How to Recover Unpaid Contractor Invoices in the UAE

A contractor finishes the work, submits an invoice, and waits. Thirty days become sixty. Sixty become ninety. Emails go unanswered. The client raises vague objections that weren't mentioned during the project. Eventually, the contractor is left with a completed scope, an unpaid balance, and no clear path to recovery.

This happens constantly in the UAE, particularly in construction but also across professional services, technology, and trading. Payment delays are not just a cashflow problem. Left unaddressed, they become a legal problem. Limitation periods run, evidence goes stale, debtors restructure or leave the country, and what was once a straightforward claim turns into a difficult one.

At Kayrouz & Associates, our litigation and construction law teams recover outstanding payments for contractors, subcontractors, consultants, and suppliers across the UAE. This guide explains the process from first demand to final enforcement, with practical guidance on which route to take and when.

Before you do anything: get the documentation right

The outcome of any recovery effort depends almost entirely on the quality of your documentation. UAE courts are document-driven. Oral agreements and informal understandings carry far less weight than signed contracts, delivery notes, and written acknowledgments.

Before sending a demand or instructing a lawyer, gather and organise the following:

• The contract or purchase order. The signed agreement between the parties, including payment terms, scope, and any variation clauses. If the contract is in English, you will need a certified Arabic translation for court proceedings.
• All invoices. Each invoice should clearly state the amount, due date, and the work or deliverables it relates to.
• Delivery notes, completion certificates, or sign-off documents. Anything that confirms the work was done or the goods were received. In construction, an engineer's payment certificate carries significant weight.
• Correspondence about the debt. Emails, WhatsApp messages, letters, or any communication where the debtor acknowledged the amount, requested more time to pay, or raised (and then dropped) objections. Under UAE law, electronic communications are admissible as evidence.
• Any cheques received. If the client issued cheques that bounced, these create a separate (and powerful) enforcement route. More on this below.

If you don't have a written contract, recovery is still possible but harder. UAE courts recognise commercial conduct, course of dealing, and documentary evidence of performance. But the burden of proof shifts significantly, and the debtor has more room to dispute the claim.

Step 1: Send a formal demand notice

The first legal step is a written demand. This is not a friendly reminder. It is a formal notice, ideally issued through a law firm or a UAE notary public, stating the amount owed, the basis for the claim, and a deadline for payment (typically 15 to 30 days).

Why this matters legally:

For payment order applications (the fastest court route), UAE law requires the creditor to have demanded payment and given the debtor at least five days to respond before filing. Skipping this step can invalidate the application.

Beyond procedure, a well-drafted legal notice often resolves the matter without going further. Many UAE businesses pay promptly once they receive a lawyer's letter, particularly when the alternative is a court filing that generates a public record and potential asset freezes. In our experience, a significant portion of contractor payment disputes settle at this stage.

The notice should be sent by registered post with acknowledgment of delivery, or through a notary public. Keep a copy of the delivery record. You will need it if the matter goes to court.

Step 2: Consider whether settlement is viable

Not every unpaid invoice needs to become a lawsuit. Once the legal notice lands, many debtors come to the table. The goal at this stage is to agree on a realistic repayment plan and formalise it in writing.

If the debtor admits the debt but claims cash constraints, a structured settlement with clear instalments and default consequences is often more effective than litigation. The settlement agreement should include a confession of judgment or an acknowledgment of debt, so that if the debtor defaults again, enforcement becomes simpler.

If the debtor disputes the amount, raises counterclaims about the quality of work, or simply ignores the notice, negotiation has limited value. Move to enforcement.

Step 3: Choose the right legal route

This is where many contractors lose time and money by picking the wrong procedure. The UAE offers several recovery mechanisms, and the right choice depends on the value of the claim, the strength of the evidence, the contract's dispute resolution clause, and whether the debtor is likely to pay voluntarily after a judgment.

