Dubai financial institution’s win in Abu Dhabi courtroom to stay authorized headache for NMC By Reuters
© Reuters. FILE PHOTO: General view of the NMC Special Hospital in Abu Dhabi, United Arab Emirates, February 11, 2020. REUTERS / Satish Kumar / File Photo
By Davide Barbuscia
DUBAI (Reuters) – An Abu Dhabi judge referred to arbitration in a dispute between NMC and Dubai Islamic Bank and ordered the firm to pay the majority of the lender’s legal costs in a case involving the recovery of creditors in the multi-billion dollar restructuring of NMC.
NMC, the largest private healthcare provider in the United Arab Emirates (UAE), got into trouble last year after disclosing more than $ 4 billion in hidden debt.
Its operations in the United Arab Emirates were brought before the courts of the ADGM international financial center of Abu Dhabi. The property should soon pass to the creditors.
But the outcome of the legal action taken by administrators Alvarez & Marsal before an ADGM court against one of NMC’s creditors, Dubai Islamic Bank (DIB), left the healthcare company out of its pocket and set the stage for further legal action created.
“In my opinion, the overall winners at this stage of the litigation are Dubai Islamic Bank,” Judge Andrew Smith said in a court hearing this week, according to a Reuters transcript.
“It seems to me that the fair order is that plaintiffs should bear their own costs and pay 75% of their costs to DIB,” he said.
The DIB’s legal fees were $ 1.2 million, the minutes show.
The judge ordered that NMC’s dispute over the validity and nature of the DIB’s securities received by the company be referred to an arbitration tribunal in London, effectively nullifying NMC’s principal claim in the Abu Dhabi proceeding.
“We are pleased with the major issues in the event that Dubai Islamic Bank is referred to arbitration through which the joint administrators will continue to try to resolve the DIB position,” joint administrator Richard Fleming told Reuters.
“Our main focus is on the upcoming introduction of the Articles of Association. This will provide the most appropriate mechanism to ensure both the provision of first class patient care and a beneficial outcome for all creditors.”
The DIB, which did not immediately respond to a request for comment, had loaned NMC approximately $ 400 million with collateral known as insurance claims relating to payments from insurance companies for medical treatment.
She applied for rights to these securities in cases filed in neighboring Dubai, while Alvarez & Marsal wanted her included in NMC’s ADGM regulated administrative process.
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