Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum has enacted a new DIFC Insolvency Law to cover companies operating in the Dubai International Financial Centre (DIFC).
DIFC said the newly-enacted law compliments its commitment to international best practice, with the Insolvency Law aiming to balance the needs of all stakeholders in the context of distressed and bankruptcy related situations.
Under the law which will come into effect on August 28, the financial hub aims to facilitate a more efficient and effective bankruptcy restructuring regime, a statement said.
Essa Kazim, governor of DIFC, said: “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.
“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 Insolvency Law and Regulations introduces a new debtor in possession bankruptcy regime in line with best practice globally which will also place the DIFC at the forefront of complicated debt restructurings.
The law also provides for a new administration process where there is evidence of mismanagement or misconduct. The law also enhances the rules governing winding up procedures and incorporates the UNCITRAL Model Law on cross border insolvency proceedings with certain modifications for application in the DIFC.
DIFC said the new law was subject to substantial research and global benchmarking, as well as thorough public consultation, to ensure that the DIFC remains the most sophisticated and business-friendly Common Law jurisdiction in the region.
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