1. Introduction
Banks in the United Arab Emirates have traditionally relied on wet ink signatures for the execution of loan agreements, guarantees, security documents, and other instruments central to their operations. This reliance is deeply embedded in banking practice and reflects a longstanding, though increasingly outdated, assumption that a physical signature on paper offers a degree of certainty and legal protection that electronic alternatives cannot match.
That assumption is being tested. Banks are facing growing pressure, internally, from clients, and the competitive market, to adopt electronic signatures. The shift is driven by practical considerations: speed of execution, operational efficiency, the ability to close transactions across jurisdictions without the delays inherent in circulating physical documents or arranging in-person meetings for signature, and the broader digital transformation agenda that the UAE government has actively promoted.
Despite this, many banks remain hesitant. The concern most frequently raised is whether an electronic signature would be accepted by the UAE courts and, more specifically, whether it would carry the same evidentiary weight as a wet ink signature. Banks worry that a counterparty might challenge an electronically signed document, that a court might decline to enforce it, or that a guarantee or security document executed electronically could be avoided.
This article examines the legal position under UAE law, explains why these concerns, while understandable, are largely misplaced, and proposes practical measures that banks can adopt to protect themselves when implementing electronic signatures.
2. The Legal Framework
The legal framework governing electronic signatures in the UAE is well established. Three principal statutes are relevant:
First, the Civil Transactions Law (Federal Law No. 5 of 1985, as amended) provides, at Article 131, that both offer and acceptance consist of “any expression of intent used to create a contract.” Since any expression of intent is sufficient, there is no mandatory form that contracts must take. Contracts can be formed verbally, in writing, or through electronic means, including by electronic signature. The same principle applies to unilateral dispositions under Article 277. It should be noted that Federal Decree-Law No. 25 of 2025, which will repeal and replace the current Civil Transactions Law with effect from 1 June 2026, modernises the rules on contract formation and recognises a broader range of methods for expressing consent. The fundamental principle that no particular form is required for a valid contract, and that electronic means are permissible, remains unchanged.
Second, the Electronic Transactions and Trust Services Law (Federal Decree-Law No. 46 of 2021, the “E-Transactions Law”) expressly permits the use of electronic signatures and regulates their legal effect. Article 28 provides that a person may use any form of electronic signature unless legislation in force provides otherwise. Critically, Article 18.1 states that the admissibility of an electronic signature as evidence in any legal proceeding “shall not be precluded by the mere fact that it is received in electronic form.”
The E-Transactions Law introduces two categories of electronic signature. A “Reliable Electronic Signature” is one that is linked to and under the exclusive control of the signatory, capable of identifying the signatory, and linked to the signed data in a manner that enables detection of any alteration (Article 19). A “Qualified Electronic Signature” meets these requirements and additionally satisfies enhanced technical standards relating to confidentiality, security, and authenticity (Article 20). A Qualified Electronic Signature is expressly deemed “equal in its authenticity to a manual signature” and carries “the same legal effect” (Article 18.3).
Third, the Law of Evidence in Civil and Commercial Transactions (Federal Decree-Law No. 35 of 2022, the “Evidence Law”) contains a dedicated chapter on electronic evidence (Articles 53 to 64). Article 55 provides that electronic evidence is subject to the same provisions as documentary evidence. Article 59 confirms that electronic evidence carries the same probative value as informal instruments under the Evidence Law. For the avoidance of doubt, Article 56 provides that “formal” electronic evidence has the same probative value as formal instruments.
The combined effect of these provisions is clear: a document bearing an electronic signature is admissible before the UAE courts and is afforded the same evidentiary weight as a document bearing a wet ink signature. Specifically, where the electronically signed document constitutes an informal instrument (that is, a document that is not issued by a public official in an official capacity, which is the case for most banking documents executed between the bank and its clients), it serves as evidence against its signatory unless that signatory denies the signature attributed to them, for example by claiming forgery (Article 28 of the Evidence Law, read with Article 59). It should be noted that the burden of proving forgery falls on the party making that claim.
It should be noted that certain instruments, particularly negotiable instruments such as cheques, raise separate issues and so fall outside the scope of this analysis. Additionally, execution of certain documents may require specific formalities under applicable law. However, these considerations are not relevant to the majority of banking documents addressed in this article (including loan agreements, guarantees, and security instruments).
