Once bankruptcy proceedings open, the bankruptcy court alone decides disputes over the debtor company's debts

Dubai Court of Cassation (General Assembly), Resolution No. 3 of 2025, 26 March 2025

Court
Dubai Court of Cassationمحكمة التمييز - دبي
Case
Dubai Court of Cassation (General Assembly), Resolution No. 3 of 2025, 26 March 2025
Arabic citation
قرار الهيئة العامة لمحكمة التمييز رقم 3 لسنة 2025، جلسة 26/3/2025
Bench
General Assembly of the court General Assembly
Topics
Bankruptcy & restructuring · Courts & arbitration · Company law
Laws applied
Bankruptcy Law
The judgment
Read it on dc.gov.ae ↗ (Dubai Courts, judgment publication service (نشر الأحكام), Court of Cassation, General Assembly Resolution No. 3 of 2025)
Summary written
1 November 2026
Print

The principle

Under Federal Decree-Law No. 51 of 2023 on Financial Reorganisation and Bankruptcy, the specialised bankruptcy court has exclusive jurisdiction over all requests and proceedings in bankruptcy cases, including disputes over a company's debts, from the moment a bankruptcy petition is accepted and proceedings opened; it decides the validity, amount and priority of debts and takes measures to protect creditors and debtors. No substantive action may be brought, or continued, against the debtor once the opening decision is made. Excluded are actions on assets and dispositions not covered by the debtor's divestment, actions the law allows the debtor to bring or defend, and criminal cases. Disputes decided or reserved for judgment before the Decree-Law took effect stay with the ordinary courts.

The case and the decision

The President of the Court of Cassation asked the General Assembly to set rules on the jurisdiction of the bankruptcy court over disputes about companies' debts under Federal Decree-Law No. 51 of 2023 on Financial Reorganisation and Bankruptcy.

The Assembly noted that the Decree-Law aims to simplify and speed up bankruptcy, reducing its cost and duration. It created an administrative unit headed by a judge of at least appeal-court rank, which receives applications, notifies interested parties, verifies applications for preventive composition, restructuring and bankruptcy, implements precautionary measures ordered by the bankruptcy court, holds creditor meetings and carries out preparatory steps. It also created specialised courts, which implies their exclusive jurisdiction over all bankruptcy-related disputes, including debt disputes, while the ordinary courts keep civil and commercial disputes outside that exclusive jurisdiction. The trustee verifies the validity and value of debts and reports to the court.

The Assembly resolved, first, that the bankruptcy court has exclusive jurisdiction over all requests and proceedings in bankruptcy cases, including company debt disputes, as soon as the bankruptcy petition is accepted and the proceedings are opened, with power to decide the validity, value and ranking of debts; no substantive action may be brought against the debtor, or a pending one continued, once the opening decision is issued. Second, three categories are excluded: actions concerning assets and dispositions not affected by the debtor's divestment; actions relating to procedures under the Decree-Law that the debtor is permitted to bring or be party to; and criminal cases. Third, as a transitional rule, the ordinary courts continue to hear disputes already decided or reserved for judgment before the Decree-Law came into force, and appeals against those judgments follow the rules in force when they are issued.

Why it matters

Creditors suing a company in financial difficulty in Dubai face a hard stop once bankruptcy proceedings open: debt claims must be pursued within the bankruptcy, and pending ordinary lawsuits against the debtor cannot continue. The resolution gives a clear allocation between the bankruptcy court and the ordinary courts, including for cases caught by the change of law.

Laws applied

Federal Decree-Law No. 51 of 2023 on Financial Reorganisation and Bankruptcy

In the court’s words

“تختص محكمة الإفلاس حصريًا بنظر جميع الطلبات والإجراءات المتعلقة بدعاوى الإفلاس، بما في ذلك منازعات الديون المتعلقة بالشركات”

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 Dubai Court of Cassation on dc.gov.ae (Dubai Courts, judgment publication service (نشر الأحكام), Court of Cassation, General Assembly Resolution No. 3 of 2025), read on 1 November 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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