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⚠ سرکاری ترجمہ — عربی اصل قانونی طور پر پابند ورژن ہے۔
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Promulgating the Financial and Bankruptcy Law
We, Mohamed Bin Zayed Al Nahyan, President of the United Arab Emirates − Having reviewed the Constitution; − Federal Law No. (1) of 1972 Concerning the Competences of Ministries and Powers of Ministers, as amended; and − Based on the Minister of Justice's proposal, Do hereby promulgate the following decree-law:
The Financial Restructuring and Bankruptcy Law, attached with this Decree-Law, shall enter into force and effect.
The provisions of Civil Procedure Law, as well as the provisions of Law of Evidence in Civil and Commercial Transactions, shall apply to all matters not specifically stipulated in the law attached herewith.
1. The Court shall, sua sponte and without fees, transfer all claims, legal proceedings, grievances and actions, which are currently pending before them and are arising out of the above-referenced Federal Decree-Law No. (9) of 2016, to the Bankruptcy Court in whatever condition they presently exist, as of the date on which the law attached
herewith enters into force.
2. Clause (1) of this Article shall not apply to the legal proceedings and actions that are already adjudicated or those set for pronouncement of judgment or ruling, so that the judgments or rulings rendered in respect thereof shall continue to be subject to the rules regulating the means of challenge that are applicable on their date of issuance.
The Cabinet shall, based upon the Minister's proposal, issue the executive regulations and resolutions deemed necessary for the implementation of the law attached with this Decree Law.
1. Federal Decree-Law No. (9) of 2016 on Bankruptcy, as amended, shall hereby be repealed.
2. Any provision that goes against or conflicts with the provisions of the law attached herewith shall hereby be repealed.
The regulations and resolutions issued in implementation of the provisions of the above-referenced Federal Decree-Law No. (9) of 2016 shall remain in full force and effect until their substitute regulations and resolutions are issued in implementation of, and to such extent that does not conflict with, the provisions of the law attached with this Decree Law.
This Decree Law shall be published in the Official Gazette, and shall enter into force six (6) months following the date of its publication.
Mohamed Bin Zayed Al Nahyan
On: 17 Rabi' I, 1445 H Corresponding to: October 2, 2023
Financial Restructuring and Bankruptcy Law Introductory Part Chapter One General Provisions
Definitions 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 : An organizational unit established at federal and local
Department 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.
Objectives of the Law Upon applying or interpreting the provisions of this Law, the following objectives shall be observed:
1. Maintain the vitality of the national economy.
2. Preserve the rights of creditors.
3. Provide assistance to the debtor to settle its debts with its creditors, in addition to avoiding liquidation of its business and declaration of bankruptcy as much as possible.
4. Enhance the proceedings in a fair, equitable, prompt and organized manner.
5. Ensure fair distribution to creditors and ensure that creditors whose claims are of the same nature are treated on an equal footing.
6. Safeguard and protect bankruptcy estate.
7. Maximize the value of bankruptcy estate as much as practically possible.
Scope of Application
1. The provisions hereof shall apply to:
a. That companies that are subject to the provisions of Commercial Companies Law;
b. Any natural person having the capacity of a trader; and
c. Licensed civil company of a professional nature.
2. The provisions hereof shall not apply to:
a. The companies wholly or partially owned by the federal or local government, and whose establishment laws, memoranda or articles of association provide that they are subject to special provisions that regulate their preventive settlement, or bankruptcy proceedings to the contrary of this law;
b. The companies and establishments established in the free zones that are subject to special provisions that regulate their preventive settlement, or bankruptcy proceedings;
c. The banks, financial institutions and insurance companies licensed by the Central Bank and which are subject to special legislation that regulates their preventive settlement, or bankruptcy proceedings, within the scope of the mechanisms established by such legislation; and
d. The debtor's debts incurred for personal, family or consumption purposes, including the purchase of commodities or services or the purchase of real property for the debtor's personal or family residence.
Notification of Regulatory Authorities No application may be filed in relation to any debt owed by any of the companies and corporate bodies that are supervised by the regulatory authorities unless and until ten (10) days have passed following the notification of the competent regulatory authority.
