Bills of Exchange and Promissory Notes - UAE Legal Position
Type
E-journal
Date
16 May 2016
Jurisdiction
United Arab Emirates
Taxonomy
Payment & Payment Systems
Copyright
LexisNexis
Relevant company
Al Tamimi & Company
Analysis
In the current economic times due to liquidity constraints among banks and financial institutions, we are finding more and more trade finance transactions are beginning to include commercial instruments such as promissory notes and bills of exchange. Therefore, it is important to understand the specific elements of such commercial instruments under the commercial laws of the United Arab Emirates (“UAE”).
Background
Commercial papers such as promissory notes and bills of exchange due to their universal nature are globally regulated by the 1930 Geneva Convention providing a Uniform Law on Bills of Exchange and Promissory Notes (“Geneva Convention”). Although the UAE has not formally ratified the Geneva Convention, the relevant provisions relating to promissory notes and bills of exchange covered under Federal Law No 18 of 1993 (“Commercial Code”) are substantially similar to the provisions of the Geneva Convention relating to such commercial instruments.
Distinction between promissory notes and bills of exchange