By Staff writer
Ruler of Dubai announces on Twitter the cabinet has approved draft legislation
The UAE cabinet on Sunday approved the country’s long-awaited draft law on bankruptcy.
In a series of tweets, Sheikh Mohammad bin Rashid Al Maktoum, Vice-President of the UAE and Prime Minister and Ruler of Dubai, said: “Today, we approved the final draft of the Federal law on Bankruptcy.
“The law aims to promote the investment attractiveness of the UAE economy and facilitate business.”
The new law paves the way for ailing companies to restructure – something that is not currently available in the UAE.
Industry bodies including the UAE Banks Federation have been lobbying for such a law for several years. They claim the absence of formal bankruptcy legislation in the country hinders the growth of small-to-medium-sized businesses in particular – a sector the government is keen to develop.
Under existing legislation, unpaid debt or a bounced cheque can wind businesses in jail.
Just last week, economy minister Sultan Saeed al-Mansouri was reported to have said the legislation may be finalised by the end of this year, to help companies weather challenging economic conditions.
We also passed the final version of the new Federal Law on bankruptcy, which aims to promote both investment and ease of doing business.— HH Sheikh Mohammed (@HHShkMohd) September 4, 2016
Welcome Chapter 11 to Dubai, hope other countries in the GCC follow suit.
Is the new law effective immediately?
What about those companies that have legal cases filed against them recently? Can they still file for bankruptcy?
Would the new law protect the drawers of bounced checks, which are treated as criminal cases?
The most important question is how this will work in practice if it is finally approved (this was just the final draft, not sure what else is required)
There is no shortage of legislation in the UAE but as many people have learnt implementation can be surprising and having your rights enforced is hard and sometimes impossible
Dude, get some legal advice. Would you really pin your hopes on the legal arguments presented in the comments section of AB?
Is there a link to the wording of the law somewhere? I'd love to read it.
Thank you Sheikh Mohammed!
Even more important personal bankruptcy law should be implemented. 1000s of people are in jails due to unpaid credit cards or loans. Not everyone is doing deliberately. Job loss is main cause. The real criminals run away and honest ones trying to find new jobs get shoved in jail.
Bankers are like mafia here, even they have earned 10 times over the time period but a few missed payments and they treat you like criminal. I am talking from my personal experience.
Well said sak, I sent 29 days in the out jail and there were plenty of my fellow inmates there through no fault of their own and no dishonesty in doing their business. Many were trapped by the government and have spent many months in prison because the government did not pay them, they wrote cheques in good faith that they would be paid but were not. Will those government officials go to jail for defrauding these men. To my friends in the out jail, I hope these laws see you freed from your unnecessary incarceration and return to a normal life with your families.
Absolutely right, I agree. 90% of defaults on Credit Cards & loans are not done deliberately, job loss is the main reason. Banks will get nothing by putting people in jail. Such people should be facilitated with some generous amnesty, be given chance to settle their liabilities by securing new jobs.