November 03, 2021 court of first instance - Orders
Claim No. CFI 063/2020
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
MASHREQBANK PSC
Claimant
and
(1) INFINITE PARTNERS INVESTMENT LLC
(2) KHALEEFA BUTTI OMAIR YOUSIF ALMUHAIRI
(3) HIS EXCELLENCY SAEED MOHAMED BUTTI MOHAMED ALQEBAISI
(4) FRESHLY FOODS BAKERY LLC
(5) FRESHLY FROZEN FOODS FACTORY LLC
(6) SENORA FOODS LLC
(7) SENORA QUALITY GENERAL TRADING LLC
Defendants
ORDER WITH REASONS OF JUSTICE SIR JEREMY COOKE
UPON the Order of Justice Sir Jeremy Cooke dated 22 September 2021 (the “Order”)
AND UPON reviewing the Defendants’ permission to appeal application dated 13 October 2021 filed against the Order (the “Permission Application”)
AND UPON reviewing the Claimants’ submissions in opposition to the Permission Application dated 25 October 2021
IT IS HEREBY ORDERED THAT:
1. The Permission Application is refused.
2. The Defendants shall pay the Claimant’s costs of the Permission Application to be assessed by the Registrar on standard basis, if not agreed.
Issued by:
Amna Al Owais
Chief Registrar
Date of issue: 3 November 2021
Time: 10am
SCHEDULE OF REASONS
1. The appeal has no prospect of success and there are no compelling reasons why it should be heard and compelling reasons why it should not be heard, in the face of other proceedings now brought by the Trustee appointed by the Abu Dhabi Court.
2. It is clear that the Insolvency Law in the DIFC governs issues of recognition of orders made and assistance to be given to foreign Courts in relation to a “Foreign Proceeding” as defined in the statute.
3. It is uncontroverted that the claim for recognition of what was described as the Abu Dhabi “Bankruptcy Order”, which was said to be a “foreign proceeding” was not made by the “Foreign Representative” within the meaning of the Insolvency Law and that under the terms of the Insolvency Law, provision is only made for recognition to be sought by such a Foreign Representative. The Claim for recognition could not therefore succeed and there is no prospect of success on an appeal in relation to the refusal to recognise the Abu Dhabi Order.
4. It is also clear that Article 117(1) of the Insolvency Law makes provision for assistance to be given by the DIFC Court in the “gathering and remitting of assets in the DIFC”, only where a Foreign Company is the subject of insolvency proceedings in its jurisdiction of incorporation. No such request was made by the Abu Dhabi Court for such assistance, merely a request for a stay of proceedings, in circumstances where the Second Defendant, as an individual, brought the Abu Dhabi proceedings ex parte and only one of the Joined Litigants in those proceedings is incorporated in Abu Dhabi. One other of the Defendants who is a Joined Litigant is also an individual, to whom the Article makes no reference in any event. The claim for the assistance sought could not therefore succeed and there is no prospect of success on an appeal in relation to the refusal to provide such assistance.
5. Whether the Delegation Letters constitute applications for recognition by other Courts or requests for assistance, they do not comply with the provisions of the Insolvency Law which is the regime dealing with local and foreign insolvency of corporations. In any event, as letters issued by one Court to another in the form they were, they could not be anything other than a request.
6. Regardless of the characterisation of the Abu Dhabi proceedings or jurisdictional issues relating thereto, in circumstances where the evidence put forward did not establish that the requirements for recognition or assistance had been met, the claim for a stay was bound to fail.
7. The Court has never ruled out the possibility of recognition of a foreign proceeding if brought by those with the authority to do so in accordance with the Insolvency Law (see paragraph 41 of the Reasons given).
7.1. A Claim Form has now been issued on 14 October 2021 in CFI-085-2021 by the Trustee originally appointed by the Abu Dhabi Court, as the alleged Foreign Representative in relation to the alleged Foreign Proceeding constituted by those Abu Dhabi proceedings and further evidence has been adduced in relation to the effect of those proceedings in a witness statement of that Trustee dated 7 October 2021.
7.2. The Claim seeks the recognition of the “restructuring in bankruptcy proceedings commenced on 27 July” in Abu Dhabi as foreign main proceedings. That Claim also seeks (amongst other relief) a stay of all proceedings in the DIFC against the Second Defendant and all Joined Litigants in Abu Dhabi and specifically refers to CFI-045-2020, CFI-063-2020, CFI-085-2020 and CFI-114-2020 as such proceedings.
7.3. Those proceedings have not yet been served on the Claimant and only by order of the Court on the Claimants in one of the other actions.
7.4. It would seem that this appeal therefore serves no useful purpose in any event, since there are at least four sets of proceedings in which the issues raised by that Claim Form should be determined, with all parties given the opportunity to appear and make submissions to the Court.
7.5. The lawyers acting for the Trustee originally appointed, who is now one of a Panel of three Trustees, have said that they are not in a position as yet, to pursue the Application made on 25 October 2021 in that action and that the Panel of three Trustees needs more time to consider its position.
7.6. When that has occurred and if and when the Panel of Trustees decides to pursue the matter, it can be considered in full.
8. There were discretionary reasons for refusing assistance in any event, which are fortified by the Trustee issuing his own Claim Form and the applications referred to in paragraph 7 above. The Claimants are prima facie entitled to pursue claims in the DIFC Courts where the Courts have jurisdiction, particularly where there is specific agreement by a Defendant to the jurisdiction of the Court.
