A cheque in Cyprus is a bill of exchange drawn on a banker, and the Bills of Exchange Law, Cap. 262, makes the drawer's position stark: by drawing it, the drawer engages to compensate the holder if it is dishonoured. The holder's side has one procedural duty that decides cases, notice of dishonour, and one arithmetic comfort: the recoverable amount is the face of the cheque, interest from presentment, and the protest expenses. A dishonoured cheque is also one of the cleanest candidates for summary judgment.
The cheque that comes back marked refer to drawer sits in a different legal position from an ordinary unpaid invoice, and mostly a better one. The debt is written on a negotiable instrument with statutory engagements attached, the defences are narrow, and the document itself is most of the trial bundle. What squanders that advantage is delay and informality in the days after the dishonour, which is exactly when the Law imposes its one demand on the holder.
The engagements written into the instrument
Under section 73, a cheque is a bill of exchange drawn on a banker, payable on demand, and the Law's bill provisions apply to it. That definition matters because it imports section 55: the drawer, by drawing the instrument, engages that on due presentment it will be paid according to its tenor, and that if it is dishonoured the drawer will compensate the holder, or any indorser compelled to pay, provided the requisite proceedings on dishonour are duly taken. An indorser gives the same engagement and cannot deny the genuineness of the drawer's signature or of the indorsements before their own.
In plain terms: the signature on the cheque is a statutory promise to make it good, and everyone who indorsed it down the line stands behind it too. The holder does not have to prove the underlying deal in the way an invoice claimant does; the instrument carries its own obligations.
The one duty that discharges the careless: notice of dishonour
Under section 48, when a cheque is dishonoured, notice of dishonour must be given to the drawer and to each indorser, and any drawer or indorser to whom notice is not given is discharged, subject to the Law's provisions. The strongest claim on paper dies quietly here more often than anywhere else.
The rules for the notice are in section 49, and for cheques the reasonable time is fixed by reference to the Cyprus Clearing House under section 82Ζ. The practice that never goes wrong is simple: the day the bank returns the cheque, written notice goes to the drawer, and to every indorser whose recourse you may need, stating that the cheque was presented and dishonoured. Then the letter before action can follow at leisure; the notice cannot.
Delay in presenting the cheque is treated more gently than delay in notifying. Under section 74, late presentment discharges the drawer only to the extent of actual damage suffered through the delay, in the narrow scenario where the drawer had the funds with the banker and the banker fails in the meantime, and the holder then stands as the banker's creditor to that extent. A stale cheque is a practical problem with the bank counter; it is rarely, by itself, the end of the claim.
What the claim is worth, by statute
Section 57 sets the measure of damages against any party liable on a dishonoured instrument: the amount of the cheque, interest from the date of presentment for payment, since a cheque is payable on demand, and the expenses of noting or protest where protest was necessary. The interest point is worth noticing: it runs from presentment, not from judgment, which on a slow-moving dispute is a real difference.
The claim on the instrument is contractual in nature, and the six year period under section 7(1) of the Limitation of Actions Law 66(I)/2012 is the clock this site's limitation calculator applies to contract debts. Six years is long; the evidence's shelf life is shorter, which is the real deadline.
Why these claims move fast when run properly
A dishonoured cheque is the textbook candidate for summary judgment: the signature is on the instrument, the statutory engagements attach to it, the bank's return marking evidences the dishonour, and the room for a genuine defence is narrow. Where a real defence exists it usually concerns the underlying transaction between the immediate parties, fraud, or a signature dispute, and it declares itself early. The firm's guide to debt recovery in Cyprus covers the procedural road; what the cheque changes is how short that road can be.
Two situations deserve their own sentence. A cheque that is crossed, or marked in a way that restricts transfer, limits how it can be collected rather than what it is worth, and the markings are read before anything else is done. And where the drawer has issued a cheque without funds, any criminal process that may follow is a matter for the authorities and is separate from, and no substitute for, the civil claim: a prosecution does not pay the holder.
If you are the one who signed it
The engagements of section 55 are not the end of every story. Between the immediate parties, the underlying transaction can matter: a cheque given for a consideration that failed, obtained by fraud, or altered after signature raises real questions, and a drawer who disputes liability should say so early, in writing, and above all should not ignore the claim into a default judgment. What does not work is silence, or the assumption that stopping the cheque ended the matter: the stop instruction is a fact of the dishonour, not a defence to the engagement.
What to send us
The cheque itself, both sides, with the bank's return marking visible. The date it was presented and the date it came back. What the cheque was given for, in a sentence, and any document behind it. Whether anyone indorsed it. And whatever notice has already been sent, with dates, because the section 48 position is the first thing checked.
Questions we are asked
The cheque bounced. Do I have to prove the whole underlying deal?
The instrument does most of that work. Under section 55 of Cap. 262 the drawer, by drawing the cheque, engages to compensate the holder if it is dishonoured, provided the proceedings on dishonour are duly taken. Between the immediate parties the underlying transaction can still be raised as a defence, but the starting position is the statutory engagement written into the signature, which is why these claims are strong candidates for summary judgment.
What must I do in the first days after the dishonour?
Give notice of dishonour, in writing, to the drawer and to every indorser you may need to pursue. Under section 48 a drawer or indorser who is not given notice is discharged, and for cheques the reasonable time is fixed by reference to the Cyprus Clearing House under section 82Ζ. Send the notice the day the cheque comes back and keep proof of sending; the letter before action can follow, the notice cannot wait for it.
How much can I recover beyond the face amount?
Section 57 gives the statutory measure: the amount of the cheque, interest from the date of presentment for payment, and the expenses of noting or protest where protest was necessary. Interest from presentment rather than from judgment is the part claimants routinely under-claim.
I sat on the cheque for months before presenting it. Have I lost the claim?
Usually not. Under section 74, delay in presentment discharges the drawer only to the extent of actual damage suffered through the delay, in the scenario where the drawer had the funds and the banker fails in the interval, and even then the holder becomes the banker's creditor for that amount. The practical problems of a stale cheque are at the bank counter; the claim on the instrument is measured by the six year contract period. Present it, record the dishonour, and give the notices.
The drawer says he stopped the cheque, so it was never going to be paid.
A stop instruction explains the dishonour; it is not by itself a defence to the drawer's engagement under section 55. What the drawer needs is a real defence on the instrument or the underlying transaction between you, and that is tested on the documents. From the holder's side, treat a stopped cheque exactly like any other dishonour: notice under section 48, then the claim.
Should I report it for prosecution instead of suing?
The two processes are separate and serve different ends. Whatever the authorities do about a cheque issued without funds, a prosecution does not pay you: the money comes from the civil claim on the instrument, which runs on its own timetable and its own rules. Deciding whether to report is your choice; deciding to preserve the civil claim, starting with the notice of dishonour, should not wait on it.
Related reading
This work sits within our litigation and debt recovery practice. The wider recovery road is in debt recovery in Cyprus, the first formal step in the letter before action, and the company-debtor lever in the statutory demand.
This article is for general information only and does not constitute legal advice. Laws and their application can change, and individual circumstances differ. For advice on your own matter, contact Klitos Platis at klitos@kleanthousplatis.com or telephone +357 22 680 330.
Klitos Platis
Advocate, Partner
Kleanthous & Platis LLC, Nicosia · Published 22 August 2026
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