Decree No. (57) for 2009
Establishing a Tribunal to decide
the Disputes Related to the
Settlement of the Financial Position of
Dubai World and its Subsidiaries
________________
We, Mohammed Bin Rashid Al Maktoum, Ruler of Dubai
After perusal of:
- Federal Law
No. (8) of 1984 Concerning Commercial Companies and its amendments;
- Federal Law
No. (18) of 1993 Concerning Commercial Transactions and its amendments;
- Law No. (3)
of 1992 Concerning the Formation of Courts in the Emirate of Dubai and its amendments;
- Law No. (9)
of 2004 Concerning the Establishment of Dubai International Financial Centre;
- Law No.
(12) of 2004 Concerning the Establishment of the Judicial Authority at the
Dubai International Financial Centre;
- Dubai
International Financial Centre Law No. (10) of 2004 Concerning the Law of the
Court of Dubai International Financial Centre;
- Law No. (3)
of 2006 Establishing Dubai World;
- Dubai
International Financial Centre Law No. (3) of 2009 Concerning the Law of
Insolvency; and
- Federal
Decree No. (35) of 2004 Concerning the Establishment of a Free Financial Zone
in the Emirate of Dubai.
Do hereby decree as follows:
Article (1)
The following words and expressions wherever used in
this Decree shall have the meaning indicated opposite each of them, unless the
context otherwise implies:
Emirate: The
Emirate of Dubai.
Ruler: His
Highness the Ruler of Dubai.
Government: The
Government of Dubai.
Tribunal: The
Tribunal formed by virtue of this Decree.
DIFC: Dubai
International Financial Centre.
Corporation: Dubai
World and/or its subsidiaries.
Courts: The
competent courts in the Emirate, including the DIFC Courts.
Article (2)
There shall be established in the Emirate a Tribunal
composed of:
1- Sir Anthony Evans Chairman
2- Michael Hwang Member
3- Sir John Chadwick Member
The Chairman may recommend to the Ruler further
persons for appointment by the Ruler to the Tribunal. The Tribunal shall not
comprise more than 5 members.
Article (3)
The Tribunal has jurisdiction to:
1- Hear and decide any demand or claim
submitted against:
a- The
Corporation, including hearing and deciding any demand to dissolve or liquidate
the Corporation; and
b- Any person
related to the settlement of the financial obligations of the Corporation,
including the Chairman and members of the Board of Directors, as well as all
the employees and workers of the Corporation.
2- Issue the interim and interlocutory
orders and decisions, including injunctions to any person to act or not to act,
or other order as the Tribunal considers appropriate.
The Tribunal may, as it considers appropriate, assign
or appoint as experts persons having expertise and competence in the matters
submitted to it.
Article (4)
Subject to the provisions of this Decree, the Tribunal
shall decide the demands and claims submitted to it by virtue of:
1- DIFC Law No
(3) of 2009 Concerning the law of
Insolvency, according to the amendments stated in the Schedule hereto;
2- The
Regulations Issued by the Board of Directors of the DIFCA Concerning DIFC
Insolvency Regulation, according to the amendments stated in the Schedule
hereto;
3- DIFC Law No
(10) of 2004 Concerning the DIFC Courts, according to the amendments stated in
the Schedule hereto;
4- Legislation
in force in the Emirate;
5- Commercial
custom; and
6- Principles of
justice, and rules of righteousness and equity.
Article (5)
1- The Tribunal
shall have its seat and hold its hearings in the DIFC.
2- All
proceedings before the Tribunal shall be open to the public unless the Tribunal
decides otherwise for considerations relating to the conduct of justice or to
protect confidentiality of information.
3- The Tribunal
shall issue its decisions and orders (i) by the unanimous or majority votes of
its members, and (ii) in the name of the Ruler.
4- The decisions
and orders of the Tribunal shall be final, irrevocable, and not subject to any
appeal or review.
5- The Registrar
of the Court of the DIFC shall act as the registrar for the Tribunal.
Article (6)
The decisions and orders issued in the Emirate by the
Tribunal shall be executed by a competent execution judge. The execution judge
shall not take any action that may hinder the execution of the decision or
order issued by the Tribunal.
Article (7)
No member of the Tribunal, nor any employee or agent
of the Tribunal, shall be held liable for anything done or omitted to be done
in the performance or purported performance of the functions or in the exercise
or purported exercise of any powers under this Decree. This Article does not
apply if the act or omission is found by the Courts to have been in bad faith.
Article (8)
1- The
Government and the DIFC shall provide the necessary administrative and
financial support to the Tribunal for it to discharge its duties under this
Decree.
2- The Chairman
of the Tribunal or the Tribunal member, to whom he delegates such
responsibility, shall undertake the task of supervising all the administrative
and financial affairs relating to the work of the Tribunal.
Article (9)
The Courts shall not hear or decide any demand, claim
or other matter which is within the jurisdiction of the Tribunal by virtue of
this Decree.
Article (10)
This Decree shall come into force from the date of its
issuing and shall be published in the Official Gazette.
Mohammed Bin Rashid Al Maktoum
Ruler of Dubai
Issued in Dubai on 13 December 2009.
Corresponding to 26 Thul-Hijjah
AH.