Bankruptcy Court Federal and local courts shall have the jurisdiction, according to the rules of jurisdiction set forth in the Civil Procedure Law, to adjudicate on the disputes arising out of the application of this law and shall decide on the applications submitted thereto in accordance with the provisions hereof. In addition, the competent judicial authority may designate the courts having the jurisdiction to adjudicate on the disputes arising out of the application of this law and to decide on the applications submitted thereto in accordance with the provisions
hereof. One or more courts or divisions shall be established within the said courts and shall be vested with the jurisdiction to adjudicate on such disputes and applications. Such a court or division, as the case may be, shall be referred to as the Bankruptcy Court.
Experts and Auditors Providing Assistance to Bankruptcy Court
1. The Bankruptcy Court may seek the assistance of a sufficient number of experts and auditors to be selected by the competent judicial authority.
2. If the expert or auditor is not listed in the roster of experts kept with the competent judicial authority, they shall take the oath before the Chief Justice of the Bankruptcy Court to perform their duties faithfully, honestly and truthfully, and to abide by the professional standards and ethics. An oath-taking report shall be drawn up and kept in the expert's file with the Bankruptcy Department.
3. The experts and auditors shall perform expertise duties on every matter for which the court engages an expert.
4. The experts and auditors shall be entitled to remunerations depending on the duties assigned to them by the Bankruptcy Court. such remunerations shall be determined based on a report of the competent judicial authority, and in light of the report to be issued by the Bankruptcy Court on the duties performed by the experts and auditors. The remuneration shall be disbursed from the budget of the competent judicial authority.
Bankruptcy Court's Judgments Judgments rendered by the Bankruptcy Court according to this law shall become immediately enforceable once rendered with no need to be served, and their stay of
execution may only take place in the cases prescribed under this law.
Bankruptcy Court's Decisions Decisions issued by the Bankruptcy Court according to this law shall become writs of execution, and the Bankruptcy Department shall affix the executive form thereon according to the procedures prescribed by law. Such decisions shall become immediately enforceable once issued with no need to be served, their enforcement may not be challenged or stayed unless the Bankruptcy Court decides to reverse or stay the execution of the underlying decision either sua sponte or at the request of the debtor or any of creditors, the Trustee or any other interested party, or based on a judgment to be rendered by the Bankruptcy Court on the stay of execution application that is submitted within the petition of challenging the decision or while the Court of Appeal is hearing the challenge.
Bankruptcy Department
1. An organizational unit to be known as "Bankruptcy Department" shall be established at the Bankruptcy Court's headquarters, and shall be headed a judge whose rank is not less than an appeal judge.
2. The Bankruptcy Department shall have a sufficient number of employees to provide assistance to the Department's manager for carrying out its functions and competences.
Bankruptcy Department's Functions The Bankruptcy Department shall perform the following functions:
1. To receive and register the applications to be received according to the provisions of this law;
2. To serve notices to the interested persons according to the provisions of this law;
3. To ensure that the applications for preventive settlement,, declaration of bankruptcy and others types of applications satisfy the information, data and documents described in this law;
4. To notify the interested persons of the decisions to be issued by the Bankruptcy Court under this law and announce the same;
5. The oversee the management of the debtor's assets and business, ensure the speedy progress of proceedings and enforce the necessary precautionary measures established by the Bankruptcy Court, as described in this law;
6. To meet the creditors in order to discuss with them any matters considered by the Bankruptcy Court. Such meetings shall be chaired by the Head of the Bankruptcy Department or his designee;
7. To summon the debtor or his heirs, clients, employees or any other person in order to hear their statements on any matter related to the debtor's debts, assets or business; and
8. To perform any other functions defined in this law or entrusted thereto by the head of the competent judicial authority.
Submission to Head of Bankruptcy Department The Bankruptcy Department shall submit all applications, notices, objections, grievances and memoranda received thereby to the head of the Bankruptcy Department or his designee as soon as they are received, in order for the appropriate course of actions to be taken with regard thereto. If the matter is related to a proceeding brought before the Bankruptcy Court, the Department shall submit the same to the Court not later than the day following the day of receipt thereof, in order for the Court to take the appropriate course of actions with regard thereto.
