In the current times of financial stress, a borrower seeking to renegotiate or refinance existing financing arrangements may be asked by its lender to enhance or refresh its security package through the grant of a new floating charge.

The question of whether a floating charge can be avoided due to section 245 of the Insolvency Act 1986 ("IA 1986") can arise in such a context.

Void floating charges under section 245 of the IA 1986

Payment Orders were originally introduced in the CPC as a fast track route for creditors holding a financial instrument, such as a letter of credit or cheque, to obtain judgment against their debtor for what is a simple and indisputable debt. Payment Orders were rarely issued by the onshore UAE courts. In 2018, Cabinet Resolution No 57 of 2018 (the “2018 Cabinet Resolution”) significantly expanded the scope of application of Payment Orders by extending them to all admitted debts rather than simply those arising out of financial instruments only.