Power of Attorney for Debt Recovery in Dubai: What Businesses Need to Know

  • 15 June
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Recovering unpaid dues isn’t just a financial issue; it can quickly spiral into a legal and operational headache, especially in a business-heavy hub like the UAE. With transactions happening at lightning speed, it is understandable that some payments get delayed or defaulted on. In those situations, you may be side-tracked from going after the defaulter or not even legally capable enough to do so yourself. Here, the Powers of Attorney can be quite helpful.

So, let us look into why granting someone the legal authority to act on your behalf- through POA- is a consideration whenever debt recovery cases are on the table in the UAE.

What Is a Power of Attorney (POA) in the UAE?

Power of Attorney is a legal document issued in favor of another person, normally an advocate or an authorised person to act on your behalf in respect of some litigious, monetary or administrative issue. For debt recovery purposes, that allows the appointed professional to represent you fully in collecting money that is legally due to you.

This isn’t just a piece of paper. This is a serious delegation of power that falls within Federal Law No. 5 of 1985 (UAE Civil Code). It can permit your agent to take legal action on your behalf, negotiate on your behalf with a debtor and sign settlement agreements on your behalf depending on the scope defined.

Why You Might Need a POA for Debt Recovery

Suppose you are a supplier out of the UAE and your client in Dubai stopped paying your invoices. In such cases, there can be too many court appearances required for these debt recoveries which can be time consuming as well as cost- consuming.

Or maybe you're based in the UAE, but the back-and-forth with lawyers and legal documents is draining your time and energy.

Enter: Power of Attorney.

By assigning a POA to a trusted debt collection agency in UAE, you’re authorizing them to take over the case, chase the payment, talk to the debtor, and even appear in court if necessary.

This spares you the hassle and headaches of tackling the UAE legal system head-on especially when they require an understanding of the Arabic language legal proceedings and filings

Legal Backbone: UAE Law on POA

The good news is that the UAE has well-established laws that make POAs both functional and enforceable. Article 924 to 929 of the Civil Transactions Law explains that the person entrusted with a POA (the person acting on your behalf) is at law to act with good faith and fall within the scope of an authority delegated.

When the POA is being presented in a court case or other legal aspect, such as debt collection in Dubai, it must be notarized, and, if issue outside the country, translated into Arabic and attested through the UAE Ministry of Foreign Affairs.

You can even customize the POA to include or exclude specific actions, like allowing negotiations but not court representation, or vice versa.

Practical Benefits of Using POA in Debt Recovery

Here’s where things get real. Assigning a POA for debt collection Dubai brings tangible advantages:

  • Speed: Debt recovery is all about timing. The longer it takes, the harder it gets. A POA allows your legal rep to act immediately without waiting for your go-ahead every time.
  • Local Expertise: Debt laws and civil procedures differ from emirate to emirate. A Dubai debt collection agency will know how to work within local jurisdictions to speed up the process.
  • Avoiding Court Visits: You don’t need to show up in court hearings yourself. Your appointed lawyer or debt collector can represent you in all sessions.
  • Focus on Business: While your debt collectors in Dubai are handling the recovery, you can focus on your business instead of legal headaches.
Example: How a POA Helped a Logistics Firm Recover AED 450,000

A logistics company based in Europe was owed over AED 450,000 by a client in Dubai. They tried email reminders and polite calls for six months, but nothing moved. The finance head eventually signed a POA authorizing a debt collection agency in UAE to take over.

Within two weeks, the agency contacted the debtor in Arabic, sent a legal notice, and began civil case proceedings. With the threat of a travel ban and court summons looming, the client settled 80% of the debt within one month, and the rest in two installments. The logistics firm never had to travel or deal with legal documents themselves.

Things to Keep in Mind Before Granting POA

Of course, handing over legal authority to someone else is a big deal. Here are a few key things to keep in mind:

  • Always work with registered law firms or licensed recovery agents.
  • Clearly define the scope of the POA- mention exactly what powers you're granting.
  • Ensure the document is properly notarized and, if needed, translated.
  • Keep copies and stay in communication with your representative throughout the process.

Quick agreements (in some cases verbal and delayed payments) are common characteristics of the rapid economy of the UAE. Though the system is designed to help businesses, finding your way through the courts without a lawyer is complicated.

That’s why many companies, especially SMEs, prefer outsourcing the matter to agencies familiar with debt Dubai matters. They not only understand the legal nuances but also how cultural sensitivity can play a role in negotiation.

In Conclusion,

Using a Power of Attorney for debt recovery in the UAE is more than just a legal formality, it's a strategy. A way to fast-track collections without involving yourself in every legal detail. Whether you’re overseas or just too occupied to deal with it yourself, authorizing an expert can help recover your dues efficiently and professionally.

At Alqada Claim Recovery Services, we’ve seen how powerful a POA can be when used correctly. This is not an aggression but it is smart and active use of tools offered by law of the UAE.

Ready to Take the Next Step?

Are you fed up with following up unpaid receivables and un-replied emails? Then perhaps it is time to leave it to the experts. Since we have to deal with legal run-around, you should deal with what you are good at- developing your business.

We are here to assist yoiu in getting back what belongs to you. Reach out to Alqada Claim Recovery Services, your trusted partner in debt collection Dubai and beyond.

Let us know if you’d like help drafting a customized Power of Attorney to kickstart your claim. It might just be the smartest decision you make for your business this year.


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