Schedule: The Law Related to the Settlement of the
Financial Position of Dubai World
and its Subsidiaries
In this Schedule, the following words and phrases
shall have the meanings respectively assigned to them hereunder, unless
otherwise indicated by the context:
“Claims Bar Date” has the meaning given to it
in Article 23 of Section 2 of this Schedule;
“Committee” has the meaning given to it in
Article 24 of Section 2 of this Schedule;
“Corporation” has the meaning given to it in
the Decree;
“Decree” means Decree No. 57 of 2009
Establishing a Tribunal to decide the Disputes Related to the Settlement of the
Financial Position of Dubai World and its Subsidiaries;
“DIFC Court Law” means Dubai International
Financial Centre Law No. (10) of 2004 Concerning the Law of the Courts of the
Dubai International Financial Centre;
“DIFC Insolvency Law” means Dubai International
Financial Centre Law No. (3) of 2009 Concerning the Law of Insolvency;
“DIFC Insolvency Regulations” means the
regulations issued by the Board of the Directors concerning DIFC Insolvency
Regulation;
“Directions Hearing” has the meaning given to
it in Article 12 of Section 2 of this Schedule;
“Exclusive Periods” means the Initial Exclusive
Period and any Extended Exclusive Period;
“Experts” has the meaning given to it in
Article 24 of Section 2 of this Schedule;
“Extended Exclusive Period” has the meaning
given to it in Article 9 of Section 2 of this Schedule;
“Initial Exclusive Period” has the meaning
given to it in Article 9 of Section 2 of this Schedule;
“Nominee” has the meaning given to it in
Article 10 of Section 1 of this Schedule;
“Notification Date” has the meaning given to it
in Article 8 of Section 1 of this Schedule;
“Post Arrangement Hearing” has the meaning
given to it in Article 15 of Section 2 of this Schedule;
“Tribunal” has the meaning given to it in the
Decree; and
“Voluntary Arrangement Notification” has the
meaning given to it in Article 8 of Section 1 of this Schedule.
Section 1.
Application of the DIFC
Insolvency Law to the Corporation
Article (1)
The DIFC Insolvency Law shall apply to each
Corporation as if it were a “Company” as that expression is used in the DIFC
Insolvency Law, subject to the amendments and modifications set out in this
Section 1 of this Schedule. For the
avoidance of any doubt, Dubai World, a corporation established pursuant to Law
No. 3 for the Year 2006 Establishing Dubai World, and/or any indirect and
direct subsidiary of Dubai World shall be taken to be a “Corporation”.
Article (2)
References in the DIFC Insolvency Law to the “Court”
and the “Registrar” shall be taken to be references to the “Tribunal” and the
“registrar of the Tribunal” respectively, mutatis mutandis.
Article (3)
References in the DIFC Insolvency Law to the “Law” and
the “Regulations” shall be taken to be references to the DIFC Insolvency Law
and the DIFC Insolvency Regulations respectively, as modified and amended by
this Schedule.
Article (4)
To the extent that there is any inconsistency between
this Schedule and the DIFC Insolvency Law, this Schedule shall prevail.
Article (5)
The numbering and the sub-headings below correspond to
the numbering and the sub-headings as they appear in the DIFC Insolvency Law.
PART 1: GENERAL
Article (6)
Part 1 of the DIFC Insolvency Law shall not apply to
the Corporation except for Article 6.
PART 2: COMPANY VOLUNTARY ARRANGEMENTS
Article (7)
The following Articles of Part 2 of the DIFC
Insolvency Law shall not apply to the Corporation: (a) Article 8(3); (b)
Article 9(2); (c) Article 10(1); (d) Article 10(3); (e) Article 11(2); (f)
Article 12(3)(b); (g) Article 12(4); (h)
Article 13(3); and (i) Article 13(6).
Article (8)
Where the board of the Corporation notify the Tribunal
in writing (the date of such notification, the “Notification Date”)
together with such other documents as may be prescribed by the registrar of the
Tribunal that they intend to make a proposal to the Corporation’s creditors for
a voluntary arrangement (a “Voluntary Arrangement Notification”), the Tribunal
shall convene and an automatic moratorium shall immediately apply to all
creditors, secured or unsecured and without their consent, in respect of such
Corporation and its assets wherever located from the time of the Voluntary Arrangement
Notification until the conclusion of proceedings or such earlier time as
ordered by the Tribunal for cause. The moratorium shall have effect as
specified in the DIFC Insolvency Regulations (as modified by this Schedule) and
shall also preclude a creditor of such Corporation from exercising any right of
set-off in respect of any obligation due from such Corporation.
Article (9)
(a) Upon
application of the Corporation, and upon no less than 20 days’ notice and a
hearing at which creditors and equity interest holders shall be entitled to
participate, the Tribunal shall be authorised to apply a moratorium to any
Corporation, affiliate of a Corporation or other entity on such terms and
conditions as the Tribunal finds to be equitable in the circumstances upon
finding the following:
(1) there is a likelihood of successful
reorganisation of the Corporation;
(2) there is an imminent irreparable harm
to the Corporation in the absence of a moratorium;
(3)
the balance of harms tips in favour of the moving party; and
(4)
the public interest weighs in favour of a moratorium.
(b) Upon
application of the Corporation, on shortened notice or on an ex parte
basis, the Tribunal shall be authorised to apply a moratorium to any
Corporation, affiliate of a Corporation or other entity on such terms and
conditions as the Tribunal finds to be equitable in the circumstances until
such time as notice and a hearing may be conducted pursuant to Article 9(a) of
Section 1 of this Schedule upon a finding that the standards set forth in
Article 9(a)(2) of this Schedule are satisfied.
(c) Upon
application by the Corporation, the Tribunal may grant a temporary restraining
order giving effect to a moratorium which may be sought by the Corporation
under this Article 9 pending the outcome of any hearing requested by the
Corporation under this Article 9.
Article (10)
The board of the Corporation shall appoint
one or more nominee(s) (“Nominee”) immediately prior to the Voluntary
Arrangement Notification and the name and qualification of each Nominee must be
set out in the Voluntary Arrangement Notification. Where more than one Nominee is appointed,
each Nominee may exercise its functions independently. The Nominee will have the authority to
perform such functions as are given to him under this Schedule and otherwise as
the Tribunal may from time to time order on application by the Corporation with
the consent of the Nominee.
