In these challenging economic times, some businesses are struggling to cope with financial pressures and financiers are concerned with their customers’ ability to service their financing arrangements. An effective insolvency regime is, therefore, an important element of financial system stability. The statutory insolvency regime in the United Arab Emirates (“UAE”) has often been regarded as under-developed and remains largely untested.

The onset of the global financial crisis brought into focus the extent to which the UAE’s business and economic landscape had changed. In order to continue to grow and protect existing investment, whilst also continuing to encourage new investment, the UAE Government recognised that various steps would need to be taken. In particular, legislative reform would be required in certain key areas.

There is a wide range of precautionary attachment options in the UAE which creditors in the region should take into account.

On Monday 14 December 2009 the Dubai Financial Support Fund received a further US$10bn from the Abu Dhabi Government to be used to satisfy a series of upcoming obligations of Dubai World and its subsidiaries (“DWG”). The monies were used in part to pay off the Nakheel sukuk which matured on the same day. The markets in the region (and elsewhere) reacted positively with significant gains and Dubai's CDS spreads narrowed. That same afternoon the Dubai Government announced a new law (Decree No. 57). Sheikh Ahmad Bin Saeed Al Maktoum, Chairman of the Dubai Supreme Fiscal Committee, said:

The Government of Dubai issued a press release on 25 November 2009 confirming that, through its Supreme Fiscal Committee (SFC), it has authorised the Dubai Financial Support Fund (DFSF) to spearhead the restructuring of Dubai World with immediate effect. Aidan Birkett, Managing Director of Corporate Finance at Deloitte, has been appointed as Chief Restructuring Officer (CRO) to "oversee the restructuring process and ensure the continuity of Dubai World's operation".  

On 14 December 2009, the same day on which Nakheel, a Dubai World subsidiary, was due to make payment under its 2009 sukuk, the Government of Dubai announced that it had received support from the Government of Abu Dhabi and the UAE Central Bank and would pay the US$4.1 billion due. It also announced that it had secured funding of an additional US$5.9 billion to be used to meet “interest expenses and working capital [of Dubai World] through April 30, 2010 – conditioned on the company being successful in negotiating a standstill”.

Sheriff McCormick at Glasgow Sheriff Court has been asked to rule on this specific point in the recent case of Gary John Cook v The Accountant in Bankruptcy [2019] SC GLA 82, which he answered in the affirmative.

This is of particular relevance for trustees in sequestration when the debtor has paid into a pension scheme and is intending to apply for a drawdown of the proceeds from that scheme, following the appointment of the trustee.

The facts are fairly straightforward:

According to the recent case of Sell Your Car With Us Ltd v Sareen [2019] – yes, they are.

Historically the courts have looked dimly on the use of insolvency proceedings as a method of debt collection. For this reason, where an individual or company appears to have the means to pay a debt but apparently refuses to do so, the courts have implied that the only proper legal recourse is through litigation. In this case, the judge explained why she considers this submission to have been taken too far.

Background

In But Ka Chon v Interactive Brokers LLC [2019] HKCA 873, the Hong Kong Court of Appeal upheld a lower court's decision to reject an application to set aside a statutory demand. The appellant had argued (among other things) that an arbitration clause in his agreement with the respondent required their dispute to be referred to arbitration.

On 5 July 2019 the Minister of Justice submitted a bill to parliament that will add a new powerful tool to the Dutch restructuring toolbox. The bill on the “Act on the Confirmation of a Private Restructuring Plan” is expected to introduce a serious competitor to the UK’s Scheme of Arrangement and the USA’s Chapter 11. The introduction of the bill will move one step closer on 26 September 2019, when members of the parliament are scheduled to submit their questions and remarks on the bill to parliament’s Standing Committee on Justice and Security.