The Dubai International Financial Centre and the legal apparatus at its core face a tricky few weeks in weighing up the Drydocks World situation.
The focus will be on the three-man tribunal that will judge the application by the firm, a part of the Dubai World conglomerate, seeking protection from creditors under the emirate's provisions for insolvency, as set out in Decree 57 by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai.
It is in the interest of Dubai and its business community that the tribunal give the situation its fullest and most transparent consideration.
Although the tribunal is ready for the case, which has its next hearing in a month or so, things may not get to that stage.
At the moment, the only Drydocks World creditornot to have approved the company's plans to restructure about US$2.2 billion (Dh8bn) of debt appears to be Monarch Alternative Capital, a US hedge fund that bought Drydocks World debt at distressed prices and is looking to turn a profit on its investment. Monarch's stake represents only a tiny fraction of Drydocks World's debt.
Although the company insists there is no special deal being cooked up for Monarch, there is still the possibility the American vulture fund will be enticed to fall into line, as happened with other "holdouts" during the protracted negotiations over Dubai World's $24.9bn of debt in 2010.
From the point of view of transparency of process, it would be a shame if that happened. If Monarch caves in, there will be no tribunal hearing any of the detailed evidence relating to Drydocks World's debt.
The case will be closed, and we will never get to hear the circumstances surrounding Drydocks World's decision to overborrow in 2006 for a big investment in South East Asia. Nor will any further light be shed on the terms of the deal done by the company with its other creditors, the 20 or so banks that have apparently agreed to its offer. It is in the public interest that any "haircut" be properly disclosed.
There are several pertinent unanswered questions about the 2006 deal that has caused the company's current distress.
How did Drydocks World justify the price back then for assets in Singapore and Indonesia that have turned out to be commercially unsuccessful? Who advised on the transaction? Does the company have any legal recourse against parties that valued the assets on grounds of negligence or incompetence? How, precisely, was the cash pile diminished to such an extent?
On the deal done with current creditors, there are also issues that need greater lucidity. How will the company repay $2.2bn out of current cash assets and future earnings in the five-year period suggested? What deal have the banks agreed to in order to roll over their loans? Will bank shareholders have to take write-downs against their loans to the company?
The members of the tribunal - two British and one Singaporean - are experienced judges in commercial and financial law, so you can expect them to ask the right questions. Even so, they will need the expertise of an investment banker, and the wisdom of Solomon, to assess the case properly.
But if they do, they will greatly advance the development of business practice in Dubai. Drydocks World's decision to seek Decree 57 protection was a good one, enabling the company to carry on trading to the benefit of all stakeholders, employees and contractors.
But now, in the interest of transparency, which is at the heart of continuing concerns among international investors about the emirate, there should be a thorough review of the company's predicament. For that reason alone this tribunal must go ahead.