UAE bankruptcy law in early draft stages - official

The United Arab Emirates  government has an initial draft for a new bankruptcy law, an official at the ministry of economy said, a move seen simplifying existing legislation for lawyers and companies.
 
Lubna Qassim, director of economic legislations department at the UAE Ministry of Economy, said that although the new legislation was in the early stages, there had been progress since talks to change the existing laws -- considered cumbersome -- began about two years ago.

"There is a draft - yes, it's in the initial stages but now its more than dialogue. It is time that effort is put in for the exit of companies," Qassim said on the sidelines of a conference in Dubai, declining to comment on a timeframe for approval.

She added that the intention was to replace the existing law.

Those championing the need for new UAE-wide legislation say the current laws do not help companies in financial distress or the legal community, and are ridden with slow and ineffective processes.

"In most cases in the past, the courts have not been in favour of applying the bankruptcy law - the tendency has been to go around the bankruptcy law and go straight for liquidation," said Essam Al Tamimi, senior partner at Al Tamimi & Co.