Dubai International Financial Centre Enacts New Insolvency Law
Dubai: In his capacity as Ruler of Dubai, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, enacted a new DIFC Insolvency Law, Law No. 1 of 2019, the Dubai International Financial Centre (DIFC), the leading international financial hub in the Middle East, Africa and South Asia (MEASA) region, has announced.
The new Insolvency Law and Regulations, which will come into effect on August 28, 2019, introduces a “new debtor in possession” bankruptcy regime in line with best practice globally. The law also provides for a new administration process where there is evidence of mismanagement or misconduct. The law also 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 Centre.
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 newly-enacted law will compliment the DIFC’s commitment to international best practice, according to a statement from Dubai Media Office, with the Insolvency Law aiming to balance the needs of all stakeholders in the context of distressed and bankruptcy related situations in DIFC, facilitating a more efficient and effective bankruptcy restructuring regime.
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.