The liquidators of two Abraaj Group companies are suing former auditors KPMG Lower Gulf and KPMG LLP in the Dubai International Financial Centre (DIFC) Courts for at least $600M. They allege negligent audits, and KPMG denies negligence and blames a fraud by Abraaj’s management. The claims have been set down for a long trial and are in pre-trial preparation.
Latest development Jan 29, 2026
On January 29, 2026, Justice Andrew Moran ordered the KPMG defendants to pay $400,000 in costs after the liquidators succeeded almost in full on a document production application. The court faulted the defendants’ long-maintained objections and late engagement.
Why it matters
The trial will test whether auditors can be made to pay for a client’s regulatory fines and for losses that the claimants say proper audits would have prevented. In 2024, the Dubai International Financial Centre Courts left both questions to be decided at trial.
Background
The Abraaj Group, a Dubai-based private equity firm, collapsed in 2018. KPMG audited Abraaj Investment Management and Abraaj Capital from 2011 and issued unqualified audit opinions on their accounts for the 2013 to 2017 financial years. In July 2019, the Dubai Financial Services Authority (DFSA) fined the two companies $299.3M and $15.3M.
On March 29, 2021, their liquidators sued KPMG Lower Gulf, KPMG (a Firm), and KPMG LLP in the Dubai International Financial Centre (DIFC) Courts. They allege that the auditors breached contractual and tortious duties and international auditing standards. They also allege that proper audits from September 2013 would have exposed the irregularities and stopped further losses. They put the claim provisionally at no less than $600M, including $242.1M in losses linked to the DFSA fines. In June 2021, the DFSA fined KPMG LLP $1.5M and former audit principal Milind Navalkar $500,000 over audit failings connected to Abraaj Capital.
KPMG says it acted with reasonable care, that a sophisticated fraud by Abraaj’s management caused the losses, and that public policy bars recovery of fines. It also relies on contractual limits and limitation, and counterclaims against the companies. Justice Wayne Martin rejected KPMG Lower Gulf’s jurisdiction challenge on November 3, 2021. The parties then agreed to stay the claims while a jurisdiction petition that KPMG Lower Gulf had lodged with Dubai’s Joint Judicial Committee was pending. On September 8, 2023, Justice Martin lifted the stay because the committee had not ruled.
In February 2024, Chief Justice Zaki Azmi refused KPMG Lower Gulf permission to appeal the order lifting the stay. On November 27, 2024, Chief Justice Martin refused KPMG’s application to strike out the claims tied to the fines and left the issues for trial. He noted that the trial, then estimated at 10 weeks, would be the longest the DIFC Courts had heard. In December 2024, the claims were set down for trial and the parties agreed a consent order that addressed the disputed existence of KPMG (a Firm). On January 29, 2026, Justice Andrew Moran ordered the KPMG defendants to pay $400,000 in costs after the liquidators succeeded almost in full on a document production application.
Timeline 15 events
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OrderJustice Andrew Moran orders KPMG to pay $400,000 in costs
The costs followed a document production application on which the liquidators succeeded almost in full. Payment was due within 14 days.
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OrderDIFC Courts issue consent order on case management
The parties agreed a consent order addressing outstanding procedural matters, including the disputed existence of the second defendant, KPMG (a Firm).
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OrderDIFC Courts set the claims down for a long trial
Following the dismissal of KPMG’s strike-out application, the claim was set down for what was reported as one of the longest trials ever listed in the DIFC Courts.
DIFC set for longest ever trial as Abraaj negligence claims against KPMG proceed
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JudgmentChief Justice Wayne Martin refuses to strike out the fines claims
The court declined to dismiss summarily the claims for losses linked to the DFSA fines and left the legal and factual issues for trial.
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HearingChief Justice Wayne Martin hears KPMG strike-out application
The Chief Justice heard argument on KPMG’s application to summarily dismiss claims tied to the DFSA fines before ruling against KPMG later that month.
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FilingKPMG applies to strike out fines-related claims
KPMG Lower Gulf and KPMG LLP applied to strike out, or obtain immediate judgment on, the part of the claim relating to the DFSA fines. They argued that the losses were irrecoverable and outside the auditors’ duty.
CFI 041/2021 Order with Reasons of Chief Justice Wayne Martin
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AppealChief Justice Zaki Azmi refuses KPMG Lower Gulf permission to appeal
The court dismissed the renewed application for permission to appeal the order lifting the stay, with costs to the liquidators.
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OrderJustice Wayne Martin lifts the stay on the DIFC claims
The judge found that the committee had not ruled in more than two years and that further delay caused serious prejudice. Written reasons followed on November 24, 2023.
