Feb 14 2010
|more articles from|
DIFC to host Dubai World hearings
"Currently, Article 4 sets out what rules and laws the Tribunal should follow and one of those is the DIFC Law No 10 of 2004, which is the DIFC Court Law. The judges on the Special Tribunal
are drawn from the DIFC Court, so they will know the rocedures," said Jonathan Sutcliffe, Partner at Fulbright & Jaworski, a legal firm in Dubai.
He said: "The Tribunal is not part of the DIFC Court though it will hold hearings in the courtroom of the DIFC Court. The DIFC Court registrar is also the registrar of the Tribunal."
Decree No 57 of 2009 gives jurisdiction to the Tribunal, which is composed of three judges - Sir Anthony Evans, Michael Hwang, SC and Justice Sir John Chadwick. "We can expect to see some claims from creditors in the near future though we do not have any names as yet," he told Emirates Business exclusively.
Decree No 57, effective December 13, 2009, established the Tribunal to decide the disputes related to the settlement of the financial position of Dubai World and its subsidiaries since Dubai World was established by a special decree and so the insolvency regime contained in the Commercial Transactions Law (Federal Law No 18 of 1993) arguably may not apply, according to him in a recent presentation to UAE construction stakeholders, which was held by the firm.
By Article 3 of Decree 57, the Tribunal has jurisdiction to "hear and decide any demand or claim submitted against... [ Dubai World companies], including hearing and deciding any demand to dissolve or liquidate [ Dubai World companies]..."
"The Government of Dubai's stated intention was to fill the gap by issuing a law that would permit restructuring of obligations of Dubai World and its subsidiaries in accordance with international best practice," he said in the presentation.
The insolvency regime created by Decree 57 states Dubai World or its subsidiaries may at any time notify the Tribunal that they intend to make a proposal to their creditors for a voluntary arrangement [notification] and creditors then have 60 days after the notification to submit proofs of claim in the ensuing insolvency process - a proof not submitted within the time limit is barred and extinguished for ever.
Once notification is given, the notifying Dubai World company has a 120-day exclusive period to propose a voluntary arrangement to creditors - and this can be extended by a further
"In the notification stage, all other legal proceedings in the Dubai Courts or DIFC Courts are subject to an automatic moratorium. From the time it makes a notification to creditors, DW or its subsidiaries has an exclusivity period of 120 days to be the only one to make any proposal regarding a voluntary arrangement, which can be further extended by the Tribunal.
"The threshold for passing a voluntary arrangement is two-thirds in value [of claims agreed to by the relevant Dubai World company or otherwise allowed by the Tribunal] of any class of creditors or equity interest holders, which if passed is binding on people within the class. If the voluntary arrangement is approved by creditors and sanctioned by the Tribunal, then the arrangement is carried through. If not, there is a possibility that the Tribunal can order the winding up of Dubai World or its subsidiaries but that is the very last resort," he said.
He added: "Even if you don't want to file a claim in the Special Tribunal now but are owed money, it is time to get your proof of claim ready in anticipation of the possible voluntary arrangement stage.
"If DW issues a notification, as a creditor you have only 60 days to submit your proof of claim into the ensuing insolvency process, which is not much time to put together the details, especially, if you are working on a complex or large project."
© Copyright Zawya. All Rights Reserved.
More in Financial Services
- UPDATE 1-Korean women scrap meeting Japanese mayor over brothel remarks
- REFILE-Elderly Korean women cancel meet with Osaka mayor over war brothel remarks
- Korean "grannies" cancel meet with Osaka mayor over war brothel remarks
- Solar plane completes second leg of cross-country flight in Texas
- College student snares record long Burmese python near Miami
- There's More