Article (11)
Each Nominee must be found by the Tribunal to be a
leading restructuring practitioner.
Article (12)
If requested by the Corporation after a Voluntary
Arrangement Notification, as soon as reasonably practicable following the
Notification Date, the Tribunal shall issue to the Corporation, the Nominee or
a representative selected by the Corporation and approved by the Tribunal a
certificate affirming the existence of proceedings before the Tribunal under
this Schedule and the appointment by the Corporation of the Nominee or another
person or body selected by the Corporation as the representative of the
Corporation and its assets, and the proceedings initiated in respect of the
Corporation pursuant to this Decree, in foreign jurisdictions. In addition, in the event that insolvency
proceedings are opened with respect to the Corporation in foreign
jurisdictions, if requested by the Corporation after a Voluntary Arrangement
Notification, the Tribunal may authorise the implementation of protocols to
coordinate insolvency proceedings in respect of the Corporation before the
Tribunal and before the courts of foreign jurisdictions and may provide such
other relief in connection with insolvency proceedings in respect of the
Corporation as the Tribunal deems appropriate.
Article (13)
If the Post
Arrangement Hearing does not sanction the voluntary arrangements in accordance
with Article 15 of Section 2 of this Schedule following a vote of creditors and
equity interest holders on such voluntary arrangements, the Tribunal shall
immediately proceed to take steps to wind up the Corporation in accordance with
Chapter 5 of Part 4 of the DIFC Insolvency Law unless the Tribunal finds that
it is in the interests of the Corporation and its creditors for the Tribunal to
decline to initiate the winding up of the Corporation.
Article (14)
Any voluntary arrangement sanctioned by the Tribunal
under Article 15 of Section 2 of this Schedule shall bind all parties in
interest, including without limitation all holders of claims or equity
interests in the Corporation, any other party ordered by the Tribunal and every
person who in accordance with this Schedule: (a) was entitled to vote at that
meeting (whether or not he was present or represented at it); or (b) would have
been so entitled if he had notice of it, as if he were a party to the voluntary
arrangement.
Article (15)
The Corporation is authorised to continue managing its
affairs notwithstanding the commencement of a voluntary arrangement proceeding
pursuant to this Schedule.
PART 3: RECEIVERSHIP
Article (16)
Part 3 of the DIFC Insolvency Law shall not apply to
the Corporation.
PART 4: WINDING UP
CHAPTER
1 - GENERAL
Article (17)
The following
Articles of Chapter 1 of Part 4 of the DIFC Insolvency Law shall not apply to
the Corporation: (a) Article 23; (b) Article 24; and (c) Articles 25(2) and
25(3).
Article (18)
Except for the mode of winding up set out in Article
13 of Section 1 of this Schedule, the Corporation shall not be wound up.
CHAPTER 2 - VOLUNTARY WINDING UP
Article (19)
Chapter 2 of Part 4 of the DIFC Insolvency Law shall
not apply to the Corporation.
CHAPTER 3 - CREDITORS VOLUNTARY WINDING UP
Article (20)
Chapter 3 of Part 4 of the DIFC Insolvency Law shall
not apply to the Corporation.
CHAPTER 4 - PROVISIONS APPLYING TO BOTH KINDS OF
VOLUNTARY WINDING UP
Article (21)
Chapter 4 of Part 4 of the DIFC Insolvency Law shall
not apply to the Corporation other than as ordered by the Tribunal on a winding
up of the Corporation under Article 13 of Section 1 of this Schedule.
CHAPTER 5 - COMPULSORY WINDING UP
Article (22)
The following Articles of Chapter 5 of Part 4 of the
DIFC Insolvency Law shall not apply to the Corporation: (a) Articles 50 to 53
(inclusive); (b) Article 57; (c) Article 66; and (d) Article 67(2).
Article (23)
The Tribunal may only wind up the Corporation if the
Tribunal does not sanction the voluntary arrangements in accordance with
Article 15 of Section 2 of this Schedule following a vote of the creditors on
such voluntary arrangements and the Tribunal finds that it is in the interests
of the Corporation and its creditors for the Tribunal to do so.
PART 5: PROTECTION OF ASSETS IN LIQUIDATION
Article (24)
The following Articles of Part 5 of the DIFC
Insolvency Law shall not apply to the Corporation: (a) Article 79; and (b)
Article 81.
Article (25)
The reference to “administrative receiver” in Articles
80 and 88(1) shall be deleted.
PART 6: RECOGNISED AND FOREIGN COMPANIES
Article (26)
Part 6 of the DIFC Insolvency Law shall not apply to
the Corporation.
PART 7: OTHER TYPES OF COMPANY
Article (27)
Part 7 of the DIFC Insolvency Law shall not apply to
the Corporation.
PART 8: APPLICATION OF THE LAW TO LIMITED PARTNERSHIPS
Article (28)
Part 8 of the DIFC Insolvency Law shall not apply to
the Corporation.
PART 9: INSOLVENCY PRACTITIONERS
Article (29)
The following Articles of Part 9 of the DIFC
Insolvency Law shall not apply to the Corporation: (a) Articles 89(2), (3), (4)
and (5); and (b) Article 91(c).
PART 10: MISCELLANEOUS
Article (30)
The following Articles of Part 10 of the DIFC Insolvency
Law shall not apply to the Corporation: (a) Article 93; (b) Article 101; and
(c) Article 103.
SCHEDULE 1: INTERPRETATION
Article (31)
The following Articles of Schedule 1 of the DIFC
Insolvency Law shall not apply: (a) Article 2; and (b) Article 4(1).
