June 29, 2021 Practice Directions
IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
PRACTICAL GUIDANCE NOTE No. 3 of 2021
THE PROCEDURE FOLLOWING VOLUNTARY LIQUIDATIONS
Citation
This Practical Guidance Note will come into effect from 29 June 2021. It may be cited as Practical Guidance Note 3 of 2021 – The Procedure for the Appointment of liquidators and may be abbreviated to PGN 3/2021.
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ASSOCIATED LAWS, RULES OR REGULATIONS:
Part 6 of DIFC Law No. 1 of 2019 (being the DIFC Insolvency Law)
The DIFC Insolvency Regulations which came into force on 13 June 2019
Part 54 of the Rules of the DIFC Courts
1. Background
1.1 Section 51(1) DIFC Insolvency Law (“Insolvency Law”), recognizes two forms of winding up: a court ordered (involuntary) winding up and a voluntary winding up.
2. Appointment in the case of an Involuntary Winding Up
2.1 In the case of an involuntary winding up, the applicant, being the person(s) or entity(ies) seeking the winding up order must follow the procedure prescribed under Part 54, Section III of the RDC in respect of a ‘Petition for a Winding-Up Order’ as well as that set out in Part 6 of the Insolvency Law.
3. Appointment in the case of a Voluntary Winding Up
3.1 In the case of a voluntary winding up, where a company, its members or creditors have agreed to appoint a liquidator, the procedure set out in Part 6 of the Insolvency Law, must be followed. No procedure is set out in the RDC, in respect of how and when the DIFC Courts is to give effect to such an appointment.
3.2 Before the DIFC Courts is able to take a liquidator’s appointment, in a voluntary winding up, as being a valid appointment entitling the liquidator to commence or defend legal proceedings on behalf of the relevant company, the liquidator is required to present to the Registrar of the DIFC Courts, a letter enclosing a copy of a “Confirmation of Appointment of Liquidator” (“Confirmation”) issued by the DIFC Registrar of Companies, along with a Resolution for winding up (as set out in the Insolvency Law) and copies of all other relevant documents supporting the Resolution to wind up the company which ought to be brought to the attention of the DIFC Courts’ Registrar.
3.3 Notably, the DIFC Courts cannot grant the liquidator access to any private proceedings, including proceedings before the Small Claims Tribunal, until the Confirmation, and its supporting documents have been filed with the DIFC Courts’ Registrar.
Dated this 29th day of June 2021
Chief Justice of the DIFC Courts
Zaki Azmi
