New insolvency legislation in the UAE: What’s changing?

News aus MEAI
|
06.06.2024

In a noteworthy development for the business landscape of the United Arab Emirates (UAE), the 2023 Federal Law Decree No. 51 concerning Financial Restructuring and Bankruptcy was promulgated, signifying a significant shift in the nation’s insolvency framework. This new legislation, effective from May 1, 2024, replaces the prior federal law on bankruptcy and introduces several key enhancements aimed at modernizing and streamlining the insolvency regime in the UAE.

Strengthened liability measures

The updated legislation broadens the scope of liability to include not just board members but also individuals actively managing companies and those supervising liquidation proceedings. This widened liability framework emphasizes accountability and promotes responsible corporate governance practices.

Establishment of the Bankruptcy Court

A notable feature of the new law is the establishment of a dedicated Bankruptcy Court vested with jurisdiction over bankruptcy-related matters. This specialized court replaces prior judicial bodies and is empowered to adjudicate on insolvency proceedings, ensuring a focused and efficient resolution process.

Decisions rendered by the Bankruptcy Court carry immediate enforceability, eliminating procedural delays and expediting the execution of judgments. The provision for prompt enforcement enhances the efficacy of the legal framework and fosters confidence in the insolvency resolution process.

Preventive settlement mechanism

Substituting the previous preventive composition mechanism, the new law introduces a preventive settlement procedure aimed at enabling ongoing operations of debtor businesses amidst financial difficulties. Essential aspects of this procedure comprise:

  • Authorization for debtors to commence preventive settlement proceedings under specific circumstances.
  • Maintenance of debtor control over business operations throughout the settlement process, with supervision from the Bankruptcy Court.
  • Establishment of a creditors‘ committee to supervise the settlement process and endorse proposed restructuring plans, guaranteeing creditor representation and involvement in decision-making.
  • Enforcing a moratorium on creditor claims at the onset of preventive settlement proceedings, granting debtors a temporary respite to devise and execute restructuring strategies.

Claw back provisions and set-off restrictions

Aligned with international best practices, the legislation enhances claw back provisions, reducing the timeframe for reversing transactions prior to bankruptcy proceedings. Furthermore, it imposes limitations on set-off actions following the initiation of insolvency proceedings, protecting creditors‘ interests, and fostering fair asset distribution.

Conclusion

The revocation of previous insolvency laws signals a new chapter for insolvency procedures in the UAE, marked by improved efficiency, transparency, and creditor safeguards. Adherence to the new Bankruptcy Law is essential for businesses in the UAE, as failure to comply could lead to penalties.

Looking forward, we anticipate the issuance of executive regulations to supplement the new law, offering additional guidance on its implementation. In the interim, existing regulations and resolutions will remain in effect, ensuring a seamless transition and stability in the insolvency framework.

In summary, the implementation of the 2024 UAE Financial Restructuring and Bankruptcy Law signifies a significant advancement in the country’s legal framework, indicating a dedicated initiative to modernize and fortify the insolvency system. Through comprehensive reforms and procedural improvements, the law aims to foster confidence, enhance financial stability, and streamline the resolution of insolvency matters in the UAE.

TAREK ANTAKI  ASSOCIATE PARTNER LEGAL CONSULTANT – ATTORNEY AT LAW T   +971 (4) 295 00-20 UAE M  +971 (50) 727 4125 tarek.antaki@roedl.com www.roedl.de  BENJAMIN KOZICA LEGAL CONSULTANT ASSOCIATE  T   +971 (4) 295 00-20 M  +971 (50) 656 3135 benjamin.kozica@roedl.com  www.roedl.de  
RÖDL & PARTNER

Weitere Neuigkeiten und Einblicke
von departer

Erfahren Sie das Neueste über uns und unsere Projekte rund um die Welt.
Um keine Neuigkeit zu verpassen, abonnieren Sie unseren Newsletter.

News aus MEAI
|
20.06.2024

Dubai’s Economic Boom and Global Appeal

Dubai’s booming economy continues to be a magnet for businesses around the globe. The city’s strategic location, bridging the East and the West, coupled with its world-class infrastructure, creates an ideal environment for businesses to thrive. This cosmopolitan city has become a global hub for trade, finance, tourism and innovation, attracting entrepreneurs, investors and professionals.

