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UAE Insolvency Law: A Real Priority for Business Growth and Further Economic Prosperity for the Region

09/02/2015

By Mr Sarosh Zaiwalla, Founder, Zaiwalla & Co Solicitors


Towards the end of last year, it was announced that the UAE’s long anticipated reform of the insolvency reform bill was reaching its final stages prior to implementation. The legal framework was drawn up following the establishment of the Dubai World Tribunal that resulted from its inability to pay its creditors in November 2009. The case cast a spotlight on the UAE, who until today does not have an officially passed insolvency bill that helps local businesses as well as international investors in manoeuvring the, at times muddy waters, of financial difficulty that many businesses experience at some point in their life cycle. The end of 2013 had finally seen the UAE move a step closer to implementing this reality, with the referral of a revised draft of the legislation to the Ministry of Justice and is only awaiting approval. The event was proceeded by an almost 12 month’s long discussion on the subject and its intricacies with representatives of the local government of all seven Emirates. To date however, it is unclear whether the new law will be enacted and since the end of 2013 no further progress updates have been heard. What has been made public since has been seen as slight criticism relating to the applicability of the legislation, mentioning that it is likely more applicable for smaller companies and would possibly be bypassed by any larger companies that are attempting to restructure their debt. This is mainly a result of a term that was commonly used in the legislation and gave the reader a specific connotation that relates more to a trader and retailer in a shop and thereby suggesting the current law could possibly be better suited to the insolvency solutions of smaller companies rather than larger... continued on page two >

 

 

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