Dubai: Dubai Islamic Bank said on Sunday in a report to the Dubai Financial Market (DFM) that it intends to file legal claims against insurance companies for the payment of insurance entitlements allocated to it under its financing facilities to NMC.
In May this year, Dubai Islamic Bank obtained a judgment against NMC officials, relating to more than $400 million of exposure to NMC, which was lent to the company using collateral known as insurance receivables, which relates to payments from insurance companies for medical treatment.
NMC, the largest private healthcare provider in the United Arab Emirates, ran into trouble last year after revealing more than $4 billion in hidden debt that left many UAE and overseas lenders in huge losses.
In September 2020, the ADGM Courts appointed Richard Fleming and Ben Cairns of Alvarez & Marsal as administrators for the group of companies and companies operating in NMC Healthcare.
Referred to arbitration
Moving forward with the restructuring, DIB insisted on its claims against insurance receivables and obtained an ADGM court ruling on May 24, 2021 in its favour that ADGM Court had no jurisdiction over the securities regulating agreements.
In another hearing on July 12, the ADGM court ruled that DIB was the “total winner” at this point in the litigation and referred the dispute between DIB and NMC to arbitration between the parties.
“Despite the arbitration proceedings, our actions against insurance companies will continue, and DIB is confident of its prospects in these proceedings,” DIB said in its submission to the Dubai Financial Market.
While the bank welcomed the court’s ruling in its favour, including an order for joint directors to pay 75 per cent of DIB’s legal costs, the bank said it was committed to restructuring NMC.
Committed to restructuring
Dubai Islamic Bank is one of the largest creditors of the NMC Group. We affirm our commitment to support the restructuring of NMC’s business to ensure its successful emergence from management.
“Any such restructuring shall be based on recognition of existing legitimate security interests in accordance with the provisions of applicable laws.”
The Bank reiterated that it will continue to vigorously defend its interests in arbitration, Dubai Courts and any other applicable legal forum.
More to track …
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