Legislation Details
- Full Title: Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023
- Law Type: Federal Decree-Law
- Law Number: (94) of 2024
- Issued Date: 02 Sep 2024
- Effective Date: 02 May 2024
- Official Gazette: No. 783
- Sector: Economy and Business
- Status: Active
- Number of Articles: 43
- Chapters/Parts: 0
- Amendments: 0
Summary
This Cabinet Resolution provides the executive regulations for the Financial Restructuring and Bankruptcy Law promulgated by Federal Decree-Law No. (51) of 2023. It establishes the regulatory authorities, defines key terms, and outlines the procedures for initiating bankruptcy and restructuring proceedings, including requirements for applications, bank guarantees, and the auction process for selling the debtor's assets. The Resolution aims to provide a comprehensive framework for managing financial distress and insolvency in the UAE. (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024) This legislation is significant for businesses and individuals in the UAE, as it sets clear rules and processes for dealing with financial difficulties and insolvency. It provides options for debtors and creditors to restructure or declare bankruptcy, while also protecting the rights of stakeholders and ensuring an orderly process. The practical impact includes increased legal certainty, faster resolution of insolvency cases, and better protection of creditor rights. (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024)
What is the scope and purpose of this law?
The scope of this Cabinet Resolution is to provide the executive regulations for the implementation of the Financial Restructuring and Bankruptcy Law promulgated by Federal Decree-Law No. (51) of 2023. The purpose is to establish the regulatory authorities, define key terms, and outline the procedures for initiating bankruptcy and restructuring proceedings in the UAE. (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024, Art. 1-2)
What are the key definitions under this law?
The key definitions under this Resolution are:
- Law: Financial Restructuring and Bankruptcy Law Promulgated by Federal Decree-Law No. (51) of 2023
- Register: The register established in the Financial Restructuring and Bankruptcy Unit at the Ministry, for recording individuals against whom court judgments have been rendered imposing any restrictions ordered by the court or for their cancellation in accordance with the provisions of the law and this Resolution
(Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024, Art. 1)
What are the main obligations and requirements?
The main obligations and requirements under this Resolution include: 1. The debtor must deposit a bank guarantee or an amount of money equal to 5% of the total debts or assets when submitting an application to initiate bankruptcy or restructuring proceedings, except for requests submitted by regulatory authorities. (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024, Art. 8) 2. The debtor must obtain the written or electronic approval of the trustee before carrying out certain actions or dispositions, such as providing or renewing a third-party guarantee, paying state or before maturity debts, or transferring ownership of assets. (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024, Art. 10) 3. The trustee must obtain the approval of the Bankruptcy Court for the liquidation and distribution plan before selling the debtor's assets by auction. (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024, Art. 11)
What licensing, registration, or approval requirements exist?
The legislation does not specify any licensing, registration, or approval requirements under this Cabinet Resolution.
What rights and protections does this law provide?
The legislation does not explicitly mention any specific rights or protections provided under this Cabinet Resolution.
Which authorities or bodies are responsible for enforcement?
The following authorities are considered the regulatory authorities responsible for enforcement under this Resolution: 1. The Central Bank of the United Arab Emirates 2. Securities and Commodities Authority (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024, Art. 2)
What are the penalties for non-compliance?
The legislation does not specify any penalties for non-compliance under this Cabinet Resolution.
What fees, charges, or financial provisions are specified?
The Resolution specifies the following financial provisions: 1. The debtor or creditor applying to initiate bankruptcy or restructuring proceedings must deposit a bank guarantee or an amount of money equal to 5% of the total debts or assets. (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024, Art. 8) 2. The bidder whose bid is approved at the auction must deposit the full price, expenses, and designated fees within 5 working days. (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024, Art. 16)
What exemptions or exceptions apply?
The legislation does not specify any exemptions or exceptions under this Cabinet Resolution.
How are disputes resolved under this law?
The legislation does not provide details on dispute resolution mechanisms under this Cabinet Resolution.
What are the key deadlines and time limits?
The key deadlines and time limits specified in this Resolution include: 1. The bidder whose bid is approved at the auction must deposit the full price, expenses, and designated fees within 5 working days. (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024, Art. 16) 2. The auction must be announced at least 5 working days prior to the scheduled date. (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024, Art. 14)
How does this law interact with other UAE legislation?
This Cabinet Resolution is issued to provide the executive regulations for the implementation of the Financial Restructuring and Bankruptcy Law promulgated by Federal Decree-Law No. (51) of 2023. (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024, Preamble)
When did this law come into effect?
This Cabinet Resolution came into effect on 02 May 2024, as specified in the "Effective Date" section. (Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023, 2024, Effective Date)
Source Documents
This article analyses Cabinet Resolution Concerning the Executive Regulations of the Financial Restructuring and Bankruptcy Law Promulgated by the Federal Decree-Law No. (51) of 2023 for legal research and educational purposes. For the purpose of interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text prevails. This does not constitute legal advice.