New appeal may force judgment debtors’ controllers to talk
 

Permission to appeal was granted in China State Construction Engineering Corporation (Middle East) (L.L.C.) v Zaya Living Real Estate Development L.L.C and others [2023] DIFC ENF 316 (10 July 2024) this month, leaving the Court of Appeal of the Dubai International Financial Centre (“DIFC”) to decide who can be forced to answer questions about a company’s means of satisfying an unpaid judgment debt.   

The appeal relates to the scope of RDC 50.2(2), which states that the court may require an “officer” of a corporate body to attend court to answer questions about its means or other matters about which information is needed to enforce a judgment or order against a corporate judgment debtor.  The appeal is therefore expected to have implications for the interpretation of the identical English provision of CPR 71.2(b).

The DIFC Court of Appeal will review the decision of the DIFC Court of First Instance that a partner in a UAE-incorporated LLC holding 99% of its share capital – who has also held herself out as its ‘CEO’ – was not an “officer” under RDC 50.2(2).  The appeal will therefore determine the meaning of “officer” in that RDC 50.2(2), joining a line of authorities on its English equivalents including Société Générale du Commerce et De L’Industrie en France v Johann Maria Farina & Co[1904] 1 KB 794 and Vitol SA v Capri Marine Ltd [2009] Bus. L.R. 271 (QBD).  

Creditors seeking to enforce judgments against companies will no doubt be hoping that the result of this appeal, expected to be heard later this year, improves their overall chances.

Rupert Reed KC and Max Marenbon represented China State in its application for permission to appeal in the DIFC Court of Appeal, instructed by Daniel Xu, Gillian Flannighan and Hala Haddad of Eversheds Sutherland (International) LLP.