Federal Decree by Law Concerning Insolvency

Article 2 — Scope of Application ¶

Part Two: Settlement of Financial Liabilities

Article 27 — Effect of Nullification of Scheme ¶

Part Three: Insolvency of Debtor and Liquidation of his Assets

Article 60 — Objection to the Rehabilitation Application ¶

Part Four: Provisions Dedicated for the Expert and Trustee

Article 69 — Article (70) Publication and Enforcement of the Law by Decree ¶

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Federal Decree by Law No. (19) of 2019 Concerning Insolvency

We, Khalifa bin Zayed Al Nahyan President of the United Arab Emirates;
-Upon reviewing the Constitution;
-Federal Law No. (1) of 1972, concerning the Competencies of Ministries and Powers of the Ministers,
-Federal Law No. (5) of 1985 Promulgating the Civil Transactions Law, as amended;
-Federal Law No. (3) of 1987 Promulgating the Penal Code, as amended;
-Federal Law No. (10) of 1992 Promulgating the Law of Evidence in Civil and Commercial Transactions,
-Federal Law No. (11) of 1992 Promulgating the Civil Procedure Code, as amended;
-Federal Law No. (35) of 1992 Promulgating Penal Procedure Code, as amended;
-Federal Law No. (18) of 1993 on Promulgating the Commercial Transactions Law, as amended;
-Federal Law No. (18) of 1995 concerning Simple Crafts;
-Federal Law No. (4) of 2004 concerning Financial Free Zones;
-Federal Law No. (1) of 2006 concerning Electronic Transactions and Commerce;
-Federal Law No. (7) of 2012 Regulating the Expertise Profession before Judicial Authorities;
-Federal Law No. (2) of 2015 concerning Commercial Companies, as amended;
-Federal Law by Decree No. (9) of 2016 concerning Bankruptcy;
-Federal Law No. (13) of 2016 concerning the Judicial Fees Before Federal Courts;
-Federal Law No. (20) of 2016 concerning the Mortgage of Movable Properties;
-Federal Law by Decree No. (14) of 2018 concerning the Central Bank & Regulation of Financial Institutions;
-And upon the proposal of the Minister of Finance, and the approval of the Cabinet;
Promulgate the following Law by Decree:

Part One: Definitions and Scope of Application

Article (1) Definitions
In application of the provisions of this Law by Decree, the following words and phrases shall have the meanings assigned to them: State; Ministry; Minister; Court; Debtor; Debtor's Debts; Debtor's Assets; Debtor's Businesses; Interested Party; Exchange Rate; Measures; Experts' Roster; Expert; Trustee; Scheme; Insolvency. [Preview only - full definitions not captured verbatim]

Article (2) Scope of Application
The provisions of this Law by Decree shall be applicable to debtors who are not subject to the provisions... [preview truncated]

Part Two: Settlement of Financial Liabilities

Article (3) Submittal of Application
The debtor may submit an application to the court without any litigation against anyone to settle his... [preview truncated]

Article (4) Non-completion of Required Data
1. If the debtor could not provide any of the documents or data required subject to the provisions o... [preview truncated]

Article (5) Payment of Fees, Costs and Expenses
1. The debtor shall pay the judicial fees. 2. The court shall estimate the fees of the experts and t... [preview truncated]

Article (6) Taking Measures
The court may, at the request of any interested party or upon its discretion, take necessary measure... [preview truncated]

Article (7) Deciding on the Application
1. The court shall decide on the request without a declaration or pleading within a period not excee... [preview truncated]

Article (8) Appointment of Expert
1.The court shall appoint, in the decision to commence the procedures of settlement of financial lia... [preview truncated]

Article (9) Submitting Debt Documents
1. The creditors shall, even if their debts are not due or guaranteed, provide the expert, within th... [preview truncated]

Article (10) Debts' Report
1. The expert shall prepare a list of all creditors of the debtor and specify the addresses of each ... [preview truncated]

Article (11) Examining the Report
1. The court shall examine the report prepared by the expert in order to verify the debts of the deb... [preview truncated]

Article (12) Application Dismissal
In all events, the court shall decide to stop the procedures of settlement of financial liabilities ... 1. If it is proved to the court that the debtor has made any action or abstained to make any action ... [preview truncated]

