Khaleefa Butti Omair Yousif Almuhairi & Anor, Re

Recognition under the Cross-Border Insolvency Regulations 2006 is mandatory where the applicant proves that proceedings satisfy the statutory definition of a foreign proceeding and that the debtor’s centre of main interests is in the relevant foreign state. Recognition as foreign main proceedings attracts the automatic stay. The court may also grant additional relief to protect and realise assets within the jurisdiction and to coordinate a cross-border restructuring. A refusal of recognition in another jurisdiction does not determine the application where the statutory regimes differ and material developments have occurred in the foreign proceedings.

The applicants, acting as the trustee committee and foreign representatives, sought recognition in England of a consolidated Abu Dhabi bankruptcy and restructuring process concerning two individual debtors and associated entities. They applied for recognition as foreign main proceedings and for a stay on enforcement and additional relief concerning assets in England.

Recognition had previously been refused by Sir Jeremy Cooke in the Dubai International Financial Centre Court. That decision concerned a different statutory regime, which did not provide for recognition of individual debtors, and was made before the restructuring plan had been approved and sanctioned. The central issues were whether the Abu Dhabi proceedings fell within the statutory definition of a foreign proceeding, whether the debtors’ centre of main interests was in the UAE, and what relief should follow.

1. Recognition granted. The Abu Dhabi proceedings were recognised as foreign main proceedings, with the automatic stay and additional relief sought in the draft order.
2. Under Article 2 of Schedule 1 to the Cross-Border Insolvency Regulations 2006, a foreign proceeding must be collective judicial or administrative proceedings in a foreign state, pursuant to insolvency law, subject to the control or supervision of a foreign court, and directed to reorganisation or liquidation. The evidence satisfied each requirement.
3. Article 17 requires recognition where the statutory conditions are met, subject to the public policy exception in Article 6. The applicants established that the debtors’ centre of main interests was in the UAE. The court was therefore obliged to recognise the proceedings as foreign main proceedings.
4. Recognition as foreign main proceedings triggered the automatic stay under Article 20. The court was also prepared to grant further relief under Article 21, including relief preventing dealings with identified London properties and entrusting their realisation to the trustee committee.
5. The earlier DIFC refusal did not affect the outcome. The DIFC regime did not extend to individual bankruptcies, the application there had been heard before a restructuring plan existed, and the plan had since been approved by creditors and sanctioned by the Abu Dhabi court. Those differences meant that the earlier refusal had no relevance to the statutory test applied in England.
6. The applicants gave an undertaking to return to the court if legislative changes to UAE bankruptcy law before implementation affected the basis of the recognition order. The order was made in the terms sought.