Federal Decree by Law No. (9) of 2016 Concerning Bankruptcy (economy and business law)

Article (1) 
In application of the provisions of this Decree -Law, the following words and expressions 
shall have the meanings assigned thereto respectively, unless the context requires 
otherwise:  
State  : The United Arab Emirates.  
Minister  : The Minister of Finance.  
Court  : The competent Court in accordance with the rules of jurisdiction set 
forth in the Civil Procedure Code.  
Competent 
Regulatory 
Authority  : The federal government or local regulatory authority determined by a 
resolution of the Cabinet.  
Debtor's Debts  : Debts owed by the debtor at the issuance date of the Court's decision 
initiating the proceedings in accordance with the provisions of Part III 
or Part IV of this Decree -Law or those arising from the obligation 
incurred by the debtor prior to the issuance o f the decision initiating 
the proceedings.  
Debtor's Assets  : Elements listed in the credit side of the debtor's estate at the date of 
the issuance of the decision initiating the proceedings or during any 
of the proceedings set out in this Decree -Law.  
Debtor's 
Business  : Activities that were practiced or are being practiced by the debtor 
during taking any of the proceedings set forth in this Decree -Law.  
Debit Estate  : The case where the debtor's asse ts do not cover, at any time, the 
liabilities.  
Cessation of 
Payment  : The debtor's failure to pay any debt when due.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  3 
 Free Zone  : Any free zone existing or to be establis hed within the State under any 
federal or local legislation.  
National 
Currency  : the UAE dirham.  
Stakeholder  : Any natural or legal person who has a right to or an interest in any of 
the proceedings set forth in this Decree -Law.  
Exchange Rate  : The rate at which the UAE dirham may be exchanged for foreign 
currencies as declared by the Central Bank of the United Arab 
Emirates.  
Precautionary 
Measures  : Any necessary measures taken by the Court in order to keep or 
administer the debtor's assets sa fely and in accordance with the 
provisions of this Decree -Law.  
Working Day  : Any official working day in the State.  
Roster of 
Experts  : The roster of certified experts of financial reorganization and 
bankruptcy affairs in accordance with Federal Law No. (7) of 2012 
referred to.  
Emergency 
Financial Crisis  : A public event that affects trade or investment in the State such as the 
outbreak of an epidemic, a natural or environmental disaster, war or 
others. Cause and duration of said crisis shall be determined by a 
Cabinet Resolution based on the proposal of the Minister.

Article (2) 
The provisions of this Decree -Law shall apply to the following:  
1. Companies subject to the provisions of the Commercial Companies Law;  
2. Companies not established in accordance with the provisions of the Commercial 
Companies Law, which are partially or fully owned by the federal or local government  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  4 
 and whose articles of association and memoranda of association provide for that they 
shall be  subject to the provisions of this Decree -Law;  
3. Companies and institutions estab lished in free zones, which are not subject to special 
provisions governing the proceedings of composition, restructuring and bankruptcy 
therein, subject to the provisions of Federal Law No. (8) of 2004 Regarding the Free 
Financial Zones;  
4. Any individu al having the capacity of a "trader" in accordance with the law;  
5. Licensed civil companies with professional character.  
  
Part Two  
Financial Reorganization

Article (3) 
1. A standing committee to be known as the "Committee of Financial Reorganization " shall 
be formed under a resolution to be issued by the Cabinet, upon a proposal submitted by 
the Minister.  
2. The resolution issued by the Cabinet referred to in Clause (1) of this Article shall 
determine the work system of the Committee and the executive and procedural rules 
that enable it to exercise its competences. The Committee may seek the assistance of 
expe rienced and competent persons as it deems appropriate.

Article (4) 
The Committee shall have the following competences:  
1. To supervise the administration of the financial reorganization of the establishments 
licensed by the Competent Supervisory Author ities, in order to facilitate amicable 
agreement between the Debtor and its creditors, with the assistance of one or more 
expert(s) to be appointed by the Committee for this purpose in accordance with the 
conditions and procedures stipulated in the Cabinet  Resolution referred to in Paragraph 
(2) of article (3) of this Decree -Law.   
 
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 2. Approving the list of experts of financial reorganization and bankruptcy to perform any 
tasks assigned to them in accordance with the provisions of this Decree -Law, in 
coordin ation with the Ministry of Justice or the local authority in the emirates having the 
local judiciary, and approving the conditions and procedures of enrollment in the Roster 
of Experts.  
3. Setting a schedule of fees of the experts to be appointed and any  costs they incur due to 
the financial reorganization proceedings. The expert appointed for the financial 
reorganization proceedings shall, within the limits of what he does to perform the 
mission entrusted to him, be treated as a public employee.  
4. Establishing and preparing a register for persons against whom judicial judgments have 
been passed, whether in respect of imposing any restrictions ordered by the Court or 
their incompetency in accordance with the provisions of this Decree -Law. The 
Committ ee shall issue a resolution to determine the register's form, the data to be 
included therein, the persons who are entitled to have access to the register, the 
conditions for such access, and other related provisions.  
5. Submitting periodic reports to th e Minister on its activities, achievements and proposals 
for the purpose of enabling it to carry out the tasks assigned thereto under this Decree -
Law.  
6. Any other competences set forth in this Decree -Law or entrusted thereto by the Cabinet.  
  
Part Three   
Composition in Bankruptcy  
Chapter One   
Submitting and Deciding on Applications

Article (5) 
Composition proceedings set forth in this Part aims at assisting the debtor to reach a 
settlement with creditors pursuant to a scheme of composition under the supervision of the 
Court and with the help of a trustee to be appointed in accordance with the pr ovisions of  
 
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 this Part.

Article (6) 
1. The debtor may solely submit to the Court an application for composition if he faces 
financial difficulties requiring assistance to reach settlements with his creditors.  
2. In order to accept the application for composition, the debtor shall not have ceased to 
pay due debts for a period of more than (30) consecutive working days because of the 
instability of the debtor's financial position, or in case of a debit estate.

Article (7) 
The debtor's application for c omposition shall cause the suspension of the performance of 
the obligation thereof set out in article (68) of this Decree -Law, during the period from the 
date of the application submission and the issuance of the Court decision on acceptance or 
rejection o f initiating the composition proceedings, and the suspension shall continue, in 
case the application is accepted, throughout the period of such proceedings.

Article (8) 
If the debtor is subject to a competent regulatory authority, the debtor may apply fo r 
composition, provided that the debtor notifies the competent regulatory authority in writing 
ten (10) working days prior to the date of application submission, and the competent 
regulatory authority may provide any related documents or pleas to the Court .

Article (9) 
1. The application for composition, which shall contain the reaso ns therefor shall be 
submitted to the Court and the following documents shall be attached to the application:  
A. A memorandum containing a brief description of the economic and financial position of 
the debtor, information about his assets in addition to  detailed data on his employees.  
B. A certified copy of the  commercial, industrial or professional license of the debtor and  
 
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 his commercial or professional register issued by the competent licensing authority in 
the emirate.  
C. A copy of commercial books or financial statements relating to the debtor's business for 
the fiscal year preceding the submission of the application.  
D. A report containing the following:  
a. The debtor's cash flow forecasts and the profit and loss forecasts for the period of 
(12) twelve months following the submission of the applicatio n. 
b. A statemen t of the names of known creditors and debtors, their addresses, the 
amount of their rights or their debts and securities provided to them, if any.  
c. A detailed statement of the debtor's movable and immovable assets, the 
approximate value of each of such  assets at the date of the application submission, 
and any securities or rights of others arising therefrom.  
E. Composition proposals and guarantees of implementation.  
F. Nomination of a trustee nominated by the debtor to take the proceedings in accord ance 
with the provisions of this Decree -Law.  
G. If the application is submitted by a company, the application shall be accompanied with 
a copy of the decision of the competent authority in the company authorizing the 
applicant to submit an application fo r taking the composition proceedings, and a copy of 
the company's incorporation documents and any amendments thereto which are 
deposited with the competent authority in the emirate.  
H. A report issued by the authority concerned with credit information in  the State.  
I. Any other documents supporting the application.  
2. If the applicant fails to provide any of the data or documents required pursuant to the 
provisions of Clause (1) of this Article, the applicant shall mention the reasons in the 
application.

