Comparison between Normal Execution Cases and New Cheque Execution Cases in the UAE

In the UAE, the execution of cases related to bounced cheques has undergone significant reform, particularly with the introduction of new laws. Here’s a breakdown of the key differences between normal execution cases and the newly introduced cheque execution cases:

1. Scope and Applicability

• Normal Execution Case: Covers a wide range of civil or commercial disputes, including unpaid debts, loan defaults, and general financial claims. It requires a full court process to obtain a judgment before execution.
• Cheque Execution Case: Specifically introduced for bounced cheques under the new Federal Decree-Law No. 14 of 2020 on cheque reforms. It allows expedited procedures for cheque-related disputes without requiring a full trial.

2. Execution Process

• Normal Execution Case:
  • A creditor must first file a lawsuit in civil or commercial court.
  • The court reviews the case, and if the plaintiff wins, the judgment becomes enforceable.
  • Execution procedures, like freezing accounts or seizing assets, are initiated only after a judgment.
• Cheque Execution Case:
  • The holder of a bounced cheque can proceed directly to execution by submitting the cheque to the court, provided it meets the required conditions.
  • The cheque is treated as an “enforceable instrument,” bypassing the need for a full trial.
  • Execution orders can be issued within a shorter time frame.

3. Legal Basis

• Normal Execution Case: Based on general principles of civil or commercial law.
• Cheque Execution Case: Based on the specific legal reforms under the UAE Commercial Transactions Law (as amended). These reforms aim to streamline cheque-related disputes.

4. Timeframe

• Normal Execution Case: Typically takes longer due to the need for court hearings, evidence submission, and a final judgment before execution.
• Cheque Execution Case: Much faster, as it skips the trial phase. Execution proceedings can begin almost immediately after the cheque is declared dishonored.

5. Defenses Available

• Normal Execution Case: The debtor has the opportunity to contest the claim by challenging the validity of the debt or questioning the merits of the case during court proceedings.
• Cheque Execution Case: These cases can also be contested or appealed in court, allowing the possibility of securing a favorable outcome.

1. Security cheques are not meant to be used for initiating execution cases.
2. Discrepancies between the claimed amount and the actual amount can be a basis for challenge.
3. The timeframe in which the cheque becomes invalid may also serve as a defense.

Many individuals face difficulties in repaying their liabilities to banks due to job losses or business failures. While the newly introduced “Cheque Execution Case” follows a process similar to civil cases, there are several legal provisions that can be utilized to contest the case and potentially avoid payment obligations.

6. Objective

• Normal Execution Case: To resolve disputes through a comprehensive judicial process, ensuring all claims and defenses are considered.
• Cheque Execution Case: To enhance the efficiency and effectiveness of debt recovery in cheque-related cases, aligning with the UAE’s goal to strengthen financial security.

Summary of the Reform:

The newly introduced cheque execution mechanism in the UAE is designed to provide speedy and efficient resolution for cheque-related disputes, reducing the burden on the judiciary and supporting creditors in recovering debts faster. It reflects the UAE’s commitment to modernizing its legal and financial frameworks.