Financial Restructuring and Bankruptcy Unit
1. A unit, to be known as the "Financial Restructuring and Bankruptcy Unit", shall be established in the Ministry, and shall comprise a sufficient number of employees having experience and specialty in financial, legal or economic affairs.
2. The Unit shall have an administrative staff to be appointed or assigned under a resolution of the Minister to help perform its duties. In addition, the Unit may seek the assistance of any persons of experience or knowhow to help it perform its functions.
Financial Restructuring and Bankruptcy Unit's Functions The Financial Restructuring and Bankruptcy Unit shall perform the following functions:
1. To coordinate with the regulatory authorities and competent Bankruptcy Courts for managing the financial restructuring and bankruptcy proceedings for the companies and
corporate bodies supervised by the regulatory authorities;
2. To give opinion on the applications filed for initiating the proceedings, preventive settlement proposal, plan, composition and debtor's assets liquidation and distribution plan, in respect of the debts of the companies and corporate bodies supervised by the regulatory authorities, in coordination with the competent regulatory authority;
3. To approve the roster of experts in the financial restructuring and bankruptcy affairs to perform the functions of Trustees or other duties according to the provisions of this law, and to set the conditions and procedures of listing and registration in the roster of experts;
4. To create, and submit to the Minister for approval, a reference schedule showing the fees of Trustees and controllers to be appointed according to the provisions of this law, and any costs incurred by them in connection with the preventive settlement, or bankruptcy proceedings;
5. To create and organize a bankruptcy register in order to record therein the applications filed in relation to financial restructuring and bankruptcy and which are governed by the provisions of this law, and any action taken with regard thereto;
6. To create and organize a register for the persons against whom court judgments are rendered imposing or revoking any restrictions ordered by the court according to the provisions of this law. The Executive Regulations of this law shall specify the form of the register, the data to be listed therein and the persons having the right to get access thereto and the relevant conditions, and all other relevant provisions;
7. To supervise the unified e-platform that is created with the aim of building an all-inclusive database for the purposes of this law, through coordination and electronic linkage with the competent federal and local courts, Bankruptcy Department and other relevant entities;
8. To coordinate with the competent judicial authority for qualifying and training the judges, Trustees and lawyers on the and bankruptcy proceedings performed by the courts, in order to stay up-to-date with the global standards;
9. To submit periodic reports to the Minister on its activities, achievements and suggestions on the duties entrusted thereto;
10. To perform any other functions provided for in this law or entrusted to the unit under a resolution of the Cabinet.
Use of Modern Technology All the procedures set forth in this law may be carried out through modern technology, including, in particular:
1. Submission of applications;
2. Service of notices and notification;
3. Grievances, objections and appeals;
4. Attending and voting on the meetings; and
5. Attending the hearings.
Chapter Two Initiation of Proceedings
Submission of the Application by the Debtor
1. The debtor may submit to the Bankruptcy Department an application for the initiation of preventive settlement, or bankruptcy proceedings, not later than sixty (60) days from the
cessation of payment date or from the date on which it becomes aware of information confirming that it would be unable to pay off its debts when they fall due, unless any of the creditors or regulatory authorities has submitted an application for initiating the proceedings within the aforementioned period. Failure to submit the application within the deadlines stipulated in this clause does not result in the application not being admitted.
2. If the debtor submits an application to initiate bankruptcy proceedings, the debtor shall be prevented from disposing of its property as of the date of the application's submission, and any disposal of its property shall be invalidated as of that date. The same shall not apply to unattachable property or the property necessary to support the debtor and its dependents and the legal costs in relation to the application for the initiation of proceedings. The debtor shall manage its assets and business unless the Bankruptcy Court decides, sua sponte or upon motion of the debtor, any of the creditors, the Trustee, or the unit, if the debtor is supervised by the regulatory authority, to appoint a temporary Trustee to manage the debtor's assets and business.
