![\"Picture1\"](\"http:\/\/hjinterim.files.wordpress.com\/2021\/01\/picture1.jpeg\" "\\"Picture1.jpeg\\"")
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Reblog\u00a0used to inform you about current ongoing actions within the UAE<\/strong><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Legal Development 26 March 2020<\/strong><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Middle East<\/strong><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Coronavirus<\/strong><\/p>\n Recent court service suspensions announced in the UAE \u2013\u00a0albeit temporary \u2013 as part of the government’s response to COVID-19 will\u00a0undoubtedly have an impact on efficacy of debt recovery options available to\u00a0creditors, at least in the near short term. These measures come at a time when\u00a0payment default rates are only expected to increase rapidly and creditors will\u00a0be looking at what actions they can and should take to protect their position,\u00a0including short- and medium-term strategies. Knowing the current practical\u00a0options and applying careful thought around recovery approaches is now more\u00a0important than ever before, and these circumstances may well prevail for some\u00a0time. In this article, we summarize the operating status of the UAE Court Court slow-down and suspension of execution<\/strong><\/p>\n The ability for creditors to seek and progress timely legal\u00a0recourse for non-payment of debts through the UAE Courts has taken a knock in\u00a0recent days as both emirate-level and federal courts variously announced\u00a0temporary procedural and operational suspensions, including significantly the\u00a0suspension of civil court hearings for initial periods of a few weeks. It is\u00a0not a complete shutdown of the court systems, with various core functions still\u00a0able to be serviced electronically and\/or remotely, but the primary implication\u00a0for creditors is the impact on the practical utility of the legal process to\u00a0procure recovery of debts by keeping legal pressure on debtors, and execution\u00a0measures in particular, which have been diminished, at least for the near short\u00a0term, and possibly longer until the landscape leans back towards being more\u00a0‘normal’.<\/p>\n One insurance industry publication has recently labelled the\u00a0present global economic shock around COVID-19 as a “black swan\u201d event\u00a0for the trade credit insurance market, in reference to the glut of payment\u00a0defaults and insolvencies anticipated in the coming weeks and months.\u00a0Non-payment notifications to credit insurers are already accelerating. There is\u00a0inevitability that many businesses will slip into bankruptcy as a result of current\u00a0events, and others that are able to survive (at least in the short term) may do\u00a0so only by deferring or defaulting on payment of debts. The risks for creditor\u00a0and debtor are acutely heightened. Uninsured creditors may feel the pain of\u00a0these events even more directly.<\/p>\n Creditors will face immediate challenging decisions as to\u00a0whether, when and how to approach debtors for payment. Do you press early and\u00a0hard for payment, expending energies and cost where it may not yield results,\u00a0or let the dust settle and employ active recovery measures when the landscape\u00a0is clearer but others may have acted earlier to your prejudice? There is a\u00a0difficult (and likely different) balance to find in each case depending on\u00a0circumstances; what is going far enough in the short term to protect and\u00a0enforce your interest, while not going so far as to harm your own prospects of\u00a0recovery in the medium-to-long term if, as will be the case for many debtors,\u00a0short term payment solutions may not be practicable.<\/p>\n Formal legal enforcement actions are typically a last resort\u00a0for creditors for a variety of reasons, including the cost and uncertainty of\u00a0legal process and time to a final outcome, but demonstrating the real prospect\u00a0or such action being taken can be a powerful deterrent employed as leverage\u00a0with debtors. We have written previously (in 2019) on various enhancements made\u00a0to the UAE legal landscape which benefit creditors through availability of fast\u00a0track judicial remedies, such as without notice payment orders combined with the\u00a0ability to execute sooner, and we have achieved a number of successes for\u00a0creditors using these procedures over the past 12 months. With legal remedies\u00a0that can produce prompt and cost-effective results, creditors have become much\u00a0more ready and willing to sue for their money, or petition for a debtor\u2019s\u00a0bankruptcy, taking advantage of these more sophisticated remedies.<\/p>\n \n Which way to go?<\/strong><\/p>\n What\u00a0thought process and strategies might a creditor (or credit insurer) now be\u00a0considering? We suggest there are two broad schools of thought:<\/strong><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Take\u00a0a tough approach and start debt recovery steps immediately \u2013 this could put you\u00a0towards the forefront of creditors seeking for payment and acting early could\u00a0yield an early result where otherwise recovery prospects could diminish over\u00a0time; especially where there is huge uncertainty over the long-term economic\u00a0impact. On the other hand, a tough approach might damage the commercial\u00a0relationship without resulting in payment, and could affect the creditor\u2019s\u00a0reputation as a supplier in the market at a time when buyers will be looking\u00a0for support through a difficult period (good