UAE Cabinet approves amendments to provisions of bankruptcy law
The amendments stipulate the addition of new provisions to the law with regards to "emergency situations" that impinge on trade or investment
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. Image courtesy Sheikh Mohammed bin Rashid Al Maktoum official Twitter handle.
By Staff Writer, Saudi Gazette
ABU DHABI — The UAE Cabinet has amended bankruptcy law, adding new articles related to emergencies affecting trade or investment such as a pandemic, natural or environmental disaster, to provide a fillip to the economic sector.
Chaired by UAE's vice president and Prime Minister Sheikh Mohammed Bin Rashid Al Maktoum, who is also the ruler of Dubai, the Cabinet approved amendments to Law No.9 of 2016 on bankruptcy to strengthen the business sector in the country.
The move is part of as part of the government’s continuous efforts to develop the legal and legislative frameworks in various sectors, particularly the economic sector, which is a fundamental pillar within the UAE strategy for the next fifty years.
The amendments stipulate the addition of new provisions to the law with regards to "emergency situations" that impinge on trade or investment, in order to enable individuals and businesses to overcome credit challenges in times of pandemics, natural and environmental disasters, wars, etc.
The amendments are aimed at ensuring the fulfillment of obligations, and mitigating losses while enabling creditors to secure their rights.
The new amendments stipulate that the debtor shall be exempted from commencing procedures to declare bankruptcy. Should the debtor file an application that would be approved by the competent court, he may reach a settlement with creditors wherein he may request a grace period, or negotiate a debt settlement within a period of not more than 12 months.
According to amendments, the competent court, in case of approving the bankruptcy application, would not take any proceedings involving the debtors' funds that are needed to keep businesses running during the set period in case they defaulted on debt for an emergency.
The new amendments give room to the possibility of getting new financing as per specific terms and conditions in order to secure the liquidity needed to recover businesses and enable them to survive challenges in times of emergencies. — WAM
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