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DIFC enacts new insolvency law, region’s first

Law balances all stakeholders’ needs and facilitates efficient restructuring

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The Dubai International Financial Centre (DIFC) has enacted a new DIFC Insolvency Law, Law No. 1 of 2019, 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.

DIFC, the leading international financial hub in the Middle East, Africa, and South Asia (MEASA) region, said the law ensures that businesses and investors can operate across the region with confidence, with the certainty and access they need to capture opportunities in the MEASA region through Dubai.

The new Insolvency Law and Regulations, which will come into effect on 28 August 2019, introduces a new debtor in possession bankruptcy regime in line with best practice globally which will also place the DIFC at the forefront of complicated debt restructurings. 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 DIFC.

The new law comes after 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.

Read the full law

Source

Dubai Media Office / DIFC