In brief
The UAE has issued Federal Law No. 48 of 2023 in relation to insolvency (the "New Insolvency Law"), which replaces Federal Law No. 9 of 2016 and comes into effect on 1 May 2024. Although the previous law was more progressive compared to the previous insolvency articles embedded in the old Commercial Code of 1993, at least in relation to the numerous insolvency matters and other protective composition and restructuring witnessed by the courts.
We have set out below some of the key characteristics of the New Insolvency Law:
Introduction
Two shareholders of KBBO have obtained recognition in the English High Court of their Abu Dhabi bankruptcy process.
On 31 October 2023, Federal Law No. 51 of 2023 Promulgating the Financial and Bankruptcy Law (the Bankruptcy Law) was published in the United Arab Emirates (UAE) Official Gazette, repealing the prior federal law on bankruptcy (Federal Law No. 9 of 2016, the Prior Law) and significantly developing the bankruptcy regime in the UAE.
On 31 October 2023, the Federal Decree-Law No. 51 of 2023 on Financial Restructuring and Bankruptcy (the Bankruptcy Law) was published in the UAE Gazette. The Bankruptcy Law replaces the Federal Law No. 9 of 2016 on Bankruptcy (as amended) (the 2016 Law).
The aim of the Bankruptcy law is to introduce a modern, streamlined and business-friendly approach to restructuring in the UAE (except for the DIFC and ADGM freezones, which have their own insolvency regimes).
Key Changes
Key Takeaways
Article 319(1) of the UAE Civil Procedure Law authorises an execution judge to imprison a debtor who fails to satisfy a judgment debt, unless the debtor is able to prove that he is insolvent.
In 2016, the United Arab Emirates (UAE) witnessed significant development in the country’s legal framework for handling corporate insolvencies with the introduction of the Federal Decree-Law No. 9/2016 on Bankruptcy (“Bankruptcy Law”).
The UAE Gazette of 31 October 2023 includes Federal Decree-Law No. 51 of 2023 on Financial Restructuring and Bankruptcy (the “New Law”). Here are some highlights:
- A section of the Courts is designated to monitor and administer bankruptcy and restructuring proceedings. This section is chaired by a Court of Appeal Judge.
- Resolution of claims between debtors and creditors is encouraged; for example, by providing wider scope to debtors seeking Protective Composition.
Routes to Reorganisation
A Comparative Study of the Insolvency Procedures Available in the United Arab Emirates, Kingdom of Saudi Arabia, United States and England and Wales
First published in the INSOL Restructuring Alert (November 2023)
Introduction
Introduction
A recent Commercial Court decision has raised an intriguing question of private international law: can a foreign judgment be enforced in England and Wales if it is not enforceable in the country where it was given?