Founder of the largest and most prestigious law firm in the Middle East explains who the law applies to and how business owners can benefit

Dubai, 12th October, 2016,

“What does the new bankruptcy law mean for you?” “Why is it important?” “Who does it apply to?” and “How will small business owners in the UAE benefit from the new law?” are all questions recently addressed by Essam Al Tamimi, Senior Partner and Founder of Al Tamimi & Company, the largest and most prestigious law firm in the Middle East, at Capital Club, Dubai’s Premier Private City Club and member of the ENSHAA group of companies.

The new bankruptcy law, which was approved on the 4th of September 2016 and will be enacted in Q1 of 2017, applies to four categories of traders: corporate entities, service companies, individuals who conduct business for profit (i.e. lawyers, doctors, engineers and so on) and corporations and semi-government corporations. The government (including government department authorities) is excluded from this law.

During his talk, Al Tamimi explained that the new draft law provides traders with three key options when in financial crisis: Restructuring, Preventative Composition and Bankruptcy. Restructuring ensures that debts and businesses are put through a “Financial Restructuring and Bankruptcy Committee” in order to avoid bankruptcy via soft-touch conciliation outside of the courts. Preventative Composition involves action taken through the courts to protect the assets of the creditors against bankruptcy. Lastly, the Bankruptcy option ensures that full bankruptcy proceedings will be taken through to the courts, which could also involve Restructuring.

Al Tamimi commented: “The strong emphasis on restructuring suggests that traders should be given the chance to restructure, pay their debts and avoid bankruptcy – this provides a better avenue for financially at-risk traders than bankruptcy itself, on which the previous law was based.”


Moreover, to ensure clarity and fairness of judgment, more than one judge may be appointed to oversee the bankruptcy proceedings and look into applications and reports.

Al Tamimi then explained that the process is managed by a Restructuring and Bankruptcy committee, whereby experts manage the process outside of court, and that not all assets are subject to sale: those which are not get absolute priority, such as alimony and assets owed to either the husband or wife.

Answering one of the most important questions on whether the draft law is good and if it covers all issues, Tamimi said that this law emphasises more on restructuring, and that it provides detailed processes, the rights and power of the judge, the court, the bankruptcy administrator, the experts, and detailed exceptions and sanctions. Further, the law introduces original concepts such as ‘new money’, which is important for restructuring.

Concluding his talk on whether or not there are any reservations of the draft law, he stated that it does not decriminalise bounced cheques, but rather suspends legal proceedings in certain situations; puts great responsibility on the court and judges to administrate, follow up and deal with applications; and groups companies, private individuals, semi government companies and professionals into one category.

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About Capital Club Dubai: http://www.capitalclubdubai.com 
Capital Club is Dubai’s Premier Private City Club situated in the heart of the city’s financial district – DIFC. A Members-only club in a contemporary setting for members to network professionally; dine and socialise; host private meetings; and attend a wealth of social and business events; the Club is connected to over 300 premier private clubs around the world as part of its reciprocal club network.

Capital Club Dubai is majority owned by Signature Clubs International, a member of the ENSHAA group of companies. As the developer and operator of the Capital Club brand, SCI has over 30 years experience in developing, launching and operating high-end private clubs in the Middle East, Europe and Asia. Its portfolio includes existing Clubs in Dubai, Bahrain and Nairobi, with upcoming initiatives planned in MENASA, Europe and the US, as part of a major five-year global roll out programme.

For more information, please contact:
Carmen Audino – PR Manager 
Sahara Communications
Mob: 00971554563251                            
carmena@saharagcc.com

© Press Release 2016