3. The Executive Regulations of this Law shall determine the minimum amount of debt that the debtor has failed to repay or would have been unable to repay when due, referred to in clause (1) of this Article.
Submission of the Application by Creditors
1. An ordinary creditor or a group of ordinary creditors may submit an application to initiate or Bankruptcy Proceedings in the event that the debtor defaults on any or more debts owed to them, provided that this debt is unconditional, undisputed and payable. In addition, the value of the debt shall not be less than the amount determined by the
Executive Regulations of this Law on the date of submitting the application, provided that the applicant has previously served a notice to the debtor of the necessity to pay off the debt owed by the latter, not later than (30) thirty days from the date of the notice and the debtor has not taken the necessary measures to repay such debt.
2. The provisions of clause (1) of this Article shall apply to creditors whose debts are secured by a mortgage on the debtor's property or a transfer of a right over the cash flows generated from the debtor's property or businesses and to creditors whose debts are secured by a mortgage or lien, provided that the value of the securities guaranteeing their rights on the date of submitting the application is less than the value of the debtor's debt with respect to the individual creditor's application or to the collective creditors' application by a difference not less than the amount determined in the Executive Regulations of this Law for the individual creditor and for the collective creditors.
Creditor's Discontinuance of its Claim for Debt If the creditor or any of the creditors refrains from claiming its debt due to the settlement of such debt or an agreement with the debtor to postpone its repayment or for any other reason after submitting the request, the debtor is not considered to have defaulted if the remaining debt to the remaining creditors is less than the prescribed limit.
Submission of the Application by the Regulatory Authority
1. The regulatory authority may submit an application to initiate proceedings or a bankruptcy application regarding any debtor supervised thereby. In addition, it shall submit evidence that the debtor is in a state of cessation of payment or in a state of
inability or instability in respect of its financial position, provided that it has notified the debtor and grant it an opportunity to respond within a period not exceeding (30) thirty days from the date of notification. Failure to submit the application within the period stipulated in this clause shall not result in the application not being admitted.
2. The Executive Regulations of this Law shall determine the minimum amount of debt that the debtor fails to pay off or is expected to fail to pay off, and also determine the minimum amount of the default in the financial position realized and is expected referred to in clause (1) of this Article.
Multiple Applications
1. If multiple applications are submitted regarding the debts of the same debtor, they shall all be combined, and a single action shall be taken regarding them altogether. If these applications include a preventive settlement application, a application and a bankruptcy declaration application, the submitted applications shall be considered a request to initiate proceedings as an original request and a request to initiate bankruptcy proceedings as an alternative request. The Bankruptcy Court issues its decision not to admit the preventive settlement application.
2. If there are multiple applications submitted by the debtor, the application for the initiation of preventive settlement proceedings shall take precedence over the application, and the application shall take precedence over the bankruptcy declaration application, in addition, the application submitted first shall take precedence and the applications submitted thereafter shall be deemed alternative applications. A decision may not be made on the alternative application unless the court does not issue its decision to admit the original application.
Applications Filed on Corporate Debts
1. If the debtor is a company, it is permissible to submit an application for the initiation of proceedings regarding its debts, even if it is in a state of liquidation or a court order is issued to dissolve the company and it continues as a real company, and the provisions contained in Article (244) of this Law apply to its partners.
2. Admitting the application shall result in the suspension of cases whose subject matter is the liquidation of the company or its placement under judicial receivership until a final decision is issued, unless the Bankruptcy Court decides otherwise.
Applications filed on Debts of a Deceased, Retired or Incapacitated Debtor
1. Subject to the provisions of Article (16) of this Law, an application to initiate the proceedings may be submitted after the death of the debtor, its retirement from trade or its loss of capacity within the two years following the death or the removal of the trader's name from the commercial register or its loss of capacity. Notices shall be sent to the deceased debtor to its last domicile without the need to designate heirs.
