Federal Supreme Court Commercial Appeal Ruling on Res Judicata in Execution of Cheques

United Arab Emirates - The Federal Supreme Court

Hearing on Tuesday, 14 July 2026

Presided over by Judge Shehab Abdulrahman Al Hammadi, "President of the Circuit"
And Membership of Judges Sabri Shams Eldin Mohamed and Dawood Ibrahim Abu Al-Shawareb.

Commercial Appeal No. 243 of 2026

Legal Principles:

1. Civil Procedure – Defenses: The defense of inadmissibility of the action due to prior adjudication (res judicata): Scope and requirements. Judgment – Reasoning: Defects warranting cassation. Evidence – Conclusive Proof: Conclusiveness of res judicata.

2. The defense of inadmissibility of the action due to prior adjudication may be raised at any stage of the proceedings, and the court shall rule on it on its own motion. The underlying basis for this rule.

3. Judgments, final judicial decisions terminating the dispute, and payment orders acquiring the force of res judicata are conclusive regarding what was decided in the dispute and cannot be contradicted by other evidence; the court must apply this of its own motion, provided there is identity of parties, legal capacities, subject matter, and cause of action.

4. The basis for the defense of res judicata is identity of parties, subject matter, and cause of action between the prior and pending actions, provided that the substance of the adjudicated issue was addressed and definitively settled to preclude renewed litigation.

5. A judgment's reasoning must be clear, evident, comprehensive of evidence and material arguments of litigants, and answered with sound reasons derived from the case records; failure to do so constitutes a defect warranting cassation.

6. Establishing that the execution judge had affixed the executory formula to the two disputed cheques in a prior execution application which acquired res judicata prior to filing the current suit seeking payment of the cheques' value. Effect: The execution judge's decision becomes conclusive as to the adjudicated rights due to the identity of parties, subject matter, and cause in both proceedings, preventing reconsideration due to prior contestation on their merits. The lower court and the appellate court's disregard of the appellants' defense of res judicata constitutes insufficiency of reasoning, flawed deduction, and an error of law warranting cassation.

(Appeal No. 243 of 2026 Commercial, Session 14/07/2026)

The Federal Supreme Court

1. It is established pursuant to Article 94 of Federal Decree-Law No. 42 of 2022 Promulgating the Civil Procedure Law that: "The defense of inadmissibility of the action due to prior adjudication may be raised at any stage of the lawsuit, and the court shall rule thereon on its own motion."

2. It is established pursuant to Article 87 of Federal Decree-Law No. 35 of 2022 Promulgating the Law of Evidence in Civil and Commercial Transactions that: "Subject to the provisions of the Civil Procedure Law, judgments, judicial decisions terminating the dispute, and payment orders that have acquired the force of res judicata shall be conclusive proof of what they have decided in the dispute, and no evidence challenging such conclusiveness shall be admissible. Such judgments, decisions terminating the dispute, or payment orders shall not have this conclusive effect except in a dispute arising between the same litigants without change in their capacities, and relating to the same right in subject matter and cause, and the court shall apply this conclusiveness on its own motion."

3. It is established in the jurisprudence of the Federal Supreme Court that the basis of the defense of res judicata is the identity of litigants, subject matter, and cause of action in both the prior and the current suits, and that the substance of the adjudicated matter must have been debated by the litigants and definitively settled between them to preclude re-litigation.

4. It is well settled in the jurisprudence of the Federal Supreme Court that the reasoning of a judgment must be clear and manifest, bearing in itself that which reassures the reader that the court examined and comprehended the evidence and documents with insight, addressed all material defenses, and answered them with sound reasons grounded in the records; otherwise, the judgment is flawed with defect warranting cassation.