DIFC Courts: reasons of November 24, 2023Global Restructuring Review
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JudgmentDIFC Court rejects KPMG bid to keep DFSA sanctions private
The DIFC Court dismissed KPMG LLP’s and its former audit principal’s appeal against a Financial Markets Tribunal decision refusing to keep the DFSA’s sanctions findings confidential.
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OrderParties agree to stay the DIFC claims
The consent stay awaited a ruling on the jurisdiction petition KPMG Lower Gulf had lodged with Dubai’s Joint Judicial Committee in April 2021.
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JudgmentJustice Wayne Martin rejects KPMG Lower Gulf’s jurisdiction challenge
The DIFC court held that it had jurisdiction over the claim. KPMG Lower Gulf then sought permission to appeal.
DIFC Courts: consent order of November 14, 2023Global Restructuring Review
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OtherDFSA sanctions KPMG LLP and audit partner over Abraaj audits
The regulator fined KPMG LLP $1.5M and former audit principal Milind Navalkar $500,000 over audit failings connected to Abraaj Capital.
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FilingAbraaj liquidators sue KPMG in the DIFC Courts
The claim form named KPMG Lower Gulf, KPMG (a firm), and KPMG LLP and alleged negligent audits of the two Abraaj companies.
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OtherDFSA fines Abraaj Capital Limited $15.3M
The DFSA separately fined Abraaj Capital Limited $15,275,925 for failing to maintain adequate capital resources, in addition to the $299.3M fine on Abraaj Investment Management Limited the same month.
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OtherDFSA imposes $299.3M fine on Abraaj
The Dubai Financial Services Authority imposed the fine for regulatory breaches. The liquidators later cited the sum as part of the losses claimed against KPMG.
Experimental AI forecast
How it is madeWill the Abraaj liquidators’ DIFC claim against KPMG settle, or reach a first-instance judgment on liability, by June 30, 2028?
- Liquidators settle with KPMG45%
- Still pending on June 30, 202830%
- Liquidators win, including fine losses9%
- KPMG liable but fine losses rejected9%
- KPMG defeats the liquidators’ claims7%
- Resolves by
- Jun 30, 2028in 20 months
- Record confidence
- Low
Settlement is the most likely result by June 30, 2028, at 45%. Large auditor negligence claims by liquidators usually settle once trial nears. KPMG has lost every major procedural fight so far, including strike-out of the fine-linked claims. The trial date is not on record, so the case may still be pending.
How it resolves. Settlement: public reports, a court notice, or a liquidators’ report show a settlement, consent order, or discontinuance of CFI 041/2021 against all KPMG defendants. Liquidators win in full: a DIFC Court of First Instance judgment holds at least one KPMG defendant liable and awards damages that include DFSA-fine-linked losses. Split ruling: a judgment holds KPMG liable but rejects the fine-linked losses. KPMG defeats claims: a judgment dismisses the claims against all KPMG defendants. Still pending: none of these occurs by June 30, 2028. Later appeals do not change the result.
Reasoning
Starting point. Large auditor negligence claims brought by liquidators in common-law commercial courts after surviving strike-out: Roughly 70% to 85% of such claims settle before judgment, often shortly before or during trial.
Liquidator claims against auditors in English-style commercial courts settle before judgment in roughly 70% to 85% of cases, typically near or during trial. Here, KPMG failed on jurisdiction, the stay, permission to appeal, and strike-out of the fine-linked claims, which raises its exposure at trial. A $400,000 costs order in January 2026 for resisting document production adds further pressure. The DFSA’s 2021 sanctions against KPMG LLP and its audit principal leave public findings that would sit uneasily with a trial defense. KPMG still has real defenses, including management fraud, the public policy bar on recovering fines, contractual caps, and limitation, so some trial risk falls on the liquidators too. The record gives no trial date, and a 10-week trial plus judgment drafting could carry a decision past mid-2028, which explains the large pending share. If the case does reach judgment, a split result on the fine-linked losses is about as likely as full success for the liquidators.
KPMG lost strike-out, so fine-linked claims face trial · Strong settlement base rate for large auditor negligence claims · No trial date on record, so timing is uncertain · DFSA sanctions against KPMG LLP raise its trial risk · Fraud and public policy defenses keep liquidators’ risk real
Generated automatically by Claude Opus 5.5 on Oct 18, 2026 from this case’s record on this site, and published without editorial review. The probabilities are the model’s judgment, not measured frequencies, and they are scored publicly as cases resolve. Not legal or investment advice. How the forecasts are made