Recently, both within the UAE and globally, there has been increased focus on insolvency and winding-up of business. Concerns have arisen regarding maximisation of creditor recovery. Legislative developments in global insolvency continue to move away from dissolution oriented systems and towards facilitating survival, where possible, of the business entity facing financial difficulty. Given the extent of foreign investment in the UAE and recent publicity regarding the financial challenges encountered by business incorporated or operating in the UAE, growing attention is focused on the UAE insolvency regime and the ability of creditors to recover debts.

In brief:

• One of the principle elements of UAE Bankruptcy Law is the use of protective composition to facilitate the survival of the trader's business and to enable the trader avoid bankruptcy. However, an approved composition procedure is not available for joint participation companies or for companies in liquidation.