{"id":115216,"date":"2021-05-27T18:57:29","date_gmt":"2021-05-27T18:57:29","guid":{"rendered":"https:\/\/fin2me.com\/?p=115216"},"modified":"2021-05-27T18:57:29","modified_gmt":"2021-05-27T18:57:29","slug":"abu-dhabi-judge-rules-in-favour-of-dubai-islamic-bank-in-nmc-case","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/abu-dhabi-judge-rules-in-favour-of-dubai-islamic-bank-in-nmc-case\/","title":{"rendered":"Abu Dhabi judge rules in favour of Dubai Islamic Bank in NMC case"},"content":{"rendered":"
DUBAI (Reuters) – A judge in Abu Dhabi ruled in favour of Dubai Islamic Bank and against the administrators of NMC, in a case that could complicate the private healthcare firm\u2019s multi-billion-dollar debt restructuring.<\/p> NMC ran into trouble last year after the disclosure of more than $4 billion in hidden debt and its UAE operating businesses were placed into administration in the courts of Abu Dhabi\u2019s international financial centre ADGM.<\/p>\n Dubai Islamic Bank, with over $400 million in exposure to NMC, lent to the company using collateral known as insurance receivables, which relate to payments by insurance companies for medical treatment.<\/p>\n NMC\u2019s administrators Alvarez & Marsal filed a suit in ADGM courts last month to obtain power over those securities, claimed by Dubai Islamic Bank, and possibly to use them to pay other creditors.<\/p>\n But an ADGM judge this week said the court had no jurisdiction over the agreements regulating the securities and that legal proceedings should be stayed on that basis, an ADGM Courts document dated May 24 showed.<\/p>\n The case pits the UAE\u2019s different legal systems against one another, with its onshore and offshore jurisdictions.<\/p>\n The onshore courts use UAE law, while the Abu Dhabi Global Markets courts and the courts of the financial free zone Dubai International Financial Centre (DIFC) are modelled on the English judicial system.<\/p>\n DIB sought rights over the insurance receivables in cases filed in neighbouring Dubai, while Alvarez & Marsal wanted to include them in NMC\u2019s administration process, regulated by ADGM, which is an offshore court.<\/p>\n \u201cI accept that the Claim Form Proceedings should be stayed in so far as they concern the determination as between DIB and the Original Guarantors of matters within the scope of the Arbitration Agreement, or as between DIB and NMC Healthcare of matters within the scope of the jurisdiction agreement in the Assignment of Receivables Agreement,\u201d Judge Andrew Smith said.<\/p>\n \u201cIn essence the ADGM court has ruled that they don\u2019t have jurisdiction … those securities will remain a liability for NMC as it goes ahead with the debt restructuring,\u201d said a source close to the matter, speaking on condition of anonymity.<\/p>\n The same source said this raised the risk of further \u201cfragmentation\u201d in ongoing dispute resolutions related to NMC\u2019s debt, potentially complicating the overall debt restructuring.<\/p>\n NMC\u2019s administrators declined to comment. Dubai Islamic Bank did not immediately respond to a comment request.<\/p>\n