Skip to main content
WinJustice Knowledge Hub
Table of Contents
< All Topics

MENA Litigation Funding Trends for 2026

Posted
Updated

Executive Summary: The Convergence of Capital and Justice

The year 2026 marks a definitive inflection point in the legal history of the Middle East and North Africa (MENA). Litigation funding, once a concept relegated to the periphery of the region’s legal ecosystem—viewed with suspicion through the lenses of traditional Sharia interpretation and civil law conservatism—has emerged as a central pillar of the dispute resolution infrastructure. This transformation is not merely a legal evolution but a reflection of the profound geoeconomic shifts reshaping the Gulf Cooperation Council (GCC) and the wider Levant. As sovereign wealth funds diversify their portfolios, as giga-projects transition from construction to operation, and as family offices seek non-correlated assets, the demand for sophisticated legal finance has surged.

The regulatory landscape of 2026 is characterized by a “race to the top” among jurisdictions competing for status as the preferred seat for international arbitration. The Kingdom of Saudi Arabia, driven by Vision 2030, has executed a legislative overhaul of unprecedented speed and scope, anchoring its market with the Civil Transactions Law and the 2025 Draft Arbitration Law. Simultaneously, the United Arab Emirates has refined its “dual-engine” system, leveraging the mature common law frameworks of the DIFC and ADGM while aggressively modernizing its onshore insolvency regime to unlock value from distressed assets. In contrast, the Levant, particularly Lebanon, presents a landscape of distress-driven litigation, where funding serves as the only viable mechanism for investors to pursue recourse amidst systemic financial collapse.

This report provides an exhaustive, expert-level analysis of the MENA litigation funding market in 2026. It dissects the regulatory frameworks, economic drivers, and Sharia-compliance structures that define this era. By synthesizing data from legislative texts, arbitral institutional rules, and market activity, we project that the MENA region is on a trajectory to outperform global growth rates in legal finance, contributing significantly to a global market forecast to reach USD 53.2 billion by 2035.1

1. The Geoeconomic Catalyst: Why MENA, Why Now?

To understand the proliferation of litigation funding in 2026, one must first analyze the macroeconomic currents driving the legal market. The demand for Third-Party Funding (TPF) is not arising in a vacuum; it is a direct response to the complexity and scale of economic activity in the region.

1.1 The Giga-Project Lifecycle and Dispute Inevitability

By 2026, the massive infrastructure initiatives launched in the early 2020s—Saudi Arabia’s NEOM, Red Sea Global, and Qiddiya; Qatar’s post-World Cup infrastructure expansion; and the UAE’s renewed real estate boom—have matured. With project maturity comes the inevitable cycle of construction disputes. The scale of these projects, often valued in the hundreds of billions of dollars, creates a “dispute overhang” where contractors and sub-contractors face liquidity crunches due to delayed payments, scope variations, and supply chain disruptions.2

In this environment, litigation funding acts as a critical liquidity bridge. It allows construction firms to monetize their claims—treating them as assets rather than liabilities—without depleting their working capital. This dynamic is particularly acute in Saudi Arabia, where the sheer volume of construction activity has outpaced the liquidity available to contractors, making non-recourse financing an essential tool for maintaining operational continuity while pursuing legitimate claims.2

1.2 Foreign Direct Investment (FDI) and Legal Certainty

The intense competition for FDI between Riyadh, Dubai, and Doha has forced a harmonization of legal standards. International investors view the availability of litigation funding as a proxy for legal system maturity. It signals that a jurisdiction allows for the sophisticated allocation of legal risk and provides access to justice regardless of immediate cash flow. Consequently, regulatory bodies have moved from passive tolerance to active regulation of TPF to signal “investor-friendliness.” This is evident in the Saudi National Competitiveness Center’s push to align arbitration laws with international standards to improve the Kingdom’s standing in global indices.3

1.3 Asset Class Diversification and Family Offices

The region’s capital allocators—specifically the large family offices and sovereign entities—have radically altered their investment strategies. Moving away from a strict reliance on real estate and public equities, these entities have increased allocations to alternative asset classes. By 2026, litigation finance is increasingly viewed as an attractive “uncorrelated” asset class—one where returns are driven by legal outcomes rather than market beta.4 The sophisticated family offices in Riyadh and Dubai are no longer just potential users of funding; they are becoming limited partners (LPs) in litigation funds, driving the supply side of the market.5

2. Kingdom of Saudi Arabia: The Regulatory Revolution

The most significant narrative in the 2026 MENA legal landscape is the ascendancy of Saudi Arabia. The Kingdom has transitioned from a jurisdiction perceived as unpredictable due to uncodified Sharia discretion to one of the most codified and structurally sound civil law jurisdictions in the region. This transformation is the bedrock upon which the modern Saudi litigation funding market is built.

