A company's manager can be detained or banned from travel if his abnormal conduct frustrates execution

Abu Dhabi Court of Cassation (General Assembly), Request No. 5 of 2026 (Civil), decision of 29 June 2026

Court
Abu Dhabi Court of Cassationمحكمة النقض - أبوظبي
Case
Abu Dhabi Court of Cassation (General Assembly), Request No. 5 of 2026 (Civil), decision of 29 June 2026
Arabic citation
الطلب رقم 5 لسنة 2026 هيئة عامة مدني، جلسة 29/6/2026
Bench
General Assembly of the court General Assembly
Topics
Courts & arbitration · Company law
Laws applied
Civil Procedure Code
Commercial Companies Law
The judgment
Read it on adjd.gov.ae ↗ (ADJD Court of Cassation Technical Office, 'Collection of judgments and decisions of the General Assembly over two decades since the establishment of the Abu Dhabi Court of Cassation' (2026), decision no. 38, pp. 231-234 (ADJD publications library, document 0901d61786449d2a))
Summary written
31 October 2026
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The principle

Under Article 322 of the Civil Procedure Law, where the judgment debtor is a private legal person the execution judge may order the detention of, or a travel ban against, its legal representative or another person, even without an execution title against that person, if that person engaged in abnormal conduct that directly or indirectly prevented or delayed execution, such as hiding or moving the debtor's assets or manipulating its accounts. Fraud is not required: mismanagement alone is enough, and the conduct may precede the execution title. The execution judge assesses this on the documents or after a brief inquiry, observing Articles 324 to 326 for travel bans.

The case and the decision

The Second Commercial Chamber referred two conflicting lines of authority on when execution measures may be taken against the representative of a company that does not satisfy a judgment, under Article 322 of the Civil Procedure Law. The first line refused measures against a company's manager unless he had committed fraud, abuse of authority, or a breach of the law or the articles of association (the grounds of manager liability in Article 84 of the Commercial Companies Law), or unless a judgment or other instrument made him personally liable for the debt; a mere refusal to produce the company's financial records was not enough. The second line held that a representative's refusal to produce the financial statements in his possession, which would reveal the company's position and the movement of funds that should have paid the judgment debt, is itself a cause of preventing execution and justifies measures without proof of the Article 84 grounds.

The General Assembly read Article 322 (detention of the legal representative or another person where the failure to perform is attributable to them personally, and travel bans under Articles 324 to 326 even without an execution title against them, after an inquiry) with Article 320(1) (the brief inquiry before a detention order). It held that the test is whether the representative or third party engaged in abnormal conduct, whether amounting to fraud or simply mismanagement, which prevented or obstructed execution directly, by concealing or smuggling the debtor's assets, or indirectly, by manipulating the balance sheets and documents that should disclose the assets available for execution, whether that conduct occurred during execution or before the execution title was issued. The execution judge decides this on the supporting documents or his inquiry, provided his reasoning is sound, and must observe Articles 324 to 326 when imposing a travel ban. The General Assembly adopted this principle and set aside contrary ones.

Why it matters

Creditors enforcing judgments against companies in Abu Dhabi often find the company empty. This decision allows execution judges to reach the individuals behind the company, through detention or travel bans, without first suing them personally, where their conduct (including hiding records or poor management) frustrated enforcement. For managers and authorised signatories, it means personal exposure in execution proceedings does not depend on proof of fraud under the Companies Law.

Laws applied

Articles 320(1), 322 and 324 to 326 of Federal Decree-Law No. 42 of 2022 (Civil Procedure Law) — text of articles 320, 322, 324, 325, 326
Article 84 of the Commercial Companies Law (Federal Decree-Law No. 32 of 2021), as relied on by one line of authority — text of article 84
Article 9 of Abu Dhabi Law No. 6 of 2024 on the Abu Dhabi Judicial Department

In the court’s words

“أن يكون قد أتى بتصرفات غير عادية سواء انطوت على الغش والتدليس أم مجرد سوء تدبير”

Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.

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Source. Summary written by Polaris from the judgment published by the Abu Dhabi Court of Cassation on adjd.gov.ae (ADJD Court of Cassation Technical Office, 'Collection of judgments and decisions of the General Assembly over two decades since the establishment of the Abu Dhabi Court of Cassation' (2026), decision no. 38, pp. 231-234 (ADJD publications library, document 0901d61786449d2a)), read on 31 October 2026. Party names are anonymised in the court’s publication.
Published for general information by Polaris Corporate Services FZ-LLC. It is not legal advice. This page is a summary written by Polaris; it is not the judgment and is not an official translation. Read the judgment on the court’s official service before relying on it. A judgment decides the dispute before the court; its weight in a later case depends on the court, the facts and any later change in the law or in the court’s own case law.

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