2. Subject to the provisions of Article (15) of this Law, the debtor's heirs may submit an application for the initiation of proceedings within the two years following death. If the heirs do not agree to submit the application, it may be submitted by any of them. In this case, the Bankruptcy Court may decide to save the application or admit the application for the initiation of proceedings according to what it deems to serve the interest of the creditors of the deceased debtor and the heirs.
3. The debtor's heirs or their legal representatives shall a person to represent them in the
proceedings in accordance with this Law. Failure to do so within (10) ten days from the date of notification thereof by the Bankruptcy Department, the Bankruptcy Court shall designate any of the heirs to represent them, and the court may dismiss the heirs' representative and appoint another of the heirs or a person acting on their behalf.
4. If the application is submitted by or against an incapacitated debtor, it shall be represented by the Trustee.
Data of the Application The application shall be submitted by the debtor or the regulatory authority, indicating the required proceedings and its reason, the previously-submitted applications and the related measures, if any. The following documents shall be attached to the application:
1. A statement that includes a brief description of the debtor's economic and financial situation and information about its property, in addition to detailed data about its employees, as well as a statement of the value of their dues owed by the debtor, if any.
2. A copy of the debtor's commercial or industrial license and commercial register.
3. A copy of the commercial books or financial statements in relation to the debtor's business for the three (3) fiscal years preceding the date of submitting the application.
4. A statement of the cases filed by and against the debtor, and the estimated amount for each. This statement shall not constitute an acknowledgment by the debtor of the validity of these debts.
5. A statement of all cases, execution proceedings or other proceedings to be halted as a result of the issuance of the decision to initiate the proceeding, in accordance with this Law or based on the Bankruptcy Court's decision.
6. A report including the following information:
a. The debtor's cash flow expectations and profit and loss expectations for the one-year period following the submission of the application.
b. A statement of the names of known creditors and debtors, their electronic and physical addresses, their telephone numbers, the value of their rights or debts and the guarantees provided therefor, if any, as well as the ranking of these creditors and debtors.
c. A detailed statement of the debtor's property and the approximate value of each of such property on the date of submitting the application, as well as a statement of any guarantees or rights of third parties arising therefrom.
d. A statement of real estate dispositions or dispositions of movable and immovable property based on the debtor's records and commercial books, as well as the value of each disposition, its date and the person to whom it was disposed of, within (3) three years before the date of submitting the application, accompanied by a statement from the competent authorities regarding the dispositions of movable or immovable property that have been recorded in the registers of those authorities.
7. Nominate a Trustee nominated by the applicant to assume the duties of the Trustee or bankruptcy Trustee, in accordance with the provisions of this Law.
8. A statement of whether the debtor is able to manage its property and desires to manage the same and the supporting documents thereof, or whether the interest of the creditors requires appointing a Trustee to assume management and the justification and supporting evidence therefor.
9. A statement of any precautionary measures that the interest of creditors requires to be taken, and whether the interest of creditors requires taking them urgently, as well as justification and supporting evidence therefor.
10. A statement of whether or not the debtor for whom an application for a preventive
settlement or is submitted is in need of obtaining financing during the period following the date of issuance of the decision to initiate the proceedings until the approval of the preventive settlement or plan or not, in which former case, a statement of the estimated total value of the financing required during the aforesaid period, its purposes, duration, guarantees and its consequences on the preventive settlement or plan and on the rights of creditors whose debts are secured and other creditors.
11. If the applicant is a representative of the legal person, the application shall be accompanied by a copy of the decision of the competent authority in the company authorizing him to submit an application to initiate the proceedings and a copy of the company's incorporation documents and articles of association and any amendments thereto.
12. Any other information, data or documents that support the information contained in the application or requested by the Bankruptcy Department. In case the applicant fails to provide any of the data, information or documents required in accordance with the provisions of this Article, it shall state the justifications for such failure in his application.
Submission of Data, Information and Documents
1. If the applicant fails to submit data, information and documents in accordance with Article (22) of this Law due to its inability to obtain them from the entity holding the same, the Bankruptcy Court may order any person who has the required information, data and documents to submit them within a period it specifies if it deems them necessary to decide on the application.
