In our previous two briefings on the Bankruptcy Law, we have looked at a summary of the key changes made by the Law, and the potential personal liability faced by directors of UAE companies in financial difficulty. In this briefing, we turn to creditor protection.
Legal Overview
Among the most challenging issues facing international companies doing business in the United Arab Emirates (UAE) is the ability to take and perfect security over assets. This is due largely to the developing nature of the country's legal system, requiring businesses to resort to less orthodox methods to reduce risk in the event of default or non-payment.
January 2017
Practice Group: Banking & Asset Finance
New UAE Insolvency Law
By Simon Mabin
Executive Summary
The new bankruptcy law was published in the Official Gazette dated 29 September 2016 following the issuance of Federal Decree Law No.9 of 2016 on Bankruptcy (the "Bankruptcy Law"). The Bankruptcy Law is expected to become effective in December 2016 / early 2017.
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
In a landmark legal development, a judgment of the DIFC Courts has been recognised and enforced for the first time in a Western jurisdiction.
The Supreme Court of New South Wales, Australia, issued an order recognising and enforcing the DIFC Courts judgment issued by Justice Sir Richard Field in Legatum Limited v Arif Salim (CFI 027/2014).
In these challenging economic times, some businesses are struggling to cope with financial pressures and financiers are concerned with their customers’ ability to service their financing arrangements. An effective insolvency regime is, therefore, an important element of financial system stability. The statutory insolvency regime in the United Arab Emirates (“UAE”) has often been regarded as under-developed and remains largely untested.
Factoring is one of the oldest forms of financing and is still relevant to almost all businesses across the globe.
It is a financing arrangement that enables a business to sell its account receivables (ie. outstanding monies owed to that business) to third parties at a discounted price. These third parties are typically banks or financial institutions, also known as factors. A company would agree to sell and assign its receivables to the factor, prior to their due date, at an agreed discounted rate. The discount accounts for the risk of non-payment.
The United Arab Emirates (UAE) appears to be finally in the process of issuing a long-awaited new federal insolvency law. Described by some as a game-changer, the government announced in July that its Cabinet has approved a draft of the new law replacing the old (and largely unused) insolvency regime. The highly anticipated law is now pending the approval and ratification of the Federal National Council and Supreme Council before it receives final approval by Sheikh Khalifa bin Zayed bin Sultan Al Nahyan, the UAE President.
Enforcement of a judgment should be the crown jewel of every successful claim.
However, the picture is not always as rosy. Sometimes the successful litigant is faced with the realisation that the judgment debtor has no substantial assets for the enforcement and recovery of the awarded sums. What is left is an ‘empty’ judgment.
This article will attempt to discuss the situation of empty judgments, what brings them about, ways to prevent them, as well as some practical recommendation and suggestions from our practice and experience.
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: