When Investment Returns Stop: What Legal Options Do Investors Have in the UAE?

27 October 2026

When an expected investment payment does not arrive, the immediate concern is whether the investment firm is still solvent and able to meet the payment.

A missed payment does not automatically mean that the investment firm is insolvent. It may reflect an internal delay, a proposed restructuring or temporary liquidity pressures that stop short of insolvency.

Before deciding whether to wait, accept revised payment terms or pursue recovery through legal means, an investor needs to establish what has happened under the investment agreement, which entity is responsible for payment and whether anything has changed that could affect the available options.

A missed payment does not always mean the same thing

The starting point is the documentation, including the investment agreement, which should set out when returns or capital are due, whether a grace period applies, what constitutes a default and what rights arise if payment is not made.

The next step is to establish what has happened beyond the missed payment itself.

A firm facing liquidity pressures may ask investors for additional time or propose revised repayment terms. That is different from a formal restructuring or insolvency process, which may affect how creditor claims are treated and whether individual enforcement action can continue.

The appropriate response will depend on which situation applies.

Waiting may be commercially sensible where there is a credible route to payment. In other circumstances, delay may expose the investor to a worsening financial position or increasing competition from other creditors.

The first task is therefore to check what has happened under the investment agreement and whether any formal process has begun.

The legal structure behind the investment matters

The firm or adviser through which the investment was arranged may not be the entity legally responsible for making payment.

Investment structures can involve an issuer, distributor, adviser, offshore investment vehicle, parent company, guarantor or another entity involved in arranging or supporting the transaction. The name or brand visible in marketing material is not necessarily the entity responsible for making payment.

The investment agreement, term sheet, investment certificate and any guarantee or security documents should identify who received the investment, who undertook to make payments and whether another party agreed to support those obligations.

Identifying the issuer may still leave other questions to examine. Depending on the facts, there may be issues around representations made to the investor, the role of advisers or distributors, guarantees that were given, or separate obligations assumed as part of the transaction.

For that reason, identifying the legal structure behind the investment is often the first step towards devising the recovery strategy.

It is also worth checking whether the firm in question was licensed to offer the product to which the investor has subscribed, including by the Capital Market Authority for onshore investments, the Dubai Financial Services Authority in the DIFC or the Financial Services Regulatory Authority in the ADGM, as applicable.

Jurisdiction can change the recovery strategy

An investor may be based in the UAE while holding an investment issued by an offshore entity or governed by foreign law.

The investment documents may specify a governing law, a particular court or an arbitration forum. Depending on the structure, proceedings could involve the UAE onshore courts, the DIFC Courts, the ADGM Courts, arbitration or a foreign jurisdiction such as England and Wales.

The correct forum can affect procedure, available interim remedies, enforcement and the practical cost of pursuing recovery.

The recovery strategy therefore depends on where a claim can properly be brought against the party that is legally responsible, and whether any resulting judgment or award can ultimately be enforced against available assets.

That analysis becomes especially important where the issuer, investor and assets are located in different jurisdictions.

A restructuring proposal does not always mean investors have to wait

When payments stop, investors may be told that a restructuring is underway or that a new repayment plan will be proposed.

The nature of that process needs to be established before deciding how to respond.

A voluntary commercial proposal seeking additional time is different from a formal restructuring or insolvency process. An informal proposal may be asking investors to agree to changes to their existing contractual position. A formal process is court-supervised and may affect creditor rights and enforcement, including whether individual claims or enforcement can continue.

Investors should therefore assess the rights they already have before deciding whether waiting is in their interests. They should also scrutinise the guarantees and safeguards offered to support the enforceability of any proposed restructuring or repayment plan, and clearly understand what consideration or benefit they will receive in exchange for agreeing to wait.

Depending on the documents, forum and circumstances, investors may also have access to specific recovery tools. These can include payment order procedures for certain clearly established monetary debts, enforcement options where cheques have been issued, and precautionary measures such as attachment or freezing orders aimed at preserving assets. The availability and suitability of these measures will depend on the evidence, the applicable legal regime and the location of the relevant assets.

A proposed restructuring should be assessed as part of the wider recovery position, rather than treated automatically as a reason to remain passive.

Revised repayment terms can change existing rights

An investor who has missed a payment may later receive an extension, revised maturity date, instalment proposal, restructuring agreement or settlement offer.