Article (13) Presenting the Scheme to Creditors
1. The expert shall prepare the scheme in cooperation with the debtor, provide a copy for creditors ... [preview truncated]

Article (14) Replacement of Guarantees
1. The expert may propose an alternative guarantee for any creditor of guaranteed debt, provided tha... [preview truncated]

Article (15) Voting on the Scheme
1. The meeting of creditors stipulated in Clause (3) of Article (13) of this Law by Decree shall not... [preview truncated]

Article (16) Persons with No Right to Vote
1.The following persons may not participate in the creditors meeting or vote therein: a. Spouse... [preview truncated]

Article (17) Amendment of Scheme
1.The debtor or any of the creditors may propose amendments to the scheme during the meeting. Credit... [preview truncated]

Article (18) Approval of the Scheme
1. Approving the scheme shall be with the majority of votes of attending creditors whose debts are n... [preview truncated]

Article (19) Extension of Voting Time
The court may, at the request of the expert if the required approval to the scheme is not obtained, ... [preview truncated]

Article (20) Ratification of the Scheme
1. The court shall ascertain that the scheme includes that all creditors who are affected thereby sh... [preview truncated]

Article (21) Management of Scheme Execution
1. The expert shall work as a supervisor of the scheme during the execution period and he shall foll... [preview truncated]

Article (22) Selling Properties of the Debtor
The expert shall sell the properties of the debtor that are decided to be sold subject to the scheme... [preview truncated]

Article (23) Scheme Execution Report
1.The expert shall prepare a report on the progress of the scheme execution every three (3) months a... [preview truncated]

Article (24) Amendment of Scheme after Commencement of Execution
If the expert deems it necessary to make amendments to the scheme during execution, which would make... [preview truncated]

Article (25) Termination and Completion of Settlement Procedures
1. The court shall decide to terminate the procedures of settlement of financial liabilities of the ... [preview truncated]

Article (26) Nullification of Scheme
1. The court shall issue a decision to set aside the approved scheme if it is shown to the court tha... [preview truncated]

Article (27) Effect of Nullification of Scheme
The court shall order within its decision to nullify or terminate the scheme in accordance with the ... [preview truncated]

Part Three: Insolvency of Debtor and Liquidation of his Assets

Article (28) Debtor's Submittal of Application
1. The debtor shall submit an application to the court to commence the procedures of his insolvency ... [preview truncated]

Article (29) Right of Creditor to Submit the Application
1. The creditor or a group of creditors whose credit is not less than two hundred thousand (200,000)... [preview truncated]

Article (30) Amendment of Financial Values and Periods
The Cabinet may, upon a recommendation from the Minister, issue a resolution to amend the financial ... [preview truncated]

Article (31) Payment of Fees, Costs and Expenses
1. Subject to the provisions of Articles (28) and (29) of this Law by Decree, the applicant shall pa... [preview truncated]

Article (32) Appointment of the Trustee
1. The court shall, if decided to commence the procedures of the debtor's insolvency and liquidation... [preview truncated]

Article (33) Publication of Appointment Decision
The trustee, within (5) five working days as of the date of the court's decision to commence the pro... [preview truncated]

Article (34) Submittal and Examination of Claims
1. The trustee shall require the creditors to submit their claims within twenty (20) working days as... [preview truncated]

Article (35) Admission of Claims and Granting Grace Period
1. The court shall determine, after reviewing the report of the trustee, the claims to be admitted a... [preview truncated]

Article (36) Managing the Procedures of Liquidation of Funds
1. If the court decides to commence the procedures of insolvency and liquidation of the funds, the t... [preview truncated]

Article (37) Requesting Information
The trustee may require information relevant to insolvency and liquidation from any person who has s... [preview truncated]

Article (38) Right to Repayment
1. Subject to Article (8) of this Law by Decree, the expert shall ensure that publishing the decisio... [preview truncated]

Article (39) Assets Exempted from Liquidation Procedures
The following shall not be included in the assets of the debtor that are subject to procedures of in... [preview truncated]

Article (40) Selling Debtor's Domicile
Without prejudice to the applicable legislations in the State, the trustee may apply to the court af... [including condition 6:] That there are no legal or regulatory reasons preventing the disposal of the house of the debtor. [preview truncated]

Article (41) Persons Prohibited from Purchasing Debtor's Assets
1.The debtor may not provide a purchase offer, whether personally or through a purchase agent, to pu... [preview truncated]

