Horizons & Co Secures Landmark Victory in Major Banking Restructuring Dispute

Case Background: An AED 180 Million Banking Restructuring Dispute

The dispute began after the borrowers defaulted under several financing facilities owed to the firm's client. Rather than move straight to enforcement, the parties negotiated at length and signed a Settlement Agreement on 26 January 2023. The agreement gave the borrowers a final grace period to meet their obligations. It also strengthened the lender's security by transferring several real estate assets registered with the Dubai Land Department, backed by a package of security cheques. 

The borrowers did not pay. Instead they brought extensive litigation on several fronts. They sought cancellation of the settlement agreement, cancellation of the registered property transfers, restoration of ownership, a ruling that the transfers were only nominal, and the return of the security cheques. The scale of the exposure, close to AED 180 million, and the number of separate proceedings made the matter significant.

Strategic Defence

Horizons & Co defended the claims across their contractual, banking, property and procedural dimensions. The defence rested on a single principle. A party that voluntarily negotiates a settlement, transfers ownership, and accepts the consequences of default cannot later ask the court to treat that agreement as if it never existed.

The defence showed that the Settlement Agreement was a valid contractual restructuring and that ownership of the transferred assets had passed lawfully and been duly registered. Under UAE law, registered title carries decisive evidential authority and cannot be displaced without proof of fraud or forgery. No such proof existed.

On the security cheques, the defence established that cancellation of the original facilities was conditional on full payment of the agreed settlement amount. Because the borrowers had not paid, they could not demand the return of the instruments, and the lender's security remained intact.

Court Judgment

The Dubai Court of Cassation rejected every ground the borrowers advanced. The related proceedings concerning the security cheques were resolved in the client's favour. The outcome preserved the restructuring in full. The settlement, the registered property transfers and the security package remained intact at every point the borrowers had challenged them.

Broader Significance for Lenders in the UAE

The judgment reinforces several principles that matter to financial institutions operating in the UAE. Registered ownership cannot be displaced merely by alleging that a transfer was intended only as security. The public land register cannot be contradicted without proof of fraud or forgery. A settlement negotiated after default remains fully enforceable.

For lenders, the result strengthens confidence in corporate restructuring mechanisms built on registered real estate transfers. For the market, it supports the integrity of Dubai's land registration system. 

The case was led by Refat Zidan, Head of Litigation, and Associate Safaa Al Mohammad. It reflects the firm's work in banking litigation and financial dispute resolution, and its record of protecting clients across multiple connected proceedings. Read more about our work in banking and finance, restructuring and insolvency, dispute resolution and real estate.

Frequently Asked Questions