Oman may introduce bankruptcy and insolvency law

Oman may look at introducing a bankruptcy and insolvency law as it moves to bolster its investment climate, a senior member of the Gulf state’s Capital Market Authority has said.

The new law is currently being discussed and is expected to be in place within “in a short space of time,” Abdullah Salem Al Salmi, acting executive vice president of Capital Market Authority, said during a conference Monday. 

 “Oman certainly needs such laws. The idea is there and we are at the discussion level taking inputs from different sources and hopefully, in a short span of time, bankruptcy and insolvency laws would be in place,” he said, The Times of Oman reported. 

The decision to introduce a bankruptcy law in Oman would follow a similar move by UAE authorities.  A draft of the UAE’s first ever bankruptcy law is likely to be completed by the end of the year, a senior Dubai government official said earlier in the month.

The ruling, modelled in part on US and British practices, is expected to help attract foreign investment and cut the number of expatriates absconding over debt obligations.

“We are more than 70 percent of the draft completed... We should come with this draft by the end of this year,” HE Sami Al Qamzi, director general of the department of economic development, told reporters on the sidelines of the Dubai Economic Outlook 2012 presentation last week.

The lack of bankruptcy laws in the UAE were pulled into the spotlight after some of Dubai’s largest state-owned firms sought to renegotiate borrowings in the wake of the global financial crisis.

Dubai World agreed economic terms with its lenders on $23.5bn of debt in May. State-owned developer Nakheel said in August it is restructuring AED59bn ($16.1bn) of liabilities, including AED32bn to Dubai government, AED19bn to trade creditors and AED8bn to banks.

The company narrowly avoided a 2009 sukuk default after Abu Dhabi stepped in with a last-minute $10bn lifeline for Dubai.