For the purpose of applying the provisions of this Law, the following words and expressions shall bear the meanings assigned thereto respectively, unless the context requires otherwise: The State: The United Arab Emirates. The Ministry: Ministry of Justice. The Minister: Minister of Justice. The Regulatory Authority: The federal or local regulatory government authority designated by the Executive Regulations of this Law. Competent Judicial Authority: Federal judicial council and local judicial authorities, as the case may be. Bankruptcy Court: The court of competent jurisdiction as specified in Article (5) of this Law. Bankruptcy Department: An organizational unit established at federal and local courts in accordance with Article (9) of this Law. The Unit: The Financial Restructuring and Bankruptcy Unit that is established pursuant to Article (12) of this Law. Bankruptcy Register: The register referred to in Clause (5) of Article (13) of this Law. Roster of Experts: A list approved by the Unit as set forth in Clause (3) of Article (13) of this Law. Debtor: The natural or legal person referred to in Clause (1) of Article (3) of this Law and who has ceased to pay off its debts or is experiencing a state of insolvency or financial distress. Financial Restructuring: A set of measures aimed at helping the debtor keep on performing its business activity and paying off its debts through the application of a preventive settlement or plan. Preventive Settlement: A set of measures taken at the request of the debtor, creditors or the regulatory authority, with the aim of helping the debtor keep on performing its business activity and paying its debts through applying a plan. The debtor or its Board of Directors or its managers may be prevented from managing the debtor's assets and business. Such measures shall be ratified and supervised by the Bankruptcy Court, with the assistance of the Trustee, as the case may be. Bankruptcy: A set of measures aimed at settling the debtor's debts vis-à-vis its creditors on a collective basis, through liquidating the debtor's assets and businesses and distributing the liquidation proceeds to the debtor's creditors. Debtor's Debts: Debts owed by the debtor on the date of issuance of the decision to initiate the proceedings in accordance with the provisions of this Law, or those arising from an obligation owed by the debtor before the issuance of the decision to initiate the proceedings. Cessation of Payment: The failure on the part of the debtor to pay off any debt due after (10) days have passed beyond the deadline specified in the relevant notice, even if the debtor's assets are valuable enough to pay off its debts, and even if the debt that has not been paid is secured by securities that are valuable enough to pay off the debt. Instability of the Debtor's Financial Position: The debtor's failure or expected failure to pay off its due debts within three months as a result of an instability of its financial position or experiencing financial distress. Entry: Inserting a note in the commercial register, bankruptcy register or any other register designated for registering the traders or professionals. Composition: An agreement between the debtor and its creditors to settle the debts after a final judgment establishing the debtor's bankruptcy is rendered. The Debtor's Assets: All movable and immovable properties owned by the debtor inside and outside the State, as well as all the financial rights owed to the debtor by third parties, whether payable immediately or later, and the rights connected with any of them, in addition to any other item that may have a current or future financial value, be it in the debtor's possession or in the possession of third parties, and whether due or undue, including moral rights, pledged and unpledged property, but not including the debtor's assets that may not be attached in accordance with the provisions of the legislation in force in the State." Debtor's Business: Business activities the debtor was practicing or which are still practiced by the debtor, at the time of performing any of the measures described in this Law. Bankruptcy Estate: All of the debtor's assets that are subject to bankruptcy proceedings in accordance with this Law. Trustee: The natural or legal person who is appointed to carry out and bankruptcy proceedings in accordance with the powers conferred upon him under this Law. Controller: A person responsible for supervising the performance of preventive settlement, and bankruptcy declaration measures. Insider: A person who ex officio is familiar with undisclosed information in relation to the debtor's business, assets, person, financial position or management. The members of the Board of Directors and the administrative staff of the debtor and its subsidiaries and the parent company shall all be deemed insiders. Announcement: The publication in two widely-circulated electronic or paper daily newspapers released in the State; one of which is published in Arabic and the other in English, or in any other way determined by the court or the Bankruptcy Department. Related Party: The Related Party shall include: 1. If the debtor is a natural person: a. The debtor's spouse, relative by blood or affinity up to the third degree and persons who, by the nature of their activity, have access to information in relation to the debtor's financial situation, including the chief financial officer, internal and external control officers or the debtor's partner in a partnership. b. For the purposes of this Law, the marital bond shall be deemed effective even if the marriage occurs after the transaction has been completed or where the marital bond ends during the year preceding any transaction related to the underlying disposition. 