Banking and insolvency
Banking, Finance and Insolvency
The card is declined at the till and the app shows the account as restricted. Nobody at the branch will say why and the call centre reads from a script. Or the letter is about something you signed years ago, a guarantee for a company that has since stopped trading, and the bank now wants the whole balance from you personally.
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The short answer
Banking problems in the UAE usually arrive without warning. An account is frozen, a facility is withdrawn, an old guarantee is called, or a loan is handed to a recovery team who want a figure you cannot pay. This page sets out what a banking lawyer in Dubai can do in each of those situations, and where the limits are.
On this page
Ten free minutes
Enough to say whether this needs a lawyer at all.
Disputes between a bank and its customer
Most of the work our banking lawyers in Dubai do is not regulatory. It is a customer on one side, a bank on the other, and a disagreement about money that has already moved.
Transactions you did not authorise
Money leaves the account through a card you still hold, a transfer you did not make, or a beneficiary you have never heard of. The bank’s first answer is often that the transaction was authenticated and therefore yours. That is a starting position, not a conclusion. What matters is how the payment was made, what the bank’s own records show, and how quickly you reported it.
Accounts frozen, restricted or closed
A freeze and a closure are different problems. A freeze means someone has put a hold on the funds. A closure means the relationship is being ended, which a bank is generally entitled to do, but the balance still belongs to you and releasing it is the real issue. Work out which you have and who placed the restriction, because that decides where the application goes.
An account frozen because of a case somewhere else
This is the one people least expect. The account is healthy and the freeze has nothing to do with the bank at all. It follows a claim by a creditor, an execution file, or an instruction from an authority. The bank is holding the funds, not deciding the matter, so complaining to the bank rarely moves anything. The application has to be made where the underlying file sits, which usually means dealing with the creditor first. Our debt recovery and collection page covers that.
Products that were mis-sold
An investment product sold as a savings plan, or a policy with charges nobody explained. The question is what you were told, what you signed, and whether the two match. Recovering on this basis is difficult and turns on the paperwork. We will tell you early if the file does not support it.
Credit cards and personal loans
Balances that grow faster than the payments reduce them, charges applied after a payment holiday, a settlement figure that changes between calls. Before arguing about the total we ask for a full statement of account from the start of the facility and reconstruct how the figure was reached. Many demands do not survive that exercise intact.
Security, guarantees and who ends up liable
Personal guarantees given by company owners
Owners and managers routinely sign personal guarantees to obtain a company facility, often without a cap or an end date. Years later the company fails and the bank looks to the individual. Whether the guarantee works depends on its form, who signed it, whether they had authority, what it covers, and whether anything has since discharged it. It is the document we most often find has not been read since it was signed.
Cheques given as security
Security cheques are still common in UAE lending, undated or postdated, held against a facility. The treatment of a dishonoured cheque changed with reforms that took effect in January 2022, and much of the advice still circulating online describes the older position. Our bounced cheque cases in Dubai page deals with this in detail.
Guarantees, cheques and travel bans
People are told, usually by whoever is chasing them, that a called guarantee or a returned cheque automatically produces a travel ban. We do not repeat that as a statement of law. Whether such a measure can arise, at what stage and on whose application is something we answer on your file.
Restructuring a loan before it defaults
The time to renegotiate is before the first payment is missed, while the bank still has a performing account and a reason to keep it. Once the file moves to recovery the terms are worse.
A restructuring only helps if the new schedule is one the borrower can meet, and if the agreement says what happens to accrued charges, to any security and to any guarantee. One that clears the arrears but leaves the guarantee untouched has solved less than it appears to.
Insolvency
The routes available to a company
The UAE framework for companies that cannot pay their debts was replaced relatively recently, and the routes, conditions and terminology are not what they were before. For that reason we set out no procedure here. Formal routes exist, they are separate from ordinary civil claims, and the choice between attempting a restructuring and accepting a liquidation turns on the company’s actual cash position rather than its balance sheet. As an insolvency lawyer in Dubai, the first thing we look at is whether the company is trading further into liability while that decision is postponed.
