What Can I Do When a Business Partner Stops Paying Me in the UAE?
Quick Answer: When a business partner stops paying you, UAE law gives you a clear path. You can serve a formal notice, apply to the court for a precautionary attachment over their assets and a travel ban against the responsible individual, then file the substantive claim within eight days to hold the attachment. Acting early, before assets move, is what protects your money.
- Preserve every record of the debt and the arrangement: memorandum of association, bank transfers, WhatsApp and email threads, invoices, and any signed or unsigned agreement.
- Send a formal written notice for payment through the Notary Public, stating the amount, the basis, and a short deadline.
- Apply ex parte for a precautionary attachment over the partner’s assets and bank accounts under the 2022 Civil Procedure Law.
- Apply in parallel for a travel ban against the partner as a natural person where the debt is at least AED 10,000 and there is a genuine flight risk.
- File the substantive claim within eight days of the attachment order so the attachment does not fall away.
- A partner who stops paying is in breach of contract, and UAE law lets you pursue recovery whether or not the agreement was ever written down.
- Precautionary attachment and a travel ban can both be obtained before you win the case, but the attachment must be backed by a substantive claim within eight days.
- Where the partner is also the company manager, you may have a personal liability route under the Commercial Companies Law, separate from the company’s own liability.
- A travel ban runs against the responsible individual, never against the company, so identifying the right natural person matters.
- Commercial claims between traders are generally time-barred after five years, so delay narrows your options.
- The agreement does not need to be a formal signed contract for the obligation to be enforceable, though written evidence makes every step easier.
A business partnership in the UAE can break down in many ways, but few are as destabilising as a partner who simply stops paying. The money owed might be a share of profits, a capital contribution that was promised and never delivered, a loan you advanced to keep the company running, or your share of a joint venture’s revenue.
This guide sets out the position for a creditor in an onshore UAE commercial dispute worth AED 100,000 or more. It covers both the LLC partner who has gone quiet and the standalone JV partner, and it explains what changes when there was never a signed agreement, and what changes again when the partner is also the company’s manager. For joint ventures specifically, see JV partner not paying in the UAE.
You usually have more leverage in the early weeks, and less as time passes and assets move.
What can I do if my business partner stops paying me in the UAE?
You can treat the non-payment as a breach of contract and pursue both the money and security for it. Alongside the claim itself, you can seek precautionary measures that protect the money while the case runs.
Article 272, Federal Law No. 5 of 1985: “In contracts binding on both parties, if one of the parties does not do what he is obliged to do under the contract, the other party may, after giving notice to the obligor, require that the contract be performed or cancelled. The judge may order the obligor to perform the contract forthwith … and he may also order that the contract be cancelled and compensation paid in any case if appropriate.”
Plain English: once you have given notice, you can ask the court either to force your partner to pay or to unwind the arrangement and pay you damages. The notice step matters, which is why the formal demand is the first legal move.
Is my partnership agreement enforceable if it was never put in writing?
Yes, in most cases. An unwritten arrangement can still create binding obligations, because UAE law looks at the substance of what the parties agreed and how they behaved, not only at a signed document. The practical difference is evidentiary: without a written agreement, you prove the terms from bank transfers, the trade licence naming the partners, board resolutions, invoices, and message threads.
The obligation to perform in good faith is implied into every contract, written or not. And demand letters do not reset the limitation clock; only a written acknowledgment of the debt by your partner, or in some cases a partial payment, can do that.
What changes when my partner is also the company manager?
You may gain a personal liability route against the individual, separate from any claim against the company.
Article 84, Federal Decree-Law No. 32 of 2021 (Commercial Companies Law): “Every manager of the Limited Liability Company shall be held liable vis-à-vis the Company, the partners and third parties for any fraudulent acts committed by such manager. He shall also be liable for any losses or expenses incurred by the company due to improper exercise of the powers or violation of the provisions of any law in force, the MOA of the Company or the appointment contract of the manager or for any gross error committed by the manager.”
Plain English: a manager who has diverted funds, paid himself ahead of the company’s debts, or acted outside his authority can be pursued in person. This reaches the individual’s own assets.
The signatory point matters for a separate reason. If your partner controls the bank accounts and signs cheques, they are the natural person against whom a travel ban can run when the debtor is the company. See director personal liability for UAE company debt.
How do I sue a business partner in the UAE, and in what order?
You move in a sequence designed to secure the money first and litigate second.
Days 1 to 30: preserve, notify, and secure
First month: lock down evidence and get court protection
- Gather and date every document proving the relationship and the debt.
