The High Court has ordered SCLAD Construction Limited to be wound up, granting a petition brought by United Precast Concrete Abu Dhabi (L.L.C.) over an unpaid debt arising from construction work in Abu Dhabi.
In a judgment delivered on 10 November 2017, Ms Justice Stewart found that the company had not raised a bona fide dispute over the debt for the purposes of section 570(a) of the Companies Act 2014. The court also found that the company was unable to pay its debts, including its contingent and prospective liabilities, and that winding it up was just and equitable.
The debt arose from five sub-contracts for the manufacture, supply and installation of precast concrete elements for a school construction programme. A final account agreement in April 2012 recorded SCLAD’s agreement to pay AED 9.8 million. The petitioner said AED 1,857,335.28 remained unpaid. SCLAD disputed that the agreement was binding, arguing that the employee who signed it lacked authority.
The judge accepted that the evidence showed a substantive issue to be tried about the signatory’s actual authority. But she found no substance to SCLAD’s challenge to his ostensible authority. The agreement bore SCLAD’s branch stamp, and the court was not given a substantial argument to counter the UAE-law evidence about the presumption arising from use of that stamp. The judge also considered the timing of the challenge and SCLAD’s changing descriptions of the signatory’s role when assessing the dispute’s good faith.
SCLAD had urged the court to let creditors pursue claims through an ongoing Abu Dhabi group execution case. The judge held that those proceedings did not provide a basis to prevent an Irish court from winding up an Irish company. She said the evidence showed SCLAD was dormant, had no assets, and faced liabilities that would not be met even if all sums owed to it by its UAE debtor were recovered. She also found the UAE process was not a suitable alternative remedy because it could take years to conclude.
The judgment did not determine whether UAE court distributions should be reversed or what standing a liquidator would have in those proceedings. It said those matters were for the UAE judicial authority overseeing the group execution case. The court found no evidence that winding up would be contrary to the creditors’ interests and declined to exercise its discretion to refuse the order.