Insolvency in the UAE-Business Failure without Bankruptcy Rules
Type
E-journal
Date
5 Apr 2016
Jurisdiction
United Arab Emirates
Taxonomy
Bankruptcy
Copyright
LexisNexis
Relevant company
Al Tamimi & Company
Analysis
This article is a case study on how the UAE, a country with two cities which are significant international financial and business centres (namely Dubai and Abu Dhabi), functions without effective insolvency laws; and why this state of affairs is likely to continue for some time.
Whilst it is not strictly true that the UAE has no insolvency laws at all, it is fair to say that no one (debtors or creditors) makes use of the existing laws. A new UAE insolvency law has been drafted, but in the writer's view it will be years before it sees the light.
A BRIEF HISTORY
Before the global financial crisis of 2008, the bankruptcy laws of the UAE were hidden away in the statute books, invisible and unknown. Even today, in the aftermath of four years of major business problems following the financial crisis of 2008, the procedures under this existing law remain almost completely unused.