This consent order marks the formal conclusion of the DIFC Court’s involvement in maintaining interim asset preservation measures against the KBBO group, following the successful ratification of restructuring plans in the onshore Abu Dhabi courts.
Why did the DIFC Court discharge the Post Judgment Freezing Order against KBBO CPG Investment and its co-defendants in CFI 045/2020?
The lawsuit, initiated by a consortium of ten major financial institutions including Emirates NBD Bank PJSC and HSBC Bank Middle East Limited, centered on the recovery of substantial debts owed by the KBBO group of companies and associated individuals. Following a series of interim measures, including the EMIRATES NBD BANK v KBBO CPG INVESTMENT [2020] DIFC CFI 045 — Worldwide freezing order and interim injunction (15 May 2020), the court maintained a Post Judgment Freezing Order dated 28 October 2021. The litigation reached a pivotal juncture when the parties engaged in parallel bankruptcy proceedings in the onshore Abu Dhabi Courts under Case No 7 of 2021.
The discharge of the DIFC freezing order was a direct consequence of the successful restructuring of the First Defendant, KBBO CPG Investment LLC, and several other named respondents. Upon the ratification of these restructuring plans by the Abu Dhabi Court on 14 September 2023, the claimants and the bankruptcy applicants reached a mutual agreement to terminate the restrictive measures previously imposed by the DIFC Court. As noted in the order:
The Post Judgment Freezing Order is discharged, dismissed and/or withdrawn as against the Restructuring Defendants from 14 September 2023.
Which DIFC Court division and judicial officer presided over the consent order in CFI 045/2020?
The order was issued by the DIFC Court of First Instance on 18 October 2023. The administrative processing and issuance of the consent order were handled by Assistant Registrar Delvin Sumo, formalizing the agreement reached between the claimants and the restructuring defendants following the onshore judicial developments.
What were the respective positions of the claimants and the KBBO restructuring defendants regarding the freezing order?
The claimants—a syndicate of regional and international banks—had previously sought and obtained stringent freezing orders to prevent the dissipation of assets by the KBBO group and its principals, including Mr. Khaleefa Butti Bin Omair Yousif Almuhari and His Excellency Saeed Mohamed Butti Mohamed Alqebaisi. The claimants’ position throughout the litigation was focused on asset preservation to satisfy substantial outstanding credit facilities.
Conversely, the restructuring defendants, having entered into formal bankruptcy proceedings under UAE Federal Law, sought the removal of these DIFC-based restrictions to facilitate the implementation of their court-ratified restructuring plans. The parties reached a consensus that the continued existence of the DIFC Post Judgment Freezing Order was incompatible with the terms of the restructuring approved by the Abu Dhabi Court. Consequently, the parties jointly approached the DIFC Court to seek the discharge of the order, effectively aligning the DIFC enforcement landscape with the broader onshore insolvency resolution.
What was the jurisdictional and doctrinal question addressed by the court in this consent order?
The court was required to determine whether it should exercise its discretion to discharge a previously granted Post Judgment Freezing Order in light of a supervening event: the ratification of a restructuring plan by an onshore UAE court. The doctrinal issue involved the interplay between DIFC Court enforcement mechanisms and the efficacy of onshore bankruptcy proceedings. Specifically, the court had to decide if the terms of the onshore restructuring plan, which mandated the withdrawal of freezing orders, provided sufficient grounds for the DIFC Court to relinquish its control over the assets of the restructuring defendants.
How did the DIFC Court apply the principle of comity and procedural efficiency in discharging the order?
The court’s reasoning was predicated on the principle of procedural harmony between the DIFC and onshore jurisdictions. By acknowledging the ratification of the Restructuring Plans in the Onshore Bankruptcy Proceedings (Case No 7 of 2021), the court recognized that the purpose of the original freezing order—to prevent asset dissipation pending resolution—had been superseded by a comprehensive, court-sanctioned insolvency framework. The judge accepted the mutual agreement of the parties as the basis for the order, ensuring that the DIFC Court’s records were updated to reflect the new legal reality of the defendants' financial status.
The Post Judgment Freezing Order is discharged, dismissed and/or withdrawn as against the Restructuring Defendants from 14 September 2023.
What specific statutory and procedural authorities were cited in the context of this discharge?
The order was issued under the general jurisdiction of the DIFC Court of First Instance to manage its own orders and processes. While the order itself is a procedural instrument, it relies on the framework established by the DIFC Courts Law and the Rules of the DIFC Courts (RDC), specifically those governing the variation or discharge of injunctions. The underlying bankruptcy proceedings were conducted pursuant to the UAE Federal Bankruptcy Law (Federal Decree-Law No. 9 of 2016, as amended), which provides the statutory basis for the restructuring plans ratified by the Abu Dhabi Court.
How did the court treat the previous interim orders in the CFI 045/2020 case family?
The court treated the Post Judgment Freezing Order dated 28 October 2021 (and its subsequent amendments on 16 November 2021 and 20 December 2021) as the primary subject of the discharge. By referencing these specific historical orders, the court ensured that the discharge was comprehensive, effectively clearing the legal path for the defendants to proceed with the implementation of their restructuring plans without the encumbrance of the prior DIFC-imposed restrictions. This decision effectively superseded the earlier, more aggressive measures, such as the EMIRATES NBD BANK v KBBO CPG INVESTMENT [2020] DIFC CFI 045 — Freezing order and mandatory injunction against multi-entity respondent group (01 June 2020).
What was the final disposition and order regarding costs in this matter?
The court ordered the discharge, dismissal, and withdrawal of the Post Judgment Freezing Order against the restructuring defendants, effective retrospectively from 14 September 2023. Regarding the legal costs associated with this specific application, the court directed that there be no order as to costs, reflecting the consensual nature of the application and the parties' mutual agreement to resolve the matter without further adversarial litigation.
What are the wider implications of this order for practitioners handling insolvency and restructuring in the DIFC?
This order highlights the necessity for practitioners to ensure that DIFC-based enforcement measures are synchronized with parallel onshore insolvency proceedings. For litigants, the case demonstrates that the DIFC Court will facilitate the implementation of onshore restructuring plans by discharging its own interim orders once those plans have been formally ratified. Practitioners must anticipate that once a restructuring plan is approved in the onshore courts, the DIFC Court will likely defer to that framework, provided the parties reach a consensus on the status of existing freezing orders. This underscores the importance of maintaining clear communication between DIFC counsel and onshore insolvency practitioners to ensure that the transition from enforcement to restructuring is seamless.
Where can I read the full judgment in EMIRATES NBD BANK v KBBO CPG INVESTMENT [2023] DIFC CFI 045?
The full text of the consent order is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0452020-1-emirates-nbd-bank-pjsc-2-hsbc-bank-limited-3-icici-bank-limited-4-icici-bank-uk-plc-5-union-bank-india-1 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-045-2020_20231018.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- UAE Federal Bankruptcy Law (Federal Decree-Law No. 9 of 2016, as amended)
- Rules of the DIFC Courts (RDC)