Abu Dhabi Court of Appeal | Commercial Judgment, 2026

An Abu Dhabi Court of Appeal judgment provides important guidance on the protection of client and investor assets where precautionary attachment is sought against a regulated investment firm.

The Court confirmed that, although an investment firm’s own assets may be subject to precautionary attachment, funds, securities and other assets held on behalf of clients and investors must be excluded from measures directed against the firm’s liabilities.

The decision highlights a fundamental distinction in financial services litigation: assets held by an institution for third parties are not necessarily assets available to satisfy claims against the institution itself.

Background

The dispute arose from commercial proceedings in which an investor obtained a monetary judgment against several defendants, including a regulated investment firm.

The investor subsequently obtained a precautionary attachment order covering bank accounts and other assets of the defendants.

Following appeals against the underlying judgment, the attachment was challenged. The court hearing the challenge cancelled the attachment against one individual defendant, whose claim had been dismissed on appeal, but maintained a revised attachment against the investment firm.

The firm appealed, challenging the continued attachment and seeking to protect assets held on behalf of its clients and investors.

Client and investor assets were protected

The central issue before the Court of Appeal was whether a precautionary attachment directed against an investment firm could extend to assets held by that firm for third parties.

The Court considered Article 14 of Federal Decree-Law No. 33 of 2025 concerning the regulation of capital markets.

It held that funds, securities and other assets belonging to clients and investors, and held by a licensed institution on their behalf, do not form part of the institution’s own estate and must be excluded from attachment for its liabilities.

Importantly, the Court treated this protection as mandatory rather than discretionary.

The Court therefore modified the attachment to expressly exclude client and investor funds, securities and other assets held for third parties, limiting its scope to property beneficially owned by the investment firm. The distinction is significant. A creditor pursuing a claim against a regulated institution cannot, merely by obtaining an attachment against that institution, reach assets belonging to its clients.

The firm’s own assets remained subject to attachment

The Court did not discharge the attachment in its entirety.

It maintained the precautionary attachment against assets belonging to the investment firm itself, subject to the applicable legal requirements.

The statutory protection afforded to client and investor assets did not extend to the firm’s proprietary property.

The decision therefore balances two distinct interests: the creditor’s ability to preserve assets available to satisfy a claim and the protection of third-party property held by a regulated financial institution.

A stay of enforcement did not automatically discharge the attachment

The Court also considered the effect of a separate order staying enforcement of the underlying appellate judgment pending cassation proceedings.

It held that a stay of enforcement was provisional and did not, by itself, invalidate the underlying judgment or extinguish the claim.

The Court distinguished between precautionary attachment, which preserves assets pending resolution or enforcement of a claim, and compulsory enforcement, which seeks satisfaction of the judgment.

Accordingly, the stay of enforcement did not automatically require the existing precautionary attachment to be discharged.

Whether such an attachment should remain in place continued to depend on the relevant legal requirements and circumstances of the case.

Practical significance

The judgment has important implications for regulated financial institutions, investment managers, creditors and investors.

For financial institutions, it reinforces the importance of maintaining clear records distinguishing proprietary assets from funds, securities and investments held for clients.

For creditors, it demonstrates that an attachment against a regulated institution must respect the legal ownership of the assets concerned. The institution’s possession or administration of assets does not necessarily make them available to satisfy its own liabilities.

For clients and investors, the decision illustrates the protection afforded by the statutory separation of their assets from those of the institution holding them.

The judgment also underlines the importance of distinguishing interim asset-preservation measures from enforcement of a monetary judgment, particularly where appellate or cassation proceedings remain pending.

Conclusion

The Abu Dhabi Court of Appeal judgment clarifies an important limit on precautionary attachment against regulated investment firms.

While a creditor may seek to preserve assets belonging to the debtor institution, that measure cannot extend to funds, securities and other assets held on behalf of clients and investors where the applicable statutory protection applies.

The decision reinforces a fundamental principle: the liabilities of a financial institution must be distinguished from the property rights of the clients whose assets it holds.

DISCLAIMER

This publication is provided for general information only. It does not constitute legal or regulatory advice and should not be relied upon as such. The outcome of any matter depends on its particular facts, the ownership and nature of the relevant assets, and applicable law. Specific legal advice should be obtained before taking or refraining from taking any action.