Calling It a Security Cheque Isn’t Enough: UAE Court of Cassation Sets the Record Straight

neetudc
Aug 8
3 min read

Introduction

Just because a case involves a cheque doesn’t mean it’s a commercial case. And not every cheque can be treated as a guarantee.

A recent judgment from the Abu Dhabi Court of Cassation (Case No. 133-2025, issued on 6 August 2025) makes that point loud and clear. The ruling draws a sharp line between civil obligations like personal loans — and commercial disputes. It also reminds us that courts deal in facts and law, not just what parties claim after things go wrong.

If you’ve ever loaned money, signed a cheque, or found yourself defending a bounced one — this decision matters.

What the Law Says

Under UAE law, a cheque is presumed to be a method of payment. It’s not automatically a guarantee. If someone wants to say otherwise, the burden is on them to prove it.

The borrower in this case received AED 1.6 million as a loan. He repaid AED 500,000 and gave a cheque for the rest. But he didn’t pay. When sued, he said the cheque was just a guarantee and argued that the case should’ve gone to the Commercial Court, not the Civil Court. He also claimed the debt was time-barred and even accused the lender of forging the loan document.

The court rejected all of it. Here’s why:

The lender didn’t sue based on the cheque. He sued based on the loan agreement — a civil contract.
That meant the Civil Court had jurisdiction, not the Commercial Court.
The two-year limit on cheque claims didn’t apply — because the case was about the original debt, not the cheque.
The borrower’s forgery claim failed — a court expert confirmed his signature on the loan acknowledgment.
The court didn’t need a second opinion once it had reliable expert evidence.

Steps to Comply

If you're lending money, accepting post-dated cheques, or relying on informal agreements, here’s how to avoid trouble later:

Get it in writing - Even if it’s a friend or family member — make sure the loan terms are signed and clear.
Know what your cheque represents - Is it a payment? A guarantee? Courts assume it’s a payment unless you prove otherwise.
Choose how you sue - You can either sue on the cheque (which has strict timelines), or sue based on the underlying loan. You can’t mix the two once you pick your path.
Keep records and timelines straight - Don’t rely on memory. Don’t delay. And don’t wait for a cheque to bounce before acting.

Common Mistakes to Avoid

Calling it a ‘guarantee’ cheque after default - That’s not enough. The court will look at the deal — not just the label.
Choosing the wrong court - Commercial courts handle commercial disputes. Loans between individuals, even if cheques are involved, are usually civil matters.
Claiming forgery without proof - Courts take forgery seriously. If a handwriting expert says it’s your signature — it’s your signature.
Asking for more experts just to delay things - Once a court has what it needs, it won’t appoint more experts just to keep the case going.

How Juris Maestro Can Help

At Juris Maestro, we don’t just show up when something goes wrong. We help clients structure deals so that if things ever do go wrong, the facts — and the paperwork — hold up in court.

If you’re lending money, issuing cheques, or trying to recover a debt, we’ll guide you on what holds legally, what doesn’t, and how to move forward. We’re practical. We’re thorough. And we keep you out of avoidable disputes.

When it comes to cheques and debt claims, it’s not about what the paper says. It’s about what the law sees.

If you’re unsure — let’s talk. Before it turns into a case.