Certain enhanced protections of debtors under the UAE Bankruptcy Law – Federal Law No. 9 of 2016 – which were previously put into place on an emergency basis in response to the Covid pandemic, have now expired. Debtors and creditors who have acted in reliance upon the enhanced provisions should now consider the proper steps in view of the reversion of the law to the pre-emergency status.
The Bankruptcy Law was amended in late 2020 to provide for various forms of enhanced debtor protections, including suspension of the requirement to file in cases of insolvency, expedited claims relief and settlement procedures, and a suspension of any bankruptcy proceedings filed by a creditor, if an “Emergency Financial Crisis” has been declared, which is defined as “a general condition affecting trade or investment in the country, such as an epidemic, natural or environmental crisis, war, etc…. determined by a decision of the Council of Ministers”.
A Ministerial decision was thereupon issued declaring the existence of an emergency financial crisis, effective from 1 April 2020 through 31 July 2021. As of today’s date, no extension of a declared financial crises has been made.
Thus, debtors’ obligations have reverted to the pre-emergency rules, including a debtor’s obligation to file if in an insolvent condition. Likewise, the stay on creditors’ filings has been lifted. All concerned parties should take note and plan accordingly.
Authored by Barry Greenberg
, Of Counsel
For an in-depth look at bankruptcy, insolvency and restructuring across the GGC, read the BSAGCC Restructuring & Insolvency Report