2. No person or entity may refrain from submitting the data, documents, and information requested by the Bankruptcy Court to be submitted on the grounds that the law requires
such person or entity to maintain their confidentiality.
Application Submitted by the Creditor The application submitted by the creditor shall contain a statement of the reasons and shall be accompanied by a copy of the notice described in Article (16) of this Law and any data, information and documents in relation to the debt and its guarantees.
Costs and Guarantee
1. Except for the applications submitted by regulatory authorities, the applicant shall deposit with the court treasury a sum of money or a bank guarantee. The Executive Regulations of this Law shall determine its rate based on the total debts or assets of the debtor on the date of submitting the application or the total debts owed to the creditor submitting the application if the application is submitted by the latter, in order to cover the expenses and costs of the initial proceedings for deciding on the application.
2. The Head of the Bankruptcy Department may decide to determine the deposit of a smaller amount, and he may also postpone the deposit of the amount or guarantee set forth in Clause (1) of this Article in the event that the applicant is the debtor and does not have the necessary liquidity for deposit on the date of submitting the application, or where the initial proceedings do not require any costs.
3. The applicant may request a refund of the deposited sum of money or the bank guarantee if the application is dismissed, in accordance with the procedures and provisions set out in the Civil Procedure Law.
Notifying the Financial and Bankruptcy Unit The Bankruptcy Department shall notify the Unit of application for initiation of the proceedings and their attachments and of every decision and proceedings taken therein, not later than (10) ten days from the date of submitting those applications to the Bankruptcy Department or from the date of taking the decision or proceedings.
Evaluation of the Debtor's Position Within (10) ten days from the date of being notified of the application or within the period specified by the Bankruptcy Court, the Unit shall evaluate the debtor's position with respect to the debts owed to institutions and companies supervised by the regulatory authorities. Furthermore, the Unit shall submit a report to be drawn up thereby in coordination with the competent regulatory authority at the Bankruptcy Department, provided that the report includes the following elements:
1. Explain the extent to which a preventive settlement or is possible or not.
2. State whether the debtor's property is sufficient to cover the costs or not.
3. State whether or not precautionary measures are required to be taken urgently and the justification therefor.
4. State whether the debtor is able to manage its business and assets on its own or whether its interest and the interest of the creditors require that the management of the debtor's business and assets be entrusted to the Trustee.
5. Nominate the Trustee recommended to be appointed to complete the or bankruptcy proceedings and his fees.
6. Any other recommendations that the Unit deems appropriate.
Notification of the Application
1. The Bankruptcy Department shall notify the debtor of the application, not later than (10) ten days from the date of its submission if the application was not submitted by it, and the debtor shall provide its response to the application not later than (10) ten days from the date of its notification. In addition, it shall submit all the information, data and documents stipulated in Article (22) of this Law, unless the debtor requests from the Bankruptcy Court to exempt it from submitting the data, documents and information due to the lack of conditions for admitting the application and the court approves its request. If the Bankruptcy Court obligates the debtor to submit the required data, information and documents, the latter shall submit the same not later than the date specified by the court.
2. During the period referred to in Clause (1) of this Article, the Bankruptcy Department shall notify the creditors whose details are included in the application, who may provide their response to the application, not later than (10) ten days of the day of their notification.
3. During the period referred to in Clause (1) of this Article, the Bankruptcy Department shall notify the Unit and the regulatory authority if the debtor is supervised by the regulatory authority. The Unit and the regulatory authority may submit what they deem appropriate, not later than (10) ten days from the date of their notification.
Waiver of the Application
1. Except for the cases where an application to initiate the proceedings is submitted by the
debtor, the applicant may waive the same at any time before the Bankruptcy Court issues a decision thereon or before taking any precautionary measures with regard thereto.
2. The Bankruptcy Court shall issue its decision to dismiss the application without prejudice, unless any other person who may submit the application in accordance with this Law has submitted another application or submitted a memorandum of its response to the application and expressed its desire to proceed with the proceedings.
