The scramble for cash has only just begun
The firms in Dubai that haven’t yet gone to arbitration over unpaid debts will be feeling more exposed than they were; businesses that struck deals with Nakheel to recover 70p in the pound, for example. The expectation was the developers would be good for the money, although you might have to play some silly games in order to get it. The statements coming out now raise doubts as to whether all those contracts will be paid.
Further down the chain, a lot of subcontractors will have worked under “pay when paid” clauses. But if these are worded to have more to do with when, rather than whether, payment happens, contractors might come unstuck if they find out the money’s never going to arrive. This is potentially a double whammy for contractors if they fail to recover their debts and have to shell out on subcontractors as well.
If you haven’t been paid, there isn’t much more you can do to ensure you get your money
But if you’re in that position, there isn’t much more you can do than what you have already been doing to maximise your chances of getting paid. People will try to shout the loudest to make sure they are paid before other creditors, which means more proceedings and more threatening noises.
Rupert Choat is a partner in CMS Cameron McKenna.