The new UAE Bankruptcy Law (Federal Decree Law No. 9 of 2016) came into force as a response to the 2008 global financial crisis. The new law was designed to encourage the development of a “rescue culture”, and replaces Volume 5 of Federal Law No. 18 of 1993 on the Commercial Transactions Law.

Who to pay when the bunker supplier becomes insolvent

1. Introduction

Introduction

The civil procedure in the UAE is governed by the Federal Law No 11 of 1992 (Civil Procedure Code) as amended, along with the Cabinet Decisions (including Cabinet Decisions 57 of 2018 and 33 of 2020), and resolutions, etc. issued from time to time. The Civil Procedure Code regulates the procedure for litigation in civil, commercial, administrative, labour and personal status matters. It also governs the procedure of appeals and execution of judgments.

The court system in UAE is hierarchal and operates both at the federal level and a local level.

This article provides for the insolvency law for the companies who are facing losses and are opting for deceleration of insolvency during the pandemic. Covid -19 pandemic has not only disturbed the financial conditions of an individual but has skeptically burdened the companies around the world.

COVID-19 has impacted all businesses and economies around the globe with a precipitous decline in demand and supply as a result of quarantine orders, business closures, and social distancing. International Monetary Fund research suggests that the world economy may shrink (in the year 2020) by 3% with the trade volume falling by 11% and the oil prices by 42% (World Economic Outlook, April 2020: The Great Lockdown). In these challenging circumstances and with significant level of debt, many companies are at the onset of insolvency.

UAE Legislators on 9 December 2018 issued a Decision of Council of Ministers Number 57 of 2018 (the Decision) regarding the recent amendments in Federal Law Number 11 of 1992 concerning the UAE Civil Procedure Code (the Civil Law). The decision issued by the Cabinet is major regarding the advertising and notification procedures. The present article by Legal Consultants of Dubai shed lights on the notification procedures in Execution cases. Following are the notable amendments made under the Decision regarding execution orders:

In a noteworthy first decision, the Judicial Tribunal for the Dubai Court and DIFC Court (JT), established to decide conflicts of jurisdiction between the two courts, has ruled on 27 January 2017 that Daman Real Capital Partners Company LLC v. Oger Dubai LLC case should be remitted for trial by the Dubai Court, and that the DIFC Court should cease from entertaining the case entirely.

UAE Law No. 18 of 1993 ‘Concerning Commercial Transactions’ (the “Commercial Transactions Law”) provides a framework for the bankruptcy of persons engaged in trade.

Part Five of the Commercial Transactions Law sets out provisions dealing with the bankruptcy procedure for traders who cease to pay their debts. This article will take a look at the bankruptcy provisions of the Commercial Transactions Law.

Definition of Bankruptcy

Section 1 of Article 645 of the Commercial Transactions Law provides:

Executive Summary 

Where multiple Cayman Islands entities in the same corporate structure become subject to insolvency proceedings (e.g. Cayman Islands master/ feeder fund structures), the Cayman Islands Courts will typically seek to appoint the same liquidators at each level where such entities share similarities in circumstances. Doing so typically aligns with the Overriding Objective of the Court to deal with matters economically and efficiently, and in the context of a liquidation, helps protect the interests of stakeholders in the liquidation. 

Global Perspectives on Insolvency, Restructuring & Dispute Resolution 

As primarily offshore lawyers, we speak on a daily basis with onshore counsel, banks, asset managers, trustees, corporates, insolvency practitioners and individuals around the world. Those conversations give our Global Insolvency & Dispute Resolution Practice Group a unique perspective on the different market trends and their regional impact in 2022.