2.1 The Civil Transactions Law (CTL): The Foundation of Certainty

The single most critical enabler of litigation funding in Saudi Arabia is the Civil Transactions Law (CTL), enacted by Royal Decree M/191 and fully entrenched by 2026.6 Prior to this law, the assessment of a claim’s merits—the primary due diligence task for any funder—was fraught with “Sharia risk.” A judge could conceivably void a contract or a funding agreement based on a discretionary interpretation of Islamic principles.

The CTL has mitigated this risk through comprehensive codification.

  • Codification of Principles: The law codifies 41 core Sharia principles, establishing a clear hierarchy: statutory provisions take precedence, followed by the CTL’s general rules, and only then do abstract Sharia principles apply.7
  • Retrospective Effect: Crucially, the law applies retrospectively to contracts entered into before its enactment (with limited exceptions), instantly stabilizing the legal basis for legacy disputes arising from the early phases of Vision 2030 projects.7
  • Contractual Certainty: By validating the binding nature of contracts and limiting the scope for judicial intervention in agreed terms, the CTL allows funders to model the probability of success with a degree of mathematical certainty that was previously impossible.9

2.2 The 2025 Draft Arbitration Law: Aligning with Global Best Practices

Following the Council of Ministers’ June 2025 resolution to enhance the arbitration ecosystem, the National Competitiveness Center released the Draft Arbitration Law in September 2025.10 This legislation, which supersedes the 2012 Arbitration Law, addresses specific pain points that previously deterred international funders.

2.2.1 The “Law of the Seat” (Article 11)

Perhaps the most “funder-friendly” innovation in the draft law is Article 11. Historically, uncertainty regarding the law governing the arbitration agreement (as distinct from the main contract) led to satellite litigation—a costly distraction that ruins a funder’s internal rate of return (IRR). The new law introduces a default provision: absent explicit agreement to the contrary, the law of the arbitration agreement is the law of the seat.12 This alignment with the English approach (post-Enka v Chubb) provides absolute predictability. If a funded party chooses Riyadh as the seat, the procedural rules are locked in, shielding the eventual award from jurisdictional challenges.14

2.2.2 Procedural Efficiency and Technology

Funders operate on a “burn rate” model; every day a case drags on is capital deployed without return. The 2025 Draft Law aggressively reduces the time and cost of arbitration through technological integration.

  • Virtual Hearings: Articles 35 and 41 explicitly authorize the use of “modern technology” for tribunal meetings and hearings, eliminating the logistical costs of flying international counsel and arbitrators to the Kingdom.11
  • Electronic Awards: Article 52 allows for awards to be signed and delivered electronically, streamlining the final mile of the process.11

2.2.3 Curing Procedural Defects

Under the 2012 law, if a tribunal consisted of an even number of arbitrators (e.g., due to a resignation), the entire arbitration could be declared void. The 2025 Draft Law (Article 13) introduces a cure mechanism, allowing for the appointment of an additional arbitrator to restore the odd number, thereby saving the proceedings.11 This “preservation of the process” is vital for funders who have invested millions in legal fees and cannot afford for a case to collapse on a technicality.

2.3 The Saudi Center for Commercial Arbitration (SCCA)

The SCCA has established itself as the operational engine of this new ecosystem. Its 2023 Arbitration Rules (prevailing in 2026) were the first in the Kingdom to explicitly regulate Third-Party Funding.15

  • Mandatory Disclosure: Article 17 of the SCCA Rules requires parties to disclose the identity of any non-party with an economic interest in the outcome of the arbitration.5 This transparency is designed to protect the integrity of the award. By ensuring there are no conflicts of interest between the funder and the arbitrators early in the process, the SCCA reduces the risk of the award being annulled later—a crucial “security of asset” feature for funders.
  • Sharia Risk Data: The SCCA has proactively addressed the “Sharia ghost” by publishing studies on annulment rates. Their data reveals that less than 1% of awards are annulled on Sharia public policy grounds, a statistic that provides empirical comfort to investment committees in London and New York.16

2.4 Capital Market Authority (CMA) and Investment Funds

In a sophisticated move to onshore the economic benefits of litigation funding, the Capital Market Authority (CMA) has revised its Investment Funds Regulations in 2025 to accommodate alternative asset classes.17

  • Private Placement Liberalization: The updated regulations allow public funds to invest in debt instruments via private placement without the requirement for the issuer to be listed or rated.17 This is a game-changer for litigation funding structures, which are often structured as non-recourse debt notes issued by special purpose vehicles (SPVs).
  • Simplified Funds: The introduction of “Simplified Investment Funds” creates a flexible vehicle for family offices and High Net Worth Individuals (HNWIs) to pool capital for litigation finance portfolios, reducing the administrative burden and allowing for bespoke governance structures.19 This regulatory change facilitates the creation of domestic litigation funds, reducing reliance on foreign capital.

3. United Arab Emirates: The Dual-Engine Maturity

While Saudi Arabia is the rapid reformer, the UAE in 2026 represents a mature, diversified market. It operates a “dual-engine” system where the offshore common law courts (DIFC/ADGM) set global standards, while the onshore civil law courts modernize to handle domestic commercial realities.