Article (10) 
1. The Court hearing the application for composition may decide, at the request of any 
stakeho lder or on its own initiative, to take the necessary measures to preserve or  
 
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 administer any of the debtor's assets, including sealing the premises of the debtor's 
business until deciding on the application.  
2. The Court may decide to proceed with any mea sures of this kind or decide to take any 
additional precautionary measures after accepting the application for composition.

Article (11) 
The Court shall ensure that the application contains all the supporting documents, and it 
may grant the debtor a time  limit to provide any additional data or documents supporting 
his application.

Article (12) 
The debtor shall file with the Court's treasury, a sum of money or a bank guarantee in the 
manner and at the date specified by the Court to cover the expenses and costs of the 
composition proceedings, including the fees and expenses of the trustee and any expert to 
be appointed.

Article (13) 
1. The Court may appoint one of the experts enrolled in the Roster of Experts or any expert 
other than those enrolled therein if the Court fails to find the person having the required 
experience.  
2. The appointed expert shall prepare a report on the debtor's financial position, including 
his opinion on the fulfillment of the necessary conditions to accept the application for 
initiating the composition proceedings and shall state whether or not the debtor's assets 
are sufficient for the composition.  
3. The Court shall determine the duties and fees of the expert and the period during which 
he shall submit the report, provided that it is not more than twenty (20) working days 
from the date of notifying him of the appointment decision.  
4. The provisions contained in Articles (19) and (20) of this Decree -Law shall appl y to the  
 
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 expert.

Article (14) 
1. The Court shall decide on the application for composition, without requiring the 
attendance of the litigants, within no more than five (5) working days from the 
submission date of the application satisfying the conditions thereof or from the date of 
filing  the expert's report, as the case may be.  
2. If the Court accepts the application, it shall decide to initiate the composition 
proceedings.

Article (15) 
The Court shall reject the application for composition in the following cases:  
1. If the debtor i s subject to the proceedings of composition, restructuring or bankruptcy 
and liquidation of his assets in the State in accordance with the provisions of this 
Decree -Law.  
2. If the debtor fai ls to provide the documents and data provided for in Articles (9) and (11) 
of this Decree -Law, or provides incomplete documents and data without justification.  
3. If it is proved that the debtor acts in bad faith or the application constitutes an abuse o f 
litigation process.  
4. If a final judgment of conviction of one of the crimes set forth in Part VI of this Decree -
Law or any crime of fraud, theft, dishonesty or embezzlement of public funds is entered 
against the debtor unless the debtor has been reha bilitated.  
5. If the Court finds that the composition proceedings are not appropriate for the debtor 
based on the data and documents submitted with the application or based on the report 
prepared by the expert in accordance with the provisions of Clause (2) of article (13) of 
this Decree -Law.  
6. If the Court decides to initiate the bankruptcy proceedings in accordance with the 
provisions of Part IV of this Decree -Law.  
7. If the debtor does not deposit the required amount or does not provide the requir ed  
 
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 bank guarantee, in accordance with the provisions of article (12) of this Decree -Law.

Article (16)  
The Court may summon any person who possesses information related to the application 
for composition and such person shall be obligated to provide the Court with any required 
information.  
  
Chapter Two  
Appointment of the trustee

Article (17) 
1. If the C ourt decides to accept the application for composition, it shall appoint, in its 
decision, a trustee from amongst the natural or legal persons nominated in accordance 
with Clause (1/F) of article (9) of this Decree -Law, the experts enrolled in the Roster o f 
Experts, or others if the Court fails to find the person having the required experience.  
2. The Court may, on its own initiative or at the request of the debtor or the controller, 
appoint more than one composition trustee, provided that they are not more than three 
trustees at once.  
3. If more than one composition trustee is appointed, they sha ll jointly perform their duties 
and take decisions by majority vote, and in the event of a tie, the matter shall be referred 
to the Court for weighting. The Court may distribute the tasks among the appointed 
trustees and determine the way they work, whethe r jointly or severally.  
4. If the Court appoints a legal person as composition trustee, it shall designate one or more 
representatives to assume the functions of the trustee, provided that such representative 
is enrolled in the Roster of Experts in accordance with the provisions of this Decree -Law.  
5. The Court shall notify the trustee of his appointment decision no later than the day 
following the issuance date of the decision.  
6. Any creditor may file a complaint against the Court's decision on the trustee 
appointment within fi ve (5) working days from the date of publication, which is in  
 
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 conformity with the provisions of article (35) of this Decree -Law, to the Court, which 
shall adjudicate on the complaint within five (5) working days without pleading. Its 
decision shall be fina l in this regard, and the complaint shall not suspend any of the 
proceedings set forth in this Part.

Article (18) 
The trustee may submit to the Court any request that would assist him in carrying out his 
duties as required, including a request for appoin tment and assignment of one or more 
experts from the Roster of Experts to assist him in any of the competences entrusted thereto. 
An expert other than those enrolled in the Roster of Experts may be appointed, when the 
need arises, under the approval of the  Court, and the Court shall determine the tasks and 
fees of the expert upon the recommendation of the trustee.

Article (19) 
Composition trustees may not be appointed from the following persons:  
1. A creditor;  
2. The debtor's spouse or brother -in-law or one of his relatives to the fourth degree;  
3. Any person against whom a final judgment of conviction of a felony or misdemeanor of 
theft, embezzlement, fraud in commercial transactions, malversation, forgery or fa lse 
testimony, any of the crimes set forth in this Decree -Law, bribery or any misdemeanor 
harming the national economy has been entered, even if rehabilitated.  
4. Any person who has been a partner, employee, auditor or agent of the debtor during the 
two years preceding the initiation of the composition proceedings.

Article (20) 
1. The appointed trustee shall receive his fees in return for the tasks carried out by him and 
receive the expenses incurred by him, as determined by the Court, from the deposi ted 
amount or the bank guarantee provided in accordance with the provisions of article (12)  
 
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 of this Decree -Law.  
2. The Court may decide to disburse amounts on account of the fees and expenses to the 
trustee who is appointed in accordance with the provisions of this Part, at any time after 
assuming his duties, by deducting the same from the amount deposited on account o f 
the fee and expense.  
3. Each stakeholder may file a complaint with the Court about the estimation of the 
trustee's fees and expenses and filing such complaint shall not cause the suspension of 
the proceedings. The Court shall adjudicate on the complain t within five (5) working 
days from the filing date and its decision shall be final in this regard.  
5. If the deposited amount or the provided bank guarantee does not cover the fees and 
expenses, the Court shall obligate the debtor to deposit the differe nce within the period 
specified thereby; otherwise the Court may order to terminate the composition 
proceedings.

