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Dubai's new DIFC Insolvency Law to take effect on 28 August, 2019

Dubai Ruler enacts new law, designed to serve stakeholders that are distressed or facing or bankruptcy-related issues

Dubai's DIFC Insolvency Law takes effect on 28 August.
Dubai's DIFC Insolvency Law takes effect on 28 August.

HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai, has enacted an Insolvency Law to cover companies in the Dubai International Financial Centre (DIFC), which will take effect on 28 August, 2019, designed to meet the needs of stakeholders that are distressed or facing bankruptcy-related situations. 

Commenting on the development, DIFC governor, Essa Kazim, said: “We are committed to continuously enhancing our legislative infrastructure in order to give leading global institutions the certainty and access they need to capture the opportunities within the MEASA region, through Dubai.”

The new law was subject to substantial research and global benchmarking, as well as thorough public consultation, which helped shape the law.

UAE state news agency, Wam, reported that the law included the introduction of a debtor-in-possession bankruptcy scheme to help DIFC with complicated debt restructurings. 

It will also reportedly provide for an administration process where there is evidence of mismanagement or misconduct.

DIFC also said the law incorporated the Uncitral Model on cross-border insolvency proceedings, with certain modifications specifically for the hub’s application.

“Ensuring that businesses and investors can operate across the region with confidence is crucial to our role in connecting the economies of East and West,” Kazim said.

The new law can be viewed at www.difc.ae/business/laws-regulations/legal-database

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Construction Week - Issue 754
Nov 23, 2019