- Serve a formal notice for payment through the Notary Public (satisfies Article 272).
- Apply ex parte for a precautionary attachment over the partner’s assets and bank accounts.
- Apply in parallel for a travel ban against the responsible individual.
Article 324, Federal Decree-Law No. 42 of 2022: “Even before filing a substantive lawsuit, if there are serious reasons that fear the Debtor’s flight, and the debt is not less than (10,000) ten thousand dirhams … the Creditor may request the competent judge … to issue an order banning the Debtor from travelling.”
Article 322: “If the Debtor is a private body corporate, the order for detention shall be made against those who represent it legally or the person to whom the failure to perform is personally attributable.”
Plain English: a company cannot be prevented from travelling, so the ban runs against the managing partner or signatory as an individual.
See how to freeze a debtor’s bank account and how to stop a debtor leaving the UAE.
Days 30 to 90: file, pressure, and assess leverage
Article 250(2), Federal Decree-Law No. 42 of 2022: “The Judgment Creditor shall, within (8) eight days at the most from the date of issuance of the attachment decision, bring a claim before the competent Court for the confirmation of their right … failing which the attachment shall be void ab initio.”
Plain English: the freeze on your partner’s accounts evaporates if you do not back it with a filed case inside eight days. Draft the substantive claim before you obtain the attachment, not after.
With the attachment holding and a travel ban in place, many disputes settle in this window. Where the debtor company is genuinely unable to pay and the debt is large, a further point of leverage is the bankruptcy route: a creditor can petition where the undisputed debt is at least AED 1,000,000 and a written demand has gone unsatisfied for 30 business days. The credible prospect of that petition often concentrates a solvent partner’s mind.
Days 90 and beyond: judgment, execution, and asset tracing
From month three, the case moves toward judgment and execution before the Execution Judge. If assets have already left the UAE, this is the stage for asset tracing and enforcement abroad. The bankruptcy clawback rules can challenge transactions a struggling company made in the six months before it stopped paying, or within two years where the counterparty was a connected party.
Worked example: AED 4 million owed by a director-partner
Illustrative case (representative figures, not a real client matter)
A Dubai mainland LLC with two equal partners. One partner runs the company as sole manager and controls the bank accounts. Over several months he draws down AED 4 million that should have been distributed to you or repaid against your loan account, then stops responding.
Week 1: Assemble the MOA, bank statements showing the drawings, and message history. Serve a notarised notice for payment.
Week 2: No response. Petition ex parte for precautionary attachment over the company’s accounts and the manager’s personal accounts, and a travel ban against him as the responsible individual.
Week 3: Orders granted. Personal accounts frozen. He cannot leave the country.
Within 8 days: File the substantive claim for AED 4 million plus interest, pleading the company’s contractual liability and, in the alternative, the manager’s personal liability under Article 84.
By week 8: Facing a frozen account and a travel ban, he opens settlement discussions. If he does not, the case proceeds to judgment and execution against the attached assets.
The AED 4 million was recoverable because the assets were secured before they could be moved, not because of anything that happened at trial.
Can my business partner move the money offshore or leave the country?
They can try, which is exactly why the precautionary measures exist and why speed matters. An attachment freezes UAE bank accounts and assets in place. A travel ban stops the responsible individual leaving. Obtained early, together, they remove the two things a non-paying partner most wants: access to the cash and the ability to exit.
The limits are worth stating honestly. An attachment reaches assets within the UAE; money already moved offshore before the freeze is harder to recover, and that is where post-judgment asset tracing comes in. See how to freeze a debtor’s bank account and how to stop a debtor leaving the UAE.
How long do I have to bring a claim against my partner?
For a commercial debt between traders, generally five years.
Article 92, Federal Decree-Law No. 50 of 2022 (Commercial Transactions Law): “Upon denial and in absence of lawful excuse, the claims of obligations of traders against each other regarding their commercial business shall be time barred upon the lapse of (5) five years from the maturity date of the obligation, unless a shorter period is provided in the law.”
Plain English: the clock runs from when the obligation fell due. Demand letters do not reset it. A written acknowledgment by your partner can.
See the time limit to sue for a debt in the UAE for the full limitation framework.
How long will a partnership dispute take in the UAE?