Article (32)
The defined terms set out in Article 3 of Schedule 1
of the DIFC Insolvency Law shall apply where required, provided that, to the
extent that there is any inconsistency between terms defined in this Schedule
and terms defined in Article 3 of Schedule 1 of the DIFC Insolvency Law, this
Schedule shall prevail.
SCHEDULE 2: POWERS OF ADMINISTRATIVE RECEIVER
Article (33)
Schedule 2 of the DIFC Insolvency Law shall not apply
to the Corporation.
Section 2.
Application of the DIFC Insolvency Regulations to the
Corporation
Article (1)
The DIFC Insolvency Regulations shall apply to each
Corporation as if it were a “Company” as that expression is used in the DIFC
Insolvency Regulations, subject to the amendments and modifications set out in
this Section 2 of this Schedule. For the
avoidance of any doubt, Dubai World, a corporation established pursuant to Law
No. 3 for the Year 2006 Establishing Dubai World, and/or any indirect and
direct subsidiary of Dubai World shall be taken to be a “Corporation”.
Article (2)
References in DIFC Insolvency Regulations to the
“Court” and the “Registrar” shall be taken to be references to the “Tribunal”
and the “registrar of the Tribunal” respectively, mutatis mutandis.
Article (3)
References in the DIFC Insolvency Regulations to the
“Law” and the “Regulations” shall be taken to be references to the DIFC
Insolvency Law and the DIFC Insolvency Regulations respectively, as modified
and amended by this Schedule.
Article (4)
To the extent that there is any inconsistency between
this Schedule and the DIFC Insolvency Regulations, this Schedule shall prevail.
Article (5)
The numbering and the sub-headings below correspond to
the numbering and the sub-headings as they appear in the DIFC Insolvency
Regulations.
PART 1: INTRODUCTION
Article (6)
The following Regulations of the DIFC Insolvency
Regulations shall not apply to the Corporation: (a) Regulation 1.4; and (b)
Regulation 1.5.2.
PART 2: VOLUNTARY ARRANGEMENTS
Article (7)
The following Regulations of the DIFC Insolvency
Regulations shall not apply to the Corporation: (a) Regulation 2.1.2; (b)
Regulation 2.5; and (c) Regulation 2.7.2.
Article (8)
The board of a Corporation may propose to initiate a
voluntary arrangement under Article 8 of the DIFC Insolvency Law by submitting
a Voluntary Arrangement Notification.
Article (9)
During the first 120 days following the Notification
Date (the “Initial Exclusive Period”), the Corporation shall have the
exclusive right to propose a voluntary arrangement. If prior to the end of the Initial Exclusive
Period, the Corporation has proposed a voluntary arrangement for approval by
its creditors, the Initial Exclusive Period shall be extended by an additional
180 days from the end of the Initial Exclusive Period (the “Extended
Exclusive Period”).
Article (10)
If prior to the expiration of the Initial Exclusive
Period or any Extended Exclusive Period, the Corporation requests the Tribunal
to extend the Initial Exclusive Period or the Extended Exclusive Period, the
Tribunal shall consider such request upon no less than 20 days’ notice to
creditors of the Corporation at an open hearing at which creditors and equity
interest holders of the Corporation shall be given an opportunity to attend and
be heard. Following such a hearing, the
Tribunal may extend the Initial Exclusive Period or the Extended Exclusive
Period (on one or more occasions) by a reasonable period, which extension shall
not exceed 90 days (in respect of each extension).
Article (11)
Prior to the expiration of the Initial Exclusive
Period or any Extended Exclusive Period, the Tribunal may terminate such
exclusive period on request of a creditor of the Corporation and upon notice
and hearing for cause shown, including bad faith.
Article (12)
When the Corporation, or any creditors or equity
interest holders after the termination of the Exclusive Periods, have a
voluntary arrangement proposal that they are satisfied is ready to be proposed
to creditors and equity interest holders, the Corporation or such creditors or
equity interest holders shall propose to the Tribunal notice and voting
procedures, which shall separately classify secured creditors, unsecured
creditors and equity interest holders for the purposes of voting, for a meeting
of creditors and equity interest holders to vote on the voluntary arrangement
proposal. In connection with any such
proposal, the Nominee shall file with the Tribunal a statement from the Nominee
concerning whether, in his opinion, (a) the proposed voluntary arrangement has
a reasonable prospect of being approved and implemented, (b) the Corporation is
likely to have sufficient funds available to it during the moratorium to enable
it to carry on its businesses and (c) meetings of the Corporation and its
creditors and equity interest holders should be summoned to consider the
proposed voluntary arrangement. The
Tribunal shall hold a hearing at which creditors and equity interest holders
shall be entitled to be heard upon no less than 20 days’ notice to consider
approval of the Corporation or such creditors’ proposed notice and voting
procedures (the “Directions Hearing”).
At the Directions Hearing, the Tribunal may order that the proposed
notice and voting procedures are approved or rejected, or that the proposed
notice and voting procedures are approved as modified by the Tribunal.
Article (13)
Prior to the occurrence of any meeting for creditors
and equity interest holders of the Corporation to vote upon any arrangement,
creditors and equity interest holders of the Corporation shall be provided with
reasonable notice of the occurrence of such meeting in a manner approved by the
Tribunal following no less than 20 days’ notice to creditors and equity
interest holders of the Corporation and a hearing. Any notice of a meeting of creditors and
equity interest holders of the Corporation to vote upon any arrangement shall
be sent in writing to all creditors and equity interest holders and shall
include a copy of the arrangement to be voted upon by creditors and equity
interest holders of the Corporation.
