Our Newest UAE Expert on Conflict and Opportunity in Today’s Middle East

Kadry Zaghawa, who joins Quinn Emanuel as Of Counsel in the United Arab Emirates, brings a wealth of experience and a stellar reputation to the role.

Those professional assets are reflected in this Q&A, in which Zaghawa looks ahead to bankruptcy litigation, the fast-changing regional crisis, how investors should proceed, and the UAE’s evolving role in the commercial, financial, legal, and political realms across the Middle East. Among the top Arabic drafters in the region, Kadry also touches on the importance of that exacting pursuit.

And, of course, on what drew him to Quinn Emanuel.

State of Financial Emergency

Kadry, you have significant experience in bankruptcy and restructuring law in the region. Now, amid the regional crisis, the UAE has an entirely new bankruptcy law, and Qatar is looking to do the same. What kinds of litigation do you see ahead over distressed debt and the like?

I expect a meaningful volume of disputes tied to nonperforming loans, and the real estate sector will feature prominently among them. When economic conditions tighten, that is where the pressure surfaces first. This has become especially relevant given recent developments. In June the UAE Cabinet issued a resolution declaring a state of financial emergency in response to the hardship suffered by businesses as a result of the regional conflict.

The practical effect is immediate: Creditors may not be able to commence bankruptcy proceedings against defaulting debtors for the duration of the emergency period, while debtors whose distress genuinely arose from the declared event gain access to a more flexible restructuring track. This will shape how distressed-debt matters are litigated and resolved in the months ahead.

The insolvency/bankruptcy space is quickly evolving in the region, and as more financial institutions and debtors begin to accept the benefits of a restructuring, the space will only continue to develop.

A Natural Hub for International Business

You have deep experience in the UAE, and are one of the foremost Arabic drafters in the region. How do you see the Emirates’ role in business, law, and politics taking shape in the coming year?

What stands out to me as a practitioner is the pace at which the UAE has modernized its legal and regulatory framework to match its commercial ambitions, including in insolvency and restructuring, in commercial and company law, and in its dispute resolution infrastructure, such as the specialized financial center courts and its arbitration institutions.

That combination of economic weight and legal sophistication is what makes the UAE a natural hub for regional and international business, and I believe its influence in shaping how business and law are conducted in the region will only deepen in the year ahead.

As for Arabic drafting, in the UAE the Arabic text is the language of the courts, so precision of legal terminology and clarity of expression are essential – an ambiguity, or a loose rendering of a legal concept, can decide a case. Quinn Emanuel’s precision and passionate, laser-focused advocacy lend themselves well to those demands.

Disputes Arising From Crisis

Drawing on your experience in shipping litigation and your broader knowledge of the region, what kind of legal disputes do you see arising from the current crisis?

Any disruption to the region's maritime chokepoints has immediate legal consequences, and I would expect to see various kinds of disputes. One kind concerns bank guarantees and letters of credit issued for goods shipped on vessels. When a voyage is delayed, diverted, or interrupted, the question of who bears that risk under the underlying instruments becomes contentious very quickly.

Another has to do with the delayed or damaged deliveries themselves, and the cargo claims that follow. Around those you then see the familiar chain of related issues: charterparty disputes over delay and deviation, war risk and marine insurance coverage questions, and arguments over force majeure and frustration of contract.

The outcome usually turns on how carefully the contracts and shipping documents were drafted before the goods ever left port.

Risk Advice in Advance

How should investors proceed in participating in the broader economic cooperation and dynamism in the region?

The single most common reason investors end up in legal conflict is that they fail to seek legal counsel before they enter into a transaction. This may also include seeking a litigator’s view, to set out the risks that could develop in any transaction or provide any advice on what to do in the event of breach.

Sound advice at the outset, combined with well-drafted contracts, is what protects an investment if a dispute emerges later. It is far less costly to build that protection in from the beginning than to litigate its absence afterward.

Drawn to the Fight

What attracted you to Quinn Emanuel after your long and distinguished career at several top Emirati firms, and what opportunities do you see for QE as it expands in the region?

Litigation is demanding work, and it is done best by people who are drawn to the fight rather than daunted by it. Quinn Emanuel is also one of the most respected law firms in the world, and being part of a global disputes-only firm that has no fear in taking on the hardest cases was exactly what I was looking for. With the legal battles generated in the region becoming larger and more complicated, clients increasingly want lawyers who operate at that level.

As QE expands in the Mideast, clients will look to its expertise in complex litigation, restructuring and insolvency, and cross-border disputes in which regional knowledge and international reach critically work together.