3.1 Offshore Jurisdictions: The Gold Standard

The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) continue to be the jurisdictions of choice for international funders due to their basis in English common law and explicit regulation of TPF.

3.1.1 Abu Dhabi Global Market (ADGM)

The ADGM’s 2019 Litigation Funding Rules remain the benchmark for regulatory clarity in the region.20

  • Funder Independence: The regulations strictly prohibit a funder from being owned, wholly or partially, by the law firm representing the client.21 This separation of church and state ensures that legal advice remains unbiased by the funder’s financial incentives.
  • Capital Adequacy: Funders must meet specific liquidity requirements, ensuring they can meet their liabilities, including adverse costs orders.22
  • Settlement Control: A key provision mandates that the funding agreement must explicitly state that the funded party retains control over the litigation and settlement. This counters the “champerty” argument that funders might force a client to settle (or not settle) against their best interests.23

3.1.2 Dubai International Financial Centre (DIFC)

The DIFC Courts have continued to refine their approach. In October 2025, the DIFC issued Practice Direction No. 1 of 2025, which overhauled the court fee and costs regime for employment claims.24

  • Access to Justice: The direction allows the Registrar to waive court fees for claimants demonstrating financial hardship. While aimed at individuals, this enshrines the principle that financial barriers should not impede justice—the philosophical underpinning of TPF.
  • Adverse Costs: The new rules give the court discretion to depart from the “loser pays” principle in specific circumstances, reducing the risk profile for funders backing employment class actions.24

3.2 Onshore UAE: The De Facto Acceptance

Historically, the onshore UAE courts (operating under civil law) had no specific laws regarding TPF, creating a grey area. By 2026, this has evolved into de facto acceptance.

  • Validity of Contracts: Legal consensus in 2026 holds that TPF agreements are valid enforceable contracts under the UAE Civil Code, provided they do not violate public policy or Sharia (e.g., by involving usurious interest or gambling).21
  • Security for Costs: A distinct advantage of the onshore courts for funders is the general absence of “security for costs” mechanisms. Unlike in the DIFC or London, where a funder might have to post millions in security before the case starts, UAE onshore courts typically do not require this, significantly improving the funder’s cash flow dynamics.23
  • Jurisdictional Conduits: The Court of the Joint Tribunal (CJT) decision in Serene Resources v Energen (September 2025) clarified the boundaries between onshore and offshore jurisdiction.25 While confirming that onshore courts have general jurisdiction for enforcement, the reciprocal enforcement protocols (especially the Jan 2025 MoU between ADGM and Dubai Courts) effectively allow funders to litigate in the “safe” offshore courts and enforce against assets onshore with increasing speed.26

3.3 The New Frontier: Specialized Bankruptcy Courts

The most dynamic growth area for UAE litigation funding in 2026 is insolvency. The operationalization of the Specialized Bankruptcy Court in Abu Dhabi in July 2025 has revolutionized this sector.27

  • The Funding Opportunity: In many insolvencies, the bankrupt company has no cash but holds valuable claims (e.g., unpaid debts, claims against directors for mismanagement). The new court system, staffed by specialized judges and experts, allows bankruptcy trustees (officeholders) to engage litigation funders to pursue these claims. The funder covers the legal costs in exchange for a share of the recovery, monetizing what would otherwise be a worthless asset.1
  • Director Liability: The UAE Bankruptcy Law (Federal Decree-Law No. 51 of 2023) imposes strict civil and criminal liability on managers and directors for actions leading to insolvency.28 These claims are prime targets for funding because directors often hold Directors & Officers (D&O) insurance policies, ensuring that if the funder wins, there is an insurance payout to collect against.
  • Market Growth: This sector is driving the UAE litigation funding market to outpace global averages, with the BFSI (Banking, Financial Services and Insurance) segment expected to account for nearly 36% of the market share by 2035.1

4. The Sharia Compliance Matrix: Structuring for Legitimacy

A recurring question for global investors in 2026 is the compatibility of litigation funding with Islamic Law (Sharia). The region has developed a sophisticated consensus that TPF, when properly structured, is not only compliant but aligned with the Sharia objective of justice (Adl).

4.1 The Mudarabah Solution

The industry standard for Sharia-compliant litigation funding in 2026 is the Mudarabah structure.29

  • Roles: The funder acts as the Rab-ul-Maal (provider of capital), and the claimant (or the legal team) acts as the Mudarib (provider of expertise/labor).
  • Profit Sharing: The parties agree to share the profits (the proceeds of the claim) according to a pre-agreed ratio.
  • Risk Allocation: Crucially, for the structure to be valid, the Rab-ul-Maal must bear the financial loss if the venture fails. This aligns perfectly with the non-recourse nature of traditional litigation funding: if the case is lost, the funder loses their investment and the claimant owes nothing. This risk-taking legitimizes the profit share, distinguishing it from Riba (usurious interest) which guarantees a return regardless of outcome.

