Rules of Territorial Jurisdiction in Insolvency Lawsuits: A Reading of Dubai Court of Cassation Rulings

Insolvency cases raise fundamental questions regarding the geographical scope of litigation, especially given the economic integration between the Emirates. One of the most prominent questions is: Can a debtor file an insolvency lawsuit before Dubai Courts while residing in another Emirate?

Between the Hammer of Debt and the Anvil of the Law: Dubai Courts Uphold Compassionate Justice in GCC National’

Highlights

A Petition for Writ of Certiorari has been granted by the U.S. Supreme Court in Keathley v. Buddy Ayers Construction, Inc., Case No. 25-6, on a ruling from the U.S. Fifth Circuit Court of Appeals.[Fn. 1]

The Question Presented in Kethley v. Buddy Ayers is this:

In autumn of 2025, the English High Court decided that liquidators have unlimited personal exposure: they cannot contractually limit or exclude their personal liability for breach of duty. An application for permission to appeal that decision is now before the Court of Appeal.

In a move that exemplifies the flexibility of the UAE’s judicial system, the Dubai Court has issued a landmark ruling declaring the insolvency of an Arab national. The individual had accumulated civil debts totaling AED 736,000, leading to a complete inability to meet financial obligations.

11 U.S.C. § 365(c)(2) says (emphasis added):

The English Court of Appeal has recently provided important guidance on transactions at an undervalue pursuant to s.238 of the Insolvency Act 1986 (“IA 86”) in the case of TAQA Bratani Ltd v Fujairah Oil and Gas UK LLC.

While Chapter 11 does not require debtor insolvency, it does require good faith (applicable to the petition and the plan), which for solvent debtors seeking to reject and modify lease-counterparty rights, includes establishing some level of financial distress susceptible to resolution through the plan process.

Key takeaways

The Supreme Court of India ('Court') in UV Asset Reconstruction Company Limited v. Electrosteel Castings Limited, Civil Appeal No. 9701/2024, has delivered a critical judgment clarifying the legal boundaries between a Deed of Undertaking and a Contract of Guarantee under Section 126 of the Indian Contract Act, 1872 (‘Act’). The Court's decision underscores that mere commercial nomenclature and internal funding arrangements do not satisfy the rigorous legal requirements of a guarantee.

Factual Background