This is page 1 of the Word document, exactly as it appears when you open it. Fields shown like THIS are placeholders for you to complete.
Notes for use
These notes accompany the template and explain the drafting choices, the compliance points and the mistakes most often made with this document. They appear as a final page in the Word file, intended to be deleted before the document is executed.
The cheque position changed — verify it
Dishonoured cheques were historically pursued through the criminal courts, and that shaped how credit was extended across the UAE. Reforms taking effect in 2022 substantially changed the position, with a dishonoured cheque capable of being treated as an instrument of execution permitting enforcement without full proceedings. This is the most misreported area in UAE practice — confirm the current route with a UAE lawyer rather than relying on either the old assumption or a general impression that cheques no longer matter.
Establish the jurisdiction before anything else
Onshore emirate courts, DIFC courts, ADGM courts, free zone mechanisms and arbitration are genuinely different forums with different languages, procedures and costs. The contract usually determines it. Filing in the wrong one wastes the fee and the time and can prejudice the claim.
Call before you write
A large share of overdue invoices are administrative — wrong address, absent approver, missing purchase order reference. A phone call resolves those at no cost to the relationship. Reserve the letter for genuine non-payment.
Name the correct entity
Trading names are not legal entities. Take the details from the current trade licence, and check whether the contracting party is the mainland entity, a free zone entity or a group affiliate. Suing the wrong one is a common and avoidable waste.
Get the arithmetic right
Credits, part payments and disputed lines must all be reflected. A demand for a figure the debtor can disprove hands them the initiative and undermines everything else in the letter.
Only threaten what you will do
A letter threatening immediate proceedings followed by months of silence teaches the debtor the threat is empty, and devalues every subsequent letter. State only what you are prepared to follow through.
Leave a route to resolve
Paragraph 5 invites either a substantive dispute or a payment proposal. Most commercial debts settle rather than litigate, and a letter that closes off discussion makes settlement harder without making recovery more likely.
An acknowledgement of debt is valuable
Where a payment plan is agreed, document it with a written acknowledgement of the amount owed. It makes the debt far easier to prove and may affect the limitation position. It costs one email.
Watch limitation
Limitation periods vary by claim type and can be shorter than expected for certain commercial claims. Debts sitting on a ledger become unenforceable quietly. Diarise the position at the outset and take advice where the debt is ageing.
Assess recoverability before spending
A judgment against a company with no assets is an expensive piece of paper, and enforcement against a debtor who has left the UAE is harder still. Check the debtor’s standing, licence status and any known enforcement against them before committing to proceedings.
Arabic translation is a real cost and a real delay
Onshore proceedings run in Arabic and documents require legal translation. For a document-heavy claim this is a significant line item and takes time. Factor it into the decision to litigate, and into the settlement calculation.
Check the dispute resolution clause first
Where the contract requires arbitration or names a specific forum, commencing elsewhere can lead to a stay and an adverse costs order. Read the clause before choosing the route — it is the cheapest step in the whole process.
Consider VAT bad debt relief
Where VAT has been accounted for on a supply that is never paid for, relief may be available on write-off subject to conditions. It is routinely forgotten and it is real money.
Fix the cause, not just the symptom
A debt that reached a letter of demand usually reflects a credit control gap — no credit check, terms never agreed, invoices issued late, no follow-up until ninety days. Step 10 asks the question that prevents the next one.
Current as of
Reflects UAE law and practice current as of {{DATE OF USE}}. **The treatment and enforcement of dishonoured cheques changed materially in 2022 and continues to develop.** Limitation periods, court procedures, payment order requirements, DIFC and ADGM jurisdiction and VAT bad debt relief conditions all change — take UAE legal advice before commencing any recovery action.
This is a ready-to-use template provided for convenience. Laws and requirements change, and every situation is different — please have it reviewed by a qualified professional (a lawyer, corporate secretary, or accountant as relevant) before you rely on it.