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NMC Healthcare: UAE court blocks attempt to enforce debt judgement

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NMC Healthcare, which is currently in administration and subject to a deed of company arrangement, has applied to the Abu Dhabi Global Market Court, and has been granted a final anti-suit injunction against Noor Capital PSC to prevent it from enforcing a judgment debt of AED 567.2m (USD 154.4m) against NMCH.

Noor Capital is a UAE-based financial institution. It was attempting to execute a judgment for AED 567.2m (USD 154.4m) against NMCH in the Dubai Courts. Noor Capital’s attempts to execute against NMCH’s assets would have disrupted the restructuring approved by a vast majority of the NMC Group’s creditors.

Noor Capital is an Abu Dhabi-registered brokerage and fund administrator. It provides trading services to private clients, including forex and gold investment.

Noor Capital was seeking to put itself into a better position than other unsecured creditors. In administrations and liquidations in England and the ADGM, the pari passu principle is foundational, and this principle requires the equal treatment of unsecured creditors (with some statutory exceptions), i.e. some unsecured creditors are not meant to receive, say, 100% returns and others, say, 15%.

The significance of the anti-suit injunction is heightened by the fact that the offshore UAE courts (DIFC and ADGM) have been reluctant to grant anti-suit injunctions against parties pursuing claims in the Dubai courts.

The ADGM Court’s judgement is expected in the next 48 hours, according to sources at law firm Quinn Emanuel, which represented NMC Healthcare. Quinn Emanuel’s London Senior Partner Richard East, said “We are extremely pleased that we have obtained this permanent injunction to prevent one rogue creditor from attempting to undermine NMCs successful restructuring.”

NMCH is in administration and subject to a deed of company arrangement (DOCA) (similar to a scheme of arrangement in England) in the ADGM. NMCH was, until 25 March 2022, the UAE-based holding company for the NMC Group of companies.

NMC Group restructuring

On 25 March 2022, the restructuring of the NMC Group occurred, which entailed the transfer away of NMCH’s subsidiaries and the compromise of creditors’ claims in exchange for new debt with equity like characteristics (essentially a debt for equity swap). NMCH remains in administration and subject to a DOCA to pursue litigation for the benefit of all creditors and to perform other functions under the DOCA.

NMCH had previously obtained, on 28 September 2022, an interim anti-suit injunction against Noor Capital. In basic terms, an anti-suit injunction is a court order that a person does not continue litigating in another court. For completeness, NMCH had applied for the anti-suit injunction in February 2022 and, on 4 April 2022, the ADGM Court ruled that it would have granted one, but NMCH chose at that time not to press for it, as the Dubai Court of Cassation had granted a stay on Noor Capital’s enforcement efforts.

NMC remains rich ground for litigation: EY was facing a £2.1bn lawsuit from the administrators of the collapsed FTSE 100 group back in May. EY was accused of failing to spot a multi-billion-dollar fraud at the firm. This included the misstatement of accounts and lack of proper accounting records.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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