faith debtors who want to pay\u00a0would usually expect their suppliers to deal with them as partners during\u00a0crisis rather turn their back on them)<\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Take\u00a0a softer \/ waiting approach \u2013 this approach assumes that things will improve\u00a0for recovery given some time, as there is more certainty around the virus\u00a0response and true economic impact and related government support, and therefore\u00a0saving your recovery actions until such time may yield better results. It also\u00a0considers the possible dilution of the pressure that might ordinarily be\u00a0applied by the prospect of more robust steps, such as legal action, the\u00a0progress and affect of which are currently significantly affected. This\u00a0approach might benefit a creditor who has strong commercial relations with the\u00a0debtor and good visibility of its financial position (which likely will require\u00a0transparency from the debtor) as well as a strong understanding of its market\u00a0and sector and how this is likely to fare in the wake of current events. On the\u00a0other hand, others may gain ahead of you from taking ‘early mover’ advantage.\u00a0Delay in acting on or escalating recovery measures may be seen by some debtors\u00a0as weakness or unwillingness to act on the part of the creditor, which leads\u00a0them to delay payment even further, putting you at the bottom of their payment\u00a0list.<\/p>\n While\u00a0each case must be considered on its own facts, the best approach currently may\u00a0be a balance between the two; the creditor needs to show the debtor that they\u00a0care and they are prepared to support it to a reasonable extent through this\u00a0difficult economic period, but at the same time the debtor needs to feel\u00a0sufficient pressure being exerted to appreciate that the creditor is treating\u00a0the debt seriously and with the full expectation it must be paid. The legal\u00a0recourse route remains a valid pressure point, albeit presently having lost\u00a0some of its immediacy through the operational delays in the system.<\/p>\n A\u00a0suggested methodology for creditors to determine their action is:<\/strong><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Evaluate\u00a0a debtor’s financial situation and trying to understand the cause of the\u00a0default, and whether the reason(s) given are genuine or mere delay tactics\u00a0veiled by the present crisis.<\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Based\u00a0on that evaluation, decide (possibly with the benefit of external advisers) the\u00a0best approach to follow for the circumstances based on what specific options\u00a0are available, including the formal legal options, e.g., finalize a repayment\u00a0plan on acceptable terms, provide short deferments where appropriate to give\u00a0the debtor the chance to pay, or commence litigation to legally enforce the\u00a0payment obligation bearing in mind what that entails and what might be the\u00a0result.<\/p>\n Some\u00a0reprieve from bankruptcy actions?<\/strong><\/p>\n Of\u00a0note in an insolvency context, and perhaps a sign of what may be to come in\u00a0other countries, is a development from Australia this week, where the\u00a0Australian Federal Government announced temporary amendments, effective 24\u00a0March 2020, to insolvency and corporations laws in response to the challenges\u00a0that businesses are facing as a result of the COVID-19 crisis. These amendments\u00a0provide a safety net to businesses in challenging times to foster survival for\u00a0those businesses once the crisis has passed.<\/p>\n In\u00a0particular, the government intends to reduce the risk of businesses being\u00a0unnecessarily pushed into insolvency and reduce the risk of personal liability\u00a0for insolvent trading as a result of debts incurred in the ordinary course of\u00a0business. The amendments are particularly relevant in an environment where many\u00a0measures of a business\u2019 solvency are fluid as the broader COVID-19\u00a0circumstances evolve.<\/p>\n While\u00a0we are not aware (at the date of publication) of any similar measures being\u00a0announced for the UAE bankruptcy regime, it is reasonable to assume something\u00a0like this is within the government’s contemplation as a temporary relief\u00a0measure for businesses. The response of the relevant authorities in relation to\u00a0the courts and suspension of certain execution remedies shows that legislative\u00a0intervention to protect businesses for wider longer-term economic benefit is\u00a0part of the state response package being deployed. It will also be recalled\u00a0that following the GFC there were various special tribunals established in\u00a0Dubai to deal with claims relating to and restructuring of certain\u00a0organizations, so there is some precedent for such measures in Dubai at least.<\/p>\n Summary of UAE Court operating status<\/strong><\/p>\n Here\u00a0in short is what has currently been announced by each of the emirate-level and\u00a0federal courts in the UAE (although note the position is developing on a daily\u00a0basis and therefore is subject to change post-publication):<\/p>\n Dubai Courts:<\/strong><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0Civil:\u00a0All judicial hearings before the Dubai Courts of First Instance, Appeal and\u00a0Cassation, that are listed during the period 22 March 2020 to 16 April 2020\u00a0(inclusive) have been suspended and will be listed for later dates. Judgments\u00a0that were due to be issued during this period will still be issued. New claims\u00a0and requests can still be submitted electronically. Court-appointed experts are\u00a0required to postpone expert meetings for two weeks.