Judgment by Dubai Court Sets New Principle for Insolvency Matters

Judgment by Dubai Court Sets New Principle for Insolvency Matters

By Sabry El Khawas and Mahmoud Elharidi 

The Dubai Court of Cassation recently set a new principle in relation to insolvency. The court stated that the commencement of a Debtor’s insolvency proceedings, and the liquidation of his money, would result in stopping all unilateral measures taken by ordinary Creditors, however, in cases where the Court decides to terminate insolvency proceedings and liquidate the money due to lack of funds or due to the Debtor’s proceeds being insufficient to pay the debts (wherein the insolvency proceedings shall not be applicable), the Creditors shall recover their rights to take unilateral measures against the debtor and will be able to enforce any judgment that they may have acquired, since the general purpose of insolvency is to liquidate a Debtor’s money and divide it pro rata to re-pay debts to Creditors. 

The judgment by the Court also mentioned that the end of the insolvency and liquidation procedures does not prevent the declaration of insolvency pursuant to Article 46.4 of Law No. 47 for the year 2021 on insolvency.


For more information, or assistance, contact:

Ali Al Zarooni
Managing Partner
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About Horizons & Co

Founded in 1999, with offices in Dubai and Abu Dhabi, Horizons & Co is one of the UAE’s leading multidisciplinary law firms. Led by prominent Emirati lawyer, Advocate Ali Al Zarooni, the firm’s legal experts come from a range of common-law and civil law jurisdictions, combining international experience and qualifications with expert knowledge and understanding of the UAE and surrounding Middle East region. 

Licensed to practice before all courts, police stations and public prosecutions in the UAE, Horizons & Co provides experienced legal services in all areas of UAE law. They are particularly expert in dispute resolution, specialising in litigation and arbitration. The firm represents major corporate and private clients on a range of complex matters before the differing dispute resolution fora within the UAE.

The firm’s clients include local and international corporations, insurers, financial institutions, developers, contractors, oil and gas companies and Government organisations. Horizons & Co frequently serve as local counsel to international firms on multifaceted civil and commercial disputes. Many international law firms also work closely with Horizons & Co in order to gain an expert insight into all matters pertaining to local UAE laws.


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