On 1 November 2021, the Federal Decree Law No. 35 of 2021 (the "Decree") (amending certain provisions of the Federal Decree Law No.9 of 2016 concerning Bankruptcy (the "UAE Bankruptcy Law")) came into force. The publication of the Decree follows a significant decision relating to directors' duties by the Dubai Court of First Instance in the matter involving the bankruptcy of Marka Holdings PJSC ("Marka") (the "Marka Case").

Overview

1. State of the Restructuring Market

1.1 Market Trends and Changes

State of the Restructuring and Insolvency Market

There were 27,359 insolvencies in France as of the end of September 2021, down 25.1% from the same period in 2020, and down 47.9% from September 2019. Such reduction is relatively stable across all sectors, including those most severely affected by the health-related restrictions, such as accommodation and food services (down 44.2% year-on-year) and trade (down 28.1% year on year).

Fewer Insolvencies for More Opportunities

At the end of 2021, corporate bankruptcies (for most company sizes and in most sectors) were at their lowest level compared to the pre-COVID-19 figures from 2019, with a 50% drop in insolvency proceedings and a 10% decrease in pre-insolvency situations. This was largely due to the temporary impact of government emergency measures and support, including:

The reform resulting from Order no. 2021-1193 dated September 15, 2021 is applicable to proceedings initiated as of October 1, 2021

French insolvency law is undergoing a far-reaching reform, 7 years after the last major reform that came from Order No. 2014-326 of March 12, 2014. This reform is the result of Order No. 2021-1193 amending Book VI of the French Commercial Code, adopted by the Council of Ministers on Wednesday, September 15, 2021 (the Order).

The automatic stay under the version of the UNCITRAL Model Law on Cross-Border Insolvency adopted by Singapore ("Singapore Model Law") is an accessible and powerful tool for protection under the Singapore restructuring regime for non-Singapore debtors facing enforcement action in Singapore. Non-Singapore debtors subject to restructuring or liquidation cases outside Singapore may obtain protection from creditor action in Singapore through the application of the Singapore Model Law, thereby facilitating the debtor's ability to restructure.

HEADLINES

The Government has extended the restrictions in place concerning winding-up petitions and forfeiture of business tenancies until 30 September 2021 and 25 March 2022 respectively.

The extensions will receive a mixed reception, with landlords likely to feel particularly aggrieved at the limitations imposed on their ability to pursue debt (by winding-up petition) in circumstances where the tenant can pay, but won’t pay.

Insolvency practitioners will need to be familiar with three new Statements of Insolvency Practice which were introduced with effect from 1 April 2021.

Companies House temporarily paused their strike off processes in April 2020 in response to the COVID-19 pandemic. The effect of this was to stay all strike off action. The stay was lifted on 10 October 2020 but stayed for a second time on 21 January 2021.

The second stay was lifted on 8 March 2021 and, absent further significant disruption caused by COVID-19, is unlikely to be subject to a further stay.

In Sarjanda Ltd (in liquidation) v Aluminium Eco Solutions Ltd and another [2021] EWHC 210 (Ch), an application to rescind a winding up order was refused where the application had been made over two years outside of the five-day time limit. That level of delay, allegedly caused by the company negotiating payment of its debts, was not a good enough reason for the breach of the time limit.