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DEBTOR FIRM’S ASSETS TO BE SEIZED

The Federal Supreme Court has issued a verdict ordering the temporary seizure of the assets of a debtor establishment that owes Dh185,000, to meet the entire amount of debt. The Al Roya Al Wadeha Engineering Establishment filed...

a lawsuit demanding Al Nahda Service Establishment to pay Dh185,000, as the debt amount which it owes to the engineering establishment as the remaining charges for some engineering works executed by them in the headquarters of the services establishment and its two branches in Dubai and Sharjah.

At the Abu Dhabi Court of First Instance, the service establishment admitted its debt to the plaintiff, while assuring that it’s not capable of paying the debt in the meantime. The court decided to temporarily seize the assets of the service company in the British Bank and the Union National Bank until the completion of paying the debt. However, the defendant filed an appeal before the Court of Appeal, saying that the seizure violates Article 261/2 from the Civil Procedures Law, and for the lack of justification for the temporary seizure according to Article 252 of the same law, because the dues of the engineering establishment are subject to completion of the work executed in Al Nahda premises, which they say is not complete. The Court of Appeal annulled the appealed verdict and considered it void.

The Al Roya Al Wadeha Engineering Establishment did not accept the verdict and filed an appeal before the Supreme Court, stating that the agreed work was complete for almost a year. This claim was backed with the expert’s report, which makes the appeal verdict invalid. The Supreme Court agreed with the appellant’s defence and recommended the annulment of the previous verdict. It again ordered the temporary confiscation of the assets of the service establishment till the debt is paid off.