3. The Real Risk: Process, Not Mechanism
If the legal position is this clear, why do banks remain concerned? The answer typically relates to one specific scenario: the counterparty denies the signature attributed to them and claims forgery. A bank that has extended credit on the strength of a guarantee or security document fears that the guarantor or obligor might later claim that the electronic signature was not theirs, that their account on the e-signature platform was compromised, or that someone else used their credentials.
This is a legitimate concern, but it is not unique to electronic signatures. The same risk exists, and has always existed, with wet ink signatures. For example, it is not uncommon for banks to face parties who have issued personal guarantees who claim that the signature was forged and seek to avoid the guarantee entirely. In such cases, the burden of proving forgery falls on the party making the claim, whether the signature is in wet ink or electronic form.
For wet ink signatures, the standard challenge is a claim of forgery. Banks typically require that certain sensitive documents, such as guarantees, be signed in the presence of a bank officer who witnesses the signature. Where the bank is unable to demonstrate that this procedure was followed, it may be more vulnerable to a forgery claim. If the purported signatory denies the signature, the matter is typically referred to a handwriting expert, and the court evaluates the evidence. The process is well understood but not infallible; handwriting analysis is an imperfect science, particularly given that signatures can change in subtle ways over time, and outcomes are not always predictable.
For electronic signatures, the challenge takes a different form, such as a claim that the signatory’s credentials were compromised or that they did not authorise the signing. However, a well-implemented electronic signature system may in fact generate a stronger evidentiary trail than a wet ink signature. E-signature platforms typically record the signatory’s identity verification, the time and date of signing, the IP address from which the document was accessed, the device used, and a tamper-evident seal confirming that the document has not been altered since signing. This audit trail is objective, contemporaneous, and difficult to fabricate.
It is also worth noting that documents, whether signed in wet ink or electronically, may be challenged on grounds that they were signed by a person who lacked authority to bind the relevant party. Such challenges typically succeed not because of any deficiency in the signing mechanism, but because the bank failed to conduct adequate due diligence on the signatory’s authority, for example by not obtaining or verifying board resolutions, shareholder approvals, or powers of attorney. This risk, again, is a process risk rather than a risk attributable to the form of signature.
The risk, therefore, does not lie in the choice between wet ink and electronic signatures. It lies in a failure of process. A poorly managed electronic signing process is vulnerable, just as a poorly managed wet ink signing process is vulnerable. The question for banks is not whether to adopt electronic signatures, but how to implement them in a manner that minimises the risk of a successful challenge.
4. Practical Recommendations for Banks
Banks seeking to adopt electronic signatures may consider the following practical measures to protect the integrity and enforceability of electronically signed documents.
4.1 Integration into Account Opening Procedures
One possible safeguard is to embed the electronic signature process into the bank’s existing account opening and onboarding procedures. At the point of account opening, when the bank already collects specimen signature cards, identification documents, and other KYC materials, the signatory should also be required to create a dedicated user account or set of credentials on the bank’s approved electronic signature platform. The details of this account, including the registered email address, mobile number, and any other identifying information, should be recorded in the customer’s file alongside their specimen signature card.
This approach has several advantages. It establishes a documented link between the individual and their electronic signature credentials at a point in time when the individual’s identity has been independently verified through the bank’s KYC process. It also makes it significantly more difficult for the signatory to later deny having signed a document electronically, because the credentials used to sign can be traced back to an account that the signatory personally created in the bank’s presence.
Banks have two options in this regard. First, a bank could integrate an electronic signature platform directly into its own systems, requiring customers to use that specific platform for all document execution. This offers maximum control and a uniform audit trail. Second, where full integration is not practicable, the bank could maintain a list of approved third-party e-signature platforms and require customers to use one of the approved platforms. In this regard, the Telecommunications and Digital Government Regulatory Authority (TDRA) maintains a UAE Trusted List of licensed trust service providers, which can serve as a reference point for banks in selecting approved platforms. In either case, the key is to ensure that the signatory’s credentials on the approved platform are recorded in the bank’s files at the point of onboarding.
