In the face of evolving financial landscapes, the United Arab Emirates has taken a significant step forward with the enactment of Federal Decree Law No. 51 of 2023 on Financial Restructuring and Bankruptcy, which supersedes the previous Federal Decree Law No. 9 of 2016. This new legislation, which came into effect on May 1, 2024, aims better to accommodate the realities of today’s business environment, safeguarding the interests of creditors while offering renewed hope and viable options to debtors facing financial distress.
In a comprehensive analysis featured in the July edition of INSOL International, Charbel Fadel, partner at Galadari Advocates & Legal Consultants, delves into the transformative implications of the UAE’s New Bankruptcy Law. His expertise highlights how the law is set to enhance the procedural mechanisms for financial restructuring and bankruptcy proceedings within the UAE.
“The New Bankruptcy Law is a game-changer for how financial distress and insolvency will be managed in the UAE,” says Charbel Fadel. “It not only strengthens economic stability but also aligns with international best practices, ensuring that the UAE remains a leading hub for global business.”
Key features of the New Law include:
Establishment of Special Bankruptcy Courts: Dedicated courts will ensure expedited and specialized handling of bankruptcy cases, supported by expert insights and modern technology for efficient proceedings.
Enhanced Debtor Protections: The law introduces measures such as the suspension of claims and preventive settlement proceedings, giving businesses a lifeline to reorganize and strategize towards solvency.
Creditors’ Rights and New Financing Opportunities: Creditors are given clear pathways to initiate bankruptcy proceedings, while debtors may receive permission for new financing under stringent conditions during restructuring phases.
The legislation’s detailed attention to accommodating various stakeholders involved in bankruptcy scenarios reflects a well-balanced approach to economic reform, with strategic provisions aimed at maintaining business operations and preserving employment.
The comprehensive analysis by Charbel Fadel in INSOL International not only underscores the legal intricacies of the New Bankruptcy Law but also its strategic importance in fostering a more resilient and flexible economic environment in the UAE.
For further insights into the UAE’s New Bankruptcy Law and its implications, the detailed feature by Charbel Fadel can be accessed in the July publication of INSOL International.
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