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New UAE bankruptcy law 'within months' |
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News -
Middleeast News
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Wednesday, 16 December 2009 11:43 |
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DUBAI - The UAE will introduce a new law “within months” to deal with cases of corporate bankruptcies in the economic downturn
, local daily Gulf News reported on Wednesday.
"The government is working on issuing a comprehensive bankruptcy-insolvency law that will protect businesses under financial stress... This is in final shape and could come anytime soon," the newspaper quoted Hamad Bu Amim, director-general of the Dubai Chamber of Commerce and Industry, as saying.
The issue of bankruptcy is controversial in the UAE federation, where expatriate owners of failed businesses prefer to flee the country than face jail if they owe money to others.
It is a criminal offence when a cheque is not honoured by the issuer’s bank.
The new bankruptcy law at the federal level could be issued within months, Essam al-Tamimi, managing partner of law firm Al Tamimi and Co, said in the Gulf News report.
Dubai said on Monday it will adopt the insolvency code used in the Dubai International Financial Center, an offshore zone, for use in the emirate and establish a tribunal to hear cases submitted against its debt-laden holding firm Dubai World.
"The government started work on this before the crisis impacted businesses here and it is in an advanced stage," Tamimi said, adding that the UAE government is looking at successful practices of other countries in this regard.
Loan defaults have increased in the UAE in the wake of the global economic crisis, with the real estate sector among the worst hit. - Maktoob
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