5. Whereas the record shows in Application No. 20240031908 that the execution judge endorsed cheques Nos. 209 and 365, drawn on the account of Company ....... for General Trading LLC for a total amount of AED 8,460,000 (eight million four hundred and sixty thousand Dirhams), with the executory formula, it is evident that this decision acquired the force of res judicata. This constitutes conclusive proof regarding the rights decided therein, and no evidence may be accepted to overturn this conclusive effect by re-submitting the adjudicated dispute to the judiciary whenever there is identity of parties, subject matter, and cause in both proceedings. Cause means the factual ground from which the plaintiff derives their right to the claim, whether a material event or a legal act, which does not alter through variations in factual evidence or legal arguments relied upon by the party; thus, the multiplicity or variation of evidence does not alter the underlying cause, for res judicata depends upon identity of cause rather than identity of evidence or statement, thereby barring re-examination since the authority of judgments supersedes public order considerations. Whereas the subject matter of both actions centers on compelling the defendants to pay the value of the two cheques arising from commercial transactions between the parties, both proceedings—whether the application to endorse the cheques with the executory formula or the current lawsuit—are identical in parties, cause, and subject matter.

the second action challenged before this Court—are identical in litigants, cause, and subject matter, and both parties had litigated their merits, settling their truth definitively to prevent re-litigation. The defendants had raised this defense before both the Court of First Instance and the Court of Appeal, both of which refrained from addressing this defense relating to public order, rendering the appealed judgment flawed by defect in reasoning and flawed deduction leading to an error in the application of the law, which warrants cassation without needing to examine the remaining grounds of appeal.

The Court

Whereas the facts—as apparent from the challenged judgment and the case documents—are that the principal plaintiff ....... filed a statement of claim satisfying all legal requirements, lodged with the Case Management Office, duly registered, and served on the defendants, seeking judgment to:

1. Order the defendants jointly and severally to pay the amount of AED 8,460,000 (eight million four hundred and sixty thousand Dirhams), representing the value of the returned cheques which the defendants had undertaken to pay if returned, pursuant to emails sent by them to the plaintiff;

2. Order the defendants jointly and severally to pay statutory interest at the rate of 9% from the date of claim until full payment, along with court fees, expenses, and advocate fees.

In explaining his claim, the plaintiff stated that pursuant to commercial dealings between the plaintiff and the defendants, the defendants handed the plaintiff two (2) cheques totaling AED 8,460,000 (eight million four hundred and sixty thousand Dirhams only), issued from the account of the third defendant Company ....... for General Trading LLC—which is 80% owned by the first defendant company. These cheques were given against the outstanding amounts due to the plaintiff from the defendants. However, upon depositing the cheques into the bank account, the drawee bank refused payment because the account had been closed, prompting the plaintiff to institute the action for the stated relief.

Whereas the defendants filed a counterclaim under No. 4075 of 2025 against the principal plaintiff, requesting in conclusion:

1. In the Counterclaim: (a) Order the counter-defendant to pay the counter-claimants an amount of AED 25,000,000 as compensation for severe damages incurred as a result of his precautionary attachment on their bank accounts and the commercial licenses of the first and third counter-claimant companies and defamation of the claimants' reputation, following reopening of pleadings and authorization to pay counterclaim fees and service of the counterclaim; (b) Expand the mandate of the appointed expert in the original suit to assess damages and calculate due compensation, appointing Category (A) experts, with the counter-claimants expressing readiness to pay expert fees.

2. In the Original Action: (a) Primarily: Dismiss the action for lack of validity and proof; (b) Alternatively: Inadmissibility of the action against the first and second original defendants due to lack of standing.

3. In all cases: Order the original plaintiff to pay all fees, costs, and advocate fees.

Procedural History

At the session of 22/01/2026, the Court of First Instance ruled:

• First: In the original suit No. 2250 of 2025, ordering the first and third defendants jointly to pay the amount of AED 8,460,000 (eight million four hundred and sixty thousand Dirhams), the value of the returned cheques, plus statutory interest at 5% from the date of submission of this judgment for execution until full payment, and dismissing other claims.

• Second: In counterclaim No. 4075 of 2025, dismissing the counterclaim, and ordering the first and third defendants jointly to pay court fees and expenses of both the original and counter actions, and AED 1,000 as advocate fees.

At the session of 22/04/2026, the Ajman Court of Appeal ruled to accept the appeal in form and dismiss it on the merits, ordering the appellants to pay appeal expenses and AED 1,000 for advocate fees.