Payment order (fastest route for documented debts)

A payment order is an expedited, ex parte procedure under Articles 143 to 150 of Federal Decree-Law No. 42 of 2022 (the UAE Civil Procedures Law). It allows a creditor with a documented, undisputed debt to obtain a court order without the debtor being present.

Requirements:

• The debt must be established in writing (a signed contract, acknowledged invoice, payment certificate, or written admission of debt)
• The amount must be certain and quantified
• The debt must be due and payable
• You must have issued a prior demand giving the debtor at least five days to pay

How it works:

You file the application with the competent court. The judge reviews the evidence and must issue a decision within three days. If granted, the payment order is immediately enforceable. In Dubai, execution can begin straight away. In Abu Dhabi and Sharjah, courts generally require a 15-day waiting period.

The debtor can file a grievance within 15 days of notification, and an appeal within 30 days after the grievance window closes. But unlike a standard civil judgment, the payment order remains enforceable during the appeal process. This is a critical advantage.

Court fees in Dubai are 6% of the claim value, with a minimum of AED 500 and a maximum of AED 40,000.

When to use it: The payment order works well for straightforward contractor invoices where the work is complete, the client has acknowledged receipt (or an engineer has certified the payment), and there is no genuine dispute about the amount. It is the fastest path from filing to enforcement.

When it won't work: If the debt is genuinely disputed, if the documentation is weak, or if the debtor is likely to raise counterclaims about defective work or incomplete scope, the court will reject the application or the debtor will successfully challenge it. In those cases, a full civil claim is the better route.

Full civil claim (for disputed debts or larger amounts)

Where the payment order route is unavailable or inappropriate, the standard option is a civil commercial claim filed before the Court of First Instance.

The process:

1. File a statement of claim in Arabic with all supporting evidence
2. Court fees: typically 6% of the claim value in Dubai
3. The court notifies the defendant and sets a hearing date
4. Both parties exchange written submissions (memoranda) with supporting documents
5. The judge may appoint an expert to assess technical issues (common in construction disputes)
6. Judgment at first instance, with appeal and cassation stages available

Timeline: A contested commercial claim at first instance typically takes 6 to 12 months, depending on complexity and whether an expert is appointed. Construction disputes involving technical assessments can take longer.

Key points for contractors:

UAE courts rely heavily on documentary evidence. Witness testimony is available but plays a secondary role. If you have signed delivery notes, engineer certifications, and a clear paper trail showing the work was completed and the invoice was acknowledged, your position is strong.

If the contract contains an arbitration clause, the court will likely decline jurisdiction and refer the parties to arbitration. Check the dispute resolution clause before filing.

Arbitration (if the contract requires it)

Many construction contracts, particularly those based on FIDIC standard forms, include arbitration clauses. If yours does, you cannot bypass it by filing in court (with the limited exception of payment orders, where some Dubai courts have accepted jurisdiction even in the presence of an arbitration clause, though this remains contested on appeal).

Advantages of arbitration for contractor disputes:

• Proceedings in English (avoiding the cost and delay of certified Arabic translations)
• Confidential, which matters for ongoing commercial relationships
• Arbitrators with construction industry expertise can be appointed
• Awards are enforceable domestically under Federal Law No. 6 of 2018 on Arbitration, and internationally under the New York Convention
• Emergency arbitrator procedures (available under DIAC and DIFC-LCIA rules) can secure interim relief quickly

Disadvantages:

• Arbitrator fees and institutional costs are higher than court fees for small to mid-size claims
• The process, while faster than a full court cycle with appeals, is not as fast as a payment order

When to use it: Arbitration is particularly effective for mid-to-large construction claims where the contract requires it, where technical issues need expert assessment, or where the debtor is an international entity that will need to enforce or challenge the award across borders.

For guidance on selecting the right dispute resolution mechanism at the contract drafting stage, see our article on construction contract risk management.

Bounced cheque enforcement (the shortcut most contractors overlook)

If the client issued cheques for the invoiced amount and those cheques were dishonoured, you may have a significantly faster recovery route.

