The Cayman Islands Court of Appeal has ruled that low-cost carrier Air Arabia (G9, Sharjah) is subject to Cayman insolvency law after it filed claims in the liquidation of private equity firm Abraaj Holdings, clearing the way for liquidators to pursue a USD700 million fraudulent trading claim against the airline.
The case stems from the collapse of Abraaj Holdings, once one of the Middle East’s largest private equity companies, which entered liquidation in the Cayman Islands in 2018 amid allegations of financial misconduct. Air Arabia was one of the largest investors in Abraaj, with USD336 million in exposure to the fund when it filed for court-supervised restructuring in June 2018.
In a May 12, 2026, ruling, the appeals court denied Air Arabia leave to challenge a lower court decision, finding the airline had submitted to Cayman jurisdiction when it filed proofs of debt in the Abraaj liquidation, despite having no offices or operations in the territory, according to online reports by Cayman Compass and legal firm Ogier.
The ruling allows Abraaj’s joint liquidators to continue a claim under Section 147 of the Cayman Companies Act, alleging Air Arabia knowingly participated in fraudulent trading tied to Abraaj’s business.
Air Arabia argues that because it has no physical presence in the Cayman Islands, it should not be subject to court proceedings there. It also said that filing a proof of debt for money allegedly owed by Abraaj does not amount to consent to jurisdiction over a fraudulent trading claim.
However, the appeals court upheld an earlier Grand Court finding that creditors who file claims in Cayman liquidations submit to the court’s jurisdiction for matters arising from those proceedings.
ch-aviation has contacted Air Arabia for comment.
