Are you aware of the potential serious consequences of issuing a bounced cheque in the UAE? A cheque is not merely a piece of paper but a legal commitment to payment. In the United Arab Emirates, cheques remain one of the most common methods of payment for both personal and business transactions. The country’s legislation strictly regulates the use of cheques, raising numerous questions among financial transaction participants. But are the legal consequences really that severe? Our experts have already prepared an answer to this and many other important questions.
What is a Bounced Cheque?
Bounced cheque occurs when the bank refuses to accept it upon presentation by the recipient, resulting in the inability to withdraw the specified amount.
A cheque can be cancelled for the following reasons:
- The drawer’s account does not have sufficient funds to cover the cheque on the date it was issued.
- The drawer instructed the bank to stop payment on the cheque.
- The cheque has been improperly signed or deliberately altered to prevent payment.
- The drawer instructed the bank to stop payment on a cheque that had already been issued.
- The drawer’s account was closed before the cheque could be presented.
What Happens If a Cheque Bounces?
In the event of a cheque being invalid, the bank must issue a return advice note to the recipient stating the reason for cancellation. The original cheque is also returned to the recipient. Following this, the presenter of the cheque may initiate legal proceedings based on a statement from the bank.
Previously, under UAE law, a bounced cheque was considered a serious criminal offence. However, recent amendments have decriminalised this act. The recipient can now file a civil lawsuit against the issuer to recover the specified amount. To prove the legitimacy of the claim, one must present the original cheque, bank statements, and any correspondence. The court may issue an order to seize the issuer’s assets to settle the debt.
Legal Framework and Changes to the UAE “Cheque Law”
The primary legislative document regulating the use of cheques in the UAE is the Federal Law No. (18) of 1993 on Commercial Transactions. It establishes the rules for issuing, transferring, presenting, and paying cheques, as well as defining the legal consequences of failing to adhere to these rules.
The UAE government has adopted Federal Decree-Law No. (14) of 2020, which has introduced significant changes to the Commercial Transactions Law regarding cheques. These amendments came into effect on 3rd October 2022. They focus on civil remedies and the imposition of financial penalties.
New Amendments to the UAE Law
Among the key changes to the Federal Law, it’s important to highlight the reduction in criminal liability and the decrease in prison time for issuing bounced cheque. Instances of cheque non-payment due to insufficient funds are no longer considered a criminal offence; instead, they are subject to civil legal measures and administrative fines. In return, civil sanctions have been strengthened, and cheque recipients have been given expanded opportunities to recover debts through civil courts.
A mechanism for partial cheque payment has also been introduced. Banks are now required to make partial payments if there are insufficient funds in the account to cover the full amount, but there are enough funds for partial coverage of the sum. The bank must provide the recipient with written confirmation of the partial payment and the remaining balance owed.
The amendments have expedited the debt collection process. A cheque is now considered an enforceable document, allowing the recipient to directly approach bailiffs without the need for preliminary court proceedings.
Criminal liability has been maintained for cases of cheque fraud, forgery, and other unlawful activities. The drawer does not have the right to stop payment on a cheque without valid reasons (loss or theft of the cheque).