Article (21) 
1. The Court may, on its own initiative, substitute the trustee as may be necessary. Further, 
the creditor or the debtor shall  be entitled to request the Court to substitute the trustee if 
it is proved that the continuation of his appointment could damage the interests of the 
debtor or creditors. Any substitute trustee shall be appointed in the same manner of the 
appointment of t he original trustee in accordance with the provisions of this Decree -
Law, and the original trustee shall cooperate to the extent necessary to enable the 
substitute trustee to assume his duties.  
2. The trustee may  request the Court to relieve him of his duties, and the Court may accept 
the same and appoint a substitute for him. The Court may determine fees for the trustee 
whose request has been accepted in return for services provided thereby.  
  
 
  
 
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 Chapter Three  
Inventory of the Debtor's Assets

Article (22) 
1. Once appointed, the trustee shall make an inventory of the debtor's assets in his 
presence, in the presence of his representative or after being notified. A report on the 
procedures taken shall be pr epared and such report shall contain a list of inventoried 
items and shall be signed by the trustee and the debtor in case of his attendance and a 
copy thereof shall be delivered to the Court.  
2. The trustee may request the Court to issue an order to sea l or unseal any of the debtor's 
assets.  
3. Assets subject matter of the inventory shall not include the rights of those entitled to the 
pension of the debtor, whether acquired before or after the date of the decision initiating 
the proceedings and such rights shall remain owned thereby.

Article (23) 
1. The Court shall provide the trustee, when appointed, with all the information available 
about the debtor.  
2. The debtor shall provide the trustee with any additional details related to the 
composition proceedings required by him, within the time  limit specified by the trustee.

Article (24) 
1- The trustee shall prepare a register of all the known creditors of the Debtor, and shall 
provide a copy of such register, having up -to-date entries, to the Court.  
2- The trustee shall enter the following o n the register:  
a. The address of each creditor, the amount of each creditor's claim and the due dates 
thereof.  
b. Identify any creditors secured by means of mortgage, the details of the security held by 
each creditor and the estimated value of each security in case of enforcement against  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  14 
 them.  
c. Identify the creditors having preferential debts, and indicate the nature of such 
preferences.  
d. Any set -off application submitted in accordance with the provisions of Section Five of 
Chapter Five of this Decree -Law.  
e. Any other details the trustee may consider necessary to perform its duties.

Article (25) 
1. The trustee may request any data or information relevant to the debtor's assets or 
business from any person who may have such information.  
2. Whoever has information about the debtor's assets or business shall be obligated to give 
the trustee the necessa ry information requested thereby, including any documents and 
books of accounts related to the debtor. The trustee shall maintain the confidentiality of 
any information related to the debtor if the disclosure thereof harms the debtor, and 
shall refrain fro m any disclosure outside the framework of the composition proceedings.  
3. In case that such person refuses to cooperate with the trustee and provide him with the 
required information, the trustee may refer the matter to the Court to determine the 
amount of information that may be requested and provided to the trustee.

Article (26) 
1. The debtor or any of his employees shall, during the composition proceedings, manage 
the debtor's business under the supervision of the trustee.  
2. The trustee may requ est the debtor to perform all the actions necessary to preserve his 
interests and the interests of his creditors during the composition proceedings.  
3. The trustee may, during the performance of his duties, carry out the following actions on 
behalf of the debtor whenever such actions achieve the purpose of the composition after 
obtaining the debtor's consent or permission of the Court:  
A. Possession of any of the debtor's assets;  
B. Request for verification and proof of ownership of any asset of the debtor;   
 
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 C. Valuation of the debtor's assets and presenting a report thereon to the Court;  
D. Collection of any money or rights on behalf of the debtor;  
3. Concluding or maintaining any insurance policies necessary to continue the debtor's 
business;  
F. Paying any payable amounts or fulfilling any required claims as part of the 
implementation of the scheme of composition;  
G. Leasing any property belonging to the debtor or terminating the lease agreements 
thereof and leasing any property, if necessary;  
H. Entering into any arrangement, acquittal or settlement, on behalf of the debtor, with 
one or more creditors of the debtor;  
I. Obtaining any guarantee or security which the debtor has neglected to obtain or 
renew.  
J. Any other actions achieving the purpose of the composition and approved by the 
Court.

Article (27) 
1. The Court may decide to suspend any of the debtor's business, upon the urgent request 
of the trustee.  
2. The Court shall issue its final decision on the partial suspension based on the report of 
the trustee, after a period not exceeding such period neede d for the Court's approval of 
the draft scheme of composition in accordance with the provisions of Chapter X of this 
Part.

Article (28) 
1. The trustee may submit to the Court, on behalf of the debtor, a request to authorize him 
to get new financing wit h security or without security during the composition 
proceedings to ensure the continuation of the debtor's business in accordance with the 
provisions contained in Chapter IV of Part V of this Decree -Law.  
2. No security taken over the debtor's assets af ter the decision initiating the composition  
 
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 proceedings shall be effective unless taken based on the prior permission of the Court.  
  
Chapter Four  
Appointment of Controllers

Article (29) 
1. The Court may appoint one or more Supervisors from among the creditors who request 
such appointment, to supervise the implementation of the Composition Procedures. In 
case of the nomination of secured and unsecured creditors or creditors who have 
preferent ial debts, at least one Supervisor shall be appointed for each group.  
2. In case of the nomination of more than one creditor from one group, the Court shall 
choose from among them the one it deems appropriate, taking into account the number 
of creditors and the amount of debt represented by each nominee.  
3. Each controller may be represented by one of his employees or his legal representative.  
4. If the debtor is subject to a competent regulatory authority, the Court may appoint a 
controller from such  authority upon its request.  
5. The controller or the legal person's representative appointed as a controller shall not be 
the debtor's spouse or brother -in-law or one of his relatives to the fourth degree.  
6. The controller shall not receive any fees and shall bear responsibility only for his serious 
or deliberate mistake during the performance of his duties.  
7. The debtor or any creditor may file a complaint with the Court about the appointment of 
the controller or his representative and such complaint shall not cause the suspension of 
the proceedings. The Court shall adjudicate on the complaint within five (5) w orking 
days from the filing date and its decision shall be final in this regard.  
8. The Court may, on its own initiative or at the request of the trustee, dismiss the controller 
and appoint another controller.  
9. The Court may relieve the controller of his duties at his request and appoint another 
controller.  
   
 
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Article (30) 
The controller shall assist the trustee and the Court and work to serve the general interest of 
the creditors. Further, the controller shall mo nitor the implementation of the conditions of 
the scheme of composition and inform the Court of violations of such conditions.  
  
Chapter Five  
Prohibiting Disposal of Assets

Article (31) 
1. The debtor shall be prohibited from performing any of the following acts as of the date 
of the decision initiating the composition proceedings:  
A. Paying any claims arising prior to the issuance of the decision initiating the 
proceedings except for any s et-off payments made in accordance with the provisions 
of Chapter V of Part V of this Decree -Law;  
B. Disposing of any of his assets or borrowing any amounts unless this is in accordance 
with the provisions of this Decree -Law and in the ordinary course of  the debtor's 
business, provided that the debtor obtains the prior approval of the trustee or the 
Court;  
C. Disposing of the company's shares or stocks or making a change in its ownership or 
legal form, if the debtor is a legal person.  
2. The Court sha ll, at the request of any stakeholder, order not to enforce any act of the 
debtor, which is inconsistent with the provisions of Clause (1) of this Article.  
  
