We are increasingly seeing requests from borrowers to carve-out assets from the scope of a lender's otherwise all asset English security package. Whilst there may be commercially sensible reasons for this request, lenders should be aware of the potential impact on their enforcement rights before agreeing to this.

Over the past year or so, we have seen a number of examples of Dubai Courts taking an extremely cautious approach to handling debtor-led bankruptcy cases, particularly in relation to determining whether there is a legitimate distressed financial position and enquiring as to the conduct of managers leading to the bankruptcy of companies.

Since the introduction of the Corporate Insolvency and Governance Act 2020 (CIGA) and the creation of the new Part 26A restructuring plan procedure, questions have been raised about whether the cost of using such a procedure would restrict its use to larger, better capitalised companies.

A majority of the Supreme Court recently held that an insolvent company does not suffer any recoverable loss if payments are made from its bank accounts that discharge a debt owed by that company.  This decision adds to the growing case law on the Quincecare duty.

The claim against HSBC

Different recession, regulatory environment and litigation market leads to different exposures

Whilst there is a clear link between recessionary conditions and claims against financial institutions, financial services professionals and directors and officers, the lessons from the previous recessions in the early 1990s and 2008 onwards may only take us so far in predicting the outcomes this time, given the different economic base going in and the catalysts for this recession (which include the pandemic, the war in Ukraine and high inflation).

In what has been referred to as a “momentous decision for company law”, the Supreme Court recently considered whether, when a company is in the ‘insolvency zone’, its directors must have regard to the interests of its creditors in addition to, or instead of, its shareholders.

Welcome to the eighth edition of our quarterly disputes newsletter, which covers key developments in the dispute resolution world over the last three months or so.

In a judgment rendered on 10 October 2021, the Dubai Court of First Instance had concluded that current and former directors and managers of Marka were personally liable towards creditors of the company merely on the basis that the assets of the company were not sufficient to pay at least 20% of its debts. The 20% threshold was set in onshore Federal Decree Law No. (9) of 2016 on Bankruptcy (the Bankruptcy Law) as it then was, and the Court determined that liability applied to current and former directors and managers without distinction where the threshold is not met.

The long awaited Sequana Supreme Court judgment[1] has provided some welcome clarity around the duties of the directors of a company in the "twilight zone" – i.e. where the company is facing financial difficulties.

In June 2021, we published an article (here)about the positive implications for insurers of our win in an unreported County Court case[1] in which the Deputy District Judge held that an insured’s insolvency did not have the effect of “pausing” the limitation clock from that date in relati