Individuals and companies in the UAE often find it difficult to deal with unpaid debts. A customer may not pay an invoice, a borrower may stop making repayments, or a company may not pay for goods or services that were already delivered. If informal reminders do not work, the creditor may need to consider formal debt recovery in the UAE.
The right way depends on what documents are available, whether the debtor disputes the amount and whether the debt is already due. Understanding these points from the start will help creditors avoid unnecessary delays and choose the right recovery process.
When Does a Payment Dispute Arise?
A payment dispute generally arises when one party claims that money is due and the other party either refuses to pay, delays payment or challenges the obligation.
For example, an unpaid invoice dispute in Dubai may arise because:
The first question is therefore not merely whether an invoice remains unpaid. It is whether there is sufficient evidence to establish the underlying obligation.
Evidence Is Important in Debt Recovery
Creditors should keep all documents pertaining to the transaction. These could be contracts, purchase orders, invoices, delivery notes, account statements, payment schedules and written acknowledgements of debt.
Emails, WhatsApp messages and other electronic communications may also be relevant. Federal Decree-Law No. 35 of 2022 concerning Evidence in Civil and Commercial Transactions expressly recognises electronic evidence, including electronic correspondence and modern means of communication.
A clear written record can be particularly important where the debtor later alleges that the amount was never agreed or that payment was not yet due.
Starting With a Formal Payment Demand
Before commencing court proceedings, a creditor will normally review the contractual payment terms and send a formal demand requesting payment.
The notice should clearly identify the debt, the amount outstanding, the basis on which it became payable and the deadline for payment.
This stage should not be treated as a formality. A properly prepared demand may resolve the matter without litigation and can also create a clear record showing that the debtor was given an opportunity to pay.
Mrs Awatif Al Khouri often recommends reviewing the entire transaction before sending the demand, particularly where there are several invoices, partial payments or competing claims between the parties. This helps ensure that the amount being demanded can be properly supported if proceedings become necessary.
Payment Orders for Clear Debts
Not every unpaid debt requires a full civil or commercial lawsuit.
The UAE Civil Procedure Code, Federal Decree-Law No. 42 of 2022, provides a payment order procedure for qualifying debts. The legislation includes circumstances where the debt is for a known amount, is due for payment and is not dependent on a condition.
This procedure can be useful where there is strong documentary evidence establishing a straightforward payment obligation.
However, a payment order will not necessarily be appropriate simply because an invoice exists. If the debtor genuinely disputes the contract, performance, calculation of the debt or another material issue, the dispute may require an ordinary court claim.
The correct procedure should therefore be considered carefully before filing.
Filing a Civil or Commercial Claim
Where the debt is disputed, the creditor may commence proceedings before the court having jurisdiction over the matter.
The claim will generally need to establish:
- the legal relationship between the parties;
- the obligation giving rise to payment;
- performance by the creditor, where relevant;
- when the amount became due;
- the amount that remains unpaid; and
- the evidence supporting the claim.
For commercial debt collection in the UAE, Federal Decree-Law No. 50 of 2022 concerning the Commercial Transactions Law may also apply where the transaction is commercial in nature. The law applies to merchants and commercial activities, including commercial activities conducted electronically or through modern technological means.
The Civil Transactions Law, Federal Decree-Law No. 25 of 2025, came into force in 2026 and is a significant part of the UAE framework governing contractual rights and obligations, which also governs general contractual and civil obligations.
What Happens After a Judgment?
Obtaining a judgment does not always mean that payment will immediately follow.
If the debtor does not voluntarily comply with an enforceable judgment or order, the creditor may proceed to the execution stage. Depending on the circumstances and the assets available, enforcement measures can potentially be directed against assets or funds belonging to the judgment debtor in accordance with the Civil Procedure Code.
This is why debt recovery should be considered from a practical perspective from the beginning. A creditor should consider not only whether the claim can succeed, but also whether there is a realistic route to enforcement.
Can the Parties Still Settle?
Yes. Settlement can remain an option even after a payment dispute has escalated.
The parties may agree on instalments, a reduced settlement amount, revised payment dates or another arrangement suitable to their circumstances. Any settlement should be carefully documented so that the amount payable, deadlines and consequences of non-payment are clear.
For businesses, a commercially sensible settlement may sometimes be preferable to prolonged proceedings, particularly where the parties wish to preserve an ongoing relationship.
Conclusion
Debt recovery in the UAE can range from a straightforward demand for an admitted debt to a contested commercial case involving contracts, invoices and questions about performance.
The most appropriate approach will depend on the evidence, the nature of the debt and the debtor’s response. Therefore, creditors should retain their documents, move quickly and identify the correct recovery process before commencing proceedings.
Guidance from an experienced UAE disputes lawyer such as Mrs Awatif Al Khouri can also help determine whether the matter is suitable for negotiation, a payment order, ordinary court proceedings or enforcement measures. A careful assessment at an early stage can often make the debt recovery process more focused and effective.