The precautionary stage is fast and the litigation stage is not.
| Stage | Typical timing |
|---|---|
| Evidence assembly and notarised notice | Week 1 to 2 |
| Ex parte attachment and travel ban orders | Within days of filing |
| Substantive claim filed (8-day window) | By day 8 after attachment |
| First instance judgment | Several months, case dependent |
| Settlement (where it happens) | Often weeks after orders bite |
| Execution before the Execution Judge | Begins once judgment is final |
Common worries answered
“Will my partner just disappear?”
They may drop out of contact, but a travel ban removes the option of leaving the country, and the eight-day filing rule keeps the pressure on. Disappearing from your calls is not the same as escaping the claim.
“Can he move the money offshore?”
He can attempt it, which is the whole reason precautionary attachment exists. An attachment obtained early freezes UAE accounts before funds can be moved, and the bankruptcy clawback rules can unwind suspicious transfers.
“Is the agreement enforceable if we never wrote it down?”
In most cases, yes. An unwritten arrangement can still bind. The courts decide on the documentary record: transfers, the trade licence, resolutions, and messages.
“How long will this take?”
The orders that protect your money come quickly, often within days. The full case can run several months, but many disputes settle once the attachment and travel ban are in force.
Frequently Asked Questions
My business partner stopped paying my profit share. What is the first thing I should do?
Preserve every record of the arrangement and the amounts owed, then serve a formal notice for payment through the Notary Public. That notice creates a clean record of demand and is the step Article 272 requires before you can ask the court to enforce or cancel the contract.
Can I freeze my partner’s bank account before I win the case?
Yes. A precautionary attachment can be obtained ex parte before judgment where you fear losing the security for your right. You must then file the substantive claim within eight days, or the attachment is void.
Can I stop my business partner from leaving the UAE?
Yes, where the debt is at least AED 10,000 and there are serious grounds to fear flight. The ban runs against the responsible individual, not the company.
My partner is the company manager and took money out of the business. Is he personally liable?
Possibly. Under the Commercial Companies Law a manager is personally liable for fraud, misuse of powers, breach of the law or the company documents, or gross error. Drawing company funds in breach of duty can fall within this, but it is a fact-specific assessment.
We never signed a partnership agreement. Can I still claim?
Yes. UAE law looks at the substance of what was agreed and how the parties behaved. You prove the terms from bank transfers, the trade licence, resolutions, and message threads.
How long do I have to bring a claim against my partner?
For commercial obligations between traders, generally five years from when the obligation fell due. Demand letters do not reset that clock, though a written acknowledgment can.
Will pursuing my partner force the company into bankruptcy?
Not necessarily, but the prospect can be useful leverage. A creditor can petition where the undisputed debt is at least AED 1,000,000 and a written demand has gone unmet for 30 business days. Often the credible threat brings a solvent partner to the table.
Where to go from here
If a partner has stopped paying you, the most valuable thing you can do this week is secure the evidence and take advice before assets move. A short case review is usually enough to tell you whether the precautionary route is open and what your realistic options are. Contact us through paymentdisputes.ae.
If a business partner has stopped paying and you have not yet secured the debt, every week that passes is a week assets can move.
Send us the memorandum of association, bank statements showing the amounts owed, your correspondence with the partner, and any signed or unsigned agreement. Within 48 hours you will get a written view on:
- Whether precautionary attachment and a travel ban are available on these facts
- Whether the manager’s personal liability route under Article 84 applies
- Whether the bankruptcy petition route provides additional leverage
- The correct forum and a realistic cost and timeline estimate
Contact us through paymentdisputes.ae.
All statutory references are drawn from the official English translations on the UAE legislation portal. Arabic prevails. Article 272 of Federal Law No. 5 of 1985 governs for agreements concluded before 1 June 2026; Federal Decree-Law No. 25 of 2025 replaces the Civil Code from that date. FDL 22/2025 (in force 1 January 2026) does not touch Articles 247-250 (precautionary attachment), the 8-day rule, or Articles 324-327 (travel bans). The AED 1,000,000 bankruptcy petition threshold is from Cabinet Decision No. 94/2024 (in force 16 September 2024), which raised it from AED 100,000 in the original law. Bankruptcy clawback periods (6-month general, 2-year connected party) are confirmed from practitioner commentary; verify exact article numbers against the primary FDL 51/2023 text before pleading reliance. The worked example uses constructed figures.
This article is for general information only. It does not constitute legal advice and does not create a lawyer-client relationship. UAE law is fact-sensitive, and outcomes depend on the evidence, the terms of the arrangement, the debtor’s conduct, and the applicable court’s assessment. Readers should obtain advice from a UAE-qualified legal consultant on the facts of their particular case before acting on anything in this guide.