Chapter Six 
Suspension of Judicial Proceedings and Abatement of the Interest

Article (32) 
1. In cases other than those provided for in this Decree -Law, the Court decision to 
commence composition proceedings pursuant to the provisions of article (14) of this 
Decree -Law shall entail the suspension of the judicial proceedings against the Debtor  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  18 
 and the judicial enforcement proceedings in respect of assets thereof. Suspension of 
judicial proceedings and enforcement proceedings provided for in this Clause shall 
continue u ntil occurrence of either of the following two events whichever is earlier:  
a. Approval of the composition plan in accordance with provisions of article (49) or 
article (50) of this Decree -Law; or  
b. Passage of (10) ten months from the date of issuance  of the Court decision to 
commence the composition proceedings pursuant to provisions of Clause (1) of this 
Article.  
2. Notwithstanding the provisions of Para. (b) of Clause (1) of this Article, after consulting 
the Trustee, the Court may extend the suspension of judicial proceedings and 
enforcement proceedings for an additional period not exceeding (4) four months.  
3. Creditors of debts secured by movable or immovable assets may require the Court to 
exclude them from suspension of enforc ement provided for in Clause (1) of this Article, 
and the Court may grant this permission if the collateral granted to the Creditor 
requesting permission is not necessary for proceeding with the composition 
proceedings. Further, the Court may give permissi on if the Creditor requesting 
permission proves that its collateral is likely to be damaged or depreciated quickly if it 
does not obtain proper protection thereof.  
4. The Creditor's application filed pursuant to Clause (3) of this Article shall be served upon 
the Trustee and the Debtor within one business day.  
5. The Debtor may submit a reply to the Creditor's application and the Trustee shall express 
its opinion on t he application within three business days from the date of being served 
the application. The Court shall decide on granting the permission within (10) ten 
business days from end of the period granted to the Debtor and the Trustee in 
accordance with this Cl ause. Deciding on the application for the permission does not 
entail notices or exchanging submissions. Upon granting the permission, the Court shall 
verify the absence of any collusion between the Debtor and the Creditor whose debt is 
secured by movable o r immovable assets, and the rank of the secured Creditor in the 
order of priority in case of securing more than one creditor by the same asset.   
 
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 3. The Court decision dismissing the application for permission may be appealed before 
the competent court of appeal. The appeal shall not result in the suspension of the 
composition proceedings. The decision made in respect of the appeal shall be final.

Article (33) 
The decision initiating the proceedings or ratifying the scheme of composition shall not 
cause t he debts to become due prior to their stated maturity or cause the abatement of the 
interests thereof.  
  
Chapter Seven  
Performance of Obligations and Contracts

Article (34) 
1. Subject to the provisions of Articles (26) and (31) of this Decree -Law, the issuance of the 
decision initiating the proceedings shall not cause the expiration or termination of any 
contract in force between the debtor and the party contracting therewith. T he party 
contracting with the debtor shall fulfill his contractual obligations unless a judgment of 
stay of execution is delivered, prior to the issuance date of the decision initiating the 
proceedings, due to the debtor's failure to perform his obligation s. 
2. The Court may, at the request of the trustee, order to terminate any contract in force to 
which the debtor is a party if it is necessary to enable the debtor to practice his business 
or if the termination is in the best interests of all creditors o f the debtor and does not 
substantially harm the interests of the other contracting party.  
3. If the debtor owns common property, the trustee or any of the co -owners may request to 
divide the common property, even if there is an agreement not permitting the division, 
and any co -owner shall have the priority over others if he wishes to buy the debtor's 
share in exchange for just compensation as determined by Court.  
  
  
 
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 Chapter Eight   
Composition Proceedings and Filing Claims

Article (35) 
The trustee shall, within five (5) working days from the date of notifying him of the 
appointment decision:  
1. publish a summary of the decision initiating the composition proceedings in two local 
widely circulated daily newspapers, one published in Arab ic and the other in English, 
provided that the publication includes calling the creditors to file their claims and 
supporting documents and to deliver the same to him within no more than twenty (20) 
working days from the date of publishing.  
2. Notify all the creditors whose addresses are known to provide him with the claims and 
documents within twenty (20) working days from the date of publishing the summary of 
the decision initiating the proceedings.

Article (36) 
1. All the creditors shall deliver to the trustee, within the time limit provided for in Article 
(35) of this Decree -Law, documents of their debts accompanied with a statement of such 
debts, their securities, if any, their maturity dates and their amount denominated in the 
national currency on the basis of the prevailing exchange rate at the issuance date of the 
decision initiating the proceedings.  
2. The trustee may request the creditor who has filed his claim to provide explanatory 
notes of the debt claim or supplementary documen ts or to specify the amount or nature 
thereof. Further, the trustee may require the ratification of any claims by the creditor's 
accountant or auditor.

Article (37) 
1. The trustee shall, after the expiry of the time limit set out in article (35) of thi s Decree -
Law, provide a list of creditors who have filed their claims, a statement of the amount of  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  21 
 each debt separately, the supporting documents and its securities, if any, his opinion on 
accepting, modifying or rejecting the same, and his proposals on t he payment method, if 
possible. The trustee shall deposit such list with the Court within ten (10) working days 
from the expiry date of the time limit set out in article (35) of this Decree -Law. This time 
limit may, if necessary, be extended once for a sim ilar period under a decision of the 
Court.  
2. The trustee shall, within three (3) working days following the deposit referred to in 
Clause (1) of this Article, publish the debt list and the statement of the accepted amounts 
of each debt in two local widely circulated daily newspapers , one published i n Arabic 
and the other in English.

Article (38) 
1. The debtor and each creditor, whether or not named in the debt list, may object to the 
contents of the list within seven (7) working days from the date of publishing the list in 
the newspapers, and this  shall not cause the suspension of the composition proceedings.  
2. The Court shall decide on the objection submitted pursuant to the provisions of Clause 
(1) of this Article within ten (10) working days from the date of submission.  
3. The Court's decision may be appealed before the competent Court of Appeal within five 
(5) working days from the date of issuance of the decision. The appeal shall not cause 
the suspension of the composition proceedings, and the decision on the appeal shall b e 
final.  
4. The Court may, before adjudicating the appeal, decide to accept the debt temporarily in 
an amount to be estimated thereby and shall notify the trustee thereof.  
5. The debt shall not be temporarily accepted if a criminal action is instituted.  
6. If the objection is related to the debt securities, it shall be temporarily accepted as an 
ordinary debt.  
7. The share of the tempora rily accepted debt shall be retained from the sale proceeds of 
the security assets. Upon any distribution to creditors in accordance with the provisions 
of this Decree -Law, if the Court decides not to recognize the temporarily accepted debt  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  22 
 or to reduce it , such retained share shall be returned, as per its ratio to the general 
security, to the creditors.  
8. The Court shall approve a list of names of the creditors whose debts are accepted, 
whether finally or temporarily.

Article (39) 
1. The creditor wh o has failed to provide his debt documents within the time limit set out 
in article (35) of this Decree -Law shall not take part in the composition proceedings, 
unless this failure is for reasons acceptable to the trustee or the Court reasons. Further, 
the creditors whose debts have been rejected completely shall not take part in the 
composition proceedings.  
2. Notwithstanding the provisions of Clause (1) of this Article, the creditor who has failed 
to provide his debt documents within the time limit set o ut in article (35) of this Decree -
Law may submit the same to the trustee to accept the debt's supporting documents and 
take part in the proceedings for acceptable reasons. The approval granted by the trustee 
in this regard shall be approved by the Court. I n case of the trustee's rejection or failure 
to respond within three (3) working days, the creditor may submit a request to the Court 
for accepting the submission of the debt's supporting documents and the Court shall 
consider the request as soon as possib le after consultation with the trustee, and issue its 
decision within (7) seven working days from the date of the request. If the Court orders 
to accept the debt, it may charge the trustee with submitting a report on the impact of 
the new debt on the draft  scheme, and refer the findings to the Court for approval. In all 
cases, the proceedings set forth in this Clause shall not suspend the composition 
proceedings.  
  
