In brief

• The emphasis of the draft law is to create a more modern, debtor-friendly regime and promote a rescue or rehabilitation culture as an alternative to formal insolvency procedures,

• The existing bankruptcy provisions which are contained in Volume V of Federal Law No. 18/1993 (UAE Commercial Transactions Law) are to be repealed. Other bankruptcy-related provisions in other UAE legislation remain untouched.

• Key features of the new law:

•   Although the new law applies more widely, it will not apply to government entities or entities incorporated and licensed to operate in a financial free zone such as the DIFC.

•   The conditions necessary for commencement of relevant insolvency procedures draw in part on those used under existing French and Germany insolvency laws.