Article (14)
(a) If at least
two-thirds in value (of claims agreed to by the Corporation or otherwise
allowed by the Tribunal) of any class of creditors or equity interest holders,
present and voting either in person or by proxy at the meeting, or voting
through such other procedure as is approved by the Tribunal, agree to any
arrangement, the arrangement, if sanctioned by the Tribunal, shall be binding
on all persons within such class that have or could have a claim against or
interest in the Corporation before the date the Tribunal sanctions the voluntary
arrangement.
(b) Notwithstanding
any other provision of this Schedule, a class of creditors or equity interest
holders that is not impaired under any voluntary arrangement, and each holder
of a claim or interest of such class, are conclusively deemed to have accepted
the voluntary arrangement, and solicitation of votes from such class is not
required. A class of creditors or equity
interest holders, and each holder of a claim or interest of such class, shall
be unimpaired if the voluntary arrangement:
(1) leaves unaltered the legal, equitable and
contractual rights to which such claim or interest entitles the holders of such
claim or interest; or
(2) provides for payment in full of such claims or
interests, including without limitation by payment in cash, transfer of
property, including without limitation a financial instrument, of equal value
of such claims or interests on the effective date of the voluntary arrangement,
or otherwise any transfer that entitles the holder to realise the indubitable equivalent
of such claims or interests;
(3) notwithstanding any contractual provision or
applicable law that entitles the holder of such claim or interest to demand or
receive accelerated payment of such claim or interest after the occurrence of a
default:
(A) cures any such default that occurred before or
after the commencement of the proceeding under this Schedule, other than a
default of a kind specified in Article 19 of Section 2 of this Schedule or of a
kind that Article 19 of Section 2 of this Schedule expressly does not require
to be cured or a default of a kind that does not result in actual pecuniary
loss;
(B) reinstates the maturity of such claim or interest
or profit as such maturity existed before such default;
(C) compensates the holder of such claim or interest
for any damages incurred as a result of any reasonable reliance by such holder
on such contractual provision or such applicable law;
(D) if such claim or such interest arises from any
failure to perform a nonmonetary obligation, compensates the holder of such
claim or such interest (other than the debtor or an insider) for any actual
pecuniary loss incurred by such holder as a result of such failure; and
(E) subject to subparagraphs (A) through (D) of this
subsection, does not otherwise alter the legal, equitable, or contractual
rights to which such claim or interest entitles the holder of such claim or
interest.
(c) Notwithstanding
any other provision of this Schedule, a class is deemed not to have accepted a
voluntary arrangement if such arrangement provides that the claims or interests
of such class do not entitle the holders of such claims or interests to receive
or retain any property under the plan on account of such claims or interests.
Article (15)
Upon no less than 20 days’ notice to creditors and
equity interest holders of the Corporation and an open hearing at which
creditors and equity interest holders may be heard (the “Post Arrangement
Hearing”), the Tribunal shall sanction the voluntary arrangement approved
by the required majority of each class of creditors or equity interest holders
under Article 14 of Section 2 of this Schedule upon a finding by the Tribunal
that:
(a)
the voluntary arrangement proposal complies with this Schedule;
(b)
the voluntary arrangement has been proposed in good faith;
(c)
the arrangement is not unfairly prejudicial to each class of creditors
and equity interest holders, and the Corporation’s general body of creditors,
taken as a whole;
(d)
either (1) all classes of creditors and equity interest holders have
voted to accept or are deemed to accept the voluntary arrangement, or (2) if a
class of claims or interests is impaired under the voluntary arrangement, at
least one impaired class of creditors has voted to accept the voluntary
arrangement;
(e)
there has been no material violation of the notice and voting procedures
approved by the Tribunal at the Directions Hearing in relation to the relevant
meeting;
(f)
any class of creditors or equity interest holders voting against the
voluntary arrangement or deemed to vote against the voluntary arrangement has
received at least as much value as such class would have received in a winding
up of the Corporation pursuant to this Schedule; and
(g)
with respect to any class of unsecured claims, either (1) the voluntary
arrangement provides that each holder of a claim of such class receive or
retain on account of such claim property of a value, as of the effective date
of the voluntary arrangement, equal to the allowed amount of such claim, (2)
the holder of any claim or interest that is junior to the claims of such class
will not receive or retain under the voluntary arrangement on account of such
junior claim or interest any property or (3) such class has voted to accept the
voluntary arrangement.
Article (16)
If following the vote of each class of creditors and
equity interest holders on a voluntary arrangement under Article 14 of Section
2 of this Schedule, any member of a class considers that:
(a)
the arrangement is unfairly prejudicial to it; or
(b)
that the voluntary arrangement was not proposed in good faith; or
(c)
that there has been material
violation of the notice and voting procedures approved by the Tribunal at the
Directions Hearing, then the creditor or equity interest holder may make a
written application to the Tribunal of its objection to the arrangement until
the date that is 10 days prior to the Post Arrangement Hearing. In the event of any such objection, any responses
shall be filed at least five days prior to the Post Arrangement Hearing, and
the Tribunal shall consider such objection, and any responses, and order such
relief as it deems just and appropriate at the Post Arrangement Hearing.
Article (17)
Upon 20 days’ notice (or such shorter period as may be
permitted by the Tribunal) and a hearing before the Tribunal at which creditors
and equity interest holders may be heard, following a Voluntary Arrangement
Notification the Corporation may obtain secured or unsecured credit and incur
secured or unsecured debt which debt has: (a) priority over unsecured debt
existing as of the commencement date; (b) is secured by a lien on property of
the Corporation that is not otherwise subject to a lien; or (c) is secured by a
junior lien on property of the Corporation that is subject to a lien. Nothing in this Article 17 shall limit the
ability of the Corporation to obtain unsecured credit in the ordinary course of
its business.
