Federal Decree-Law No. 51/2023 Promulgating the Financial Reorganisation and Bankruptcy Law repealed Federal Decree-Law No. 9/2016 On Bankruptcy and entered into force on 1 May 2024. Federal Decree-Law No. 51/2023 redefines the bankruptcy regime in the United Arab Emirates (UAE) with updated procedures for preventive settlement, restructuring, and bankruptcy. Federal Decree-Law No. 51/2023 also replaced Federal Decree-Law No. 21/2020 amending some provisions of Federal Decree-Law No. 9/2016 on Bankruptcy which included emergency provisions that have now been incorporated into Federal Decree-Law No. 51/2023.

• Preventive settlement: A debtor-led procedure for financially distressed businesses (that are not yet insolvent) to obtain court protection, negotiate with creditors, and restructure their debts under judicial supervision, as provided under articles 56-75 of Federal Decree-Law No. 51/2023.

• Restructuring proceedings: A process initiated by a debtor, creditor, or regulator, allowing the restructuring of a debtor’s business under court supervision and with the assistance of a trustee, to preserve the business and repay debts in accordance with a ratified plan. Governed by articles 76-120 of Federal Decree-Law No. 51/2023.