How Do Legal Proceedings Unfold?
Legal proceedings involving cases of bounced cheques can encompass both criminal and civil procedures, depending on the nature of the offence.
If the cheque issuer fails to settle the amount within the grace period specified in the official notice, the next step will be to file for criminal proceedings. The claim can be submitted through the local police or directly through the prosecutor.
If the problem escalates, the matter is referred to the prosecution service and criminal court. The court assesses the situation based on the evidence provided and can impose a fine or prison sentence depending on the severity and amount involved.
Among the main grounds for criminal prosecution, the following should be highlighted:
- Issuing a cheque with no intention of paying it.
- Altering information on a cheque or using a counterfeit cheque;
- Use of cheques in violation of the agreement terms.
Among the possible consequences of bounced cheque due to insufficient funds are monetary fines, imprisonment depending on the severity of the crime, and even deportation for foreign nationals.
Within the framework of civil litigation, the cheque recipient files a claim demanding payment of the amount and compensation for damages. The parties submit documents, testimonies, and other evidence. The court hears the arguments of the parties and makes a decision.
Due to the recent changes in legislation, a cheque is now considered an enforceable document, allowing the recipient to directly approach bailiffs without undergoing lengthy legal proceedings.
Can You Still Pursue a Civil Claim?
Yes, the initiation of a criminal case does not deprive the aggrieved party of the right to file a civil lawsuit to recover the debt amount. Civil courts can compel payment, even seize property or impose additional fines if court orders are not complied with.
When filing a civil lawsuit, it’s crucial to prove that the cheque was either cancelled or bounced due to insufficient funds at the time it was presented, and also that the cancellation of the cheque resulted in financial losses or damages that require compensation.
To file a civil claim, it is necessary to gather documents that confirm the cheque debt: bank statements, business correspondence, and other materials. The claim is submitted to the civil court with an explanation of the grounds for recovery.
We recommend securing legal support from an experienced solicitor who is well-versed in local legislation and can effectively represent the plaintiff’s interests in court. A qualified lawyer will assist in preparing all necessary documents, organising evidence, and presenting the legal stance in court.
Penalties for Bounced Cheques
- Cheque Amount – under AED 50,000: AED 2,000 fine.
- Between AED 50,000 and AED 100,000: AED 5,000 fine.
- Between AED 100,000 and AED 200,000: AED 10,000 fine.
- Forgery or Counterfeiting: At least one year in jail and fines between AED 20,000 and AED 100,000.
- Seized articles related to check forgery can be confiscated.
- The court may also prohibit the convict from engaging in commercial or professional activities for up to 3 years.
- Instructing dishonour before the drawing date, closing an account intentionally, or signing a check to prohibit its honour can lead to imprisonment for a period of 6 months to 2 years.

!!! N.B.: The criminal action for bounced checks may be dropped if the entire value is paid before forced execution procedures or if conciliation is reached.
What Should You do When Facing a Bounced Cheque?
If you find yourself in a situation with an bounced cheque, it’s imperative to contact your bank immediately for an official explanation of the reason for non-payment. Determine whether the issue is technical (such as errors in filling out the cheque) or related to insufficient funds.
Then, it’s necessary to get in touch with the issuer, inform them of the issue, and request clarification. Suggest alternative payment methods or agree on a new payment deadline.
If it’s not possible to resolve the issue amicably, it’s crucial to secure qualified legal support. A professional solicitor can help determine which legal steps are sensible in your situation.
Consider mediation. A neutral mediator can help both parties reach a mutually beneficial agreement without going to court. Alternatively, you could file a claim in civil court to recover the amount of the cheque and possible compensation for damages.
A cheque can be used as an enforcement document for the swift recovery of debt through bailiffs. If there are signs of fraud or other criminal activities, file a complaint with the police.
How to Check the Status of a Bounced Cheque Sase in the UAE?
Cases involving bounced cheques in the UAE are typically heard in either civil or criminal courts, depending on the nature of the case. To check the status of a case, it is necessary to know the name of the court, the case number, the year of registration, and the names of the parties involved (plaintiff and defendant).
If you are not aware of the case number, you can obtain it through a solicitor. You can also visit the court office with identification documents and proof of your relation to the case.
You can check the status of the case on the UAE Ministry of Justice portal – www.moj.gov.ae. To do this, you need to register or log into an existing account, navigate to the “E-Services” section, select the “Check Case Status” option, and enter the required information: case number, year, and name of the court.
In addition, each emirate has its own judicial portal. For example, Dubai – www.dc.gov.ae. Abu Dhabi – www.adjd.gov.ae. The steps are similar: registration, selection of service, data entry, and status receipt.

Conclusion: Why Should You Care?
Issuing a bounced cheque isn’t just a financial blunder; it’s a legal matter that can damage your financial reputation and legal status. With the laws now leaning towards financial penalties and reducing imprisonment, it’s vital for anyone involved in financial transactions in the UAE to grasp these subtleties. If you’re caught up in a bounced cheque situation, whether as the victim or the accused, it’s crucial to seek advice from a specialised solicitor. These legal issues demand professional expertise to make sure your rights and interests are properly safeguarded.
Regrettably, “bounced cheques” can not only result in criminal prosecution at the national level in the UAE but also lead to the issuance of an Interpol Red Notice. Our solicitors have a wealth of successful experience in dealing with such matters, removing the details of the individuals concerned from Interpol’s records.
INTERPOL INVOLVEMENT
Unfortunately, “bounced cheques” can not only result in criminal prosecution on the national level in the UAE, but also lead to issuing an Interpol Red Notice. Our lawyers have extensive successful experience in handling such matters removing the data of individuals concerned from Interpol’s files.