Under Federal Decree-Law No. 50 of 2022 (the Commercial Transactions Law), a bounced cheque can be filed directly with the execution court in Dubai. If the drawer does not object, payment can be enforced within as little as 15 days. Execution court fees are 5% of the cheque amount plus AED 150.

Since 2022, cheque bounce cases are primarily civil rather than criminal, unless the drawer deliberately stopped payment, closed the account, or committed fraud. But the civil enforcement route is fast, and the cheque itself serves as a standalone instrument of debt. You do not need to prove the underlying contract or complete a full civil claim.

If you hold bounced cheques from a client, this should be your first enforcement step. For a full breakdown of the current rules, see our guide on cheque bounce cases in Dubai.

Step 4: Protect the money before judgment

Winning a court case means nothing if the debtor has moved assets out of reach by the time you try to enforce. UAE law allows creditors to apply for precautionary attachment (asset freezing) before or during proceedings.

Under the Civil Procedures Law, a creditor can apply for an order to freeze bank accounts, attach real estate, or seize moveable assets where there is a risk that the debtor will dissipate assets. The application can be made alongside a payment order or a civil claim.

Practical tips:

• Apply early. The longer you wait, the more time the debtor has to move funds.
• Provide specific information about the debtor's assets (bank accounts, property, vehicles). Courts are more likely to grant a freeze if you can identify particular assets.
• Be prepared for the debtor to challenge the freeze. The court will assess whether the claim is well-founded and whether the risk of asset dissipation is real.

In construction disputes, precautionary attachment is particularly important when the project company is a special purpose vehicle (SPV) with limited assets outside the project itself. If the project is completed and sales proceeds have been distributed, recovery options narrow quickly.

Step 5: Enforce the judgment

A court judgment or arbitration award is not self-executing. Once you have a favourable decision, you need to open an execution file with the execution court to compel payment.

Enforcement measures available in the UAE:

• Bank account seizure: The court can order banks to transfer funds from the debtor's accounts to the creditor. This is the most common and effective enforcement tool.
• Salary attachment: Where the debtor is an individual, the court can order a portion of their salary to be deducted and paid to the creditor.
• Travel ban: The court can impose a travel ban on individuals who fail to satisfy a judgment debt. This is a powerful tool in the UAE, where many business owners are expatriates.
• Asset seizure and auction: The court can order the seizure and sale of moveable and immoveable property, including real estate and vehicles.
• Imprisonment: In extreme cases of deliberate non-payment, the execution judge can order detention. This is rarely used but serves as a last-resort pressure mechanism.

Timeline for enforcement: If the debtor cooperates or has identifiable assets, enforcement can be completed within weeks. If the debtor is evasive or asset-poor, it can take considerably longer.

Special considerations for construction sector claims

Construction payment disputes have features that make them different from ordinary commercial debt recovery.

Back-to-back payment clauses. Subcontracts often include "pay-when-paid" or "pay-if-paid" clauses, making the subcontractor's payment conditional on the main contractor receiving payment from the employer. UAE courts have historically given these clauses effect, which means a subcontractor may struggle to recover from the main contractor if the employer has not paid. However, the enforceability of these clauses is increasingly scrutinised, and the specific wording matters.

Retention money. Standard construction contracts typically withhold 5-10% of each interim payment as retention, released only after the defects liability period ends. If retention is overdue, it forms a separate recoverable claim. Include it in your demand.

Variation disputes. Many non-payment issues stem from disagreements about variations. The contractor performed additional work, the client disputes whether it was instructed or properly valued. If your contract requires written variation orders and you don't have them, the claim becomes harder to prove. Document variation instructions in writing at the time they are given.

Engineer certifications. Under FIDIC-based contracts, the engineer's interim payment certificate is the primary basis for payment. A certified amount that goes unpaid is strong evidence for a payment order application. Dubai courts have granted payment orders based on engineer certifications even where the underlying contract contained an arbitration clause.

