Amid liquidation procedure, the interest of creditors must be kept as the foremost priority and, as the group, they shall authority to claim their debt. All creditors shall be dealt with equality, albeit their position is always struck down to the last in the priority list. With significant variations in country’s economy, investors are now scared to make an investment in the market due to a potential risk of losing the savings. Civil Lawyers of Dubai have witnessed reluctance in filing a civil claim due to the risk of losing the claim as the company is under the liquidation process. It regularly happens that the concerned parties are stressed with the technique that will be required to be conformed to so as to be included them in the list of Creditors, regardless of the authority entertaining the matter.
As a matter of fact, the Top Lawyers of Dubai has resolved the issue for all the creditors as, under Commercial Companies Law of UAE, the creditor can refer the matter before the arbitration institute or the relevant court to recover the credit from the company who is under the process of liquidation. This is consonance with Article 691 of the Commercial Companies Law, where the court action for debt may run parallel with the liquidation proceedings. The UAE Commercial Companies Law No. 8 of 1984 (“CCL”) states that as soon as the application for liquidation is registered, the company will be referred to in the process of liquidation. Amid the liquidation time frame, it will hold its corporate identity to the degree required for the liquidation process. The directors or members will stop with the work during liquidation of the organization. The liquidator will perform all the required liquidation responsibilities, especially to speak to the organization through legal procedures, settle the entities’ obligations and sell its versatile resources or land by sale or some other method except if the appointment letter of the liquidator mentions the sale of assets through varied means. In this manner, as an issue of law, when the organization is under the process of liquidation, the organization retains its corporate body amid the liquidation procedure and the liquidators act on behalf of the company before the courts.
Consequently, as the only delegate of the company, the company will not be extinct unless the liquidation process is finished and final. The Company in liquidation or its liquidators will formally and as required by the law to contact the creditors so as to survey their cases that they may have against the Company under liquidation and to welcome them to display their cases in the liquidation. Nevertheless, regardless of whether the liquidator fails to formally tell creditors of the liquidation, the information of liquidation will be published in 2 local newspapers published in Arabic.
In this way, the liquidation procedures don’t influence the rights and claims that the creditors may have under the Agreement(s) with the borrower organization as the intervention or suit procedures are vital so as to protect the cases of the creditors and the reimbursement of the outstanding amount through liquidation.
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