Throughout the United Arab Emirates
("UAE"), a common frustration exists
with insolvencies due to its time-consuming nature and
significantly low recovery rates, which stemmed from the outdated
governance of insolvency under Volume 5 of the Federal Law No. 18
of 1993 on Commercial Transactions. Under these vague provisions,
it was an offence for a company to fail to petition for bankruptcy
within 30 days of the date of suspension of payment of its debts,
and criminal proceedings could be taken against the directors of a
company for failing to initiate and apply for corporate
bankruptcy.
However, the relatively new Federal Law No. 9 of 2016 on
Bankruptcy (the "Bankruptcy Law") has
shed light on the treatment of companies in the UAE facing
financial difficulties, and brings a certain level of clarity to
the processes available to such companies. The provisions outlined
in the Bankruptcy Law reflects an in-depth analysis of the
insolvency process in multiple