News aus DACH
|
15.07.2024

Employer Branding in Krisenzeiten: Strategien für den Mittelstand

Krisenzeiten stellen Unternehmen vor besondere Herausforderungen, insbesondere im Bereich des Employer Brandings. Ein starkes Employer Branding kann jedoch den Unterschied machen und die Attraktivität des Unternehmens auf dem Arbeitsmarkt erhöhen. In diesem Artikel beleuchten wir, warum Employer Branding in Krisenzeiten so wichtig ist und welche Strategien mittelständische Unternehmen anwenden können, um ihre Arbeitgebermarke zu stärken. […]

News aus MEAI
|
28.06.2024

The opening of the European Chamber of Commerce in Saudi Arabia

Two months ago, the European Union has celebrated the opening of the European Chamber of Commerce in the Kingdom of Saudi Arabia (ECCKSA). This strategic move is set to significantly enhance economic ties between the EU and the Gulf region, offering new possibilities for businesses across Europe, particularly those from the DACH region, looking to […]

News aus MEAI
|
28.03.2024

Unlocking Economic Potential: Saudi Arabia’s Progress and Opportunities for German, Swiss and Austrian Companies

Saudi Arabia, a nation historically reliant on oil revenues, has embarked on a transformative journey towards economic diversification and growth. With the Vision 2030 plan as its guiding force, the country has made significant strides over the past two years, aiming to position itself as a dynamic and diversified economy. Saudi Arabia has been successful […]

Experteninterview, News aus DACH
|
15.05.2024

Priorisierung von mentaler und physischer Gesundheit am Arbeitsplatz

Ein Experteninterview mit Dr. med. Anne Pfeiffer Im heutigen dynamischen Arbeitsumfeld stehen Führungskräfte und Organisationen vor einer Vielzahl gesundheitlicher Herausforderungen. Wie können wir trotz anspruchsvoller Zeitpläne und Verantwortlichkeiten die mentale und physische Gesundheit priorisieren? Um Antworten auf diese entscheidenden Fragen zu erhalten, haben wir uns mit Dr. med. Anne Pfeiffer unterhalten – einer renommierten Mind-Body-Medizin-Therapeutin, […]

News aus MEAI
|
14.06.2024

Saudi Arabia is swiftly evolving into a global leader

Saudi Arabia is swiftly evolving into a global leader. By 2023, the country achieved an impressive 87% of its Vision 2030 goals, significantly boosting non-oil revenues to $121.8 billion and reducing unemployment to 7.7%. These milestones underscore the kingdom’s dedication to sustainable growth and economic diversification. Vision 2030 has propelled Saudi Arabia to third place […]

News aus MEAI
|
18.06.2024

The UAE introduced „Work Bundle“ to ease residency processes

The UAE government has introduced the „Work Bundle“ initiative to streamline employee residency processes and work permits for private sector companies. Initially, this program will be rolled out in Dubai, with plans to extend it to other emirates over time.

News aus MEAI
|
03.06.2024

Green Vision: UAE Announces 10-Year Blue Residency Visa for Environmental Leaders

On May 15, the UAE Cabinet approved a new long-term residency visa – the ‘Blue Residency’, for individuals who have made contributions in the environmental field. The Blue Residency visa is a 10-year residency awarded to individuals who have made exceptional contributions to environmental protection. This includes work in marine life conservation, land-based ecosystem preservation, […]

News aus DACH
|
09.07.2024

Wie Personalabteilungen und Executive-Search-Firmen eine erfolgreiche Partnerschaft bilden

Den Mittelstand stärken: Der Einfluss von Executive-Search-Firmen auf die Talentakquise Im heutigen wettbewerbsintensiven Umfeld stehen kleine und mittlere Unternehmen (KMU) weltweit vor großen Herausforderungen, wenn es darum geht, erstklassige Führungskräfte zu gewinnen. Diese Herausforderungen umfassen Zeitdruck, den Zugang zu spezialisierten Fähigkeiten und die Notwendigkeit, bei verdeckten, sensiblen Einstellungen Vertraulichkeit zu wahren. Executive-Search-Firmen wie Departer – […]

News aus MEAI
|
12.06.2024

Entdecken Sie die HR- und Gehaltstrends 2024-25: Machen Sie mit!

Sind Sie Mitarbeiter oder HR-Entscheidungsträger in einem deutschen, österreichischen oder schweizer (DACH) Unternehmen in den Vereinigten Arabischen Emiraten? Falls ja, haben wir eine aufregende Gelegenheit für Sie! Wir freuen uns, Sie zur HR- und Gehaltsumfrage 2024-25 einzuladen, einem gemeinsamen Projekt von Departer – The Know Who People und der AHK (Deutsch-Emiratische Industrie- und Handelskammer). Diese […]

News aus MEAI
|
21.03.2024

Germany-India Alliance: Pioneering Prosperity in Global Markets

India’s thriving economy has attracted global attention, presenting enticing opportunities for foreign investors. Leading the G20 nations in economic expansion, India boasted a remarkable 7.2% growth in the fiscal year 2022-23 and is poised to sustain this momentum with a projected GDP growth rate of 6.9% in 2023-24. As the top economy in the European […]

News aus MEAI
|
25.06.2024

Saudi Arabia: A Transformative Opportunity for International Businesses

Saudi Arabia is undergoing a remarkable transformation, rapidly establishing itself as a global economic leader. With substantial progress towards its Vision 2030 goals, the Kingdom presents a wealth of opportunities for European and DACH businesses looking to expand into a dynamic and evolving market. Vision 2030: Pioneering Sustainable Growth By the end of 2023, Saudi […]

Kontakt
© COPYRIGHT 2024 by Departer GmbH