Horizons & Co Secures Landmark Victory In UAE Bankruptcy Proceedings

Horizons & Co Secures Landmark Victory in UAE Bankruptcy Proceedings

Horizons & Co, the leading Emirati law firm, has achieved a major victory before the Dubai Courts in one of the most significant bankruptcy cases in UAE history. The firm successfully defended a former board director against claims arising from proceedings involving AED 18.8 billion.

Case Background

The case followed the collapse of a major UAE company, which triggered complex insolvency proceedings with multiple stakeholders and substantial claims. The client, a non-executive director of the holding company, was named alongside other directors in the bankruptcy trustee’s liability report. The report alleged mismanagement, misappropriation of funds, and manipulation of company records, claiming the directors were responsible for the company’s financial distress and eventual bankruptcy.

This matter was closely watched across the region due to the scale of the financial exposure and the number of parties involved, marking it as one of the most high-profile insolvency cases in recent UAE history.

Strategic Defence

Horizons & Co mounted a robust defence, addressing both procedural and substantive aspects of the trustee’s allegations. Central to the defence was the principle under UAE law that director liability cannot be presumed solely based on a board position, and that specific statutory conditions must be met before liability can be imposed.

The defence challenged the trustee’s approach, pointing out that the client had been improperly joined into the proceedings based only on the liability report, rather than through a separate civil claim as required under UAE Bankruptcy Law. It was also highlighted that any claim against directors must be filed within two years of the bankruptcy judgment, a period that had already lapsed.

The client’s non-executive role was emphasised. As a board member without involvement in day-to-day management, the client could not be held responsible for operational decisions. The trustee’s report also failed to demonstrate statutory misconduct or meet the legal threshold for director liability.

Further, the defence underscored the separate legal personality of each company within the corporate group and noted that several allegations concerned events occurring after management authority had already transferred to court-appointed trustees.

Court Judgment

The Dubai Court ruled in favour of Horizons & Co’s client, rejecting the trustee’s attempt to impose liability. The ruling effectively cleared the client of exposure in claims exceeding AED 18.8 billion, delivering a decisive outcome in one of the UAE’s most significant bankruptcy proceedings.

Broader Significance

Beyond the immediate result, this judgment reinforces a key principle in UAE insolvency law: director liability must be grounded in clear legal evidence, proper procedural compliance, and specific proof of wrongdoing.

Legal Team

The case was led by Ali Al Zarooni (Managing Partner), along with Dr. Mahrous (Partner) and Rowan Noor (Associate).

Conclusion

This decision underscores the importance of strict procedural compliance and evidentiary standards in bankruptcy proceedings, while reaffirming protections for non-executive directors. It also highlights Horizons & Co’s capability in handling complex, high-value disputes, securing successful outcomes in some of the region’s most consequential commercial matters.

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