UAE Federal Judicial Council Regulates Bankruptcy Court

The UAE Minister of Justice and President of the Federal Judicial Council has issued a resolution regulating the Bankruptcy Court (“Resolution”).

The Resolution designated the Abu Dhabi Federal Court of First Instance as the court’s headquarter and granted it jurisdiction over all applications and disputes arising under the Federal Decree-Law on Financial Restructuring and Bankruptcy.

The Resolution also authorizes the Federal Judicial Council to establish one or more additional Bankruptcy Court branches in any of the Emirates. These branches will operate under the authority of the main court headquartered in Abu Dhabi and will have jurisdiction over the same types of applications and disputes arising from the Federal Decree-Law on Financial Restructuring and Bankruptcy.

The Resolution also provides for the establishment of a Bankruptcy Department within the Bankruptcy Court, to be headed by a judge holding a rank no lower than that of an appeal judge.

The Resolution outlined that the Bankruptcy Department will be responsible for key administrative and procedural functions, including receiving applications, objections, and grievances; registering cases; notifying relevant parties; and verifying that applications such as preventive settlement, restructuring, or bankruptcy declarations, meet the legal requirements regarding content, data, and supporting documentation, as required under the law

According to the Resolution, the Bankruptcy Court shall be composed of a President, who must hold a judicial rank not lower than that of an appeal judge, along with a number of specialized judges who will be appointed via a separate decision issued by the Federal Judicial Council. This is to ensure that the court is staffed with professionals possessing the necessary expertise in bankruptcy and financial restructuring matters.

The Resolution also sets out specific provisions regarding the appointment and role of bankruptcy experts and consultants. The Bankruptcy Court is empowered to seek assistance from qualified professionals and specialists with expertise in bankruptcy and financial restructuring.

The Resolution also outlined the responsibilities that will be assigned to those experts and consultants, such as supervising the management of the debtor’s assets and ongoing business operations, implementing precautionary measures to preserve value, facilitating the swift progression of proceedings, organizing and conducting meetings with creditors, and summoning the debtor or its legal representative to provide information or clarification regarding its debts, assets, or business affairs. This framework ensures that complex bankruptcy matters are handled efficiently and with the necessary technical expertise.

The Resolution, besides enhancing the UAE’s legal framework that streamlines procedures and ensures cases handled by expert judges and professionals, it will further promote financial stability, improve transparency, align with international best practices, and boost investor confidence.

Essa Ziad Galadari Director & Deputy  Head of Litigation essa@galadarilaw.com