This judgment was not accepted by the appellants, who filed the present appeal. The appeal was reviewed in chambers, found worthy of consideration in a hearing, heard as recorded in the hearing minutes, and the date of today's session was set for pronouncement of judgment.

Grounds of Appeal and Court's Assessment

Whereas the appellants contend under the second ground of appeal that the appealed judgment violated the law, erred in its application, and violated the force of res judicata, on the basis that an order was issued by the Execution Department granting the executory formula and initiating execution proceedings in Execution Case No. 2298 of 2024 Cheque Execution Ajman, which constitutes a decision terminating the dispute between the parties and acquired the force of res judicata. This established the first respondent's right to obtain the amount of the cheques claimed in the current action from the third appellant, notwithstanding our non-admission thereof. The appealed judgment ignored this conclusiveness and ordered the first and third appellants to pay the same amount a second time, resulting in the first respondent holding two execution writs for the same debt. Furthermore, the operative part of the first instance judgment explicitly stated that the subject of the judgment was the exact cheques Nos. 209 and 365 in dispute between the parties, thereby warranting cassation.

Whereas this grievance is well-founded; under Article 94 of Federal Decree-Law No. 42 of 2022 Promulgating the Civil Procedure Law:

"The defense of inadmissibility of the action due to prior adjudication may be raised at any stage of the lawsuit, and the court shall rule thereon on its own motion."

It is also established pursuant to Article 87 of Federal Decree-Law No. 35 of 2022 Promulgating the Law of Evidence in Civil and Commercial Transactions that:

"Subject to the provisions of the Civil Procedure Law, judgments, judicial decisions terminating the dispute, and payment orders that have acquired the force of res judicata shall be conclusive proof of what they have decided in the dispute, and no evidence challenging such conclusiveness shall be admissible. Such judgments, judicial decisions terminating the dispute, or payment orders shall not have this conclusive effect except in a dispute arising between the same litigants without change in their capacities, and relating to the same right in subject matter and cause, and the court shall apply this conclusiveness on its own motion."

It is established in the rulings of this Court that the defense of res judicata requires identity of parties, subject matter, and cause of action in both the prior and pending actions, and that the adjudicated matter was debated by the parties on its merits and definitively established between them to preclude re-litigation.

It is further settled in the jurisprudence of this Court that a judgment's reasoning must be clear and manifest, bearing in itself that which reassures the reader that the court examined and comprehended the evidence and documents with insight, addressed all material defenses, and answered them with sound reasons grounded in the records; otherwise, the judgment is defective, warranting cassation.

Whereas the record shows in Application No. 20240031908 that the execution judge endorsed cheques Nos. 209 and 365 drawn on the account of Company ....... for General Trading LLC for a total amount of AED 8,460,000 (eight million four hundred and sixty thousand Dirhams) with the executory formula, it is evident that this acquired the force of res judicata, serving as conclusive proof regarding the rights decided therein. No evidence may be accepted to overturn this conclusive effect by re-submitting the adjudicated dispute to the judiciary when the parties, subject matter, and cause of action are identical in both suits.

The cause of action is the factual basis from which the plaintiff derives their right to the claim, whether a material fact or a legal act, and it does not change through variations in factual evidence or legal arguments relied upon by the party. Multiplicity of evidence supporting the same cause or differences in proof from one suit to another are irrelevant, for the test of res judicata lies in the identity of the cause of action rather than the identity of evidence or statement, barring re-examination because the authority of judgments supersedes public order considerations.

Whereas the subject matter of both actions was directed at compelling the defendants to pay the value of the two cheques arising from commercial transactions between the parties, it is established that both proceedings—whether the application to affix the executory formula to the cheques or the second action appealed before this Court—are identical in parties, cause, and subject matter, and the parties litigated their merits, settling their truth definitively to prevent re-litigation. The defendants maintained this defense before the Court of First Instance and the Court of Appeal, both of which refrained from addressing this defense relating to public order. This flaws the appealed judgment with insufficiency of reasoning and flawed deduction leading to an error in the application of the law, which warrants quashing the judgment without needing to examine the remaining grounds of appeal.