The United Arab Emirates has officially launched its first dedicated bankruptcy court. Hence, it has marked a transformative milestone in the financial and legal landscape of the nation. Moreover, experts see this move as a firm step towards aligning the UAE with the international insolvency best practices.
In addition, the step aims at boosting investor confidence and creating a centralised system for more transparent and efficient bankruptcy proceedings. Moreover, the new UAE bankruptcy court introduced a streamlined framework for managing bankruptcy, restructuring, and financial reorganisation cases across the country. However, the court was established through the Federal Decree-Law No. 51 of 2023, operational since 1 May 2024, and reinforced by Federal Decision No. 39 of 2025.
A Centralised Bankruptcy Court for Modernised Insolvency
Before this change, the cases related to bankruptcy were processed through the general commercial court. Now, the new dedicated Bankruptcy Court manages all those disputes and applications under a specialised system.
According to the civil law experts, this centralisation brings consistency, speed, and clarity to the previous complex process. Faisal Attia, civil law expert at Pinsent Masons Dubai, said that the move supports the status of the UAE as a reliable financial hub.
He said, “By centralising bankruptcy cases under a dedicated judicial body, this move will support the business stability and further position the UAE as a regional hub for restructuring and insolvency.” Moreover, he highlighted that Article 2 of the Bankruptcy Law prioritises economic energy, creditor rights, and debtor assistance. Hence, it ensures the regime’s support of business continuity and avoids unnecessary liquidation.
Jurisdiction and Scope of the Bankruptcy Court
The new court has jurisdiction over all disputes and applications arising under the Financial Reorganisation and Bankruptcy Law (UAE Bankruptcy Law). Below are the key jurisdiction highlights:
- Primary location: Abu Dhabi federal court
- Authority for expansion: The Federal Judicial Council might establish extra seats in other emirates
- Uncertainty in non-federal emirates: Dubai, Sharjah, Ras Al Khaimah, and Abu Dhabi have their own judicial systems. Hence, it will create cross-emirate jurisdictional clarity and an evolving matter.
The intention behind this reform is to create a unified platform for all bankruptcy cases under the federal law.
Structure: Specialised Judges and Expert Support
The Decision highlights a strong structure to support the new court. Below is the structure of the UAE Bankruptcy Court:
- Specialised Judges
Judges are required to be specialists in insolvency. Moreover, the judge of the minimum appellate rank will head the court. Hence, this ensures that a highly experienced juridical professional handles complicated cases.
- Bankruptcy Administration Department
It is also called the Bankruptcy Administration. In addition, the department manages the administrative and operational functions of the court. Moreover, it includes two specialised divisions mentioned below:
- Division of Applications, Notifications, Objections & Grievances
- Division of Oversight & Follow-Up
Both divisions work under a judge of appellate rank to ensure effective case handling and monitoring.
- Secretariat
A dedicated secretariat will provide clerical support, official correspondence, and administrative assistance.
- Experts
Experts and advisors are going to assist in the following cases:
- Verifying applications
- Monitoring debtors’ assets and business management
- Implementing court-ordered precautionary measures
- Meeting creditors and debtors for case proceedings
This ensures that technical financial assessments are conducted by professionals with deep restructuring and insolvency experience.
A System Designed for Efficiency and Transparency
The new legal infrastructure is developed to streamline the complex insolvency process and clarify procedural steps. In addition, it ensures accurate interpretation of the bankruptcy law and promotes faster case management.
Additionally, all existing cases under the 2016 Bankruptcy Law (Law No. 9/2016) have been automatically transferred to the new UAE Bankruptcy Court. In addition, it means that it began functioning with an active caseload from Day 1.
Impact on Businesses Operating in the UAE
Legal experts note that the businesses operating in the UAE are required to reassess their internal insolvency preparedness with the establishment of the dedicated court. Moreover, Nour Abi Rached, civil commercial law expert at Pinsent Masons Dubai, suggests companies follow the following steps:
- Review insolvency strategies
- Monitor internal compliance with the new system
- Seek guidance to navigate early operational challenges
- Prepare for transitional issues such as case transfers
Businesses must ensure that they are aligned with the new procedural expectations to maintain compliance and avoid unnecessary delays.
Will Bankruptcy Filings Increase in the UAE?
Besides the detailed new framework, experts predicted that the volume of filings might not increase instantly. Moreover, the UAE 2023 amendments eased the mandatory filing requirements for debtors. Hence, it has resulted in relatively quiet bankruptcy activity since last year.
On the other hand, the new court is expected to improve stakeholder confidence and give clarity in managing complicated insolvency disputes. Moreover, it could lay the foundation for a more predictable restructuring environment.
This could motivate more filings over time as businesses gain confidence in the fairness and efficiency of the system.
A Major Step Toward a Mature Insolvency Regime
The creation of the first dedicated Bankruptcy Court of the UAE is widely seen as a sign of the maturing financial and legal framework of the nation. So, it has attracted reassurance that the country is committed to giving a clear, predictable, and efficient insolvency system for investors and international companies.
The new UAE Bankruptcy Court has strengthened the position of the UAE as an attractive destination for global investment and business growth. In addition, it has expert-backed procedures, specialised judges, and a streamlined administrative setup.
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