Financial Restructuring and Bankruptcy Law — articles 201–297

1. Any stakeholder may request invalidation of the composition if the insolvent debtor fails to abide by its conditions. 2. The composition shall be invalidated in any of the following cases: a. If, after being ratified …

1. An application to invalidate or rescind the composition shall be submitted to the Bankruptcy Department by any of the creditors, accompanied by all supporting documents, data and information indicating that either of …

1. If the application for invalidation or rescission of the composition and its attachments reveal its seriousness, the Bankruptcy Court shall issue a decision admitting the application, not later than (10) ten days from…

1. The decision to admit and refer the application for the invalidation or rescission of the composition to the Bankruptcy Court shall be served. Furthermore, it shall be recorded and served upon the debtor, creditors, t…

The decision referred to in Article (204) of this Law shall be deemed annulled by force of law, with its consequences, in any of the following cases: 1. Issuance of a judgment by the Bankruptcy Court dismissing the appli…

Subject to the provisions of Articles (202) and (203) of this Law, when the investigation is conducted with insolvent debtor with regard to the crime of bankruptcy fraud after ratifying the composition or after issuing a…

1. The Bankruptcy Court shall adjudicate the application submitted regarding the invalidity or rescission of the composition within (10) ten days from the date of the first hearing thereof. 2. If the court orders that th…

The trustee shall call the new creditors to submit their debt documents in accordance with debt verification procedures. New debts shall be verified in accordance with those procedures, without re-verifying previously-ap…

Invalidating the composition shall results in the discharge of the bona fide surety, who guarantees the implementation of the terms of the composition. Rescission of the composition shall not result in the discharge of t…

1. After the composition is held invalid or rescinded, the creditors shall recover their full debts, with respect to the insolvent debtor only, and such creditors shall become part of the group of creditors with their fu…

The provisions stipulated in this Part shall apply to the proceedings in relation to the preventive settlement, and bankruptcy declaration, in matters with no special provision in this Law.

1. The owner of the assets in the possession of the debtor may, after obtaining permission from the Bankruptcy Court, recover those assets if he proves that he will sustain serious damage as a result of not recovering th…

Creditors with secured debts may, after obtaining the permission of the Bankruptcy Court, initiate the enforcement proceedings against the assets that serve as security for their debts or exercise their rights stipulated…

1. The trustee, the debtor and the Unit, where the debtor is supervised by the regulatory authority, shall be notified of any application submitted by secured creditors in accordance with Article (213) of this Law, not l…

1. The Bankruptcy Court shall issue its decision not later than (10) ten days from the date of submitting the application for sale permission. 2. If the Bankruptcy Court issues its decision permitting the sale, the credi…

The Bankruptcy Court may refuse to grant sale permission, whether the debt is subject to preventive settlement proceedings, or bankruptcy declaration, based on an objection submitted thereto by the debtor, the trustee or…

The trustee or debtor may offer to the secured creditors an alternative guarantee, provided that the alternative guarantee is equivalent to the existing guarantee. If they do not accept this offer, the Bankruptcy Court m…

The trustee or the debtor may, as the case may be, after obtaining permission from the Bankruptcy Court, pay off the secured debt for the sake of using the pledged assets for the benefit of the remaining creditors.

1. If there is a group of debtors who are liable for a single debt, and a decision is issued to initiate proceedings against any of them on such a debt, the decision shall not have any effect on the other co-debtors, unl…

1. If a creditor collects part of the debt from any of the co-principal debtors, and then a decision is issued to initiate the proceedings for the rest of the co-debtors or any of them, the creditor may only get involved…

1. If a decision is issued to imitate the proceedings for all co-principal debtors at once, the creditor may get involved in all proceedings for each co-debtor with all of its debt until he recovers the debt in full, inc…

1. If an estate is transferred to the debtor, the latter shall notify the trustee or the creditors, as the case may be. Its creditors shall only have a right over such estate after the decedent's creditors have recovered…

1. After the issuance of the decision to initiate the proceedings, the debtor may not repay its debts. 2. The debtor may, subject to prior approval of the Bankruptcy Court, pay off its debts arising from the rights of em…

1. It is not permissible to set off debts payable after the decision to initiate the proceedings, unless the same is based on the implementation of the preventive settlement proposal or the plan or based on a Bankruptcy …