4.2 Video Verification for Sensitive Documents
For particularly sensitive documents, such as loan facility agreements, personal guarantees, corporate guarantees, pledges, assignments of receivables, and other security instruments, where a bank would traditionally require a wet ink signature witnessed by a bank officer, the bank should consider adding an additional layer of verification.
Specifically, at the point of electronic signing, the bank could conduct a short recorded video call with the signatory. During this call, the bank officer would confirm the signatory’s identity, confirm that the signatory understands the nature and effect of the document being signed, and record the signatory’s express confirmation that they have signed (or are about to sign) the document electronically. The video recording would then be preserved in the bank’s archives, linked to the relevant transaction file.
This measure serves two purposes. First, it provides a contemporaneous, audiovisual record of the signatory’s identity and intent, which should be powerful evidence in the event of a later dispute. Second, it replicates the protective function of the traditional “witnessing” requirement: having a bank officer present (even remotely) at the point of signing creates a formal moment of accountability that discourages subsequent denial.
It is worth noting that this video verification step need not be onerous. A brief call of two to three minutes, following a standardised script, would be sufficient. The cost and inconvenience are minimal compared to the security it provides, particularly for high-value transactions.
4.3 Additional Considerations
Beyond the two core measures above, banks may also consider the following:
First, the bank’s electronic signature policy should be documented in a formal internal procedure, approved at an appropriate level of management, and communicated to all relevant staff. The procedure should specify which documents may be signed electronically, which require additional verification (such as the video call described above), and which, if any, must continue to be executed in wet ink. Banks should ensure that their internal policy is consistent with all applicable legal requirements.
Second, the bank should ensure that its standard form agreements contain express provisions recognising the validity and binding nature of electronic signatures and waiving any objection to the use of electronic means for document execution. While such a clause may not be strictly necessary given the statutory framework, it may serve to provide an additional contractual basis for enforcement and deter frivolous challenges.
Third, the bank should select an e-signature platform that meets the technical requirements for a “Reliable Electronic Signature” under Article 19 of the E-Transactions Law at a minimum, and ideally one that is capable of producing a “Qualified Electronic Signature” under Article 20. The platform should generate a comprehensive audit trail, including identity verification records, timestamps, IP addresses, and tamper-evident seals.
Fourth, one practical advantage of wet ink signatures is that they produce a physical document held in the bank’s files, providing a layer of redundancy in the event of loss or corruption of electronic data. Banks will already have electronic archiving, backup, and disaster recovery systems in place; however, when transitioning to electronic signatures, it is prudent to review whether those systems are sufficient to accommodate the increased reliance on electronically stored documents. Where the bank considers it necessary, it may also wish to print and retain physical copies of key electronically signed documents for its records.
5. Conclusion
The UAE’s legislative framework provides a clear and robust basis for the use of electronic signatures in banking transactions. An electronically signed document is admissible before the UAE courts and carries the same evidentiary weight as a wet ink signed document. The concerns that many banks harbour about the enforceability of electronic signatures are, in light of this framework, largely overstated.
The real risk for banks is not the mechanism of signing but the quality of the process surrounding it. A well-implemented electronic signature process, supported by proper onboarding procedures, platform integration, and, for sensitive documents, video verification, may arguably provide a stronger evidentiary foundation than traditional wet ink signature processes followed by banks. The audit trail generated by a reputable e-signature platform is objective, contemporaneous, and comprehensive in a way that a specimen signature card and a handwriting expert’s opinion are not.
Banks that continue to insist on wet ink signatures as a matter of blanket policy are not reducing their risk. They are simply preserving a traditional process while forgoing the efficiency and speed that electronic signatures offer, without necessarily compromising security. The question is no longer whether electronic signatures are legally valid. They are. The question is whether the bank’s internal processes are designed to maximise the evidentiary value of whatever signing mechanism is used.
Disclaimer
This article is published for general information purposes only. It does not constitute legal advice and should not be relied upon as such. The contents reflect the author’s understanding of UAE law as at the date of publication. Specific legal advice should be sought in relation to any particular matter or transaction. The author and Salloum & Partners LLC accept no responsibility for any action taken or not taken on the basis of this article.