4.2 Overcoming Gharar (Uncertainty)

Critics historically argued that litigation funding involved Gharar (excessive uncertainty). However, contemporary legal scholarship and fatwas in 2026 distinguish between the uncertainty of the outcome (which is a natural part of business risk) and the uncertainty of the contract terms. As long as the funding agreement clearly defines the subject matter, the costs to be covered, and the profit-sharing mechanism, it is deemed sufficiently certain.15

4.3 Islamic Finance as a Client

Ironically, the Islamic Finance industry is a major consumer of litigation funding. The Sukuk market, forecast to exceed $190 billion in issuances in 2025, generates complex disputes regarding default and restructuring.32 Funding these disputes requires deep expertise in Islamic financial instruments (e.g., Ijara, Wakala), creating a niche for funders who can offer “Sharia-compliant funding for Sharia-compliant disputes”.33

5. Distress and Opportunity in the Levant: The Lebanon Case

While the Gulf represents a market of growth and modernization, Lebanon in 2026 represents a market of distress and restitution. The financial collapse, now in its seventh year, has generated a specific, high-stakes litigation environment.

5.1 The Banking Insolvency and “Lollars”

The Lebanese banking sector remains insolvent, with losses exceeding $72 billion.34 The distinction between “fresh dollars” and “lollars” (pre-2019 deposits trapped in the system) continues to drive litigation.

  • The Enforcement Battle: Depositors have won judgments in UK and French courts ordering banks to repay deposits in hard currency. However, enforcing these judgments is complex due to Banque du Liban (BDL) circulars like BD 13729 (July 2025), which attempt to restrict transfers and shield banks.35
  • Funding Strategy: Funders are backing these cases not as simple commercial claims but as multi-jurisdictional asset tracing exercises. They fund the forensic work required to identify and attach assets of Lebanese banks held in correspondent accounts or foreign subsidiaries.36

5.2 Bilateral Investment Treaty (BIT) Arbitrations

The crisis has triggered a wave of investor-state arbitrations under Bilateral Investment Treaties (BITs).

  • Al Habtoor Group v. Lebanon: This case is the bellwether for 2026. The Emirati conglomerate Al Habtoor Group initiated a treaty dispute claiming over $1 billion in damages for trapped funds and the state’s failure to protect investments.37
  • Cooling-Off Period: The group triggered the six-month “cooling-off” period in early 2024. By 2026, this dispute has likely escalated to full arbitration. The case hinges on whether the de facto capital controls constitute “expropriation” under the UAE-Lebanon BIT.37
  • Implications: A victory for Al Habtoor would establish a precedent that could be used by thousands of other Gulf investors. Funders are closely monitoring this, preparing to fund “follow-on” treaty claims.
  • Security for Costs: Recent tribunals in Lebanon-related BIT cases (e.g., under the Germany-Lebanon BIT) have refused to order security for costs against claimants merely because they are funded.39 This judicial stance preserves access to arbitration for investors whose liquidity has been destroyed by the very state actions they are challenging.

6. Emerging Frontiers: Qatar and Egypt

Beyond the primary hubs, 2026 sees significant regulatory movement in Qatar and Egypt, integrating them into the regional funding map.

6.1 Qatar: Post-Construction Disputes

Qatar’s legal market is defined by the tail-end of the massive infrastructure boom.

  • QICCA 2025 Rules: The Qatar International Center for Conciliation and Arbitration (QICCA) launched new arbitration rules effective January 1, 2025. Article 9 explicitly requires parties to disclose the existence of TPF and the identity of the funder.40 This replaces the silent 2012 rules and brings Qatar in line with global transparency standards.
  • Consolidation: The new rules also introduce improved provisions for joinder and consolidation.41 This is particularly attractive for funders involved in construction disputes, which often involve chains of contractors. Consolidating these into a single proceeding improves capital efficiency.

6.2 Egypt: The African Gateway

Egypt remains a heavyweight in North African arbitration.

  • CRCICA 2024 Rules: The Cairo Regional Centre for International Commercial Arbitration (CRCICA) introduced rules in 2024 that mandated TPF disclosure (Article 53).42
  • Currency Factors: The devaluation of the Egyptian Pound continues to drive disputes involving foreign investors seeking payment in hard currency. Funders are active here, backing claims where the underlying contract is denominated in USD or EUR, thus hedging against local currency risk.43

7. Market Sizing, Sector Analysis and Competitive Landscape

7.1 Market Valuation and Growth

The litigation funding market in the MENA region is projected to grow at a Compound Annual Growth Rate (CAGR) exceeding the global average of 10.7% between 2026 and 2035.1

  • Global Context: The global market is forecast to reach USD 53.2 billion by 2035.1
  • Regional Acceleration: The MENA region’s growth is accelerated by a “catch-up” effect. Starting from a lower base than the US or UK, the rapid deregulation in Saudi Arabia and the UAE is unlocking pent-up demand.

