Businesses

The operating environment across the region has shifted materially in a short period of time. Businesses are managing simultaneous pressures — disrupted cashflow, counterparty uncertainty, heightened stakeholder scrutiny, and a regulatory environment that rewards proactive positioning. In this context, the distinction between businesses that navigate disruption successfully and those that do not is rarely about the disruption itself. It is almost always about the quality of the decisions made in the weeks before a situation becomes unmanageable. The following five priorities are designed to help you make those decisions well.

1. Manage Cashflow and Creditor Risk Before Either Manages You

Businesses under financial pressure often delay formal creditor engagement until the position has deteriorated beyond easy resolution. Early, structured communication with key creditors — framed around a realistic repayment or deferral proposal — is significantly more effective than reactive negotiation. It also preserves the legal protections available to directors and reduces the risk that a civil dispute escalates into something more serious. The markers of insolvency under UAE law are specific and consequential; understanding where your business sits against those markers now is a prerequisite to managing them.

How we support: We advise on cashflow structuring, creditor communication strategy, and settlement mechanics across onshore UAE, ADGM, and DIFC — including the preparation of structured deferral and repayment frameworks that are both commercially workable and legally defensible.

2. Protect Directors and Senior Managers from Personal Exposure

Personal liability for directors and managers is one of the most underappreciated risks in a period of financial stress. UAE law — including the recently updated Federal Decree Law No. 51 of 2023 on Financial Restructuring and Bankruptcy — creates meaningful exposure for individuals who continue trading, make preferential payments, or fail to maintain adequate governance records at a time when they knew, or ought to have known, that the company was in difficulty. Decisions made today create the documentary record that will define that exposure tomorrow.

How we support: We provide rapid governance reviews, board-level decision documentation, and director-specific risk assessments to ensure that those running businesses in this environment are protected by the decisions they make, not exposed by them.

3. Get Ahead of Contract and Payment Risk

Payment deferrals, renegotiations, and counterparty defaults are accelerating across sectors. Contracts that were performing without issue six months ago are now sources of real commercial risk. Force majeure and hardship provisions — where applicable — require careful handling: triggering them incorrectly can itself constitute a breach, and the conditions for their application under UAE law are more specific than most clients assume. Material adverse change clauses, where present in financing arrangements or key commercial agreements, warrant equally careful review — both as a mechanism your business may seek to invoke and as a risk in agreements where a counterparty holds that same right. The most effective position is one prepared before a counterparty moves first.

How we support: We review and advise on existing contractual arrangements, draft renegotiation correspondence, and develop strategic positioning across payment disputes, deferral negotiations, and contractual risk allocation — with a cross-border lens where agreements span multiple jurisdictions.

4. Control Your Communications

In a heightened environment, communications carry disproportionate legal weight. A message to a creditor, landlord, or stakeholder that is drafted without legal awareness can constitute an admission, a misrepresentation, or — in extreme cases — the foundation of a criminal complaint. UAE regulatory frameworks governing electronic communications and media are broad in application. The distinction between what a business means to say and what a communication actually says, legally, is rarely obvious without expert input.

How we support: We review outward-facing communications, advise on messaging discipline across internal and external audiences, and help businesses calibrate their tone to be transparent and constructive without creating unnecessary legal exposure.

5. Contain Disputes Before They Escalate

Not every dispute requires litigation — and in the current environment, premature legal escalation is often the worst commercial outcome available to both sides. The businesses that maintain leverage are those that engage disputes strategically: acknowledging the concern, controlling the process, and presenting structured resolution pathways before a counterparty has the opportunity to set the terms of engagement. Once a matter reaches a  court filing, the cost — financial, reputational, and operational — increases significantly.

How we support: We advise on pre-dispute strategy, mediation positioning, and settlement structuring, with the objective of resolving commercial disputes on commercially acceptable terms and without unnecessary escalation on either side.

6. Review Your Insurance Coverage Against Current Exclusions

Standard commercial insurance policies — including business interruption, property damage, and liability covers — typically contain exclusions for loss or liability arising from war, invasion, or related events. Many businesses have not reviewed their policy wording against the current environment, and the gap between assumed coverage and actual entitlement can be material. Identifying that gap before a claim arises is significantly more effective than discovering it at the point of loss, when insurers will apply those exclusions strictly.

How we support: We assist clients in reviewing existing policy terms, identifying exclusion clauses that may be engaged in the current environment, and advising on the legal position where coverage falls short of reasonable commercial expectation — including the basis for any challenge to an insurer's position.

Argentum Law operates as an extension of your in-house legal function — combining the rigour of a top-tier international practice with the practical, execution-focused approach that complex situations require. We are supporting clients across these issues in real time and are available to assist where needed.

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