Article (18)
If the Corporation is unable to obtain credit pursuant
to Article 17 of Section 2 of this Schedule, upon 20 days’ notice (or such
shorter period as may be permitted by the Tribunal) and a hearing before the
Tribunal at which creditors may be heard, the Tribunal, after a Voluntary
Arrangement Notification, may authorise the obtaining of credit or the
incurring of debt secured by a senior or equal lien on property of the
Corporation that is subject to a lien only if there is adequate protection of
the interest of the holder of the lien on the property of the Corporation on
which such senior or equal lien is proposed to be granted or if with the
consent of the holder of the lien on the property of the Corporation on which
such senior or equal lien is proposed to be granted. For the purpose of this Article 18, “adequate
protection” shall mean an interest reasonably sufficient to protect the
holder of a valid security interest in property of the Corporation against a
diminution in the value of such security interest to the extent such
diminution is occasioned by the moratorium, any grant of a lien pursuant to
this Article 18 or the Corporation’s use, sale, or lease of the property
subject to such security interest following the Voluntary Arrangement
Notification.
Article (19)
(a) (1) Subject to approval of
the Tribunal, the Corporation may assume or
reject any executory contract or unexpired lease of
the Corporation.
(2) Notwithstanding any term of an unexpired
lease of real property, any unexpired lease of real property covering more than
one parcel of real property shall be severable with respect to each parcel of
real property. Subject to approval of
the Tribunal, the Corporation may assume an unexpired lease relating to more
than one parcel of real property either in whole or in part, as it relates to
any one or more of such parcels of real property, and simultaneously reject
such unexpired lease in whole or in part as it relates to any one or more of
such parcels of real property, as if such unexpired lease was comprised of
separate unexpired leases with respect to each parcel of real property.
(3)
Notwithstanding any other term
of an executory contract or unexpired lease, or any other term of this
Schedule, without approval of the Tribunal, an executory contract or unexpired
lease may be modified in a manner favourable to the Corporation upon mutual
agreement of the parties thereto.
(b) (1) If there has been
a default in an executory contract or
unexpired lease of the Corporation, the Corporation may
not assume such contract or lease
unless,
at the time of assumption of
such contract or lease, the Corporation:
(A) cures, or provides adequate assurance that the
Corporation will promptly cure, such default;
(B) compensates, or provides adequate
assurance that the Corporation will promptly compensate, a party other than the
Corporation to such contract or lease, for any actual pecuniary loss to such
party resulting from such default; and
(C) provides adequate assurance of future
performance under such contract or lease.
(2)
Paragraph (1) of this subsection does not apply to a default that is a
breach of a provision relating to:
(A) the insolvency or financial condition
of the Corporation at any time before
the closing of the proceedings;
(B) the commencement of a case or
proceedings seeking any relief under any insolvency, restructuring,
reorganisation or bankruptcy law;
(C) the appointment of or taking
possession by a receiver or similar person under any insolvency, restructuring,
reorganisation or bankruptcy law; or
(D) the assumption or rejection in part,
severance, modification or other alteration of the terms of an unexpired lease
relating to more than one parcel of real property pursuant to Article 19(a)(2)
of Section 2 of this Schedule.
(c) The Corporation
may not assign any executory contract of the Corporation, whether or not such
contract or lease prohibits or restricts assignment of rights or delegation of
duties, if such contract is a contract to make a loan, or assume other debt
financing or financial accommodations, to or for the benefit of the
Corporation, or to issue a security of the Corporation.
(d) The Corporation may
assume or reject an executory contract or unexpired lease of residential real
property or of personal property of the Corporation at any time before the sanctioning
of a voluntary arrangement by the Tribunal.
(e) (1) Notwithstanding a provision in an
executory contract or unexpired lease, or in applicable law, an
executory contract or unexpired lease of
the Corporation may not be
terminated or modified,and any right or
obligation under such contract or lease
may not be terminated or modified, at
any time after the Notification Date
solely because of a provision in
such contract or lease that
is conditioned on:
(A) the insolvency or financial condition of the
Corporation at any time before the closing of the proceedings;
(B) the commencement of a case or
proceedings seeking any relief under any insolvency, restructuring,
reorganisation or bankruptcy law; or
(C) the appointment of or taking
possession by a receiver or similar person under any insolvency, restructuring,
reorganisation or bankruptcy law.
(2)
Paragraph (1) of this subsection does not apply to an executory contract
or unexpired lease of the Corporation, whether or not such contract or lease prohibits
or restricts assignment of rights or delegation of duties, if:
(A) (i) applicable law excuses a party, other than the
Corporation, to such contract or lease from accepting performance from or
rendering performance to the Corporation or to an assignee of such contract or
lease, whether or not such contract or lease prohibits or restricts assignment
of rights or delegation of duties; and
(ii) such party does not consent to such extension or
assignment; or
(B) such contract is a contract to make a loan, or
assume other debt financing or financial
accommodations, to or for the benefit of the Corporation, or to issue a
security of the Corporation.
(f))
1) Except as
provided in subsections ((b)) and ((c)) of this Article 19 notwithstanding a provision in an
executory contract or unexpired lease of
the Corporation, or in applicable law, that prohibits, restricts, or
conditions the assignment of such contract or
lease,
the Corporation may assign under
paragraph (2) of this subsection: (A
such executory contract, B such unexpired lease or (C) with respect
to an unexpired lease relating to more
than one parcel of real
property,
such unexpired lease in whole
or in part, as it relates
to any one or more
of such parcels of real
property,
as if such unexpired lease was
comprised of separate unexpired leases with respect
to each parcel of real
property.