The remainder of the debt owed to the creditor, after the set-off is carried out, shall be included in the debtor's debts and occupy the same rank as the original debt. The remainder owed to the debtor shall also be incl…

The person, who has subrogated the creditor based on an agreement, may not demand a setoff between the rights transferred to them by the creditor and the debts owed by them to the debtor, and shall fulfill the rights of …

1. After the issuance of the decision to initiate the proceedings, the debtor or the trustee may not undertake any of the following actions without obtaining the permission from the Bankruptcy Court: a. Distribution of p…

1. It is permissible that the goods, ownership interests, real estate and any other assets, which are kept in the debtor's possession as a bailment or for the purpose of being sold on behalf of their owner or for the pur…

The owner may recover the price of the goods, ownership interests or real estate which the debtor sold on behalf of their owner, if the price has not been paid in cash or by a negotiable instrument or by set-off in a cur…

In the cases referred to in Articles (228) and (229) of this Law, the recovering party shall hand over to the trustee the rights owed to the debtor.

1. If the sale contract is terminated by virtue of a judgment or a condition in the contract before a decision is issued to initiate bankruptcy proceedings with respect to the purchaser's debt, the seller may recover the…

1. If a decision is issued to initiate bankruptcy proceedings for the purchaser before paying the price and the goods are still in the seller's possession, the goods have not yet entered the purchaser's warehouses or the…

If a decision is issued to initiate bankruptcy proceedings regarding the purchaser's debt before paying the price and after the goods have entered to its warehouses or the warehouses of its agent authorized to sell them,…

1. Negotiable instruments and other instruments of value handed over to the debtor may be recovered to collect their value or to allocate them for a specific payment, if they are found in kind in the debtor's assets and …

Banknotes deposited with the debtor as a bailment may not be recovered unless the recovering party proves their specific characteristics and the specific characteristics of banknotes shall be proven by all means of evide…

1. Any person shall have the right to recover from the debtor's assets any items proven to be owned by such a person. If the debtor or the trustee, as the case may be, refuses to return the items, the dispute shall be re…

It is not permissible for either spouse to recover from the other spouse's assets the gifts and donations given thereto by its spouse during the marriage by the way of disposition between the living or will after death, …

1. Each of the spouses may recover from the other spouse's assets its movable and immovable assets if it proves its ownership thereof, and these assets remain inclusive of the rights that the third party has legally acqu…

Unless there is a special provision in this Chapter, the provisions of this Law shall apply to preventive settlement, and bankruptcy proceedings undertaken regarding corporate debts.

1. The company manager, the liquidator or third parties may not submit an application for initiation of proceedings in accordance with the provisions of this Law without obtaining approval to do so from the majority of t…

If the debtor is a company and it is decided to initiate proceedings regarding its debts, adjudication of every application whose subject is the liquidation of the company or its placement under judicial receivership, sh…

The trustee shall represent and act on behalf of the company that has been declared bankrupt in every matter in which the Law requires taking opinion, the appearance or approval of the Board of Directors, of the bankrupt…

1. With the exception of companies subject to preventive settlement proceedings, if any partners or shareholders are indebted to the company due to non-payment of the remainder of their shares in the capital or for any o…

1. The application for initiation of the proceedings submitted regarding the company's debt shall be considered to be submitted at the same time regarding the debt of each of the Active Partners therein on the date of su…

The Bankruptcy Court may consider the application for the initiation of proceedings submitted regarding the company's debts as submitted regarding the debt of any person who used the name of this company and acted on its…

1. If the company is declared bankrupt, the Bankruptcy Court may, upon the request of the trustee, the Unit, where the debtor is supervised by the regulatory authority, or any of the creditors, oblige the members of the …

If, after an inventory of the debtor's assets, it becomes clear that their value does not exceed the value specified in the Executive Regulations, the court may, sua sponte or upon the motion of the debtor, the trustee o…

1. Notwithstanding the provisions of Article (185) of this Law, if bankruptcy proceeding ends for the debtor referred to in Article (247) of this Law, this debtor has the right to submit an application to the Bankruptcy …

1. The debtor's discharge of debts in accordance with Article (248) of this Law may not result in the debtor recovering assets under liquidation and distribution in accordance with the provisions of this Law in a way tha…