7.2 Key Sectors for Funding in 2026

SectorPrimary DriverKey JurisdictionFunding Suitability
Construction & InfrastructureVision 2030 Giga-projects; Payment delays.KSA, QatarHigh: Large claim values ($100m+) justify funding costs.
Insolvency & RestructuringNew Bankruptcy Courts; Post-pandemic fallout.UAE, KSAHigh: Trustee lacks cash; claims against directors are insured.
Banking & FinanceNPL portfolios; Islamic Finance defaults.UAE, LebanonMedium: Complex enforcement but high volume.
Intellectual PropertyTech transfer to GCC; Patent infringement.KSA, UAERising: As GCC economies pivot to tech/AI.
Investor-State (BIT)Currency controls; Expropriation.Lebanon, EgyptHigh Risk/Reward: Long duration but massive payouts.

7.3 The Competitive Landscape

  • Global Funders: Major international players like Burford Capital and Omni Bridgeway have solidified their dominance. Burford’s Dubai office serves as a hub for the entire region, deploying capital into high-value arbitration and insolvency matters.44
  • Law Firms: The entry of international firms into Riyadh (e.g., White & Case, Morgan Lewis, Kirkland & Ellis, Quinn Emanuel) has been a catalyst.46 These firms are accustomed to working with funders in London and New York and are actively educating their GCC clients on the benefits of TPF.
  • Local Specialists: Top-tier local firms like Al Tamimi, Hadef & Partners, and Zamakhshary have developed specialized desks to handle the intersection of local enforcement and international funding structures.50

8. Strategic Outlook and 2030 Horizon

As we look toward 2030, the trajectory for litigation funding in the MENA region is clear: integration, normalization, and expansion.

  • From “Permitted” to “Strategic”: In 2026, funding is no longer just about access to justice for the impecunious. It is a corporate finance tool used by solvent entities to manage legal budgets and de-risk balance sheets.
  • The Rise of Secondary Markets: We anticipate the development of a secondary market for legal claims in the region, where funded awards are traded or securitized, likely facilitated by the progressive financial regulations of the ADGM and Riyadh’s CMA.
  • AI and Prediction: The digitization of court judgments in Saudi Arabia and the UAE will feed into AI-driven predictive models. Funders will increasingly use this data to price risk more accurately in civil law jurisdictions, narrowing the pricing gap between common law and civil law disputes.

In conclusion, the MENA region in 2026 has successfully navigated the transition from a jurisdiction of uncertainty to one of opportunity. Through deliberate legislative action—most notably the Saudi Civil Transactions Law and the UAE’s specialized courts—the region has built a legal infrastructure that not only tolerates litigation funding but actively invites it as a partner in economic development.

Detailed Comparison of Arbitration & Funding Rules (2026)

The following table synthesizes the key regulatory differences across the primary MENA jurisdictions as of 2026, providing a quick reference for investors and legal practitioners.

FeatureSaudi Arabia (SCCA / Draft Law)UAE (DIFC / ADGM)UAE (Onshore)Qatar (QICCA)Egypt (CRCICA)
Governing Law of FundingImplied acceptance; regulated via SCCA Rules & CMA.Explicitly Regulated (ADGM Rules / DIFC Practice Direction).Unregulated; governed by Civil Code contracts.Explicitly Regulated (QICCA Rules 2025).Explicitly Regulated (CRCICA Rules 2024).
Disclosure of FunderMandatory (SCCA Art. 17). 5Mandatory (DIFC PD 2/2017; ADGM Rules). 48Not mandatory, but recommended for enforcement safety.Mandatory (QICCA Art. 9). 40Mandatory (CRCICA Art. 53). 42
Security for CostsAvailable but rare in practice; low Sharia annulment risk.Common remedy; Courts may consider funding status. 23generally not recognized in Civil Procedure. 23Discretionary under new rules.Discretionary; Tribunal power.
Funder Liability for CostsNo specific provision; generally non-party costs orders are rare.Yes; ADGM/DIFC courts can order costs against funders. 48No power to enforce costs against third parties onshore. 23Tribunal discretion.Tribunal discretion.
Sharia ComplianceHigh scrutiny; Mudarabah structure preferred.Not applicable (Common Law), unless enforce onshore.Applicable; Contracts must not violate public policy.Applicable; disclosure aids transparency.Not strictly applicable in commercial arbitration.
Key Recent Reform2025 Draft Arbitration Law (Law of Seat default). 132025 DIFC Practice Direction (Costs/Fees). 242025 Bankruptcy Court (Abu Dhabi). 272025 QICCA Rules (Modernization). 412024 CRCICA Rules (Emergency Arb). 51

Sector Deep Dive: Construction Disputes in Saudi Arabia

The construction sector in Saudi Arabia represents the single largest capital pool for litigation funders in 2026. This section analyzes the specific mechanics of these disputes.