Dubai's new construction law. Dubai Law No. 7 of 2025, effective from January 2026, introduces a unified regulatory framework for contractors operating in Dubai. While it primarily concerns contractor registration and compliance, its enforcement mechanisms (including licence suspension and deregistration) may create additional leverage in payment disputes with contractors who depend on their Dubai registration to operate.

Limitation periods: don't wait too long

Under UAE law, the general limitation period for commercial debts is 15 years from the date the debt became due. However, specific categories of claims carry shorter limitation periods. Contractor claims related to construction defects, for example, are subject to different timeframes under the Civil Code.

The practical risk of delay is not just legal. It is commercial. The longer you wait, the harder it becomes to recover. Debtors restructure, close companies, leave the jurisdiction, or simply run out of money. Filing early preserves your position and signals that you are serious.

How to prevent the problem in the first place

The most effective recovery tool is a well-drafted contract. Before starting work, make sure your agreement addresses:

• Payment terms with specific due dates. "Payment within 30 days of invoice" is enforceable. "Payment upon completion" without a defined completion mechanism is an invitation to dispute.
• Interest on late payment. UAE law permits contractual interest on commercial debts. Specify the rate in the contract.
• Retention terms and release conditions. If retention applies, state when and how it is released, and what the contractor must provide (defects liability certificate, performance certificate) to trigger release.
• A clear dispute resolution clause. Choose between court and arbitration deliberately, not by default. Tiered clauses (negotiation, then mediation, then arbitration) are common in construction but must be drafted carefully to avoid procedural challenges.
• Jurisdiction. If you want the option of a payment order for straightforward debts, consider whether an arbitration clause will prevent you from using this faster route.

For advice on structuring these protections, our construction law and corporate and commercial teams work with contractors and employers at the contract drafting stage to reduce the risk of payment disputes later.

Recovery routes at a glance

When to instruct a lawyer

For smaller invoices (under AED 50,000), a well-drafted legal notice from a law firm is often enough to prompt payment. If it doesn't, the payment order route is cost-effective and can be handled without prolonged proceedings.

For larger claims, or where the debtor is contesting liability, raising counterclaims, or showing signs of asset dissipation, early legal involvement protects your position. The difference between recovering AED 2 million and recovering nothing often comes down to whether precautionary measures were filed before the debtor moved funds.

If you have unpaid contractor invoices and want to assess your recovery options, contact our litigation and dispute resolution team. We handle payment disputes across construction, professional services, and commercial trading, with experience in both court proceedings and arbitration.

FAQ

Can I recover an unpaid invoice in the UAE without a written contract? Yes. UAE courts accept invoices, delivery notes, emails, and other documentary evidence of commercial dealings. The claim is harder to prove without a signed contract, but it is not impossible if you have a clear paper trail showing the work was performed and the amount was agreed.

What is the fastest way to recover an unpaid contractor invoice in Dubai? The payment order procedure under the Civil Procedures Law. If the debt is documented in writing and undisputed, the court must decide within three days. The order is immediately enforceable in Dubai. For bounced cheques, enforcement through the execution court can take as little as 15 days.

How much does it cost to file a debt recovery case in Dubai? Court fees for a payment order or civil claim in Dubai are 6% of the claim value, with a minimum of AED 500 and a maximum of AED 40,000. Legal fees are separate and depend on the complexity of the case.

Can I freeze a debtor's bank account before getting a court judgment? Yes. UAE law allows precautionary attachment of assets where there is a risk the debtor will dissipate them. The application can be filed alongside a payment order or civil claim. You will need to provide evidence of the debt and the risk of asset dissipation.

What is the limitation period for recovering unpaid invoices in the UAE? The general limitation period for commercial debts under UAE law is 15 years from the date the debt became due. However, specific types of claims may carry shorter limitation periods, and practical recovery becomes harder the longer you wait.

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