned for no or insufficient funds (later overruled federally)
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 …
Challenges to insurance-committee decisions issued before 1 December 2023 go to first instance, later ones to appeal
Federal Decree-Law No. 48 of 2023 on Regulating Insurance Activities, in force from 1 December 2023, sends challenges against decisions of the insurance dispute settlemen…
A debtor company's trade licences and other intangible business assets can be attached by its creditors
All of a debtor's assets secure its debts (Article 391 of the Civil Transactions Law), and a creditor may attach the debtor's movable and immovable property except what t…
Whether you are establishing a new venture, restructuring an existing enterprise, or exploring residency pathways — we are here to advise.
Arrange a Consultation →