Dubai Court of Cassation, Commercial Appeal No. 358 of 2025, judgment of 15 May 2025
Article 265(2) of the 2023 Bankruptcy Law makes final the Court of Appeal's judgments on challenges to decisions of the bankruptcy court; as an exception it is read narrowly and covers only judgments on the bankruptcy procedure itself, so judgments on admissibility or jurisdiction may be appealed in cassation. Under Article 37 of the Civil Procedure Law, bankruptcy cases belong to the court where the debtor's business is located, or its main business if there are several; the court of the debtor's residence is competent only if the trader has retired. Jurisdiction between the emirates' courts is a matter of public policy, and a recent lease cannot create jurisdiction.
An individual employed by a company in Abu Dhabi, with debts of about AED 2.77 million under enforcement files and a monthly salary of about AED 27,000, applied to the Dubai courts to open bankruptcy proceedings and to stay enforcement of the judgments against him. The first-instance court held that Dubai courts lacked jurisdiction, and the Court of Appeal, sitting in chambers, affirmed.
The Court of Cassation first held the appeal admissible. Article 265(2) of the 2023 Bankruptcy Law makes final the appeal court's judgments on challenges to the bankruptcy court's decisions, but as an exception it covers only judgments on the bankruptcy procedure, not those on admissibility or jurisdiction, which may be appealed in cassation.
On the merits, it upheld the lack of jurisdiction. Each emirate has its own judiciary except in matters entrusted to the federal courts (Article 104 of the Constitution); Dubai courts must keep within their jurisdiction, and this is a matter of public policy, distinct from territorial jurisdiction within one court system. Article 37 of the Civil Procedure Law gives bankruptcy cases to the court of the debtor's place of business, and to the court of his residence only if he has retired from trade. The courts below found that the enforcement files were in Abu Dhabi, that he worked, held his vehicle, family records and commercial licences there, and owned land registered there; a lease of a one-bedroom flat in Dubai signed a month before the application was an attempt to create jurisdiction. His complaint that the courts had not opened proceedings failed because they had decided only jurisdiction.
Individuals and companies seeking the protection of the bankruptcy law must apply in the emirate where their business is based. The judgment shows that courts look at the substance, such as licences, enforcement files and employment, and will disregard a recently arranged Dubai address. It also confirms that rulings on jurisdiction in bankruptcy cases remain open to cassation despite the finality rule in the 2023 law.
| Article 265(2) of Federal Decree-Law No. 51 of 2023 on Financial Restructuring and Bankruptcy — text of article 265 |
| Article 37 of Federal Decree-Law No. 42 of 2022 (Civil Procedure Law) — text of article 37 |
| Article 104 of the Constitution of the United Arab Emirates |
“يكون الاختصاص في الدعاوى المتعلقة بالإفلاس للمحكمة التي يقع في دائرتها المحل التجاري للمفلس”Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.
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