The “Dispute Overhang”:

By 2026, the initial phases of Vision 2030 projects (launched c. 2017-2020) constitute a massive backlog of claims.

  • Scale: Projects like The Line (NEOM) and Red Sea Global involve hundreds of prime and sub-contractors.
  • Cause of Action: Disputes primarily arise from “variation orders” (changes to scope) and “delay events” (supply chain issues). Under the new Civil Transactions Law, the contractor’s right to claim for unforeseen circumstances (hardship) is more clearly defined than under previous uncodified law.6
  • Funding Need: Contractors are often “asset rich” (in terms of equipment and receivables) but “cash poor.” Funding allows them to hire top-tier expert witnesses (delay analysts, quantum experts) which are essential to winning these high-value arbitrations.
  • Enforcement: With the SCCA administering these cases and the 2025 Arbitration Law ensuring the process is robust, funders have high confidence that an award, once rendered, will be enforced by the Saudi Enforcement Courts without a “re-opening” of the merits.52

Sector Deep Dive: Insolvency Monetization in the UAE

The transformation of the UAE’s insolvency landscape creates a secondary market for distressed assets.

The Mechanism of Funding:

  1. Appointment: A licensed Bankruptcy Trustee (Officeholder) is appointed by the Abu Dhabi Specialized Bankruptcy Court.27
  2. Asset Assessment: The trustee identifies that the debtor company has been stripped of assets by former directors, or has valid claims against third parties.
  3. Funding Agreement: The trustee, lacking funds in the estate to pay lawyers, enters into a funding agreement. This agreement is sanctioned by the court.
  4. Recovery: The funder pays for the litigation against the directors (under Civil/Criminal liability provisions of the 2023 Law).28
  5. Distribution: Proceeds are split: Funder (Capital + Success Fee) -> Trustee (Fees) -> Creditors.

This model, imported from mature jurisdictions like the UK and Australia, is fully operational in the UAE by 2026, driving a wave of litigation against negligent directors and fraudulent conveyances.1

