3 Minutes to Read DUBAI, United Arab Emirates (Reuters) – In a case that could affect creditor recoveries in NMC’s multibillion-dollar restructuring, an Abu Dhabi judge referred a dispute between NMC and Dubai Islamic Bank to arbitration and ordered the company to pay the lender’s legal costs in full. PHOTO FROM THE FILE: On February 11, 2020, a general view of the NMC specialty hospital in Abu Dhabi, United Arab Emirates. Satish Kumar/File Photo/REUTERS Last year, NMC, the UAE’s largest private healthcare provider, ran into financial difficulties after the discovery of more than $4 billion in hidden debt. In the courts of Abu Dhabi’s international financial centre ADGM, its UAE operating firms were placed into administration. Ownership is expected to pass to the creditors in the near future. However, the outcome of a legal action brought by administrators Alvarez & Marsal in an ADGM court against one of NMC’s creditors, Dubai Islamic Bank (DIB), has left the healthcare company in the red and has set the stage for more legal action. According to a transcript seen by Reuters, Judge Andrew Smith said in a court hearing this week, “To my mind the overall winners on this phase of litigation are Dubai Islamic Bank.” “It appears to me that the fair order is that the claimants bear their own costs and pay DIB 75% of their costs,” he explained. According to the transcript, DIB’s legal fees were $1.2 million. The judge ordered that NMC’s dispute over the validity and nature of DIB’s securities be referred to arbitration in London, effectively putting an end to NMC’s main claim in the Abu Dhabi proceedings. Joint Administrator Richard Fleming told Reuters, “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.” “Our primary focus is on the upcoming launch of the company arrangement deeds. This will be the most effective tool for ensuring both high-quality patient care and a favorable outcome for all creditors.” DIB had lent roughly $400 million to NMC using insurance receivables as security, which are payments made by insurance companies for medical care. DIB did not immediately respond to a request for comment. It claimed rights to those securities in cases filed in Dubai, while Alvarez & Marsal wanted to incorporate them in NMC’s ADGM-regulated administration procedure. Davide Barbuscia contributed reporting, and Emelia Sithole-Matarise edited the piece./n
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