 
 
  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  23 
 Chapter Nine  
Scheme of Composition

Article (40) 
1. The debtor shall, with the assistance of the trustee, prepare a draft scheme of 
composition and submit it to the Court within forty five (45) working days from the date 
of publishing the decision initiating the composition proceedings, and the Court may, a t 
the request of the debtor or the trustee, extended such period for further period or 
periods not exceeding, in the aggregate, twenty (20) working days, provided that he 
submits to the Court periodic reports on the progress of the preparation of the draft  
scheme every ten (10) working days.  
2. The draft scheme of composition shall include the following:  
A. To what extent the debtor's business might re -achieve profits;  
B. The debtor's activities to be suspended or terminated;  
C. Terms and conditions of the settlement of any obligations;  
D. Any performance bonds to be provided by the debtor, if any;  
E. Any offer for buying all or part of the debtor's assets, if any;  
F. Grace periods and payment discounts;  
G. The possibility of converting debt into shares in the capital of any project;  
H. Any offer for consolidating, creating, redeeming, selling, or substituting any securities 
if it is necessary to implement the draft scheme;  
I. The implementation period of the scheme, subject to the provision of Clause (1) of 
this Article.  
3. The trust ee may include in the draft scheme of composition any other matters deemed 
useful in the implementation of the scheme of composition.

Article (41) 
The scheme of composition shall include a timetable for its implementation, which shall not 
exceed three (3 ) years from the date of the scheme ratification by the Court, and it may be  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  24 
 extended for a similar period with the consent of the majority of creditors who hold two -
thirds of the debts unpaid in accordance with the scheme and any amendments thereto.

Article (42) 
1. The Court shall, within ten (10) working days from the submission date of the draft 
scheme of composition, review the draft scheme to ensure that it is in the interest of all 
parties. The Court may request, during such period, the trustee to make any neces sary 
amendments to the draft scheme and return the same to the Court within no more than 
ten (10) working days from the notification date of the Court's request, and such period 
shall be renewable, under a decision of the Court, for a similar period once.  
2. If the Court is satisfied with the draft scheme, it shall request the trustee to call the 
creditors, within five (5) working days, for a meeting to discuss the draft scheme of 
composition and vote thereon, and the trustee shall provide the creditors w hose debts 
are accepted with a copy of the draft scheme of composition.  
3. The call for the meeting referred to in Paragraph (2) of this Article shall be published in 
two widely distributed local daily newspapers, one of which is published in Arabic and 
the other in English. The call shall set the place and time of the meeting. In addition, the 
Court may instruct the trustee to send the call for meeting by any other possible methods 
of communication, including the notification by electronic means.  
4. The meeting shall be held within (15) fifteen business days from the date of publication 
of the call for meeting as determined by the Court in line with the interest of the 
Composition. The electronic means may be used to organize the meeting and discuss the  
plan or vote thereon, so that any of the creditors may easily communicate as appropriate 
to the procedures based on the trustee's recommendation.  
5. The Court may decide to call the creditors for other meetings during the proceedings or 
to postpone the date of the creditors' meeting, taking into account the number of the 
known creditors and any other circumstances of importance to the holding of the 
meeting.  
6. If the debtor is subject to a competent regulatory authority, such authority shall be called   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  25 
 to attend the meetings.

Article (43) 
1. After consulting the trustee, the Court may, either upon a proposal of a group of 
creditors or sua sponte, issue a decision to form one or more committees of creditors 
representing different categories, including one or more committees of unsecured 
credito rs, one or more committees of secured creditors and one or more committees of 
creditors having preferential debts. The Court may also form one or more committees of 
bond and sukuk holders, for the purpose of discussing the Composition Plan and 
proposing an y amendments thereto at the meetings organized under article (42) of this 
Decree -Law.  
2. Each committee may select its representative from among the creditors or the legal or 
financial consultants, and identify the matters entrusted thereto in accordance  with the 
provisions of this Decree -Law. The representative of each committee shall be notified of 
all correspondence related to the meeting and then, such committee shall be responsible 
for notifying its creditors of the proceedings.  
3. The Court may, b ased on the proposal of the trustee, restrict the selected representative's 
powers or relieve him of his duties if it finds that the powers granted to him are broad 
and harmful to the interests of creditors.  
4. The Court may re -form any of the committees  referred to in Clause (1) of this Article, if 
deemed necessary.

Article (44) 
1. The trustee and the debtor shall provide an explanation of the items of the scheme of 
composition during the meetings held to discuss the scheme.  
2. Any creditor may, at the meetings held to vote on the draft scheme of composition, make 
any amendments thereto, and the committee before which the amendment is proposed 
and any other committee affected by the proposed amendment shall express the 
opinion th ereof on such amendments.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  26 
 3. The Court may call the creditors for further meetings to consider the proposed 
amendments, and it may decide to approve or reject any of the proposed amendments in 
preparation for ratifying the draft scheme of composition in accordance with the 
provisions of article (49) of this Decree -Law.

Article (45) 
1. The voting rights on the draft Composition Plan shall be limited to the ordinary creditors 
and creditors having preferential debts whose debts have been finally accepted . 
2. Notwithstanding the provisions of Clause (1) of this Article, the Court may allow the 
creditors whose debts are temporarily accepted to vote on the draft scheme of 
composition, based on a proposal by the trustee and the Court shall determine in its 
decision the conditions and limits of granting such permission.

Article (46) 
1. The court shall permit the secured creditor to vote on the Composition Plan on the basis 
of its secured debt without impacting the security right if the plan affects its secured 
rights. The creditors with secured debts shall not vote in situations other th an the 
abovementioned one, unless they waive those securities in advance. Such waiver shall 
be recorded in the minutes of the meeting.  
2. If the Creditors with secured debt votes on the Composition Plan without being 
authorized by the court or expressly waiving its security, such voting shall be deemed a 
waiver of that security.  
3. The surrender shall be effective only if the scheme of composition is ratified, and if the 
composition is invalidated, the security covered by the surrender shall be re -enfor ced.

Article (47) 
1. The draft Composition Plan shall be approved by the majority vote of the creditors 
whose debts are finally accepted, or those whose debts are provisionally accepted and  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  27 
 permitted to vote, provided that such majority holds in the ag gregate at least two thirds 
of the accepted value of the total debts.  
2. If one of the two majorities referred to in Clause (1) of this Article is not achieved, the 
meeting shall be postponed for seven (7) working days.  
3. If one of the two majorities is not achieved after the extension in accordance with Clause 
(2) of this A rticle, it shall be deemed a rejection of the scheme of composition.  
4. The creditors who have attended the first meeting or been represented therein, and 
voted for approving the scheme of composition may be absent from the second meeting. 
In such case, their approval of the scheme of composition at the first meeting shall 
remain valid and effective and their votes shall be counted in the quorum at the second 
meeting unless they attend the second meeting and change their previous votes or there 
is a chang e made to the scheme of composition.  
5. Minutes of the meeting held to vote on the draft scheme of composition shall be written 
and signed by the trustee, the debtor and the present creditors permitted to vote. If one 
of them refuses to sign the same, hi s name and the reason for refusal shall be mentioned 
in the minutes.  
6. All the creditors who participate in voting on the draft scheme of composition shall 
inform the trustee of their elected addresses for receiving notices, including the 
addresses to w hich notices by electronic means are sent. Giving notice using such means 
shall be effective in respect of all subsequent proceedings.  
7. Items of the scheme of composition shall apply to the creditors voting against the 
scheme.