Works cited

  1. Litigation Funding Investment Market Size, Growth Trends 2026-2035 – Research Nester, accessed on December 23, 2025, https://www.researchnester.com/reports/litigation-funding-investment-market/2800
  2. As Saudi Arabia booms, so does legal finance | Burford Capital, accessed on December 23, 2025, https://www.burfordcapital.com/insights-news-events/insights-research/saudi-arabia-construction-funding/
  3. Arbitration law – منصة استطلاع – المركز الوطني للتنافسية, accessed on December 23, 2025, https://istitlaa.ncc.gov.sa/en/Trade/Ncc/Arbitrationlaw/Pages/default.aspx
  4. How family offices are spreading their wings in the Middle East | CFA Institute, accessed on December 23, 2025, https://www.cfainstitute.org/insights/articles/family-offices-middle-east-expansion
  5. Growing confidence for funders in the Middle East | Global law firm – Norton Rose Fulbright, accessed on December 23, 2025, https://www.nortonrosefulbright.com/en/knowledge/publications/4e966008/growing-confidence-for-funders-in-the-middle-east
  6. Civil transaction law of Saudi Arabia – Clifford Chance, accessed on December 23, 2025, https://www.cliffordchance.com/briefings/2024/02/civil-transaction-law-of-saudi-arabia.html
  7. Landmark Saudi Civil Transactions Law sets a new milestone for legislative reform in the Kingdom – Norton Rose Fulbright, accessed on December 23, 2025, https://www.nortonrosefulbright.com/en/knowledge/publications/0309bed4/landmark-saudi-civil-transactions-law-sets-a-new-milestone-for-legislative-reform-in-the-kingdom
  8. The New Saudi Civil Transactions Law: What You Need to Know | Insights – Mayer Brown, accessed on December 23, 2025, https://www.mayerbrown.com/en/insights/publications/2023/07/the-new-saudi-civil-transactions-law-what-you-need-to-know
  9. The Impact of the Saudi Civil Transactions Law on Major Project Delivery | Publications, accessed on December 23, 2025, https://www.kirkland.com/publications/kirkland-alert/2024/04/the-impact-of-the-saudi-civil-transactions-law-on-major-project-delivery
  10. Saudi Arabia’s draft arbitration law: key changes and implications – A&O Shearman, accessed on December 23, 2025, https://www.aoshearman.com/en/insights/saudi-arabia-draft-arbitration-law-key-changes-and-implications
  11. Kingdom of Saudi Arabia: New Draft Arbitration Law – Volterra Fietta, accessed on December 23, 2025, https://volterrafietta.com/kingdom-of-saudi-arabia-new-draft-arbitration-law/
  12. Saudi Arabia publishes draft of new arbitration law for public consultation, accessed on December 23, 2025, https://www.hsfkramer.com/notes/middle-east/2025-posts/saudi-arabia-publishes-draft-of-new-arbitration-law-for-public-consultation
  13. A First Look at Saudi Arabia’s New Draft Arbitration Law – BCLP, accessed on December 23, 2025, https://www.bclplaw.com/en-US/events-insights-news/a-first-look-at-saudi-arabias-new-draft-arbitration-law.html
  14. The dawn of a new era for arbitration in Saudi Arabia: The draft arbitration law and its key reforms – CMS LawNow, accessed on December 23, 2025, https://cms-lawnow.com/en/ealerts/2025/10/the-dawn-of-a-new-era-for-arbitration-in-saudi-arabia-the-draft-arbitration-law-and-its-key-reforms
  15. Third-Party Funding in the Dispute Resolution Landscape of the MENA Region – Brill, accessed on December 23, 2025, https://brill.com/view/journals/yimo/aop/article-10.1163-22112987-20240082/article-10.1163-22112987-20240082.pdf
  16. Paris Arbitration Week 2025 – Saudi Center for Commercial Arbitration, accessed on December 23, 2025, https://sadr.org/en/media-center/news/paris-arbitration-week-2025
  17. The Capital Market Authority Issues Key Regulatory Enhancements Impacting Investment Funds in the Kingdom of Saudi Arabia – King & Spalding, accessed on December 23, 2025, https://www.kslaw.com/news-and-insights/the-capital-market-authority-issues-key-regulatory-enhancements-impacting-investment-funds-in-the-kingdom-of-saudi-arabia
  18. INVESTMENT FUNDS REGULATIONS, accessed on December 23, 2025, https://cma.gov.sa/en/RulesRegulations/Regulations/Documents/Investment_Funds_Regulations_2025_EN.pdf
  19. The Capital Market Authority Introduces a New Category of Funds in Saudi Arabia – King & Spalding, accessed on December 23, 2025, https://www.kslaw.com/news-and-insights/the-capital-market-authority-introduces-a-new-category-of-funds-in-saudi-arabia
  20. ADGM Litigation Funding Rules – Clifford Chance, accessed on December 23, 2025, https://www.cliffordchance.com/briefings/2019/07/adgm_litigation_fundingrules.html
  21. Litigation Funding 2025 – UAE | Global Practice Guides | Chambers and Partners, accessed on December 23, 2025, https://practiceguides.chambers.com/practice-guides/litigation-funding-2025/uae
  22. Growing confidence for funders in the Middle East – Norton Rose Fulbright, accessed on December 23, 2025, https://www.nortonrosefulbright.com/en-fr/knowledge/publications/4e966008/growing-confidence-for-funders-in-the-middle-east
  23. Litigation Funding 2025 – Comparisons | Global Practice Guides | Chambers and Partners, accessed on December 23, 2025, https://practiceguides.chambers.com/practice-guides/comparison/1199/15427/24217-24224-24228-24232
  24. DIFC Courts issue new Practice Direction to improve access to justice, accessed on December 23, 2025, https://www.hsfkramer.com/notes/middle-east/2025-posts/difc-courts-issue-new-practice-direction-to-improve-access-to-justice
  25. A Landmark with Consequences: The CJT’s Latest Decision and Its Implications for Enforcement within the DIFC – M&CO Legal, accessed on December 23, 2025, https://mandcolegal.com/cjt-decision-difc-enforcement-serene-v-energen/
  26. Latest Developments in UAE Arbitration 2025: Strengthening the Legal Framework for Dispute Resolution – Alsuwaidi & Company, accessed on December 23, 2025, https://alsuwaidi.ae/latest-developments-in-uae-arbitration-2025-strengthening-the-legal-framework-for-dispute-resolution/
