Dubai is in urgent need of legal reform and must look to decriminalise the bouncing of post-dated cheques and introduce straightforward bankruptcy laws, one of the emirate’s most prominent lawyers told the Arabian Business conference in Dubai on Monday.
“We need to upgrade our legal system so that investors have faith in doing business in the region. I say it loud and I say it clear, outdated laws have to be outlawed,” said Dr Habib Al Mulla, executive chairman of Habib Al Mulla and Company and former chairman of the Dubai Financial Services Authority (DFSA).
Speaking at the third Arabian Business Forum in the Armani Hotel in Dubai, Al Mulla added that the emirate’s laws were often “issued in reaction to events and in many cases the reaction comes too little too late.”
Two main areas he believes need urgent reform are the emirate’s bankruptcy laws and the decriminalisation of the bouncing of a cheque of post-dated cheques.
“The failure of a business should not be a criminal offence and the failure to pay a post dated cheque is, in my view, no more than a failure to perform a contract and it too should not be made criminal,” said Al Mulla.
In order to move forward out of the downturn, Al Mulla told delegates at the conference that the authorities need to focus on legal reform as a vehicle for future economic growth.
“Until that happens and until the government realises that legal reform plays a vital role in economic growth, I don’t believe we will have change,” he concluded.
His comments come just days after it was reported that a UAE developer has filed for liquidation, a move which is thought to be the first court-mandated bankruptcy of a UAE distressed property project since the financial crisis began.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.