In a landmark bankruptcy case judgment issued on 10 October 2021 the Dubai Court of First Instance has held the directors and managers of an insolvent Dubai-based PJSC to be personally liable to pay the outstanding debts of the previously listed company (now in liquidation) pursuant to the UAE Bankruptcy Law. This decision represents a very significant milestone in the UAE insolvency landscape since the enactment of the Bankruptcy Law in late 2016, being the first known instance of a case where such personal liability has been ordered.

The Section

This was first published in the LexisNexis Insolvency Law Bulletin (Vol. 21, No. 5 & 6).

This article is co-authored by Justin Ward of Litigation Capital Management and Marcel Fernandes of 12 Wentworth Selborne Chambers.

On 9 June 2021, the Dubai Court of Cassation adopting a restrictive interpretation of the UAE Federal Law No 11 of 1992 and its amendments (the Civil Procedure Code) has added a requirement for the success of a debt recovery claim through a payment order application to the summary judge: there must be written evidence that the debt was either accepted or acknowledged by the debtor. This article provides an overview of the legal requirements of the payment order claim and what this new requirement of the Dubai Court of Cassation means for creditors in Dubai.

The High Court has given its blessing, in two recent cases, to ever more creative company restructuring – which will be a relief to occupational tenants as they look to emerge from COVID, but will likely give landlords cause for concern.

(This article was originally published in the Australian Restructuring Insolvency & Turnaround Association Journal, Vol. 33 – March 2021)

A liquidator can be exposed personally in litigation. In this article we discuss the risks to a liquidator associated with litigation by examining some recent cases where liquidators have been ordered to pay costs personally. To mitigate these risks, we provide guidance on litigation strategy for liquidators.

Background

The plaintiff was the primary trading entity within a larger group of companies which operated a development and construction business.

The liquidation of the group was complex, with a significant number of claims identified as requiring investigation. Further, ASIC’s allegations of serious misconduct resulted in a significant amount of the liquidator’s time being allocated to assisting ASIC with its investigation.

Problem

The COVID-19 pandemic is also keeping legislators on their toes, who are continuing to try to mitigate the impact of the pandemic on the economy. The focus was initially on the temporary suspension of the obligation to file for insolvency by the COVID-19 Insolvency Suspension Act (COVInsAG). Following on from this, with the Act on the Further Development of Restructuring and Insolvency Law (SanInsFoG), which came into force on 1 January 2021, the legislator has further modified obligations of conduct and, correspondingly, the liability of managing directors in the crisis of the company.

This article was originally published in the Australian Restructuring, Insolvency & Turnaround Association Journal (Volume 32 #01 2020)

The first of March marked the second anniversary of the changes to the Corporations Act 2001 (Cth) (Act) permitting an external administrator to assign rights to sue. The Australian Government proposed the reform in the hope that the ‘sale of rights of action may enable the value in such rights to be realised’[1].

On 22 October 2020, the UAE government made various changes to the UAE Bankruptcy Law*, including the concept of Emergency Financial Crisis (EFC). Subsequently, on 10 January 2021, the UAE Cabinet declared the existence of an EFC in the UAE. In this article, Partners Michael Morris and Keith Hutchison explore how this declaration may impact on debtors and creditors.

Emergency Financial Crisis

One of the key changes implemented was a power given to the UAE Cabinet to declare an EFC. An EFC is defined as: