The Dubai International Financial Centre (DIFC) has enacted a new insolvency law which it said meets international best practice guidelines.
The new Insolvency Law and Regulations, which became effective on 13 June 2019, creates a new debtor in possession bankruptcy regime which it said will place the DIFC “at the forefront of complicated debt restructurings”.
Essa Kazim, governor of DIFC, said: “Ensuring that businesses and investors can operate across the region with confidence is crucial to our role in connecting the economies of East and West.
“We are committed to continuously enhancing our legislative infrastructure in order to give leading global institutions the certainty and access they need to capture the opportunities within the MEASA region, through Dubai.”
The law also provides for a new administration process where there is evidence of mismanagement or misconduct.
In addition, it enhances the rules governing winding up procedures; and incorporates the UNCITRAL Model Law on cross border insolvency proceedings with certain modifications for application in the DIFC.
The new law was subject to “substantial research and global benchmarking, as well as thorough public consultation, which helped shape the law to ensure that the DIFC remains the most sophisticated and business-friendly Common Law jurisdiction in the region”.
The official announcement came on 30 May when Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, enacted the DIFC Insolvency Law, Law No. 1 of 2019.
