The UAE Cabinet recently approved Decree-Law No. (19) of 2019 on the Insolvency of Natural Persons concerning natural person’s inability to pay debts due to insolvency and debt default. This new law is aimed at enhancing the competitiveness of the UAE, ease of doing business and at facilitating more favorable conditions for individuals facing financial difficulties and protecting those unable to meet debt obligations from going bankrupt.
The UAE government issued a new bankruptcy law, UAE Federal Decree Law No. 9 of 2016 (“Bankruptcy Law”) which came into force on 29 December 2016.
The introduction of the Bankruptcy Law is regarded as an important step towards bringing more clarity to the UAE’s insolvency regime. The Bankruptcy Law outlined a more modernized approach to company restructuring and insolvency management.
FUNDING IN FOCUS CONTENT SERIES REPORT T HREE JULY 2016 2 | VANNIN CAPITAL Funding in Focus Content Series Welcome Welcome to the third edition of Funding in Focus. Since the inception of Funding in Focus, the funding market has grown and developed. This development is reflected in the number, type and complexity of the cases we are being asked to fund across the globe. We have seen an exponential rise in requests for funding in a range of sectors, including in arbitration and insolvency, and in a range of jurisdictions.
Dubai's announcement on 25 November 2009 that it would seek a standstill (the "Standstill Announcement") on the debt of Dubai World, a Government of Dubai holding company, whose principal business activities include the master developers Nakheel and Limitless, port operator DP World, and investment house Istithmar, caused a considerable impact across world markets and widespread comment amongst the world media.
Following the Standstill Announcement a number of significant events and further announcements have taken place, principal amongst these have been:
The legislative framework for insolvency and bankruptcy in the United Arab Emirates is codified under the two following laws.
ADGM DIFC Regulatory Regime Regulated by the ADGM Financial Services Regulatory Authority (“FSRA”). Regulated by the Dubai Financial Services Authority (“DFSA”). Regulatory Status Prudential category 3C firm. Prudential category 3C firm. Structure • Private Company Limited by Shares; or • Foreign Recognised Company (Branch). • Private Company Limited by Shares; or • Foreign Recognised Company (Branch). Permitted/Authorised Activity • Managing Assets • Arranging Deals in Investments • Advising on Financial Products.
The UAE Bankruptcy law has recently seen a change. In the past insolvencies required companies in the UAE to undergo consensual restructuring of a debtor’s liabilities. In addition, largely untested legislations previously pushed companies and their partners towards restrained insolvencies owing to limiting procedures. The new bankruptcy law is a game-changer, bringing with its major changes which will positively impact businesses.
In March of 2019, an Emirati limited liability company (the “LLC”) had restructured its debts under the Bankruptcy Law; Federal Decree-Law No. 9 of 2016 which was first published in the Official Gazette on 29 September 2016 and came into force on 29 December 2016.
Under Chapter 4 of the Bankruptcy Law the Bankruptcy Circuit of the Abu Dhabi Primary Court oversaw the restructuring of the LLC under which had been operating in the contracting industry since 2008 and had debts exceeding eighteen times its paid-up capital.
The new United Arab Emirates (UAE) Insolvency Law (Federal Law No.9 of 2016) (Insolvency Law) was published in the UAE Gazette on 29 September 2016 and came in to force three months later on 29 December 2016. The Insolvency Law is a federal law that applies to all seven emirates comprising the UAE. The initial view from market participants is that by replacing the old insolvency law, which placed a greater emphasis on creditor protections and formal bankruptcy proceedings alongside criminal penalties, the Insolvency Law is an overdue but welcome development.
إن الثقة والإئتمان هي أساس التعامل التجاري في معظم المعاملات بين التجار لأنه يتم في معظم الأحوال أن يقوم التجار فيما بينهم بالتعامل الآجل اي أن يتم توريد البضاعة أو الخدمة وبعد ذلك يتم تحصيل الثمن أو الأجر بعد فترة أو على أقساط ، وإذا استمر التاجر في سداد التزاماته وديونه في مواعيدها فلا يمكن لأحد أن يسبب له اي مشكلة ، أما إذا توقف أوتعثر في سداد تلك الديون فيضطرب مركزه المالي ويهتز ائتمانه وقد يلجأ إلى وسائل أو إجراءات لتهريب أمواله من التنفيذ عليها أو يجامل بعض الدائنين على حساب البعض الآخر وهنا قد يتضرر الدائنين كلهم أو بعضهم حيث قد يمكن لأحدهم أن يحصل على