An Abu Dhabi judge who was given the responsibility for the arbitration of a dispute between NMC and Dubai Islamic Bank had ordered the firm to pay almost the entire legal costs which is there on the shoulder of the lender and that too in a case that impacts creditor recoveries in NMC`s multi-billion restructuring.
NMC is the largest private healthcare provider in the United Arab Emirates (UAE) which got embroiled in a controversy in 2020 after it was revealed that the company did not show $4 billion in hidden debt.
NMC’s UAE operating businesses were placed into administration in the courts of Abu Dhabi`s international financial centre ADGM. Meanwhile, the ownership is set to soon move to the creditors.
This entire legal action done by administrators Alvarez & Marsal in an ADGM court against one of NMC`s creditors, Dubai Islamic Bank (DIB), has left the healthcare company with no money and has made it eligible for more legal action.
“To my mind the overall winners on this phase of litigation are Dubai Islamic Bank,” Judge Andrew Smith said in a court hearing this week, the transcript showed.
“It seems to me that the fair order is that the claimants should bear their own costs and should pay DIB 75% of their costs,” he said.
DIB`s legal costs led to $1.2 million, the transcript showed.
The judge further ordered that NMC’s dispute of the validity and nature of DIB`s securities received from the company must be referred to the arbitration in London.
“We are comfortable with the key issues in the case with Dubai Islamic Bank being referred to arbitration, through which the joint administrators will continue to seek to resolve DIB’s position,” Joint Administrator Richard Fleming told.
“Our core focus is on the forthcoming launch of the deeds of company arrangement. This will provide the most appropriate mechanism to ensure both the delivery of first-class patient care and a beneficial outcome for all creditors.”
DIB had further lent around $400 million to NMC using collateral such as insurance receivables, which relate to payments by insurance companies for medical treatment.
It had asked for rights over those securities in cases filed in Dubai, while Alvarez & Marsal wanted to include them in NMC`s administration process, regulated by ADGM.