When a Cayman Islands company is in official liquidation, no proceedings or claims can be commenced against the company without the Cayman Court's permission. This requirement serves as a safeguard for the liquidation estate of the company in liquidation from being unnecessarily depleted at the expense of stakeholders of the liquidation.

We have recently experienced an increase in mandates concerning disputes between shareholders and the Board of a Cayman company, which in many cases, leads to a shareholder applying to appoint provisional liquidators over the Company on a just and equitable basis. Therefore, we considered it important to remind those considering this remedy of the evidentiary hurdles they need to overcome to exercise it successfully.

In yet another example of the Dubai International Financial Centre (DIFC) making its company and insolvency law even more versatile, the DIFC has introduced a mechanism which will operate in a similar manner to a scheme of arrangement under English law. The law came into effect on 12 November 2018.

Key terms

OW Bunker, one of the world’s major bunker suppliers and traders, and one of the largest companies in Denmark in terms of revenue, has filed for in-court restructuring for major parts of its business.

The subsidiaries involved face insolvency following the uncovering a $125m fraud in Singapore and a $150m risk management loss.

In Brief:

In a follow-up action to its 2020 amendment to the 2016 Corporate Bankruptcy Law (that defined an Emergency Financial Crisis as “A general situation that affects trade or investment in the country, such as a pandemic, natural or environmental disaster, war, etc.”) the UAE Cabinet has now officially declared that an Emergency Financial Crisis shall be deemed to exist during the period from 1 April 2020 until 31 July 2021 due to COVID-19 with various implications for businesses distressed as a result of the pandemic.

As a director or manager of a UAE company, you will know that like individuals, companies experience times of good health and occasional periods of sickness.

In this note, we focus on you, as directors (which includes managers) of “onshore” limited liability companies (“LLCs”), noting of course that the rules may also apply to certain free zone entities as well. We want you as directors to be certain of your duties and responsibilities in the good times but also sure of the actions you should or could take if things go wrong for your company, and financial difficulties arise.

Introduction

When a limited liability company goes into liquidation, its creditors are faced with considerable uncertainty, not least over their rights to securities on loans made to the defaulter. In such cases, a number of questions arise, including the following:

January 2017

Practice Group: Banking & Asset Finance

New UAE Insolvency Law

By Simon Mabin

Executive Summary

The new bankruptcy law was published in the Official Gazette dated 29 September 2016 following the issuance of Federal Decree Law No.9 of 2016 on Bankruptcy (the "Bankruptcy Law"). The Bankruptcy Law is expected to become effective in December 2016 / early 2017.

Enforcement of a judgment should be the crown jewel of every successful claim.

However, the picture is not always as rosy. Sometimes the successful litigant is faced with the realisation that the judgment debtor has no substantial assets for the enforcement and recovery of the awarded sums. What is left is an ‘empty’ judgment.

This article will attempt to discuss the situation of empty judgments, what brings them about, ways to prevent them, as well as some practical recommendation and suggestions from our practice and experience.