1. Introduction
Banks in the United Arab Emirates have traditionally relied on wet ink signatures for the execution of loan agreements, guarantees, security documents, and other instruments central to their operations. This reliance is deeply embedded in banking practice and reflects a longstanding, though increasingly outdated, assumption that a physical signature on paper offers a degree of certainty and legal protection that electronic alternatives cannot match.
That assumption is being tested. Banks are facing growing pressure, internally, from clients, and the competitive market, to adopt electronic signatures. The shift is driven by practical considerations: speed of execution, operational efficiency, the ability to close transactions across jurisdictions without the delays inherent in circulating physical documents or arranging in-person meetings for signature, and the broader digital transformation agenda that the UAE government has actively promoted.
Despite this, many banks remain hesitant. The concern most frequently raised is whether an electronic signature would be accepted by the UAE courts and, more specifically, whether it would carry the same evidentiary weight as a wet ink signature. Banks worry that a counterparty might challenge an electronically signed document, that a court might decline to enforce it, or that a guarantee or security document executed electronically could be avoided.
This article examines the legal position under UAE law, explains why these concerns, while understandable, are largely misplaced, and proposes practical measures that banks can adopt to protect themselves when implementing electronic signatures.
2. The Legal Framework
The legal framework governing electronic signatures in the UAE is well established. Three principal statutes are relevant:
First, the Civil Transactions Law (Federal Law No. 5 of 1985, as amended) provides, at Article 131, that both offer and acceptance consist of “any expression of intent used to create a contract.” Since any expression of intent is sufficient, there is no mandatory form that contracts must take. Contracts can be formed verbally, in writing, or through electronic means, including by electronic signature. The same principle applies to unilateral dispositions under Article 277. It should be noted that Federal Decree-Law No. 25 of 2025, which will repeal and replace the current Civil Transactions Law with effect from 1 June 2026, modernises the rules on contract formation and recognises a broader range of methods for expressing consent. The fundamental principle that no particular form is required for a valid contract, and that electronic means are permissible, remains unchanged.
Second, the Electronic Transactions and Trust Services Law (Federal Decree-Law No. 46 of 2021, the “E-Transactions Law”) expressly permits the use of electronic signatures and regulates their legal effect. Article 28 provides that a person may use any form of electronic signature unless legislation in force provides otherwise. Critically, Article 18.1 states that the admissibility of an electronic signature as evidence in any legal proceeding “shall not be precluded by the mere fact that it is received in electronic form.”
The E-Transactions Law introduces two categories of electronic signature. A “Reliable Electronic Signature” is one that is linked to and under the exclusive control of the signatory, capable of identifying the signatory, and linked to the signed data in a manner that enables detection of any alteration (Article 19). A “Qualified Electronic Signature” meets these requirements and additionally satisfies enhanced technical standards relating to confidentiality, security, and authenticity (Article 20). A Qualified Electronic Signature is expressly deemed “equal in its authenticity to a manual signature” and carries “the same legal effect” (Article 18.3).
Third, the Law of Evidence in Civil and Commercial Transactions (Federal Decree-Law No. 35 of 2022, the “Evidence Law”) contains a dedicated chapter on electronic evidence (Articles 53 to 64). Article 55 provides that electronic evidence is subject to the same provisions as documentary evidence. Article 59 confirms that electronic evidence carries the same probative value as informal instruments under the Evidence Law. For the avoidance of doubt, Article 56 provides that “formal” electronic evidence has the same probative value as formal instruments.
The combined effect of these provisions is clear: a document bearing an electronic signature is admissible before the UAE courts and is afforded the same evidentiary weight as a document bearing a wet ink signature. Specifically, where the electronically signed document constitutes an informal instrument (that is, a document that is not issued by a public official in an official capacity, which is the case for most banking documents executed between the bank and its clients), it serves as evidence against its signatory unless that signatory denies the signature attributed to them, for example by claiming forgery (Article 28 of the Evidence Law, read with Article 59). It should be noted that the burden of proving forgery falls on the party making that claim.
It should be noted that certain instruments, particularly negotiable instruments such as cheques, raise separate issues and so fall outside the scope of this analysis. Additionally, execution of certain documents may require specific formalities under applicable law. However, these considerations are not relevant to the majority of banking documents addressed in this article (including loan agreements, guarantees, and security instruments).