The debtor may not be discharged from the remainder of the debt in accordance with Article (248) of this Law in the following cases: 1. If the debt is owed under the Personal Status Law, or arises from debts owed to the …

As an exception to the provisions of this Law, the provisions of this Chapter and the decisions issued in implementation of its provisions shall apply to proceedings for preventive settlement, or bankruptcy declaration d…

If the debtor submits an application for initiation of the proceedings for the preventive settlement, or bankruptcy declaration during an emergency financial crisis, the Bankruptcy Court may admit the application and tak…

1. If the Bankruptcy Court admits the debtor's application stated in Article (252) of this Law, the debtor may ask the court to grant him a period not exceeding forty (40) days to negotiate with the creditors to reach an…

1. The Bankruptcy Court shall not take any precautionary measures on any of the debtor's assets necessary for the continuation of its business during the period of the emergency financial crisis, including affixing seals…

If the application for the initiation of proceedings was submitted by the debtor or creditor and was admitted by the Bankruptcy Court before the emergency financial crisis, the Bankruptcy Court may amend the deadlines an…

1. If the debtor is a legal person and ceases to repay the debts owed thereby due to the emergency financial crisis, the members of the Board of Directors and managers shall not assume liability if they dispose of the de…

If the debtor's application for the initiation of preventive settlement and proceedings is admitted in accordance with Article (252) of this Law, the Bankruptcy Court may permit the debtor, based on its request, to obtai…

Any interested party may file a grievance before the Bankruptcy Court when the debtor or trustee commits any of the following acts: 1. If it failed to such party of attending any of the creditors' meetings or to inform i…

Any interested party may file a grievance before the Bankruptcy Court if the Bankruptcy Department fails to perform any of its obligations stipulated in this Law.

The grievance shall be submitted in accordance with this Part, not later than (10) ten days from the date of the Grievant's knowledge of the aggrieved incident. If this incident is subject to notification or announcement…

1. The grievance shall be submitted to the Bankruptcy Department which shall notify the trustee, the Unit, where the debtor is supervised by the regulatory authority, the controller and the debtor if the grievance was su…

1. The grievance shall not entail the suspension of the proceedings unless the Bankruptcy Court decides otherwise. 2. The Bankruptcy Court may request the Grievant to provide an in-kind or bank guarantee issued by any of…

1. Any interested party may file an appeal against the Bankruptcy Court's decision before the Court of Appeal, not later than thirty (30) days from the date of service or notification of the decision. 2. Judgments issued…

1. The challenge shall be submitted to the Bankruptcy Department, which shall register the same with the Court of Appeal. The Court shall set a hearing to consider such challenge within (30) thirty days from the date of …

1. The Bankruptcy Department shall refer the challenge file and the memorandums it has received to the Court of Appeal within (10) ten days from the end of the period referred to in Article (264.2) of this Law, provided …

The penalties stipulated in this Part shall not prejudice to any more severe penalty stipulated in any other law.

The trustee and controller shall be considered a public employee with regard to actions for which the laws have established a penalty or whose punishment has been harshened if committed by a public employee.

Any debtor, whose bankruptcy has been declared based on a final judgment, and who, after having ceased to repay its debts, commits any of the following acts, shall be considered to have committed bankruptcy fraud and sha…

The chairman and members of the company's board of directors and its managers, auditors and officers responsible for its liquidation or, shall be punished with imprisonment for a period not exceeding (5) five years and /…

Any debtor, who has been declared insolvent debtor by a final judgment and is proven to have committed any of the following actions, shall be considered insolvent debtor by default and shall be punished with imprisonment…

In the event that a final judgment is issued declaring the bankruptcy of a company, the members of its Board of Directors, managers and liquidators shall be punished with imprisonment and / or a fine not exceeding five h…

If the criminal actions are filed for bankruptcy fraud or bankruptcy by default, or where a judgment is issued in accordance with the provisions of the foregoing Articles, the proceedings for preventive settlement,, bank…

1. A penalty of imprisonment and / or a fine of not more than (AED 1,000,000) a million UAE dirhams shall be imposed on any trustee who embezzles the debtor's assets during his management. 2. The court shall order that t…

1. Whoever steals, embezzles or conceals the debtor's assets while being aware that a decision has been issued to initiate bankruptcy declaration proceedings, even if the debtor's spouse, any of their ascendants or desce…

1. A penalty of imprisonment and / or a fine of not more than (AED 300,000) three hundred thousand UAE dirhams shall be imposed on any creditor of a debtor in respect of whom a decision to initiate proceedings has been i…

Whoever fraudulently submits fictitious debts in their name or in the name of third parties shall be punished with imprisonment and / or a fine not exceeding (AED 500,000) five hundred thousand UAE dirhams.

