Background

Statistics show that, to date, insolvencies in the UAE have been more time-consuming, and have resulted in significantly lower recovery rates, than in other developed jurisdictions.

The UAE's current insolvency regime is principally contained in the Commercial Code (Federal Law No. 18/1993). These provisions, however, are largely untested and are generally regarded as needing modernisation for the UAE's economy today.

The UAE government has been formally considering amendments to the insolvency regime since 2009, and a previous draft insolvency law was published in 2011 (the 2011 Draft); the New Law, however, is different in certain respects, as discussed below.

Key changes under the New Law

• Repeal of current regime : Chapter V of the Commercial Code, which sets out the UAE's current insolvency regime, will be expressly repealed, together with various bankruptcy-related crimes set out in the Penal Code.