Article (48) 
Co-debtors of the original debtor or his sureties for debts shall not benefit from the 
composition. However, if the composition is achieved with a company, the partners who are 
liable to the full extent of their property for its debts shall benefit from th e conditions 
thereof unless the composition indicates otherwise.  
   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  28 
 Chapter Ten  
Ratification and Implementation of the Scheme of Composition

Article (49) 
1. The trustee shall, within three (3) working days from the date of the meeting at which 
the required majority vote for approving the scheme of composition, submit the draft 
scheme to the Court, so as to render its decision ratifying or rejecting the scheme of 
composition.  
2. Any creditor whose debt is accepted and who does not approve the scheme of 
composition when voting thereon may object to the draft scheme submitted to the Court 
within three (3) working days from the expiry date of the time limit speci fied in Clause 
(1) of this Article. The Court shall decide on the objection submitted within five (5) 
working days from the date of submission of the objection and its decision in this regard 
shall be final.  
3. The Court shall summarily issue its decisio n ratifying the scheme of composition after 
ensuring the fulfillment of all the conditions, and it may decide to accelerate the maturity 
of the debts due to the creditor who accepts to reduce his debts, in the best interest of 
the composition proceedings. The Court's decision shall be binding on all creditors in 
this regard.  
4. The Court shall verify that the scheme of composition guarantees that all the creditors 
who are affected by the scheme will receive at least what they would have received had 
the debtor's assets been liquidated on the date of voting on the scheme, as per t he 
Court's estimation of such assets.  
5. The Composition Plan shall not affect the priority rights conferred upon secured debts or 
creditors having preferential debts as provided for in this Decree -Law.

Article (50) 
1. If the Court rejects to ratify the scheme of composition, it may return the scheme to the 
trustee to amend the same within ten (10) working days from the date of rejection and  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  29 
 re-submit it thereto for ratification or may decide to initiate the bankruptcy proceedings 
in accordance with t he provisions of this Decree -Law.  
2. The debtor or any of the creditors whose debts are finally accepted may file a complaint 
with the Court about its decision rejecting the ratification or the amendment of the 
scheme of composition. The Court shall adju dicate on the complaint within ten (10) 
working days from the date of filling the complaint and its decision shall be final.

Article (51) 
1. The debtor may offer his creditors an alternative security equivalent to the existing 
security. In case of non -acceptance of such offer, the Court may decide to substitute the 
security if it finds that the alternative security is not less than the value of  the existing 
security and does not constitute harm to the interests of the creditor to whom the 
alternative security is offered.  
2. The Court's decision may be appealed before the competent Court of Appeal within five 
(5) working days from the issuance date of the Court's decision. The appeal shall not 
cause the suspension of the proceedings, and the decision on the appeal shall be final.

Article (52) 
1. The trustee shall ensure that the sale of any of the debtor's assets to be sold in 
accordance wit h the scheme of composition shall be at the best price in light of the 
prevailing market conditions at the selling date. The trustee shall deposit part of the sale 
proceeds, which represent the value of the claims secured by the sold assets in the bank 
account determined by the Court.  
2. Once the scheme of composition is ratified, the trustee shall pay the creditors whose 
debts are secured by the assets sold in accordance with Clause (1) of this Article, their 
debts from the sale proceeds of such assets, as per their prioritization.  
  
  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  30

Article (53) 
1. If the Court finds that some of the debtor's assets are essential for the continuation of his 
business, it may decide to prohibit the disposal of such assets without its approval for a 
specified period not exceeding the period of the scheme of composition.  If such assets 
are given as security, the Court may substitute the security in accordance with the 
provisions of this Decree -Law.  
2. Each stakeholder may submit to the Court an application for non -enforcement of any 
disposal made in violation of the pro visions of Clause (1) of this Article, within three (3) 
years from the issuance date of the Court's decision or from the date of ratifying the 
scheme of composition, whichever is later.

Article (54)  
The trustee shall, within seven (7) working days from the date of ratifying the scheme of 
composition, record the Court's decision ratifying the scheme of composition in the 
commercial or professional register, as the case may be, and publish the same in t wo local 
widely circulated daily newspapers , one published in Arabic and the other in English, 
provided that it contains a summary of the most important condition of the composition, the 
debtor's name, place of residence, and Registration No. in the comme rcial or professional 
register, as the case may be, and the date of the decision ratifying the scheme of 
composition.

Article (55) 
1. The t rustee shall supervise the scheme of composition throughout its implementation 
period.  
2. The trustee shall be obligated to:  
A. monitor the progress of the scheme of composition and inform the Court of any 
failure to implement the same;  
B. submit to the Court a report on the progress of the implementation of the scheme of  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  31 
 composition every three months. Each creditor may obtain a copy of the report.  
3. If the trustee deems it is necessary to make any amendments to the scheme of 
composition during it s implementation and such amendments cause changes in the 
rights or obligations of any party thereto, he shall request the Court to approve such 
amendments. The Court shall, prior to deciding on the request, notify all the parties 
taking part in voting on the scheme and the creditors whom it deems necessary to be 
notified, within five (5) working days from the date of the request of the trustee, in order 
to submit any observations about the required amendments within ten (10) working 
days from the date of n otification. The Court may issue its decision approving the 
amendment in whole or in part or rejecting it.

Article (56) 
Once all the obligations stipulated in the scheme of composition are fulfilled, the Court shall, 
at the request of the trustee, the debtor or any stakeholder, issue a decision completing the 
implementation of the scheme of composition. Such decision shall be published in two local 
widely circulated daily newspapers, one published in Arabic and the other in English.

Article (57) 
In the event of the debtor's demise after issuing the decision initiating the proceedings, his 
heirs or their representatives sha ll replace the debtor in respect of completing the 
composition proceedings.  
  
Chapter Eleven  
Nullity and Annulment

Article (58) 
If an investigation is initiated against the debtor with regard to any of the crimes set forth in 
Part VI of this Decree -Law, or a criminal action is instituted against the debtor with regard to 
such crimes, after the ratification of the scheme of composit ion, the Court, which has ratified  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  32 
 the scheme of composition, may decide, at the request of any stakeholder, take the 
measures it deems necessary to seize the debtor's assets. Such measures shall be canceled if 
it is decided to close the investigation or i f a judgment of acquittal of the debtor is entered.

Article (59) 
1. Every stakeholder may submit a request for nullifying the composition proceedings 
within six (6) months from the date of initiating the investigation provided for in Article 
(58) of th is Decree -Law; otherwise the request shall be unacceptable. In any case, the 
request for nullifying the composition proceedings shall not be acceptable if submitted 
after the lapse of two years from the issuance date of the decision ratifying the scheme of  
composition.  
2. The composition proceedings shall be nullified if a judgment of conviction of any of the 
crimes set forth in Part VI of this Decree -Law is delivered against the debtor, after the 
ratification of the scheme of composition, unless the Cour t decides otherwise to protect 
the interests of the creditors.  
3. Nullity of the composition proceedings shall result in discharging the surety acting in 
good faith, who guarantees the implementation of all or some of the conditions of the 
scheme of composition.