3. The Real Risk: Process, Not Mechanism
If the legal position is this clear, why do banks remain concerned? The answer typically relates to one specific scenario: the counterparty denies the signature attributed to them and claims forgery. A bank that has extended credit on the strength of a guarantee or security document fears that the guarantor or obligor might later claim that the electronic signature was not theirs, that their account on the e-signature platform was compromised, or that someone else used their credentials.
This is a legitimate concern, but it is not unique to electronic signatures. The same risk exists, and has always existed, with wet ink signatures. For example, it is not uncommon for banks to face parties who have issued personal guarantees who claim that the signature was forged and seek to avoid the guarantee entirely. In such cases, the burden of proving forgery falls on the party making the claim, whether the signature is in wet ink or electronic form.
For wet ink signatures, the standard challenge is a claim of forgery. Banks typically require that certain sensitive documents, such as guarantees, be signed in the presence of a bank officer who witnesses the signature. Where the bank is unable to demonstrate that this procedure was followed, it may be more vulnerable to a forgery claim. If the purported signatory denies the signature, the matter is typically referred to a handwriting expert, and the court evaluates the evidence. The process is well understood but not infallible; handwriting analysis is an imperfect science, particularly given that signatures can change in subtle ways over time, and outcomes are not always predictable.
For electronic signatures, the challenge takes a different form, such as a claim that the signatory’s credentials were compromised or that they did not authorise the signing. However, a well-implemented electronic signature system may in fact generate a stronger evidentiary trail than a wet ink signature. E-signature platforms typically record the signatory’s identity verification, the time and date of signing, the IP address from which the document was accessed, the device used, and a tamper-evident seal confirming that the document has not been altered since signing. This audit trail is objective, contemporaneous, and difficult to fabricate.
It is also worth noting that documents, whether signed in wet ink or electronically, may be challenged on grounds that they were signed by a person who lacked authority to bind the relevant party. Such challenges typically succeed not because of any deficiency in the signing mechanism, but because the bank failed to conduct adequate due diligence on the signatory’s authority, for example by not obtaining or verifying board resolutions, shareholder approvals, or powers of attorney. This risk, again, is a process risk rather than a risk attributable to the form of signature.
The risk, therefore, does not lie in the choice between wet ink and electronic signatures. It lies in a failure of process. A poorly managed electronic signing process is vulnerable, just as a poorly managed wet ink signing process is vulnerable. The question for banks is not whether to adopt electronic signatures, but how to implement them in a manner that minimises the risk of a successful challenge.
4. Practical Recommendations for Banks
Banks seeking to adopt electronic signatures may consider the following practical measures to protect the integrity and enforceability of electronically signed documents.
4.1 Integration into Account Opening Procedures
One possible safeguard is to embed the electronic signature process into the bank’s existing account opening and onboarding procedures. At the point of account opening, when the bank already collects specimen signature cards, identification documents, and other KYC materials, the signatory should also be required to create a dedicated user account or set of credentials on the bank’s approved electronic signature platform. The details of this account, including the registered email address, mobile number, and any other identifying information, should be recorded in the customer’s file alongside their specimen signature card.
This approach has several advantages. It establishes a documented link between the individual and their electronic signature credentials at a point in time when the individual’s identity has been independently verified through the bank’s KYC process. It also makes it significantly more difficult for the signatory to later deny having signed a document electronically, because the credentials used to sign can be traced back to an account that the signatory personally created in the bank’s presence.
Banks have two options in this regard. First, a bank could integrate an electronic signature platform directly into its own systems, requiring customers to use that specific platform for all document execution. This offers maximum control and a uniform audit trail. Second, where full integration is not practicable, the bank could maintain a list of approved third-party e-signature platforms and require customers to use one of the approved platforms. In this regard, the Telecommunications and Digital Government Regulatory Authority (TDRA) maintains a UAE Trusted List of licensed trust service providers, which can serve as a reference point for banks in selecting approved platforms. In either case, the key is to ensure that the signatory’s credentials on the approved platform are recorded in the bank’s files at the point of onboarding.
