Overlapping cells are not displaying in the correct order.
DGN file was created out of a DWG. The resulting DGN was 3D, because all DWG files are 3D. This was having impact on the display order.
To solve the problem:
1.) Export the drawing to 2D (File/Export/2D)
2.) In case there's text in the cells, go to File/Settings/User/Preferences/View Options and turn off the "Anti-alias Text".
Changing Element Display Order