Dubai: Dubai Islamic Bank on Sunday said in a filing to the Dubai Financial Market (DFM) that it intends to make legal claims on insurance companies to make payments of insurance receivables assigned to it under its finance facilities to NMC.
In May this year DIB secured a ruling against the administrators of NMC, relating to more than $400 million in exposure to NMC, lent to the company using collateral known as insurance receivables, which relate to payments by insurance companies for medical treatment.
NMC, the largest private healthcare provider in the UAE, ran into trouble last year after the disclosure of more than $4 billion in hidden debt left many UAE and overseas lenders with heavy losses.
In September 2020, ADGM Courts appointed Richard Fleming and Ben Cairns of Alvarez & Marsal as administrators for NMC Healthcare’s group of operating companies and businesses.
Referred to arbitration
As the administrators went ahead with the restructuring, DIB insisted on its claims against the insurance receivables and obtained a ADGM court ruling on May 24, 2021 in its favour that the ADGM court has no jurisdiction over the agreements regulating the securities.
In a further hearing on July 12, the ADGM court ruled that the DIB is “the overall winner" in this phase of litigation and referred to dispute between DIB and NMC to arbitration between both parties.
In its filing to DFM, DIB said: “Notwithstanding the arbitration proceedings, our proceedings against the insurance companies will continue and DIB is confident in its prospects in these proceedings.”
While welcoming the court ruling in its favour including the order on joint administrators NMC to reimburse 75 per cent of the legal costs to DIB, the bank said it is committed to the restructuring of NMC.
Committed to restructuring
“DIB is one of the largest creditors to the NMC Group. We affirm our commitment to support restructuring of the NMC business to ensure its successful emergence from administration,” DIB said in a statement to DFM.
“Any such restructuring must be based on an acknowledgement of existing legitimate security interests in accordance with the provisions of applicable laws.”
The bank reiterated that it will continue to robustly defend its interests in the arbitration, the Dubai Courts and any other applicable legal forum.