The Ministry of Finance (MoF) has announced that it has referred the Bankruptcy and Financial Restructuring Law Initiative, which was prepared in coordination with specialized local and international entities, to the technical committee at the Ministry of Justice. The announcement was made following a meeting headed by HE Younis Haji Al Khouri, Undersecretary of MoF between committees from MoF, Ministry of Economy, Ministry of Justice, and the UAE Central Bank which took place at MoF’s headquarters in Dubai today.
The new law will incorporate a range of contemporary economic theories concerned with restructuring commercial and non-commercial debt, debtor obligations regarding accumulating debt, and facilitating restructuring processes for companies and organizations. It will also allow for bank loan applications to finance businesses that are facing financial difficulties according to certain rules and prerequisites. The new law will also include a number of processes and mechanisms to protect the rights of debtors and creditors for commercial and non-commercial debt cases.
Commenting on the meeting, HE Al Khouri said: “The decision to refer this project to the Ministry of Justice, in addition to its reaching this advanced phase, follows MoF’s efforts during the past years in the field of bankruptcy and financial restructuring. These efforts have led to this initiative to develop a new law in this area; one that is built on modern and advanced economic principles, and is distinguished from previous laws in its efficiency and effectiveness.”
HE Al Khouri added: “MoF expects that the new, untraditional features incorporated in this new law will aid in promoting growth in the UAE’s economy as it will allow for business that are facing financial hardships to work on restructuring frameworks and on repaying their debt without decreasing their productivity.”
MoF had previously held a meeting with the UAE’s local governments and a number of national legal and economic entities, where it presented the new law initiative in order to receive their feedback and comments regarding this project. Attendees at the meeting included Dubai Economic Council (DEC), The Government of Dubai Legal Affairs Department, and the Abu Dhabi Council for Economic Development (ADCED). MoF will continue to meet with other entities in this regard, including Sharjah Government’s legal department.
The new proposed law is set apart from other similar initiatives through its attempt to forgo traditional theories for dealing with bankruptcy and financial restructuring. The new law’s jurisdiction will not be limited to investors and business, but will extend to include individual, civil debt cases, and debt instances concerning certain professionals such as doctors, lawyers and others.