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Like all of us, business leaders the world over find themselves in entirely unfamiliar territory.

Inboxes are overflowing with communications from well-intended consultants and professional service providers looking to give their insights and to assert their ability to cope and provide clients with ongoing support.

We hope that this short bulletin helps to condense some of the useful information that may already be out there or buried in your inbox.

We set out below a checklist of some of the key issues that many company directors and managers will wish to consider when devising and implementing their Covid-19 crisis management strategies.

Key amongst them is cash flow management.

We can't emphasise enough the need to protect your key business relationships at such a time of crisis (your partners are all primed to remember both welcome gestures of support and less generous commercial opportunism). Having said that, the accounts payable and credit control functions will have a huge role to play in any cash flow-dependent business: paying out funds quicker than you're getting paid is a sure-fire way to impair liquidity and put your business in more peril.

Note that the bulletin is general in nature and limited in scope and that it should not be viewed as in any way exhaustive or a substitute for specialist legal or other professional advice: we have produced articles and circulars which go into more detail and we are only too happy to discuss any specific issues you may have.


Any and all measures need to be taken in full compliance by the directors with their legal duties. This is more important now than ever as we can be fairly sure that future law-makers will review closely the aftermath of the pandemic and seek to fix legislative policy which could shine a light on directors' actions in managing businesses during the pandemic, in particular businesses that do not survive.

Action Points:

 • Mitigate the risk of being fixed with liabilities by acting at all times in good faith, with care and diligence and staying abreast of changes to government policy, law and practice.

• Bear in mind, among other things, your increased reporting obligations in light of the pandemic and its consequences.

• Be mindful of the greater scrutiny directors will be under in the event of the company's default, and potential civil and criminal liabilities which may arise in the worst case scenario.

• Generally, consider the impact of each decision on the reputation of the company, the group, its staff and customers.

• Work closely with the communication team to ensure any actions are taken in line with the company's ethos and brand identity to minimise reputational risk.


At a turbulent and highly uncertain time of crisis (the acute phase of which may last for weeks, perhaps months more), owners and managers are understandably looking at what steps they can take to control costs and secure revenues. As the situation evolves, businesses are looking to triage their issues and focus and prioritise their responses accordingly by reference to scenario planning and financial modeling. There are some immediate priorities.

Action Points:

Contractual Positions

 • Review all relevant commercial, real estate, banking, construction, investment and other contracts to understand your legal position and seek to anticipate problems, and, where appropriate, engage in discussions with your counterparties to ensure compliance or, as the case may be, adjust onerous terms, seek temporary relief or, where permitted, terminate the contract.

Support measures

• Seek to benefit from relevant support measures announced by the government, the relevant central bank, the relevant federal authority as well as freezones.


• Ask for relief or flexibility from your landlord in paying your rent.

• Understand your position under any relevant facilities and if appropriate speak to your liquidity provider to enhance or re-finance your debt eg rescheduling repayments or seeking to extend overdraft facilities.

• Review and invest time and energy in your credit control function.

• Ensure that your accounts payable function is proactively managing payments in a manner that protects your cash flows.

• Consider entering into hedging arrangements or possibly unwinding your existing hedges.

• Consider whether you may wish to raise funding against illiquid assets.

• Consider selling non-core assets.

• Where relevant, particularly for listed companies, make the relevant disclosures about the impact of the crisis on your business.


• Review your existing insurance policies to assess the possibility of claims for business interruption and lost revenue.

• Consider additional suitable policies such as credit insurance in light of potential counterparty defaults and/or D&O liability insurance in light of potential claims of mismanagement.

Staff costs

• Subject to the necessary engagement with staff, companies may be able to reduce wages and hours and utilise annual vacation or unpaid leave as an immediate means by which to manage costs and lessen the impact of lower utilisation levels.

• Seek legal advice and consider reputational issues and longer term needs before proceeding with redundancy measures.


Businesses are being required to adapt quickly to the new regulatory and operational landscape.

Action Points:

Compliance and legality

• Keep abreast of all the recently announced rules and regulations in response to the outbreak. Speak to your advisers.

• Review and enhance systems, policies and procedures to ensure compliance and avoid unintended breaches caused by the changing legal landscape (even where the changes may be temporary).


• Identify alternative suppliers and devise contingency plans, taking into account the mid to longer term forecasts for affected areas and business interruptions.

• Seek to militate against over-reliance on individual or groups of customers and re-consider your pricing strategies.
Accounts and financial reporting

• Seek deadline extensions if required.

• Stay in close contact with your auditors and ensure appropriate adjustments and disclosures in the quarterly management accounts.

IT and IT licences

• Assess whether any enhancements or modifications in licences and IT capabilities are required in light of remote working.

• Ensure continued maintenance of IT security extends to remote working. The new methods of working may also give rise to significant data protection issues.

• Consider relevant confidentiality and data protection issues in connection with the use of certain video conferencing tools and take necessary security measures where available.

• Get informed on the latest arrangements by the postal and courier services in your emirate. Emirates Post in Dubai for example are no longer operating their registered services in the same way, requiring proof of ID details rather than signatures.

• Agree alternative arrangements with your counterparties where your agreements currently make issuance of notices difficult.

Electronic execution and notarisation

• Consider transacting using e-signatures. In the UAE, e-signatures are allowed (although not widely used) under Federal Law No. 1 of 2006 on Electronic Commerce and Transactions. We would advise parties to ensure that their reliance on electronic signatures, especially for critical contracts, is kept under review and where appropriate legal advice sought.

• The Notary Public services in certain emirates have also recently launched an online notarisation process for certain notarised contracts.


As companies move from reacting to the immediate impact of the Covid-19 crisis to adapting to the new business landscape, some will start to develop strategies to allow them to emerge leaner and stronger.

Action Points:

• Review traditional accepted processes and business norms and look to innovate.

• Consider accelerating digital transformation plans and upskilling of staff.

• Speak to your customers to seek to understand longer term moves in markets, products and business models.


Many of the above measures will be dependent on a degree of compliance and cooperation from counterparties and relevant stakeholders (eg employees). You may therefore find yourself in a position where, in spite of your best efforts, you are unable to resolve things amicably and a formal dispute resolution process is the only option (whether initiated by you or a counterparty).

Action Points:

• Seek to avoid a dispute by finding middle ground where it exists. It may be useful to use the services of a professional mediator or a law firm in seeking to find an amicable solution.

• Determine as early as possible that a dispute is likely or inevitable and instruct legal advisers.

• In the UAE, the principle of without prejudice negotiations is not recognised so it is more difficult to make offers of settlement without this being used against you. Be aware of the need to tread carefully in pre-litigation discussions.

• Check for jurisdiction and choice of law before proceeding. Your lawyers will help you with this.


You may view cash flow management and the short to medium term shoring up of the business as only giving partial comfort if the current crisis poses an existential risk to the business. There are other considerations, such as the ring-fencing of assets, the streamlining of core operations, and recognising as early as possible that the solvency of the business is at risk.

Action points:

• Look at pre-emptively restructuring the business to ring-fence particular assets and areas of risk and/or to insulate key assets or business lines against risks. This may assist in providing renewed focus on the sustainable operations.

• Seek the protection of available insolvency relief or prevention measures and ensure compliance with other insolvency regulations.

• Ensure that you do not continue to trade while insolvent.

• Seek specialist insolvency advice.

The Trowers team would be happy to assist you with any issues you may be facing and we hope to collectively come out of this crisis intact and maybe even with some lessons learned and important adjustments made, and therefore in some way stronger.