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Your Company's Debt, Your Passport: Abu Dhabi's Top Court Redraws the Line for Managers
Updated: Oct 11
Introduction: The Comfort Managers Relied On
For years, managers of UAE companies have taken comfort in a familiar principle. The company owes the money, not the person who runs it. If a creditor wanted to reach the manager, the creditor first had to go back to court and prove fraud, abuse of authority or some other ground of personal liability.
On 29 June 2026, the General Assembly of the Abu Dhabi Court of Cassation narrowed that comfort considerably. It did not abandon the principle that a company's debts are the company's own. What it did was separate two questions that had been running together for a long time: who owes the debt, and who is standing in the way of it being paid.
That distinction sounds academic. In practice, it decides whether a manager can board a flight.
What the Court Decided: Not Only "Who Owes?" but "Who Is in the Way?"
The General Assembly sits to resolve conflicts between earlier decisions of the court, and there was a genuine conflict here. One line of judgments required a creditor to establish the representative's personal liability, typically by proving fraud or abuse under the Commercial Companies Law, before any coercive step could be taken against that individual. The other line looked at something narrower and more practical: did the representative's conduct prevent or delay execution of the judgment?
The General Assembly chose the second approach. Coercive measures, meaning a travel ban or an imprisonment order, can be imposed on the representative of a defaulting company where the failure of execution is attributable to that representative's conduct, even without a separate judgment against them personally.
What the Law Says: Article 322 Is Not Article 84
The provision at the centre of the ruling is Article 322 of the Civil Procedure Law, Federal Decree-Law No. 42 of 2022. It allows an execution judge to order imprisonment or a travel ban against a company's legal representative, or a third party, where their conduct has prevented or obstructed execution, even though there is no executable title against that individual.
The court's key analytical move was to treat Article 322 as operating independently of Article 84 of the Commercial Companies Law (Federal Decree-Law No. 32 of 2021), which governs the personal liability of managers. The two provisions answer different questions.
Article 84 asks whether the manager should personally pay. That requires the familiar elements of wrongdoing and leads to a judgment against the manager's own assets.
Article 322 asks whether the manager's behaviour is the reason a judgment against the company is not being satisfied. It does not make the manager a debtor. It applies pressure to the person who controls the outcome.
Seen this way, the earlier requirement of a separate liability judgment was asking Article 322 to do the work of Article 84. The General Assembly declined to read it like that.
The Bar for "Obstruction" Is Lower Than You Think
The threshold the court set is the part most managers will find uncomfortable. The ruling makes the following points clear.
Fraud and deceit are not required.
It is enough that the representative's conduct directly or indirectly prevented, delayed or frustrated execution.
Poor management or mismanagement may be capable of meeting that test.
The relevant conduct can take place before the judgment or before execution began, provided there is a clear causal link to the failure of enforcement.
That last point deserves attention. A creditor is not limited to what the manager did once the bailiff arrived. Decisions taken months earlier, while the dispute was still being argued, can be examined if they are what left the company unable or unwilling to pay.
The Safeguards That Still Stand
It would be a misreading to treat this ruling as a licence to ban every director whose company has an unpaid judgment. The court built in real limits.
Nothing is automatic. The execution judge must decide whether the conduct is attributable to the representative and whether it caused or contributed to the obstruction.
Genuine inability to pay is different. A company that simply has no money is not the same as a company whose manager is keeping money out of reach.
Procedural protections still apply. An investigation is required before imprisonment under Article 320(1) of the Civil Procedure Law, and travel bans remain subject to the safeguards in Articles 324 to 326.
The corporate veil is not pierced. The ruling does not turn the company's debt into the manager's debt or expose the manager's personal assets. That still needs a separate legal basis.
Practical Significance: Why Boardrooms Should Pay Attention
Enforcement, not judgment, has long been the weak point of commercial litigation in the region. Winning a case against a company that has quietly emptied its accounts can feel like winning nothing at all. The General Assembly has given execution judges a lever aimed squarely at that gap.
The focus moves from status to conduct. Under the older approach, the question was largely about the manager's legal position. Now it is about what the manager actually did, which makes decision making, payments, asset transfers and cooperation with the execution court central to any application.
Creditors gain leverage, but carry the burden of causation. The test is easier to meet than fraud, but it is not a formality. Applications built on the bare fact that a judgment is unpaid are unlikely to succeed.
A single test now applies. Because the decision resolves a conflict within the court itself, execution judges across Abu Dhabi now have one clearly stated standard to work from.
Some questions remain for later cases. Where does ordinary commercial misjudgment end and conduct that "frustrates" execution begin? How will courts treat a manager who has resigned but whose earlier decisions caused the problem? And how will the test apply in group structures where the person truly controlling the money is not the named manager?
What is already clear is this. A company's debt remains the company's debt, but the person whose conduct keeps that debt unpaid can no longer assume they are out of reach simply because no court has found them personally liable.
How Juris Maestro Can Help
Juris Maestro advises companies, directors, shareholders and creditors across the UAE on corporate governance, directors' duties and how company debts are enforced, and drafts the board resolutions, settlement terms and agreements that put that advice into practice. Whether you are a creditor holding an unpaid judgment or a manager who wants to understand where they stand while their company is in a dispute, we can review the position and explain your options clearly.
If you're unsure, let's talk. Before it turns into a case.
info@jurismaestro.com | +971 56 116 3390 | www.jurismaestro.com
This article interprets a court judgment for general information only. It is not legal advice.