Article (60) 
1. Any creditor may request the Court rati fying the scheme of composition to annul the 
scheme of composition if the debtor fails to fulfill the conditions of the scheme of 
composition or if the debtor dies and it becomes clear that it is impossible to implement 
the same for any reason.  
2. Annulm ent of the scheme of composition shall not result in discharging the surety, who 
guarantees the implementation of its conditions and he shall be summoned to attend 
the hearing at which the request for annulment is heard.  
   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  33

Article (61) 
The Court may includ e in its judgment of nullity of the composition proceedings or 
annulment of the scheme of composition, an order of sealing the debtor's assets, except for 
the assets that may not be attached by law and the living expenses prescribed for the debtor 
and his dependents. The Court shall charge the trustee, within five (5) working days from 
the date of the nullity or annulment judgment, with publishing a summary of the judgment 
in two local widely circulated daily newspapers, one published in Arabic and the othe r in 
English, and the trustee shall conduct a supplemental inventory of the debtor's assets.

Article (62) 
Dispositions of the debtor after the issuance of the decision ratifying the scheme of 
composition and before the nullity of the proceedings or the annulment of the scheme of 
composition shall be effective against the creditors, and they may request to rescind the 
same only in accordance with the rules stipul ated in the Civil Transactions Law in respect of 
the Paulian Action. Such action shall not be heard after the lapse of two years from the date 
of nullity of the composition proceedings or annulment of the scheme of composition.

Article (63) 
The nullity o f the composition proceedings or the annulment of the scheme of composition 
shall not require the bona fide creditors to refund the amounts received before the nullity or 
annulment judgment and such amounts shall be deducted from the value of their debts.  
  
Chapter Twelve  
Adjudicating to Terminate the Composition Proceedings and Convert the 
Proceedings into a Declaration of the Debtor's Bankruptcy and Liquidation 
of His Assets

Article (64) 
The Court shall deliver a judgment terminating the composition proce edings, declaring the  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  34 
 debtor's bankruptcy and liquidating his assets, in accordance with the provisions of Chapter 
XII of Part IV of this Decree -Law if it is ruled to nullify the composition proceedings or annul 
the scheme of composition in accordance with  the provisions of this Chapter.

Article (65) 
The Court may decide, at its option or at the request of any stakeholder, to terminate the 
composition proceedings and convert the composition proceedings into the proceedings of 
declaration of the debtor's b ankruptcy in accordance with the provisions of Part IV of this 
Decree -Law, in the following cases:  
1. If it is proven that the debtor has ceased to pay due debts for a period of more than (30) 
consecutive working days due to the instability of the debtor 's financial position, or in 
case of a debit estate at the date of initiating the composition proceedings or if the Court 
discovers the same during the implementation of the scheme of composition.  
2. If it is impossible to apply the scheme of composition  and the termination of the 
composition proceedings leads to the cessation of payment for a period of more than 
(30) consecutive working days due to the instability of the debtor's financial position, or 
due to a debit estate.

Article (66) 
If the Court decides to terminate the composition proceedings and declare the debtor's 
bankruptcy and liquidation of his assets in accordance with the provisions of article (64) of 
this Decree -Law, or to convert the composition proceedings in accordance wi th the 
provisions of article (65) of this Decree -Law, this shall lead to the following:  
1. Termination of the appointment of the composition trustee, unless the Court decides to 
appoint him as the trustee of bankruptcy and liquidation of assets in accord ance with 
Articles (82) and (126) of this Decree -Law.  
2. The Court which has decided to terminate the composition proceedings in accordance 
with Articles (64) and (65) of this Decree -Law shall continue to hear the proceedings of 
bankruptcy and liquidatio n of the debtor's assets.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  35 
 Part Four   
Bankruptcy

Article (67) 
The proceedings set out in this Part shall regulate the following:  
1. Restructuring of the debtor, if possible, by assisting the same to implement a scheme of 
restructuring his business.  
2. Declaration of bankruptcy of the debtor and fair liquidation of his assets to fulfill his 
obligations.  
  
Chapter One  
Submitting Applic ations for Initiating Bankruptcy Proceedings

Article (68) 
1. The debtor shall submit to the Court an application for initiating the proceedings in 
accordance with the provisions of this Part if he ceases to pay due debts when due for a 
period of more th an (30) consecutive working days due to the instability of the debtor's 
financial position, or in case of a debit estate.  
2. If the debtor is subject to a competent regulatory authority, the debtor shall notify such 
authority in writing of his intention to submit the application referred to in Clause (1) of 
this Article, fifteen (15) working days prior to the date of the application, and the 
competent regulatory authority may provide any related documents or pleas to the 
Court.

Article (69) 
1- Any creditor, or a body of creditors holding a debt in an amount of not less than one 
hundred thousand UAE dirhams (AED 100,000) may apply to the Court to commence the 
procedures pursuant to this Chapter if the creditor has previously given the Debtor a  notice 
in writing demanding the repayment of the due debt and the Debtor failed to pay the same 
within (30) thirty successive Business Days from the date of such notice.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  36 
 2- The creditor with secured debt may submit an application in accordance with Paragr aph 
(1) of this Article if the claimed amount is a part of the difference of the secured debt due 
and the security value does not cover the entire value of the secured debt when conducting 
the procedures.  
3- The Cabinet may, upon the recommendation of the Minister, issue a decision amending 
the amount of the debt threshold referred to in Paragraph (1) of this Article.

Article (70) 
If any of the creditors abandons his application due to receiving a due payment before 
initiating the proceedings, the debtor shall not be deemed to have ceased to make payments 
in respect of such due payment.

Article (71) 
If the debtor is subject to a competent regulatory authority, the application may be 
submitted to the Court, in accordance with the provisions of this Part, by such authority, 
provided that it submits a proof of the debtor's debit estate.

Article (72) 
The Public Prosecution may, as required by the public interest, apply to the Court for 
initiating the proceedings in accordance with the provisions of this Par t, provided that it 
submits a proof of the debtor's debit estate.

Article (73) 
1- The application shall be submitted by the Debtor or the Competent Supervisory Authority 
to the Court, and introducing reasons for such application.  
2- The debtor may determ ine whether the application is for restructuring purposes or for 
bankruptcy and liquidation, and shall mention relevant grounds in the application.  
3- The application shall be accompanied by the following documents:   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  37 
  
a. A memorandum including a brief des cription of the Debtor's economic and financial 
position and information about the Debtor's Assets, in addition to a detailed account of 
the Debtor's employees.  
b. A certified copy of the commercial, industrial or professional license of the Debtor and 
the Debtor's commercial register issued by the competent authority in the Emirate.  
c. A copy of the accounting books or financial statements relating to the Debtor's  Business 
for the year preceding the application.  
d. A report including the following:  
a. The Debtor's cash flow and profit and loss projections for the twelve months 
following the filing of the application.  
b. A list of the names of the known credit ors and debtors with their addresses, the 
amounts of their respective entitlements or debts and the securities provided, if any.  
c. A detailed statement of the Debtor's movable and immovable Assets, and the 
estimated value of each asset as at the date of  filing the application, and a statement 
of any securities or rights of third parties over the Assets.  
e. The Debtor's nomination of a trustee to undertake the procedures pursuant to the 
provisions of this Decree -Law.  
f. Where the applicant is a corporate entity, the application shall be accompanied by a 
copy of the resolution of the company's competent body authorizing the applicant to file 
the procedures comm encement application and copies of the incorporation documents 
of the company and any amendments thereto, as filed with the competent authority in 
the Emirate.  
g. Any other documents supporting the filing of the application.  
h. A report issued by the c ompetent Credit Information Authority in the State.  
4- If the applicant fails to submit any of the data or documents required pursuant to the 
provisions of Paragraph (3) of this Article, the applicant shall specify the reasons of the same 
in its applicatio n. 
5- If the Court is satisfied that the documents submitted are not sufficient to decide on the  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  38 
 application, it may grant the applicant an extension to provide the Court with any additional 
details or documents in support of its application.

