In yet another example of the Dubai International Financial Centre (DIFC) making its company and insolvency law even more versatile, the DIFC has introduced a mechanism which will operate in a similar manner to a scheme of arrangement under English law. The law came into effect on 12 November 2018.

Key terms

In September 2018 the Dubai International Financial Centre Authority (“DIFCA”) announced that it proposes to replace its current insolvency law with a new law to update the insolvency regime in the Dubai International Financial Centre (“DIFC”) and that it has launched a consultation in relation to the same.

Why are changes proposed?

Over the Bank holiday weekend, the UK government announced that it intends to introduce new legislation to implement certain measures (detailed below) as soon as parliamentary time permits.

International guidelines on cross-border insolvency matters have recently been adopted by the BVI courts. The Judicial Insolvency Network guidelines – drafted in 2016 by ten insolvency judges from international jurisdictions, including a BVI Commercial Court Judge – aim to create co-operation and communication between courts on cross-jurisdiction proceedings, and to minimise the time and expense involved in litigation.

The adoption of new international guidelines on cross-border insolvency matters by the BVI courts has been welcomed by Ogier insolvency law specialist Nicholas Brookes.

The Judicial Insolvency Network guidelines – drafted in 2016 by ten insolvency judges from international jurisdictions, including a BVI Commercial Court Judge – aim to create co-operation and communication between courts on cross-jurisdiction proceedings, and to minimise the time and expense involved in litigation.

The long-awaited UAE Federal Bankruptcy Law (the New Law) is expected to take effect on 29 December 2016. The reforms aim to modernise the largely untested existing bankruptcy legislation in a manner suitable to the economic and business landscape of a fast-developing country like the UAE. The move is away from the stigma of bankruptcy and business failure to rescue and rehabilitation.

This briefing covers Brexit implications of restructuring and insolvency, in particular it discusses the implications on the European Regulation on Insolvency Proceedings and recognition of insolvency judgments and how schemes of arrangement will be impacted by Brexit.

Two recent decisions of the UK courts concern UK liquidation and administration of foreign companies

Refusal to Wind-Up Foreign Companies: Re Buccament Bay Limited [2014] EWHC 3130 (Ch)

The High Court of England and Wales may refuse to exercise its discretion to wind up companies incorporated abroad where there would be little likelihood of the petitioners deriving benefit from the winding-up.

Summary

Our experience working on restructurings across Europe and Asia has given us an appreciation for the value of preparedness. Businesses encountering financial difficulties — whether arising from turbulent financial markets, an unforeseen crisis, increasing or burdensome regulation or competitive pressure — often find their survival may depend on how well prepared they were for the unique pressures a restructuring event brings.