<\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0Criminal:\u00a0All criminal cases before the Criminal Court of First Instance administratively\u00a0postponed until after 16 April 2020. Hearings of criminal appeals concerning\u00a0detainees \/ prisoners and hearings of urgent matters are expressly excluded.<\/p>\n DIFC Courts:<\/strong><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0Operating\u00a0on a remote basis since 17 March 2020. Hearings to be conducted via\u00a0teleconference. Hearings in the Small Claims Tribunal will be either through\u00a0video-conference (for overseas litigants) or teleconference (for those situated\u00a0in the UAE). Claim filing and payment of filing fees can be done entirely\u00a0electronically (as normal).<\/p>\n Abu Dhabi Courts:<\/strong><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0All\u00a0proceedings not ready for final judgment are suspended for not less than 30\u00a0days. For hearings scheduled to take place in the coming 30 days, local\u00a0advocates will be notified on (or shortly after) the date of the scheduled\u00a0hearing to advise of the new (re-scheduled) hearing date. Registration of all\u00a0types of new claims, appeals and cassations will continue electronically as\u00a0normal, with urgency given to claims affected by time limits (i.e., to protect\u00a0an expiring limitation period).<\/p>\n \u00b7 \u00a0 \u00a0Cases\u00a0ready for final judgment must be booked for final judgment and the final\u00a0judgments must be issued in the absence of the parties.<\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0Rent\u00a0evictions and any executory proceedings related thereto, and the enforcing of\u00a0any new civil and commercial judgments, will be suspended for a period of two\u00a0months (commencement date still tbc):<\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0All\u00a0executory procedures related to civil cases are halted, including the capture,\u00a0seizure and arrest of people, the blocking of bank accounts, and the garnishment\u00a0of vehicles, stocks and properties. However, cases related to alimony and\u00a0labour disputes are exempt.<\/p>\n \u00b7 \u00a0 \u00a0\u00a0While\u00a0presently unconfirmed, applications for precautionary attachments (i.e., not\u00a0for execution) and other precautionary measures (which are summary measures),\u00a0may still possible, though could be materially impacted by other suspended\u00a0procedures.<\/p>\n Ras Al Khaimah Courts:<\/strong><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0Executing\u00a0eviction of residential units is postponed. Arrests and bringing into custody\u00a0of debtors is postponed. Attachment procedures on movables, bonds, stocks and\u00a0real estate are suspended (unclear if relates to execution only).<\/p>\n Federal Courts (Sharjah, Umm Al Quwain,\u00a0Fujairah, Ajman):<\/strong><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0While\u00a0presently unconfirmed, it is believed that all Federal Court hearings are\u00a0postponed for a period of one month from 24 March 2020. Immediately prior to\u00a0publication, a UAE Cabinet directive was issued making provisions for measures\u00a0in the Federal Courts over the next one-month period. Further details are to be\u00a0advised.<\/p>\n","protected":false},"excerpt":{"rendered":" Reblog\u00a0used to inform you about current ongoing actions within the UAE \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Legal Development 26 March 2020 \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Middle East \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Coronavirus Recent court service suspensions announced in the UAE \u2013\u00a0albeit temporary \u2013 as part of the government’s response to COVID-19 will\u00a0undoubtedly have an impact on efficacy of debt recovery options available to\u00a0creditors, at least in the near … Read moreCOVID-19 UAE: Debt recoveries impact UAE<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":1876,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[18,28,19,20,29,21,22,23,24,25,26,27],"tags":[],"class_list":["post-1878","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-education","category-entities","category-financial-industry","category-gdpr","category-government","category-null-null","category-reaching-out-network","category-recruitement","category-reporting","category-security","category-security-treats","category-your-help-is-needed"],"_links":{"self":[{"href":"https:\/\/hjinterim.tech\/index.php\/wp-json\/wp\/v2\/posts\/1878","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hjinterim.tech\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hjinterim.tech\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hjinterim.tech\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/hjinterim.tech\/index.php\/wp-json\/wp\/v2\/comments?post=1878"}],"version-history":[{"count":0,"href":"https:\/\/hjinterim.tech\/index.php\/wp-json\/wp\/v2\/posts\/1878\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hjinterim.tech\/index.php\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/hjinterim.tech\/index.php\/wp-json\/wp\/v2\/media?parent=1878"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hjinterim.tech\/index.php\/wp-json\/wp\/v2\/categories?post=1878"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hjinterim.tech\/index.php\/wp-json\/wp\/v2\/tags?post=1878"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nSystem and share some thoughts on the impact and considerations for creditors\u00a0in their approach to debt recovery.<\/p>\n