Article (42) Order of Priority on Debtor's Assets
1. The trustee shall, after the approval of the court, distribute the revenues of liquidation accord... [preview truncated]

Article (43) Distribution of Revenues of Selling Debtor's Assets
1. The trustee may distribute the revenues of liquidation after each sale transaction or after aggre... [preview truncated]

Article (44) Procedures in Specific Conditions
1. If the debtor hinders the procedures of insolvency and liquidation of assets in a way that preven... [preview truncated]

Article (45) The Report of Liquidation Procedures Progress
The trustee shall inform the court and the debtor every month of the progress of the proceedings of ... [preview truncated]

Article (46) Closure of Insolvency and Liquidation Procedures
1. After completion of the final distribution of the debtor's funds to creditors, the court shall is... [preview truncated]

Article (47)
The court is entitled to take necessary measures against the debtor if he committed or starts to com... [preview truncated]

Article (48)
The procedures of the declaration of insolvency and liquidation of the debtor's assets as stipulated... [preview truncated]

Article (49)
The trustee shall notify the heirs of the deceased to nominate a representative thereof in the proce... [preview truncated]

Article (50) Dispositions of Debtor after Commencing the Procedures
The decision of the court to open the proceedings of insolvency and liquidation of funds of the debt... [preview truncated]

Article (51) Suspension of Procedures
1. During the procedures of insolvency and liquidation of assets, no lawsuits may be filed or procee... [preview truncated]

Article (52) Interests and Guarantees Provided
The decision to commence the procedures of insolvency and liquidation of assets shall result in the ... [preview truncated]

Article (53) Enforcement of Contracts
1. The decision to commence the procedures of insolvency and liquidation of assets shall not result ... [preview truncated]

Article (54) Prohibiting Dispositions and Entry in the Register
Subject to Article (50) of this Law by Decree, declaring insolvency and liquidation of the debtor's ... [preview truncated]

Article (55) Lapse of Time
Unless the provisions of this Chapter stipulate otherwise, the rights from which the debtor has been... [preview truncated]

Article (56) Rehabilitation Due to Debt Fulfilment
The debtor whose insolvency was declared shall be rehabilitated, even if the time stipulated in Arti... [preview truncated]

Article (57) Settlement and Discharge
The debtor whose insolvency was declared may be rehabilitated, even if the time stipulated in Articl... [preview truncated]

Article (58) Rehabilitation of Deceased Debtor
The debtor whose insolvency was declared shall be rehabilitated after his death at the request of th... [preview truncated]

Article (59) Rehabilitation Application
The application for rehabilitation shall be submitted with supporting documents to the court that is... [preview truncated]

Article (60) Objection to the Rehabilitation Application
1. Any creditor whose debts were accepted by the court and did not collect his right shall be entitl... [preview truncated]

Part Four: Provisions Dedicated for the Expert and Trustee

Article (61) Replacement
1. The court may at any time replace the expert or the trustee or appoint additional experts or trus... [preview truncated]

Article (62) Fees
The court shall determine the fees of the expert or trustee appointed and such fees shall be paid fr... [preview truncated]

Article (63) Fees collection
1. The expert or trustee shall collect his fees, allowances of costs and expenses incurred from the ... [preview truncated]

Part Five: Penalties

Article (64)
Penalties stipulated in this Law by Decree shall not prejudice any severer penalty stipulated by any... [preview truncated]

Article (65)
Any creditor who commits any of the following acts shall be punished with imprisonment and a fine no... [preview truncated]

Article (66)
A debtor shall be punished with imprisonment for a period not exceeding two years and a fine not les... [preview truncated]

Part Six: Final Provisions

Article (67)
1. If the court decides to commence the procedures of settlement of financial liabilities or proceed... 2. If the court decides to suspend the penal procedures according to the provisions of Clause (1) of... 3. If the debtor obtains a decision from the court to settle his liability towards the creditor hold... [preview truncated]

Article (68)
No appeal may be submitted against any judgment or decision issued by the court during the procedure... [preview truncated]

Article (69)
Any provision contrary to or contravening the provisions of this Law by Decree shall be repealed.

Article 70 — Publication and Enforcement of the Law by Decree ¶

This Law by Decree shall be published in the Official Gazette and shall come into force three months... [preview truncated]

Translated in cooperation with
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