A new Bankruptcy Law has been released in the United Arab Emirates. It has many measures aimed at preserving the country’s economy, protecting the rights of creditors, and helping debtors avoid filing for bankruptcy by helping them settle their obligations.
With the court’s consent, the law allows the debtor to maintain significant control over the business while also fairly compensating creditors for the amount owed to them. This is a game-changer for both parties.
Based on quotes from regional law firm BSA, Areen Jayousi, partner at Horizons & Co., and Navandeep Matta, senior associate at Kochhar & Co., Dubai, here is what we know about the new law:
What date does the law go into force?
On October 31, 2023, the UAE Bankruptcy Law was published in the UAE Gazette. It will take effect on May 1, 2024.
To further increase investor confidence, the new law simplifies the restructuring and insolvency procedures and updates the legal framework. The law acknowledges that in order to ensure a smooth and successful restructuring, the interests of numerous stakeholders—including creditors, employees, and spouses—must be balanced.