(2) The
Corporation may assign an executory contract or unexpired lease of the
Corporation only if:
(A) the Corporation assumes such contract or lease in
accordance with the provisions of this Article 19; and
(B) adequate assurance of future performance by the
assignee of such contract or lease, or the relevant portion of such lease, is
provided, whether or not there has been a default in such contract or lease.
(3)
Notwithstanding a provision in an executory contract or unexpired lease
of the Corporation, or in applicable law that terminates or modifies, or
permits a party other than the debtor to terminate or modify, such contract or
lease or a right or obligation under such contract or lease on account of an
assignment of such contract or lease, such contract, lease, right, or
obligation may not be terminated or modified under such provision because of
the extension or assignment of such contract or lease by the Corporation.
(g) The rejection of an executory contract or unexpired lease, or any part
of an unexpired lease, of the Corporation constitutes a breach of such contract
or lease:
(1) if such contract or lease, or any such part of an unexpired
lease, has not been assumed under this Article 19 or under a voluntary
arrangement, immediately before the commencement date; or
(2) if such contract or lease, or any such part of an
unexpired lease, has been assumed under this Article 19 or under a voluntary
arrangement:
(A) if before such rejection the Tribunal has not
initiated the winding up of the Corporation, at the time of such rejection; or
(B) if before such rejection the Tribunal has
initiated the winding up of the Corporation:
(i) immediately before the date such winding up was
initiated, if such contract or lease was assumed before such winding up; or
(ii) at the time of such rejection, if such contract
or lease was assumed after such winding up.
(h) Assignment by the Corporation to an entity of a contract or lease, or
any such part of a lease, assumed under this Article 19 relieves the
Corporation from any liability for any breach of such contract or lease, or
such part of a lease, occurring after such assignment.
Article (20)
The Tribunal, at its own initiative or upon request of
the Corporation may authorise procedures with respect to administration of
proceedings with respect to the Corporation pursuant to this Schedule,
including without limitation procedures governing notice to creditors and
creditor participation in hearings, as it deems appropriate under the facts and
circumstances.
Article (21)
Upon receipt of a Voluntary Arrangement Notification,
the Tribunal shall convene and may grant such relief at request of the Corporation
without notice as is required under the circumstances, including without
limitation procedures for notification of creditors of the commencement of
proceedings pursuant to this Schedule, procedures for administration of
proceedings pursuant to this Schedule and appointment of a representative of
the Corporation and its assets, and the proceedings conducted pursuant to this
Schedule, to seek recognition of the proceedings pursuant to this Schedule in
foreign jurisdictions. The Tribunal
shall issue no relief that affects or modifies the rights of creditors and
other parties in interest for at least 20 days following receipt of a Voluntary
Arrangement Notification unless the Tribunal finds that immediate and
irreparable harm would result without such relief.
Article (22)
(a) The
Corporation may, subject to approval of the Tribunal, dispose of property
subject to a lien or other security and property in the possession of the
Corporation which is the subject of a hire purchase contract or retention of
title contract, as if it were not subject to the security hire purchase
contract or retention of title contract.
(b) The
Tribunal shall grant approval for a disposal pursuant to subparagraph (a) of
this Article upon finding that disposal of the property is a reasonable
exercise of the Corporation’s business judgment and would be likely to promote
the purpose of this Law in respect of the Corporation.
(c) An order
under this article is subject to the condition that the net proceeds of
disposal of the property applied towards discharging the sums secured by the
security or owned under the hire purchase contract or retention of title
contract.
(d) If an order
under this paragraph relates to more than one security or claim, application of
money under subparagraph (c) shall be in the order of the priorities of such
securities or claims.
Article (23)
Upon application of the
Corporation, the Tribunal may establish procedures for the submission of proofs
of claim by any and all creditors of the Corporation, including without
limitation a deadline for submission of proofs of claim such that any claims
not submitted prior to such date (the “Claims Bar Date”) shall be
forever barred and extinguished. The
Claims Bar Date shall be 60 days after the Notification Date, unless extended
with the approval of the Tribunal.
Article (24)
Persons appointed by the Tribunal under Article 3 of
the Decree (the “Experts”) shall be required to facilitate the formation
of a committee of unsecured creditors, the membership of which shall be
voluntary and approved by the Tribunal to ensure adequate and fair
representation of unsecured creditors. The Experts may make
recommendations to the Tribunal in relation to the formation of any other
committees of creditors, and the Tribunal may approve such committees the
membership of which shall be voluntary. The Corporation shall bear the
reasonable costs and expenses, including professional fees, of any such
committee formed pursuant to this Article 24 (each a “Committee”), provided
such costs and expenses relate to the proceedings in respect of the Corporation
initiated under this Schedule. The
Committee shall have the right to appear and be heard on any matter where
rights of creditors are affected, and, following termination of the Exclusive
Periods, shall have the right to propose a voluntary arrangement, but no
Committee shall otherwise have any right, power, or authority of individual
creditors, indenture trustees, the Corporation or the Nominee. The Committee, and all members of such
Committee, shall be deemed to have undertaken fiduciary duties to the creditors
represented by the Committee, and to have consented to the jurisdiction of the
Tribunal for the purposes of enforcing the Decree, including the moratorium, and
orders of the Tribunal. Neither the Committees nor any member of such
Committee shall bring action against the Corporation or its assets, directors,
officers, employees, agents, secondees or representatives or the Nominee in any
forum or jurisdiction other than the Tribunal as a condition to approval by the
Tribunal.
PART 3: MORATORIUM
Article (25)
The following Regulations of the DIFC Insolvency
Regulations shall not apply to the Corporation: (a) Regulation 3.1; (b)
Regulation 3.2; (c) Regulation 3.3; (d) Regulation 3.4; (e) Regulation 3.6.2
and (f) Regulations 3.7.1 through and including 3.7.6.
