A construction company in Munich was owed AED 1.2 million by a Dubai developer. They had a signed contract, twelve months of unpaid invoices, and an email from the debtor's MD acknowledging the amount. Open and shut, their German lawyer said. File in Dubai Courts.
Eighteen months later, they'd spent €40,000 on legal fees, attended zero hearings (their lawyer attended — they watched from Germany), and recovered nothing. Not because the case was weak. Because their legal team filed in mainland courts when the contract specified DIFC jurisdiction. By the time they refiled correctly, the developer had restructured into a new entity and the original company held no assets.
The debt was real. The evidence was solid. The legal strategy was wrong — and wrong in Dubai doesn't mean a setback. It means the money is gone.
How Dubai's Court System Works for Debt Collection
Dubai has two parallel court systems, and filing in the wrong one is the most expensive mistake a foreign creditor can make.
Dubai Courts (mainland). Civil law system, proceedings entirely in Arabic. Handles cases where the debtor is registered on the Dubai mainland or where the contract doesn't specify alternative jurisdiction. Three tiers: Court of First Instance, Court of Appeal, Court of Cassation. A straightforward debt claim typically takes 6-12 months through First Instance, though payment orders for undisputed debts can move faster.
DIFC Courts. English common law system, proceedings in English. Handles cases where the contract contains a DIFC jurisdiction clause, where one party is registered in the DIFC, or where both parties agree to DIFC jurisdiction. Faster, more familiar to international creditors — but only available for eligible cases. Filing here when your case belongs in mainland courts wastes months and money.
The choice between these two systems depends on your contract terms, the debtor's registration, and the specific circumstances. Getting it wrong doesn't just delay recovery — it can destroy it. A local legal team makes this determination in the first consultation. A foreign lawyer researching UAE jurisdiction from overseas is guessing, however educated the guess.
The Legal Debt Collection Process: Stage by Stage
Pre-Court: The Formal Demand That Creates Legal Standing
Before any court filing, UAE procedure requires a formal demand — a notarised legal notice to the debtor specifying the amount owed, the contractual basis, and a deadline for payment (typically 15-30 days). This isn't optional. Judges expect to see it. It also serves a practical purpose: roughly 30-40% of cases settle after a formal legal demand, making court proceedings unnecessary.
The demand must be drafted in Arabic for mainland proceedings and should reference the specific legal provisions being relied upon. A demand issued by a licensed UAE collection agency with integrated legal capability carries more weight than one from an overseas law firm — because the debtor knows the agency is five minutes away and the court filing is already being prepared.
Filing: Payment Orders vs. Full Proceedings
For undisputed debts — where the debtor acknowledges the amount but simply hasn't paid — Dubai Courts offer a payment order procedure (similar to a summary judgment). This is faster and cheaper than full proceedings, typically resolving within 2-4 months. The debtor can object, which converts the case to full proceedings, but frivolous objections are apparent to judges and can backfire.
For disputed debts, full proceedings are necessary. This involves written submissions, document disclosure, possible expert appointment, and hearings. Timeline: 6-12 months at First Instance. The key is having a legal team that presents the case in the language and format that UAE judges expect — not translated from a Western legal framework, but built for this jurisdiction from the ground up.
Enforcement: Where Judgments Become Money
Winning a judgment is half the battle. Enforcing it is the other half — and in Dubai, the enforcement toolkit is more powerful than most international creditors realise.
Bank account attachment. The court freezes the debtor's bank accounts across UAE banks. This is often the fastest path to payment — a company that can't access its accounts resolves the judgment quickly.
Travel ban. The court restricts the debtor's directors from leaving the UAE. In a jurisdiction where business owners routinely travel between countries, this is extraordinarily effective. A director facing a Dubai trip that becomes indefinite until a judgment is satisfied tends to find payment solutions rapidly.
Asset seizure. Physical assets, vehicles, equipment, and real property can be attached and sold to satisfy the judgment.
Company winding-up. For substantial debts, petitioning to wind up the debtor's company is the nuclear option — and the threat alone often produces settlement.
An experienced enforcement team knows which tools to deploy in which sequence for maximum pressure. The strategy isn't one-size-fits-all — it depends on the debtor's assets, business model, and pressure points.
What Legal Debt Collection in Dubai Actually Costs
Court fees in Dubai are calculated as a percentage of the claim value — typically 7.5% of the claimed amount, capped at AED 40,000 for mainland courts. DIFC Courts have their own fee schedule. Add legal representation fees, translation costs (for mainland proceedings), and potential expert fees.
For a claim of AED 500,000, expect total legal costs in the range of AED 50,000-80,000 including court fees and legal representation. This is why debt age matters so critically: pursuing a well-documented AED 500,000 claim at 90 days overdue (80% recovery probability) is a fundamentally different calculation than the same claim at 12 months (under 25% probability).
Most agencies with integrated legal capability structure fees to align their interests with yours — contingency components where they earn more when you recover more. Ask about this explicitly. An agency that only charges fixed legal fees regardless of outcome has less incentive to fight for every dirham. Compare how different agencies structure their fees before committing.
Three Legal Mistakes That Cost Foreign Creditors the Most
Filing in the wrong jurisdiction. Mainland vs. DIFC is the obvious one, but free zone complications add another layer. A debtor in JAFZA, DMCC, or DAFZA may have specific dispute resolution procedures that override standard court filings. Getting jurisdiction wrong doesn't just delay — it can require starting the entire process over, during which the debtor restructures or moves assets.
Using a foreign law firm without local execution capability. International law firms provide excellent legal analysis. But analysis without local execution — someone who can file in Arabic, appear in Dubai Courts, and manage the enforcement process — leaves a gap the debtor exploits. The debtor's question is always the same: can this creditor actually follow through in my jurisdiction? If the answer is "not without several intermediaries and months of coordination," the debtor waits.
Treating legal action as a last resort instead of a timeline. Many creditors exhaust every amicable option before considering legal proceedings, by which point the debt is 9-12 months old and recovery probability has halved. Legal action isn't a last resort — it's a timeline. The faster you can credibly threaten and execute legal proceedings, the more likely the debtor settles before you need to.
Frequently Asked Questions
Can I file a case in Dubai Courts from overseas?
Not directly. You need a UAE-based legal representative with a notarised, attested power of attorney. The POA must be notarised in your home country and either apostilled (for Hague Convention countries) or embassy-attested (for non-Hague countries). An agency with legal capability provides POA templates and guides you through the process — most creditors complete it within 5-7 business days.
What if the debtor files a counterclaim?
Counterclaims are common — particularly fabricated ones designed to delay proceedings. An experienced legal team recognises tactical counterclaims immediately and responds appropriately, preventing the debtor from converting a straightforward debt recovery into a prolonged commercial dispute. Judges in Dubai Courts see this tactic regularly and are generally unsympathetic to counterclaims that appear only after collection proceedings begin.
How long does enforcement take after getting a judgment?
Bank account attachment can be executed within days of a judgment becoming enforceable. Travel bans similarly. Asset seizure and sale takes longer — typically 2-4 months. The total timeline from judgment to cash depends on the debtor's assets and cooperation. Some debtors pay immediately when enforcement begins. Others require the full toolkit. An experienced enforcement team adjusts tactics based on debtor behaviour rather than following a rigid script.
Ali Saidi
Veteran debt collection expert, renowned for his mastery of B2B debt recovery in the Middle East. Based in Dubai for the past 15 years,has spearheaded debt recovery for global giants like Emirates Airlines, Aramco, and HSBC. His key achievements include recovering $15 million from a Saudi-based construction firm and securing a $7 million settlement for a Dubai logistics company in record time.