4.2 Video Verification for Sensitive Documents
For particularly sensitive documents, such as loan facility agreements, personal guarantees, corporate guarantees, pledges, assignments of receivables, and other security instruments, where a bank would traditionally require a wet ink signature witnessed by a bank officer, the bank should consider adding an additional layer of verification.
Specifically, at the point of electronic signing, the bank could conduct a short recorded video call with the signatory. During this call, the bank officer would confirm the signatory’s identity, confirm that the signatory understands the nature and effect of the document being signed, and record the signatory’s express confirmation that they have signed (or are about to sign) the document electronically. The video recording would then be preserved in the bank’s archives, linked to the relevant transaction file.
This measure serves two purposes. First, it provides a contemporaneous, audiovisual record of the signatory’s identity and intent, which should be powerful evidence in the event of a later dispute. Second, it replicates the protective function of the traditional “witnessing” requirement: having a bank officer present (even remotely) at the point of signing creates a formal moment of accountability that discourages subsequent denial.
It is worth noting that this video verification step need not be onerous. A brief call of two to three minutes, following a standardised script, would be sufficient. The cost and inconvenience are minimal compared to the security it provides, particularly for high-value transactions.
4.3 Additional Considerations
Beyond the two core measures above, banks may also consider the following:
First, the bank’s electronic signature policy should be documented in a formal internal procedure, approved at an appropriate level of management, and communicated to all relevant staff. The procedure should specify which documents may be signed electronically, which require additional verification (such as the video call described above), and which, if any, must continue to be executed in wet ink. Banks should ensure that their internal policy is consistent with all applicable legal requirements.
Second, the bank should ensure that its standard form agreements contain express provisions recognising the validity and binding nature of electronic signatures and waiving any objection to the use of electronic means for document execution. While such a clause may not be strictly necessary given the statutory framework, it may serve to provide an additional contractual basis for enforcement and deter frivolous challenges.
Third, the bank should select an e-signature platform that meets the technical requirements for a “Reliable Electronic Signature” under Article 19 of the E-Transactions Law at a minimum, and ideally one that is capable of producing a “Qualified Electronic Signature” under Article 20. The platform should generate a comprehensive audit trail, including identity verification records, timestamps, IP addresses, and tamper-evident seals.
Fourth, one practical advantage of wet ink signatures is that they produce a physical document held in the bank’s files, providing a layer of redundancy in the event of loss or corruption of electronic data. Banks will already have electronic archiving, backup, and disaster recovery systems in place; however, when transitioning to electronic signatures, it is prudent to review whether those systems are sufficient to accommodate the increased reliance on electronically stored documents. Where the bank considers it necessary, it may also wish to print and retain physical copies of key electronically signed documents for its records.
5. Conclusion
The UAE’s legislative framework provides a clear and robust basis for the use of electronic signatures in banking transactions. An electronically signed document is admissible before the UAE courts and carries the same evidentiary weight as a wet ink signed document. The concerns that many banks harbour about the enforceability of electronic signatures are, in light of this framework, largely overstated.
The real risk for banks is not the mechanism of signing but the quality of the process surrounding it. A well-implemented electronic signature process, supported by proper onboarding procedures, platform integration, and, for sensitive documents, video verification, may arguably provide a stronger evidentiary foundation than traditional wet ink signature processes followed by banks. The audit trail generated by a reputable e-signature platform is objective, contemporaneous, and comprehensive in a way that a specimen signature card and a handwriting expert’s opinion are not.
Banks that continue to insist on wet ink signatures as a matter of blanket policy are not reducing their risk. They are simply preserving a traditional process while forgoing the efficiency and speed that electronic signatures offer, without necessarily compromising security. The question is no longer whether electronic signatures are legally valid. They are. The question is whether the bank’s internal processes are designed to maximise the evidentiary value of whatever signing mechanism is used.
Disclaimer
This article is published for general information purposes only. It does not constitute legal advice and should not be relied upon as such. The contents reflect the author’s understanding of UAE law as at the date of publication. Specific legal advice should be sought in relation to any particular matter or transaction. The author and Salloum & Partners LLC accept no responsibility for any action taken or not taken on the basis of this article.