Any debtor who commits any of the following acts shall be punished with imprisonment and / or a fine not exceeding (AED 500,000) five hundred thousand UAE dirhams: 1. Intentionally conceals all or any of their assets, wi…

Any creditor, who commits any of the following acts shall be punished with imprisonment for a period not exceeding (2) two years and / or a fine not exceeding (AED 200,000) two hundred thousand UAE dirhams: 1. Deliberate…

The penalty of imprisonment for a period not exceeding one year and / or a fine of not more than (AED 200,000) two hundred thousand UAE dirhams shall be imposed on whoever: 1. Is not a creditor and gets involved in the d…

Whoever abstains from executing a decision issued by the Bankruptcy Court in accordance with this Law in respect of submitting data, information or documents or giving testimony, shall be punished with imprisonment for a…

If the Bankruptcy Court decides to initiate preventive settlement or proceedings in accordance with this Law, any criminal proceedings that have been initiated or will be initiated against the debtor shall be stayed, if …

1. The effect of suspension of the criminal proceedings referred to in Article (281) of this Law shall continue until the Bankruptcy Court issues a decision to ratify or reject the preventive settlement proposal and plan…

The Bankruptcy Department shall, within (10) ten days from the date of issuance of the criminal judgment for any of the crimes stipulated in this Law, serve its judgment and record the same in the Bankruptcy Register and…

When a court renders conviction judgment on the crimes stipulated in Articles (278, 279, and 280) of this Law, the court may order that the convict be prohibited from managing any company or practicing any business, for …

Unless otherwise stipulated in this Chapter, the debtor declared bankrupt shall recover the rights which have been denied to them under the provisions of this law, upon the lapse of one year from the bankruptcy proceedin…

1. A judgment shall be issued to establish rehabilitation of the insolvent debtor, even if the period stipulated in Article (285) of this Law has not expired, if the insolvent debtor pays all of his debts, including the …

1. Rehabilitate may only be granted to an insolvent debtor who has been convicted of any of the crimes in relation to the bankruptcy fraud or bankruptcy by default after the lapse of (3) three years from the execution of…

The insolvent debtor shall be rehabilitated after their death upon motion of any of the heirs, and the dates stipulated in Article (285) of this Law shall be calculated as of the date of death.

If a creditor willfully refuses to collect their debt or is absent, or where it is not possible to identify their place of residence, the debt may be deposited in the treasury of the Bankruptcy Court, and a deposit slip …

1. The application for establishing rehabilitation, accompanied by supporting documents, shall be submitted to the Bankruptcy Department. The Bankruptcy Department shall send the application within (10) ten days from the…

The Public Prosecution shall, within (10) ten days from the date of its receipt of a copy of the rehabilitation application, submit to the Bankruptcy Department a report containing data including the type of bankruptcy, …

Any creditor, who has not collected their right, may submit an objection to the rehabilitation application within (10) ten days from the date of service of the application's summary. The objection shall be filed under a …

1. The Bankruptcy Department shall, within ten (10) days of receiving the Public Prosecution's response, transfer the file of the rehabilitation application and the objections to the Bankruptcy Court, accompanied by a re…

The Bankruptcy Court shall decide on the rehabilitation application under a final judgment. If the Bankruptcy Court dismisses the application, the same may only be filed again after one year following the date of issuanc…

1. If, before the rehabilitation application is decided on, investigations are conducted with the insolvent debtor regarding any of the bankruptcy crimes or where a criminal action has been initiated against them in this…

If a judgment of conviction is rendered against the insolvent debtor on the grounds of any of the bankruptcy crimes after a judgment establishing their rehabilitation had been rendered, the latter judgment shall be consi…

The judgment establishing rehabilitation shall entitle to the insolvent debtor to recover their political rights and shall remove all restrictions on their civil capacity to acquire rights, assume obligations and occupy …