Article (26)
A moratorium shall automatically apply immediately on
the Notification Date by virtue of filing of a Voluntary Arrangement
Notification by the Corporation and shall apply to all creditors, secured or
unsecured and without their consent, in respect of such Corporation and its
assets wherever located from the Notification Date until the conclusion of
proceedings or such earlier time as ordered by the Tribunal for cause. The moratorium shall have effect as specified
in the DIFC Insolvency Regulations (as modified by this Schedule) and shall
also preclude a creditor of such Corporation from exercising any right of
set-off in respect of any obligation due from such Corporation.
Article (27)
The automatic moratorium shall apply for the duration
of the voluntary arrangement and winding
up proceedings before the Tribunal (if ordered by the Tribunal).
Article (28)
(a) Upon
application of the Corporation, and upon no less than 20 days’ notice and
hearing at which creditors and equity interest holders shall be entitled to
participate, the Tribunal shall be authorised to apply a moratorium to any
Corporation, affiliate of a Corporation or other entity on such terms and
conditions as the Tribunal finds to be equitable in the circumstances upon
finding the following:
(1) there is a likelihood of successful reorganisation
of the Corporation;
(2) there is an imminent irreparable harm to the
Corporation in the absence of a moratorium;
(3) the balance of harms tips in favour of the moving
party; and
(4) the public interest weighs in favour of a
moratorium.
(b) Upon
application of the Corporation, on shortened notice or on an ex parte basis,
the Tribunal shall be authorised to apply a moratorium to any Corporation,
affiliate of a Corporation or other entity on such terms and conditions as the
Tribunal finds to be equitable in the circumstances until the such time as
notice and a hearing may be conducted pursuant to Article 28(a) of Section 2 of
this Schedule upon a finding that the standards set forth in Article 28(a)(2)
of Section 2 of this Schedule are satisfied.
(c) Upon
application by the Corporation, the Tribunal may grant a temporary restraining
order giving effect to a moratorium which may be sought by the Corporation
under this Article 9 pending the outcome of any hearing requested by the
Corporation under this Article 9.
Article (29)
Immediately following the coming into force of the
moratorium, the Corporation shall advertise the coming into force of the
moratorium in at least two international newswire services designed to provide
notice that its coming into force comes to the attention of the Corporation’s
creditors. The Tribunal may direct, at
its own initiative, the Corporation to issue such other notice of the coming
into force of the moratorium as it deems appropriate under the facts and
circumstances.
Article (30)
The Tribunal may, in its discretion, authorise the
Corporation to pay or otherwise honor obligations outstanding as of the
Notification Date as may be necessary or appropriate to facilitate the
Corporation’s restructuring.
PART 4: RECEIVERSHIP
Article (31)
Part 4 of the DIFC Insolvency Regulations shall not
apply to the Corporation.
PART 5: WINDING UP
Article (32)
The following Regulations of the DIFC Insolvency
Regulations shall not apply to the Corporation: (a) Regulation 5.1; (b)
Regulation 5.2; (c) Regulation 5.3; (d) Regulation 5.31; and (e) Regulation
5.53.
Article (33)
The Corporation may only be wound up by the
Tribunal. The Corporation may only be
wound up by the Tribunal if the Post Arrangement Hearing does not sanction the
voluntary arrangements in accordance with Article 15 of Section 2 of this
Schedule and the Tribunal finds that it is in the interests of the Corporation
and its creditors for the Tribunal to do so.
PART 7: FINANCIAL MARKETS
Article (34)
Part 7 of the DIFC Insolvency Regulations shall not
apply to the Corporation.
ANNEX 1: MEETINGS
Article (35)
The following Regulations of Annex 1 of the DIFC
Insolvency Regulations shall not apply to the Corporation: (a) Regulation 1.1;
(b) Regulation 1.7.4; (c) Regulation 1.9; and (d) Regulation 1.14. The convenor (as referred to in Annex 1) of any
meeting shall be the Nominee or such other person appointed by the Tribunal
under Article 12 of Section 2 of this Schedule.
ANNEX 2: THE CREDITORS’ COMMITTEE
Article (36)
Annex 2 of the DIFC Insolvency Regulations shall not apply to the
Corporation.
ANNEX 3: REQUIRED CONTENT FOR A STATEMENT OF AFFAIRS
Article (37)
Regulation 3.1.13 of Annex 3 of the Regulations of the DIFC Insolvency
Regulations shall not apply to the Corporation.
Section 3.
Application of the DIFC Court Law to the Tribunal
Article (1)
Part 7 and Part 10 of the DIFC Court Law shall govern
the practice, procedure and evidentiary rules of the Tribunal, subject to the
amendments and modifications set out in this Section 3 of Schedule.
Article (2)
References in Part 7 and Part 10 of the DIFC Court Law
to the “DIFC Court” shall be taken to be references to the Tribunal.
Article (3)
References in Part 7 and Part 10 of the DIFC Court Law
to the “Rules of Court” shall be taken to be references to the rules applied by
the Tribunal. The rules applied by the
Tribunal shall be the Rules of the DIFC Court as may be amended by the
Tribunal.
Article (4)
References in Part 7 and Part 10 of the DIFC Courts
Law to a “Judge” shall be taken to be references to a member of the Tribunal.
Article (5)
The following Articles of Part 7 of the DIFC Courts
Law shall not apply to the Tribunal: (a) Article 31; (b) Article 32; (c)
Article 38; (d) Article 42; (e) Articles 45(3) and 45(4); (f) Article 46(2);
(g) Article 47; and (h) Article 52.
Mohammed
Bin Rashid Al Maktoum
Ruler of Dubai
Issued in Dubai on 13 December 2009
Corresponding to 26 Thu al-Hijjah 1431 A.H.