2. If the debtor is a legal person. a. The subsidiaries of such legal person. b. Members of the Board of Directors or senior executive management of the legal person. c. Members of the Board of Directors or senior executive management of the subsidiary company. d. Every person who owns (5%) or more of the shares of the legal person or any of its subsidiaries. e. Relatives up to the third degree or partners of the persons and entities specified in clauses (a, b, c and d) above. f. Savings funds for persons working in the legal person. g. Enterprises, joint ventures and partnerships between the legal person and any other entity. h. Companies whose members of the Board of Directors or of the senior executive management and their relatives up to the third degree have the direct or indirect ability to exercise effective influence over the legal person. i. A person who ex officio is able to get access to internal information on the financial position of the debtor, including the chairman and members of the Board of Directors, the Director General and the CFO, the internal and external auditors or the representative of the legal person, as well as relatives of the above-mentioned persons up to the third degree. j. Any natural person charged with paying off the debtor's debts. Discontinuance of Claims: The suspension of any action or executive measure initiated against the debtor as long as the same is related to its assets or debts, with the exception of labor actions and personal status actions, provided that estate-related actions are excluded from personal status cases. Ranking of Creditors: Ranking of the categories of creditors by similarity of their rights with respect to the debtor as follows: 1. Creditors with ordinary debts. 2. Creditors with debts secured by a mortgage, a special lien over movable or immovable property or a general lien over the debtor's assets For the purpose of discussing the preventive settlement proposal, the plan or for any other purpose stipulated in this Law. Required Majority: The majority required to consider the matter presented to the creditors' meeting approved. Such majority is established when voting is made according to the ranking of creditors and the following conditions are met: 1. Creditors having at least more than half of the debts must be attending the meeting during which the voting takes place. 2. The approval of the creditor or creditors having two-thirds of the debts represented at the meeting must be present. Viability of the Debtor's Business' Continuation: The debtor's ability to pay off its debts or to get its business back to profitability upon approval of the preventive settlement or proposal. This ability is proven according to a technical report to be drawn up by the Trustee. Existing Business: It is an economic enterprise that is sold on the basis of the assumption that it will continue to carry out its activities, including its physical and moral elements such as the trade name, industrial or commercial licenses or other licenses, real estate, movables, tools, equipment, usufruct or lease agreements, commercial reputation and contact with customers, in addition to other physical and moral elements that make up that business and are necessary for continuation of carrying out the activity. Precautionary Measures: Measures taken by the court with the aim of safeguarding and managing the debtor's assets or bankruptcy estate and precluding all fraudulent acts to conceal the same, including affixation of seals on the debtor's business premises or appointing a temporary Trustee to manage the debtor's assets or setting restrictions on the debtor or any debtor-related party with regard to disposing of its property or preventing it and any members of the Board of Directors, managers, members of the Board of Directors or managers of any company related to the debtor from traveling during a certain period or until a specific measure is taken. Financial Emergency: An incident that befalls the debtor, resulting in a disturbance in its financial situation and its inability to pay off its debts or its cessation of payment as a result of a general situation that affects trade or investment in the State, such as an outbreak of an epidemic, a natural or environmental disaster, a war or other events. The reason for such situation and its duration shall be determined by a decision of the Cabinet based on the Minister's proposal. Day: The formal working day in the State. Exchange Rate: The exchange rate of the UAE dirham against foreign currencies as announced by the Central Bank of the UAE (CBUAE). Balance Sheet: The debtor's balance sheet and profit and loss account.
Interpretation and application must be checked against the official text and current version.