.jpg?20260606')
A LANDMARK ruling by the Bahrain High Court has cleared the way for massive financial payouts to the creditors of a defunct local bank, following a major legal victory that knocked back more than $2.8 billion in contested claims.
International law firm Charles Russell Speechlys – acting as the liquidator for Awal Bank (in liquidation) – successfully defended its rejection of over $2.8bn in claims brought against the bank’s estate by the bankruptcy trustees of several “connected parties.”
In a dramatic twist, the court not only rejected the massive multibillion-dollar claims against Awal Bank, but ruled that those connected parties actually owe Awal Bank a staggering $2.56bn.
The judgment follows a legal challenge to the liquidator’s July 2023 adjudications, which had thrown out the $2.8bn in claims.
The high-stakes proceedings involved extensive demands for Awal Bank’s internal books and records. Because Awal Bank remains licensed and regulated by the Central Bank of Bahrain (CBB) while in liquidation, the liquidator fiercely resisted handing over wider customer records, citing strict confidentiality laws under Article 117 of the CBB and Financial Institutions Law.
To resolve the impasse, the Bahraini Court appointed an independent expert in March 2025. The final expert report, delivered on February 12 this year, almost entirely mirrored the liquidator’s original findings.
The ruling is set to have a massive practical impact on the winding-up process. Funds that had been strictly ring-fenced in case the $2.8bn claims were accepted are now expected to be unlocked and distributed to Awal Bank’s legitimate, admitted creditors.
Speaking on behalf of the liquidator, Patrick Gearon, partner and head of Middle East Offices at Charles Russell Speechlys, praised the verdict.
“This is an important judgment for Awal Bank’s creditors,” Mr Gearon said. “The court has rejected claims which, if admitted in full, would have materially affected the liquidation estate and delayed distributions to creditors.”
“The judgment confirms the very substantial indebtedness owed by these connected parties to Awal Bank and should clear the way for the liquidator to progress further distributions and continue steps to have Awal Bank admitted as a creditor in the liquidation estates of the connected parties.”
Awal Bank first entered administration back in 2009. Since then, the liquidator has launched an aggressive, multi-jurisdictional asset recovery hunt spanning Bahrain, Saudi Arabia, the Cayman Islands, and the UK.
To date, gross asset realisations have reached approximately $998 million. The liquidator has already pushed out interim payments of roughly $247m to admitted creditors, representing a 15.2pc distribution.
Following this definitive court ruling, the liquidator is now moving to officially file Awal Bank’s newly validated $2.56bn claim against the bankruptcy estates of the connected parties, while finalising the bank’s closure and preparing the next round of interim payouts to waiting creditors.
&uuid=(email))