A revised proposal may ultimately provide the best commercial outcome. Its legal effect should still be checked before it is accepted.

New terms can alter payment dates, existing defaults, guarantees, security arrangements, enforcement rights or claims against other parties. In some cases, the investor may be agreeing to postpone or change rights that already exist.

Before signing, investors should consider both when they are being told they will be paid and what they are being asked to change, postpone or give up in return.

Particular care is needed with terms that release a guarantor or security, waive existing defaults, convert the debt into equity or another instrument, or are bundled with confidentiality obligations. Where payments are received while terms are being negotiated, investors should consider expressly reserving their rights.

That makes the terms of any revised proposal as important as the promised repayment date, and investors should consider obtaining advice on their legal effect before agreeing to them.

When Does an Investment Dispute Become a Potential Fraud Case?

Not every investment dispute is purely contractual or the result of a business facing financial difficulties.

In some cases, the available information may raise wider concerns about how the investment was marketed, where investor funds were directed, whether representations made to investors were accurate or whether the investment opportunity itself was genuine from the outset.

The mere fact that payments have stopped does not, by itself, establish fraud. Many legitimate businesses experience internal delays, liquidity pressures or commercial failure. However, where there are indications that investors were induced to invest through deliberate misrepresentations, false assurances, concealment of material facts, misuse of investor funds or other dishonest conduct, the position may require a different legal assessment.

In those circumstances, an investor should consider whether the matter extends beyond a civil recovery claim and whether regulatory complaints or criminal proceedings may also be relevant. The availability of such options will depend on the facts, the available evidence and the jurisdiction involved.

The key question is whether the issue is simply a delayed repayment or failed investment, or whether the available evidence suggests conduct that warrants examination as a potential fraud. The answer to that question may materially affect both the recovery strategy and the protective measures available to investors.

Preserve the documents that may matter later

Where investment payments have stopped, the documents created before and after the investment can become central to assessing what rights remain available.

An investor should preserve material such as:

• subscription agreements, term sheets and investment certificates;
• payment schedules, proof of transfers and records of previous payments;
• guarantees, security documents and any cheques given as security;
• account statements;
• brochures, presentations and screenshots of websites or social media pages, which may later be taken down;
• emails, WhatsApp and other messages with advisers, distributors or representatives, including written representations about returns or repayment;
• the firm’s licence details and any onboarding documents;
• notices concerning missed payments; and
• restructuring, extension or settlement proposals.

These records can help establish how the investment was structured, who assumed which obligations and whether the position changed after payments stopped.

They may also become important if there is later disagreement about what was represented, agreed or accepted.

What should investors do next?

Before deciding how to respond, an investor needs a clear picture of the investment itself.

That means identifying who owes the money, what the contract provides, which forum is appropriate, whether any formal process has started, whether assets remain available and what effect any proposed restructuring or revised terms would have.

Depending on the circumstances, the next step may be to wait under a credible repayment plan, negotiate revised terms, participate in a restructuring or pursue recovery.

Where several entities are involved, the issuer is based offshore, repayment terms are being changed or there are concerns about available assets, early legal advice can materially affect the options that remain available.

 

Need help assessing your recovery options?

ADG Legal‘s investor recovery and financial disputes team assists investors facing missed payments, disputed investment obligations and difficulties recovering funds. Our multidisciplinary team draws on experience in dispute resolution, restructuring and asset recovery to assess contractual rights, identify potentially responsible parties and develop recovery strategies, including where investments and assets span multiple jurisdictions.

About the authors

David McCoy is Head of our International Disputes team and Managing Partner of our Abu Dhabi office. He has extensive experience in complex cross-border disputes before the DIFC Courts, ADGM Courts and English High Court, as well as in major international arbitrations.

Bradley Marais is Counsel in our International Disputes team. He advises on international and cross-border disputes, with particular experience in commercial litigation, contractual disputes, insolvency, fraud claims and domestic and international arbitration.

Shamseddien Essam is a Senior Associate in our Local Litigation team, advising clients on a broad range of civil and commercial disputes across the GCC. His practice encompasses litigation, arbitration, cross-border commercial disputes, and the recognition and enforcement of foreign judgments and arbitral awards.