Subpoena and Impleader of Persons In accordance with conditions that provide for appropriate and adequate protection for creditors, the Bankruptcy Court may order the impleader of any natural or legal person into the proceedings stipulated in this Law if that person's assets are intertwined with the debtor's property in such a way that is difficult to separate them or if the court considers that it would not be practical or cost-effective to initiate separate proceedings with respect to such persons.
Setting the Cessation of Payment Date
1. The Bankruptcy Court shall decide on the application within (10) ten days from the expiry of the periods specified for responding thereto, by issuing a decision to initiate preventive settlement, or bankruptcy proceedings. In addition, it shall specify in its decision a temporary cessation of payment date.
2. If the decision to initiate the proceedings fails to designate the date on which the debtor defaults, the date on which the decision to initiate the proceedings is issued shall be
considered a temporary cessation of payment date.
3. If the decision to initiate the proceedings was issued after the death of the debtor or after its retirement from trade or loss of capacity, and the cessation of payment date was not specified, the date of death, retirement from trade or loss of capacity shall be considered a temporary cessation of payment date.
Amendment of Cessation of Payment Date The Bankruptcy Court may, sua sponte or upon motion of the debtor, any of the creditors, the Trustee or other relevant parties, amend the temporary cessation of payment date until the date of approving the list of debts. After the expiration of this period, the date designated for cessation of payment shall be considered final. In all cases, the cessation of payment date may not be backdated to more than two years prior to the date of issuance of the decision to initiate the proceedings.
Inadmissibility or Dismissal of the Application
1. The Bankruptcy Court shall issue its decision not to admit the application if the documents, data and information stipulated in Article (22) of this Law are not submitted, or if they are submitted incomplete without an excuse acceptable to the court.
2. The court issues its decision to dismiss the application if its conditions are not met.
3. If it becomes clear that the application submitted by the creditor was intended only to cause harm the debtor, the debtor and anyone aggrieved by the application may claim for compensation for the damage, and a liability case shall be filed before the Bankruptcy Court.
4. If it becomes clear that the request submitted by the debtor was intended only to harm the creditors and discontinue their claims, the creditors and anyone aggrieved by the application may claim for compensation for the damage, and a liability case shall be filed before the Bankruptcy Court.
Precautionary Measures
1. The Bankruptcy Court may, sua sponte or upon a motion submitted thereto by the Unit, if the debtor is supervised by the regulatory authority, by the regulatory authority or by any relevant party, may decide to take any precautionary measures.
2. The Bankruptcy Court may, sua sponte or upon a motion submitted thereto by the debtor, issue its decision to discontinue claims.
3. The decisions of the Bankruptcy Court referred to in Clauses (1) and (2) of this Article shall be reasoned.
Announcement of the Decision
1. The Bankruptcy Department shall, not later than (10) ten days following the date of issuance of the Bankruptcy Court's decisions relating to application to initiate the proceedings, dismissal, inadmissibility or termination of proceedings, announce the decision, notify the relevant parties and request the securities markets to disclose the decision if the debtor is listed there, in addition to requiring the debtor to publish the same on its website, unless the court decides to suffice with any of these methods.
2. The Bankruptcy Court may decide to announce the decision in any of the daily newspapers issued in a foreign country if a large number of the debtor's creditors,
property or businesses are located in that country or for any other reason determined by the court.
3. In all cases, the decision issued with regard to the application to initiate the proceedings shall be recorded within the period stipulated in Clause (1) of this Article.
4. All decisions stipulated in the provisions of this Law and its Executive Regulations shall be announced, not later than (10) ten days following the date of issuance of the decision, and the court may suffice with recording the decision in the bankruptcy register and the commercial register.
Chapter Three Appointment of the Trustee and Controller
Appointment of the Trustee If the Bankruptcy Court decides to admit the application to initiate or bankruptcy proceedings, the Trustee nominated by the Unit shall be designated in the same decision, and his fees shall be estimated in accordance with the provisions of this Law.
Appointment of Multiple Trustees
1. The Bankruptcy Court may, sua sponte or upon motion of the debtor or the Unit, if the debtor is supervised by a regulator authority, assign the Unit to nominate more than a Trustee and suggest the amount of their fees, and it shall issue its decision to appoint them and approve their fees.
