By Yaser Dajani, Managing Director and Quantuma’s Middle East lead

As we reported in an earlier article, new insolvency, bankruptcy and restructuring laws are opening up opportunities to rescue troubled businesses and boost asset recovery in the Middle East. But some cases have been more successful than others.

Drawing on the discussions from a Quantuma-hosted roundtable for lawyers and insolvency practitioners in London, Yaser Dajani assesses which recent cases have succeeded, which haven’t and what we can learn from the outcomes.

A good insolvency solution works for all stakeholders.

For the business, success would be survival as a going concern. Not only would this protect jobs and shareholder value, the enterprise’s continued ability to trade and deliver returns would also provide the most effective way to repay debts and settle claims.

Where survival isn’t possible, it’s still possible to maximize the value of the estate by offering debtors greater opportunities for reorganization of rescuable assets, providing a simplified liquidation process, and ensuring fair treatment of creditors.

In turn, if the business’ troubles stem from poor governance, misappropriation of funds or fraud, an effective legal framework would enable the court to impose penalties, secure compensation, reclaim losses, and track down concealed or dissipated assets.

Securing the right outcomes

As an insolvency and recovery team, we recognize the value of the legislative reforms enacted across the Middle East. Over the past ten years, legislators have sought to build on global best practice and apply this to the cultural and business nuances of the region.

Recent landmark cases have provided the acid test of whether the legislative reforms are translating into fairer, more effective, and more enforceable settlements.

NMC – success

Perhaps the biggest, though by no means total, success has been the restructuring of Abu Dhabi-based NMC Health. 

In April 2020, NMC Health disclosed more than US$4 billion in debt that had been hidden from its balance sheet. This led to the FTSE100 NMC Health (UK) being placed into administration. The exposed creditors included regional banks, notably the Abu Dhabi Commercial Bank (ADCB), Abu Dhabi Islamic Bank and Dubai Islamic Bank, along with global giants Barclays, HSBC and Standard Chartered. 

Following a succession of court cases across both the UAE and abroad, NMC's creditors have been offered a US$2.25 billion arrangement as part of the restructuring process to clear their existing debt demands. Following the exit from administration under the jurisdiction of the Abu Dhabi Global Market (ADGM) and formation of a new NMC group, the business is now embarking on expansion.

This is only a fraction of the sums owed. And as for responsibility, various claims against management and auditors have come and gone with no imminent signs of conclusion or restitution. But NMC shows that funds are retrievable and businesses that are operationally viable can be rescued, even if their balance sheets are not.

KBBO – some success

In a related case, a plan to restructure Abu Dhabi investment firm KBBO Group and its hospital unit received court approval in 2023 under the UAE 2016 Bankruptcy Law. KBBO was one of the biggest shareholders of NMC Health. The group faces around AED 7 billion (US$1.9 billion) to AED 12 billion of claims, including complex cross guarantee positions. This major restructuring is therefore a milestone for the Bankruptcy Law, though the return on submitted claims is likely to be limited.

Many failures

Alongside these partial successes, there are some notable failures. At the forefront is the failed construction giant, Arabtec. Rather than seeking debt settlement or seeking extra time to meet its obligations as would have been possible under the UAE 2016 Bankruptcy Law, the business opted for an insolvent liquidation. 

Other failures include the retail group, Marka. In October 2021, a local court in Dubai declared the company bankrupt and all assets were brought into liquidation. Marka did not have sufficient assets to cover 20% of its debts. The court ruled that the managers and directors were jointly liable to pay the debt amounting to AED 448 million and stripped their rights from managing this company and other companies in the future. But how much of this AED 448 million can and will be recovered remains to be seen. And while the ruling would appear to impose greater management liability and may therefore lead to improvements in governance, UAE law has no system for binding precedent.

Improving your chance of success

What we can conclude from these cases is that legislative reforms have opened up new routes to settlement and restitution. But these legal frameworks are still evolving and need more time to bed down. This underlines the need for the right expertise, approach, and support in navigating through the legal processes and securing a favorable outcome.

Let’s talk 

If you would like to discuss any of the issues raised in this article or how we can support debt recovery, please feel free to get in touch.

Yaser Dajani


Yaser Dajani
Managing Director 


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