UAE Set To Approve New Bankruptcy Law By End-2012
The United Arab Emirates is close to finalising an updated federal bankruptcy law and a draft of the legislation should be ready by the end of this year, Justice Minister Hadef bin Juan al-Dhaheri said on Monday, Reuters reported. The draft, which has been in the works since 2009, should enable both listed and family-owned companies in the UAE to be rescued rather than having to go through lengthy bankruptcy or liquidation proceedings. "The ministry is studying a set of laws," Dhaheri told a conference on financial restructuring and bankruptcy in Dubai. "Among them is a federal law on foreign investment, another one on SMEs (small and medium-sized enterprises) and also another law on arbitration in commercial transactions and another one on bankruptcy and restructuring," he said. Asked whether the government was going to clear the long-awaited bankruptcy legislation this year, Dhaheri later told reporters: "Hopefully, God willing." Dubai's debt crisis in 2009-2010 put company restructuring firmly in focus for both the government and investors. However, existing federal bankruptcy laws remain untested in UAE courts as distressed companies prefer to settle creditor claims privately because the existing legislation is opaque and complex. In 2009, Dubai, one of seven UAE members, issued a special decree to deal with a $25 billion debt restructuring at its flagship conglomerate Dubai World. Read more.