One of the most common ways of conducting business within the UAE is through an onshore limited liability company. Commercial companies incorporated onshore in the UAE have a separate legal personality.1 The company can enter into legally binding agreements in its own name and take on valid and binding obligations. Actions of the directors of a company, on behalf of such a company, generally bind the company.2 Generally, any liabilities resulting from those actions are for the account of the company, rather than for the account of the individual directors in their personal capacity.

HFW DISPUTES DIGEST 2022 Welcome to our first annual digest, in which we collate our 2022 global HFW LITIGATION and International Arbitration publications in one place. This edition includes updates from the whole Disputes arena across England, AsiaPac, and the Middle East. HFW is one of the world’s largest and most active disputes practices, litigation is in our DNA. We have more than 350 specialist disputes lawyers in offices across the Americas, Europe, the Middle East, and AsiaPac.

The much-anticipated UK Supreme Court decision in BTI 2014 LLC v Sequana SA & Ors was finally released, giving clarity to directors and insolvency practitioners about the existence, scope and engagement of the so-called “creditor duty”. A relatively recent development in English law, the creditor duty is in fact really a dormant creature of the existing directors’ fiduciary duties that awakens in an insolvency, or near insolvency, context.

Introduction

The court ruled that:

Key Points

Welcome to the October 2022 edition of the HFW Commodities bulletin.

In this extended edition, a number of our partners from across the globe have taken time to reflect on the profound impact of the Russian invasion of Ukraine on the commodities sector. It includes contributions from our offices in Australia, Geneva, London and Singapore, with articles on energy and food security, sanctions, insolvency, regulation, the energy transition and force majeure.

On the back page, you will find details of the latest news and where you can meet the team next.

Key Points

Hong Kong Airlines (HKA) has announced that it is seeking to implement a restructuring of its aircraft lease obligations and other liabilities by court action in the UK and Hong Kong.

The plan proposes to give aircraft lessors a right to an upfront cash recovery — of about 5 percent of their claims (or in the case of lessors of aircraft being retained, the right to elect equity in the restructured HKA) — and potential future payouts starting in 2028 tied to the future earnings of the airline.

Part 1: Preventative composition as a restructuring tool

As commercial companies in the UAE grapple with increasing inflation and interest rates, constraints to supply chains and labour market challenges, it seems inevitable that the number experiencing financial distress will rise. 

Key Point

• The UK government's proposals to only partially implement a new UNCITRAL Model Law means that creditors of English law debts who do not consent to a foreign restructuring proceeding will still have recourse to enforcing their rights against the debtor's UK-based assets.

English Law Is Still a Special Situation

Naumets (Trustee), Dorokhov (Bankrupt) v Dorokhov [2022] FCA 748 In the matter of Hydrodec Group Plc [2021] NSWSC 755

Elon Musk recently said he has a "super bad feeling" about the economy, pithily declaring what most financial commentators have been predicting in more technical terms.