Where directors stand
Directors and managers ask whether company debt can reach them personally. Usually it cannot, but there are circumstances where it can, and they turn on conduct rather than on the failure itself. Advice taken before the position worsens can still change the answer.
If you are the creditor
Once a debtor enters a formal process a creditor’s options narrow. Claims usually have to be submitted into the process rather than pursued separately, and an execution file that was progressing may stop. Creditors who continue on the old track lose time they do not have.
Personal insolvency
There is a regime for individuals in financial difficulty, and it is not the company route under another name. Whether it is open to you, and what it protects, are questions we answer on your circumstances.
Finance work outside disputes
Facility and security documents
Reviewing a facility letter, a security agreement or a guarantee before signing costs a fraction of arguing about it afterwards. As a finance lawyer in the UAE this is the least dramatic and most useful part of the work: reading what the document obliges you to do, and what it lets the lender do without asking.
Licensed and regulated activity
Lending, payments and brokerage are licensed activities in the UAE, and which authority licenses them depends on the activity and on where the business sits. If you are building a financial product, the licensing question belongs at the start of the plan, not after the launch date is set. Where the issue is company structure rather than the product, our corporate and commercial lawyers in Dubai page covers that.
Onshore, DIFC and ADGM
The financial free zones operate their own courts and rules, separate from the onshore system. Which one governs your matter is usually decided by the contract and by where the counterparty sits, and it changes the route the case takes.
How long you have to act
Claims against a bank and claims by a bank are both subject to time limits that differ by claim type. It is checked at the start of the file.
What to bring to a first meeting
Account statements covering the whole period in dispute, not only the months you are arguing about. The facility letter, loan agreement or card terms. Every guarantee or security document you signed, including ones you think are spent. Any cheque and its return slip. The written exchange with the bank, in order. For a company matter, the trade licence and the latest accounts. A short timeline with dates helps.
How we work on a banking file
We reconstruct the account and the documents before forming a view, because the bank’s summary of the position and the documents behind it are not always the same thing. Then we tell you the realistic outcome, including when that is a settlement rather than a claim. Where the dispute proceeds as a civil action, our civil litigation lawyers in Dubai page sets out the stages, and our legal fees page explains our charges.
Questions we are asked
Can a bank freeze my account without telling me?
Restrictions do get applied before the customer is told, and the branch is often not the one who applied them. The useful question is who placed it and on what file, because that decides where the application to release it goes.
I signed a personal guarantee for my company. Am I liable?
Possibly, and possibly not for the amount being demanded. Guarantees fail on their own terms more often than people expect: the wrong signatory, no authority, a cap that has been exceeded, a facility later replaced by a different one. Send us the document rather than the demand letter.
The bank rejected my complaint. Is that the end of it?
No. Banks here run an internal complaints process and there is an escalation route beyond it, separate from the option of a civil claim. Which is appropriate depends on the amount, the evidence and what you want back. Put your complaint in writing either way, because that record is what any later claim rests on.
Can I be stopped from leaving the UAE over a bank debt?
There are measures available to creditors at certain stages of enforcement. Whether any applies to you depends on the type of debt, the stage the matter has reached and what has been filed. We would rather look at your file than publish a general answer.
Do you act for banks as well as against them?
Ask us on the first call and we will tell you straight away whether we can act for you on this matter.
Speak to a banking lawyer in Dubai
If your account is frozen, if a guarantee is being called, or if a company is running out of cash, the first hour of advice is the one that changes the options.
Call +971 50 747 9570 or email help@lawyerindubai.ae with the statements and the facility documents. Our office is at Empire Height Towers, Marasi Drive, Business Bay, Dubai. You can also use the form on our contact page.
Related pages: debt collection and recovery, bounced cheque cases, corporate and commercial law, civil litigation, legal fees.
What this costs
The first ten minutes are free. After that a standard fee applies and you are told what it is, in writing, before any work starts. Court and government fees are set by the court and are separate from ours.
Tell us what happened
Ten minutes, no charge, and a straight answer about whether you need a lawyer for this.