Legislation Details
- Full Title: Cabinet Resolution Regarding the Determination of the Debt Amount Requiring the Debtor to File an Application to Initiate Insolvency and Liquidation Proceedings and the Amendment of Certain Timeframes Set Forth in Federal Decree by Law Regarding Insolvenc
- Law Type: Federal Decree-Law
- Law Number: No. (47) of 2021
- Issued Date: 21 Apr 2021
- Effective Date: 17 May 2021
- Official Gazette: No. 702
- Sector: Justice and Judiciary
- Status: Active
- Number of Articles: 10
- Chapters/Parts: 0
- Amendments: 0
Summary
This Federal Decree-Law amends certain provisions of the UAE's Federal Decree-Law No. (19) of 2019 Regarding Insolvency. Specifically, it sets the debt amount that requires a debtor to file for insolvency and liquidation proceedings at AED 250,000, and the amount that entitles a creditor or group of creditors to file such proceedings against a debtor at AED 1,000,000. Additionally, it extends the timeframes for filing such applications from 50 to 65 working days. (Cabinet Resolution No. (47) of 2021, 2021, Arts. 1-3) The amendments aim to strike a balance between protecting debtors from premature insolvency proceedings while also ensuring creditors have adequate recourse. This is important for businesses and individuals in the UAE, as it clarifies the legal thresholds and timelines for initiating insolvency cases, which can have significant financial and legal consequences. (Cabinet Resolution No. (47) of 2021, 2021)
What is the scope and purpose of this law?
The scope of this Cabinet Resolution is to amend certain provisions of Federal Decree-Law No. (19) of 2019 Regarding Insolvency. Specifically, it sets the debt thresholds for debtors and creditors to file for insolvency and liquidation proceedings, and adjusts the timeframes for such filings. (Cabinet Resolution No. (47) of 2021, 2021, Arts. 1-3) The purpose is to strike a balance between protecting debtors from premature insolvency proceedings while also ensuring creditors have adequate recourse to initiate such proceedings when necessary. This is intended to provide clarity and certainty around the legal requirements for insolvency cases in the UAE. (Cabinet Resolution No. (47) of 2021, 2021)
What are the key definitions under this law?
The Resolution does not provide any specific definitions. It amends provisions of Federal Decree-Law No. (19) of 2019 Regarding Insolvency, which would contain the relevant legal definitions. (Cabinet Resolution No. (47) of 2021, 2021)
What are the main obligations and requirements?
The main obligations and requirements under this Resolution are:
- Debtor's obligation to file for insolvency: A debtor is required to file an application to initiate insolvency and liquidation proceedings if their debt amount exceeds AED 250,000. (Cabinet Resolution No. (47) of 2021, 2021, Art. 1)
- Creditor's right to file for insolvency: A creditor or group of creditors is entitled to file an application to initiate insolvency and liquidation proceedings against a debtor if the debt amount exceeds AED 1,000,000. (Cabinet Resolution No. (47) of 2021, 2021, Art. 2)
- Timeframe for filing insolvency applications: The timeframe for debtors and creditors to file insolvency and liquidation applications has been extended from 50 to 65 working days. (Cabinet Resolution No. (47) of 2021, 2021, Art. 3)
What are the penalties for non-compliance?
The Resolution does not specify any penalties for non-compliance. It only amends the debt thresholds and timeframes for filing insolvency applications, without introducing any new penalty provisions. (Cabinet Resolution No. (47) of 2021, 2021)
How does this law interact with other UAE legislation?
This Cabinet Resolution amends specific provisions of Federal Decree-Law No. (19) of 2019 Regarding Insolvency. It does not repeal or replace the Insolvency Law, but rather modifies the debt thresholds and timeframes set forth in Articles 28 and 29 of that law. (Cabinet Resolution No. (47) of 2021, 2021, Arts. 1-3)
When did this law come into effect?
This Cabinet Resolution came into effect on 17 May 2021, the day following its publication in the Official Gazette No. 702. (Cabinet Resolution No. (47) of 2021, 2021, Art. 4)
Source Documents
This article analyses Cabinet Resolution Regarding the Determination of the Debt Amount Requiring the Debtor to File an Application to Initiate Insolvency and Liquidation Proceedings and the Amendment of Certain Timeframes Set Forth in Federal Decree by Law Regarding Insolvenc 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.