2. If there are multiple Trustees, they shall work together, and the Trustees shall be jointly
responsible for their work, and it is permissible for them to act on behalf of each other. However, they may not delegate third parties without obtaining the permission from the Bankruptcy Court, and the Trustee and whoever represents him shall be jointly responsible. The court may divide the duties among the Trustees or entrust any of them with a specific mission. In which latter case, the Trustee shall only responsible for the mission he is assigned to perform.
Appointment of Trustee Following Approval of Creditors List
1. In all cases in which a decision is issued to appoint a Trustee after approving the list of creditors, or in cases in which the Bankruptcy Court issues a decision to replace the Trustee or appoint a new Trustee, the Bankruptcy Department shall call all creditors within (10) ten days following the date of issuance of the decision, including creditors with secured debts, to nominate a Trustee and estimate his fees. The Bankruptcy Department may, in coordination with the Unit, develop a list of not less than (3) three candidates to be selected from. The Head of the Bankruptcy Department or his representative shall chair this meeting, and the nominated Trustee shall be appointed based on the approval of the required majority.
2. If the Creditors' Committee stipulated in Article (63) of this Law approves the selection of the Trustee as described in Clause (1) of this Article and his fees are estimated, the Bankruptcy Department shall, not later than (10) ten days of the creditors' meeting, announce the outcome of the meeting to the Bankruptcy Court so that the latter can approve the selection of the Creditors' Committee and issue a decision to appoint the Trustee and estimate his fees.
3. In the event that the Creditors' Committee does not agree on appointing the Trustee and
determining his fees, the Bankruptcy Court may appoint the Trustee and determine his fees from a list prepared by the Bankruptcy Department in coordination with the Unit, in which the number of candidates shall not be less than three (3).
Appointment of Legal Person as Trustee If a legal person is appointed as a Trustee, it shall nominate one or more representatives to assume the duties of the Trustee, and the Trustee shall be responsible for its representative. In all cases, the Trustee's representative shall be a person registered in the Unit's Roster of experts.
Applications of the Trustee The Trustee appointed in accordance with the provisions of this Law may submit to the Bankruptcy Department any application to take a decision that would help him perform his mission in the appropriate manner, and the same includes, for example, an application to appoint or delegate one or more Trustees to assist him in any of the matters for which he is responsible.
Persons Prohibited from Being Appointed as Trustees The following persons may not be appointed as Trustees:
1. Any of the creditors.
2. Debtor-related party.
3. Any person against whom a final judgment has been issued in a felony or misdemeanor of theft, embezzlement, fraud in commercial transactions, breach of trust, fraud, forgery, perjury, bribery or any of the crimes stipulated in this Law or any misdemeanor affecting the national economy, even if he has been acquitted.
4. Any person who, during the last two years preceding the submission of the application to initiate the proceedings, was a partner of the debtor, an employee thereof, an auditor of its accounts or its attorney.
Duties of the Trustee The Trustee shall carry out his duties under the supervision of the Bankruptcy Department, and he shall follow up on the proceedings promptly and ensure that he takes all measures that provide protection for the interests of both the debtor and creditors.
Powers of the Trustee
1. In cases where the Trustee is entrusted with the management of the debtor's assets and business, the Trustee shall safeguard those funds and act on behalf of the debtor in all actions required to manage the debtor's assets and business.
2. If the debtor is supervised by the regulatory authority, the Trustee shall coordinate with the regulatory authority and the Unit, to ensure that the funds deposited in the debtor's account represent its own funds and not clients' funds deposited therewith as a trust or to perform an agreement concluded between the debtor and its clients.
3. If the debtor is a company, the Trustee shall have the same powers stipulated in the company's articles of association for the board of directors, the chairman of the board,
the CEO and the company director.
4. If any of the management's duties or any of the company's actions require the approval of the General Assembly, the Trustee shall submit to the Bankruptcy Department an application to present the matter to the Bankruptcy Court for approval, and the court shall issue its decision on the application, not later than (10) ten days from the date of its submission.