  27. UAE Launches First Specialised Bankruptcy Court – Charles Russell Speechlys, accessed on December 23, 2025, https://www.charlesrussellspeechlys.com/en/insights/quick-reads/102l2d7-uae-launches-first-specialised-bankruptcy-court/
  28. Sharp Teeth: Civil and Criminal Liability for Officers and Directors of Insolvent Saudi and UAE Companies – King & Spalding, accessed on December 23, 2025, https://www.kslaw.com/news-and-insights/sharp-teeth-civil-and-criminal-liability-for-officers-and-directors-of-insolvent-saudi-and-uae-companies
  29. Third party funding and Shariah (Islamic) compliance – Omni Bridgeway, accessed on December 23, 2025, https://omnibridgeway.com/insights/blog/blog-posts/blog-details/global/2021/05/02/third-party-funding-and-shariah-(islamic)-compliance
  30. accessed on December 23, 2025, https://www.dlapiper.com/en-us/insights/publications/2022/1/is-litigation-funding-compatible-with-shariah-principles#:~:text=Third%2C%20the%20litigation%20funding%20model,to%20a%20pre%2Dagreed%20ratio.
  31. Is litigation funding compatible with Shariah principles? – DLA Piper, accessed on December 23, 2025, https://www.dlapiper.com/en-us/insights/publications/2022/1/is-litigation-funding-compatible-with-shariah-principles
  32. Islamic funds managers steer 2025 with old school Sukuk, new-gen AI | IFN Investor, accessed on December 23, 2025, https://ifninvestor.com/islamic-funds-managers-steer-2025-with-old-school-sukuk-new-gen-ai/
  33. Islamic Finance | Insights – Mayer Brown, accessed on December 23, 2025, https://www.mayerbrown.com/en/insights/events/2025/09/islamic-finance
  34. 2025 Investment Climate Statements: Lebanon – U.S. Department of State, accessed on December 23, 2025, https://www.state.gov/reports/2025-investment-climate-statements/lebanon
  35. Foreign currency transfers from Lebanon: Banque du Liban issues new regulatory restrictions amid increasing foreign litigation | Herbert Smith Freehills Kramer | Global law firm, accessed on December 23, 2025, https://www.hsfkramer.com/notes/arbitration/2025-06/foreign-currency-foreign-litigation-lebanon
  36. High Court decides two cases in favour of UK depositor seeking to recover money from Lebanese banks, accessed on December 23, 2025, https://fountaincourt.uk/2022/12/high-court-decides-two-cases-in-favour-of-uk-depositor-seeking-to-recover-money-from-lebanese-banks/
  37. Al Habtoor Group Issues a Notice of an Investment Dispute Against Lebanon, accessed on December 23, 2025, https://www.habtoor.com/en/news/26/2202/al-habtoor-group-issues-a-notice-of-an-investment-dispute-against-lebanon
  38. Al Habtoor Group issues formal notice of investment dispute against Lebanon – Gulf News, accessed on December 23, 2025, https://gulfnews.com/business/property/al-habtoor-group-issues-formal-notice-of-investment-dispute-against-lebanon-1.100331543
  39. Investment treaty arbitrations: the evolution of third party funding – Omni Bridgeway, accessed on December 23, 2025, https://omnibridgeway.com/insights/blog/blog-posts/blog-details/global/2018/10/30/investment-treaty-arbitrations-the-evolution-of-third-party-funding
  40. Qatar International Center for Conciliation and Arbitration launches QICCA Arbitration Rules 2024 – Reed Smith LLP, accessed on December 23, 2025, https://www.reedsmith.com/articles/qatar-international-center-for-conciliation-and-arbitration/
  41. Qatar International Center for Conciliation and Arbitration launches new arbitration rules effective from January 2025 | Herbert Smith Freehills Kramer, accessed on December 23, 2025, https://www.hsfkramer.com/notes/arbitration/2025-03/qatar-international-center-for-conciliation-and-arbitration-launches-new-arbitration-rules-effective-from-january-2025
  42. Egypt: Investment Treaty Arbitration – Legal 500 Country Comparative Guides 2025, accessed on December 23, 2025, https://www.legal500.com/guides/chapter/egypt-investment-treaty-arbitration/?export-pdf
  43. Third-Party Funding in Egyptian Arbitration – Shehata & Partners, accessed on December 23, 2025, https://shehatalaw.com/law-update/third-party-funding-in-egyptian-arbitration/
  44. Litigation Funding In The Middle East – Burford Capital, accessed on December 23, 2025, https://www.burfordcapital.com/what-we-do/where-we-are/middle-east/
  45. Litigation Funding, Middle East-wide, Litigation Support | Chambers Rankings, accessed on December 23, 2025, https://chambers.com/legal-rankings/litigation-funding-middle-east-wide-58:2816:16087:1
  46. Middle East – White & Case LLP, accessed on December 23, 2025, https://www.whitecase.com/law/regions/middle-east
  47. Morgan Lewis Deepens Middle East Presence with Riyadh Office Launch, accessed on December 23, 2025, https://www.morganlewis.com/news/2025/11/morgan-lewis-deepens-middle-east-presence-with-riyadh-office-launch
  48. Middle East Update – January 2024 – Quinn Emanuel, accessed on December 23, 2025, https://www.quinnemanuel.com/the-firm/publications/middle-east-update-january-2024/
  49. Middle East & North Africa Practice | Quinn Emanuel Urquhart & Sullivan, LLP, accessed on December 23, 2025, https://www.quinnemanuel.com/practice-areas/middle-east-north-africa-practice/
  50. IFLR Middle East Awards 2025 in association with ITR: shortlist revealed, accessed on December 23, 2025, https://www.iflr.com/article/2f970tcyisqsc5q2a26m8/awards/iflr-middle-east-awards-2025-in-association-with-itr-shortlist-revealed
  51. 2025 Arbitration Reforms For Hospitality Disputes In MENA – Youssef & Partners, accessed on December 23, 2025, https://youssef.law/insights/2025-arbitration-reforms-for-hospitality-disputes-in-mena/
  52. Saudi Arabia’s Draft Arbitration Law – The Next Chapter in the Kingdom’s Arbitration Reform, accessed on December 23, 2025, https://www.tamimi.com/news/saudi-arabias-draft-arbitration-law-the-next-chapter-in-the-kingdoms-arbitration-reform/

Scroll to Top