The High Court dismissed a bankruptcy summons brought by National Bank of Ras Al-Khaimah, trading as RAKBANK, against F.K., finding that the respondent had raised arguable defences requiring a trial and that the bank should have obtained a judgment before seeking the summons.
In a judgment delivered on 23 September 2021, Humphreys J. said the bank advanced AED 1.25 million to F.K. in 2014. F.K. was adjudicated bankrupt on 20 June 2016 and discharged a year later. A statement of affairs prepared before the adjudication did not mention the 2014 loan.
After the bankruptcy adjudication, a further loan application was made in October 2016 for AED 1.26 million. The judgment says AED 398,636.95 was new money, with most of the loan used to repay the 2014 borrowing. F.K. disputed how much of the later loan provided a genuine post-bankruptcy benefit, saying the restructuring had been forced on him through threatening and harassing behaviour. Those claims were not findings made after a trial.
The judge said it was reasonably arguable that the 2014 debt had been discharged and could not be revived through the 2016 restructuring. Other possible defences included whether the genuinely new money fell below the €20,000 statutory threshold for bankruptcy adjudication, and whether the amount claimed was overstated.
The judgment also considered evidence of debt collection calls to F.K., his employer and his solicitors, and references to possible imprisonment in the United Arab Emirates. The bank denied that the evidence established harassment and said the references to imprisonment reflected the law there. Humphreys J. did not make a final finding that harassment or an improper threat had occurred. He held that the evidence could support a defence if accepted at trial, while noting that the evidence about UAE law was limited.
The court further relied on its discretion to dismiss the summons. The amount demanded was not supported by a court judgment, and the judge concluded that the circumstances called for a judgment to be obtained first. The ruling set aside the bankruptcy summons; it did not determine the underlying debt dispute after trial.
Costs were proposed in F.K.’s favour, including reserved costs and the costs of written submissions, subject to any written submission to the contrary within 14 days of delivery of the judgment.