Local courts are ill-equipped to handle the types of restructuring and bankruptcy procedures set out in the provisions of the UAE’s draft bankruptcy law, a senior lawyer has said.
Essam Al Tamimi, the founder and managing partner of law firm Al Tamimi and Company, told the National that the draft law, once enacted, may place a significant strain on the courts and public prosecution system, with the need for a large increase in trained insolvency practitioners.
“The law is very well drafted and very comprehensive, with well-structured provisions equivalent to Chapter 11 [in the US] that will protect insolvent companies from going bankrupt. The main concern is the practicalities.”
A large number of insolvency experts will be required to assist with court-driven insolvency proceedings, but such experts being limited for now in the UAE.
The draft law would require extensive training for police and public prosecutors, he added.
The draft of the bankruptcy law, which draws on bankruptcy protection laws from jurisdictions including France, Germany and the Netherlands, was approved by the Cabinet a month ago, with government figures at the time expecting it to come into effect from early 2017, the report said.
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