Recent updates to the UAE Civil Procedure Code in 2018 have resulted in improved access to claiming unpaid debts against defaulted debtors. The new procedure known as the "Payment Order" procedure, can be used effectively to obtain enforceable judgments against such debtors. Payment Orders can be submitted under an expedited process.
Key advantages of Payment Orders are:
- Ex-parte judgment (i.e without notice to debtor);
- Written admission of debt, even communication such as email, can be claimed against a debtor;
- Once obtained, a decision under the Payment Order can be used to initiate immediate enforcement against the debtor;
- A claimant can claim interest on the outstanding debt from the date of judgment;
- The Court is required to issue its decision within 3 days of the claim being submitted, and the debtor has 15 days to appeal such an order.
Process & Requirements:
- The admission of debt must be evidenced clearly and unequivocally through any form of written or electronic communication;
- The claimant must give the debtor at least 5 days to make payment from the date of issuing a demand notice.
Where the creditor possesses an unequivocal admission of debt from the debtor, payment orders have proven to be an effective mechanism for immediate recovery of debt. The Payment Order development is also a reason for debtors to be cautious when negotiating a settlement in good faith as such negotiation discussions could be used against them in a Payment Order case.
The Payment Order process is now an accepted mechanism in the UAE Courts, our lawyers have been successful in obtaining numerous successful Payment Order judgments for our clients.
Originally published Feb 23, 2021
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