Article (74) 
1. The application submitted to the Court by the creditor shall be accompanied by the 
following documents:  
a. A copy of the notice referred to in Paragraph (1) of article (69) of this Decree -Law.  
b. Any data relating to the debt, including the amount of the debt and any available 
security.  
c. The Debtor's nomination of a trustee, to be appointed to undertake the procedures 
pursuant to the provisions of this Decree -Law.  
2. The creditor may determin e whether the application is for restructuring purposes or for 
bankruptcy and liquidation, and shall mention relevant grounds in the application.

Article (75) 
1. If the debtor is a company, the application may be submitted even if the company is 
under liquidation or a judgment of annulment is delivered against it and the company 
continues its business de facto.  
2. Submitting the application for initiating the pro ceedings in accordance with Paragraph 
(1) of this Article shall cause the suspension of the decision on every application whose 
subject matter is the company's liquidation or placing it under receivership.

Article (76) 
With the exception of applications submitted by the Public Prosecution, the applicant shall 
file with the Court's treasury, a sum of money or a bank guarantee of no more than (AED 
20,000) twenty thousand Dirhams in the manner and at the date specified by the Court to 
cover the expenses of t he initial proceedings to decide on the application. However, the 
Court may postpone the deposit of the sum or guarantee referred to above if the debtor  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  39 
 filling the application does not have the necessary liquidity to deposit the same at the date of 
submit ting the application.  
  
Chapter Two   
Deciding on Applications

Article (77) 
1. The Court may decide to appoint one of the experts enrolled in the Roster of Experts or 
any expert other than those enrolled therein if the Court fails to find the person havi ng 
the required experience so as to assist it in evaluating the debtor's status. The Court shall 
determine, in the same decision, the duties and fees of such expert and the period during 
which he shall submit the report, provided that it is not more than t en (10) working days 
from the date of the appointment decision.  
2. The appointed expert shall prepare, within the period specified by the Court, a report on 
the debtor's financial position, including his opinion on the possibility of restructuring of 
the debtor and whether or not the debtor's assets are sufficient to cover the restructuring 
costs.

Article (78) 
1. The Court shall decide o n the application, without litigation procedures, within a period 
not exceeding five (5) Business Days from the date the application is filed fulfilling all 
requirements or from the date the expert's report is filed, as the case may be.  
2. If the Court f inds that the conditions required under this Chapter for the commencement 
of the bankruptcy procedures are met, the Court shall accept the application and order 
the commencement of the procedures.  
3. The Court may indicate in its decision that it has app roved the possible debt 
restructuring the debtor and commence the reconstructing plan based on the documents 
submitted by the debtor, Supervisory Authority and creditor in the application in 
accordance with Paragraph (2) of article (73) and Paragraph (2) o f article (74) of this  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  40 
 Decree -Law.

Article (79) 
The Court shall dismiss the application where the documents and details required in Articles 
(73) and (74) of this Decree -Law are not furnished, or if the same are incompletely 
submitted without an acceptab le reason, unless the Court decides to accept the application 
at its discretion in accordance with the conditions considered proper by it and subject to the 
interests of both the debtor and creditors.

Article (80) 
1. The Court may summon any person who possesses information related to the 
application and such person shall be obligated to provide the Court with any required 
information.  
2. The Court may issue a decision joining any natural or legal person in the proce edings set 
forth in this Part in accordance with the conditions providing adequate and sufficient 
protection to creditors if there is overlap between the assets of such person and the 
debtor's assets and it is difficult to be divided, or if the Court finds  that it is not practical 
or cost -effective to initiate separate proceedings with respect to such persons.  
3. The Court's decision on the joinder may be appealed before the competent Court of 
Appeal. The appeal shall not cause the suspension of proceedin gs, and the decision on 
the appeal shall be final.

Article (81) 
1. The Court hearing the application may decide, at the request of any stakeholder or on its 
own initiative, to take the necessary measures to preserve or administer the debtor's 
assets, i ncluding sealing the premises of the debtor's business until deciding on the 
application.  
2. The Court may decide to proceed with any measures of this kind or decide to take any  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  41 
 additional precautionary measures.  
  
Chapter Three  
Appointment of Trustees and Controllers

Article (82) 
1. If the Court decides to accept the application submitted pursuant to the provisions of this 
Chapter, it shall appoint a trustee from among the experts nominated pursuant to 
Paragraph (1/E) of Articl e (73) or Paragraph (1/C) of article (74) of this Decree -Law, a 
natural or juridical person registered in the Experts’ Panel, or another expert, if the Court 
does not find an expert with the required expertise.  
2. The Court may, sua sponte or upon the re quest of the Debtor, any Creditor or Supervisor, 
appoint more than one trustee, provided that the number of the trustees appointed at 
the same time shall not exceed three (3).  
3. If more than one trustee is appointed, they shall jointly perform their dut ies and take 
decisions by majority vote. In the event of a tie, the matter shall be referred to the Court 
for weighting. The Court may distribute the tasks among the appointed trustees and 
determine the way they work, whether jointly or severally.  
4. If the Court appoints a legal person as a trustee, it shall designate one or more 
representatives to assume the functions of the trustee, provided that such representative 
is enrolled in the Roster of Experts in accordance with the provisions of this Decree -Law. 
5. The Court may decide to continue the appointment of the trustee of composition to 
assume the mission of the trustee in accordance with the provisions of this Part and it 
may appoint other trustees or dismiss any of them in accordance with the provisions of  
this Part.  
6. The Court shall notify the trustee of his appointment decision no later than the working 
day following the issuance date of the decision.  
7. The debtor or any creditor may file a complaint against the Court's decision on the 
trustee appo intment within five (5) working days from the date of publication, which is  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  42 
 in conformity with the provisions of article (88) of this Decree -Law, with the same 
competent Court, which shall adjudicate on the complaint within five (5) working days 
without pl eading. Its decision shall be final in this regard, and the complaint shall not 
suspend any of the proceedings set forth in this Part.

Article (83) 
The trustee appointed in accordance with the provisions of this Part may submit to the Court 
any request that would assist him in carrying out his duties as required, including for 
example, a request for appointment and assignment of one or more experts fr om the Roster 
of Experts to assist him in any of the competences entrusted thereto. The Court may appoint 
an expert not enrolled in the Roster of Experts, when the need arises, and the Court shall 
determine the mission and fees of the expert, upon the reco mmendation of the trustee.

Article (84) 
Trustees or experts may not be appointed from the following persons:  
1. The debtor's creditor;  
2. The debtor's spouse or brother -in-law or one of his relatives to the fourth degree;  
3. Any person against whom a final judgment of conviction of a felony or misdemeanor of 
theft, embezzlement, fraud in commercial transactions, malversation, forgery or fa lse 
testimony, any of the crimes set forth in this Decree -Law, bribery or any misdemeanor 
harming the national economy has been entered, even if rehabilitated.  
4. Any person who has been a partner, employee, auditor or agent of the debtor during the 
two years preceding the initiation of the proceedings.

Article (85) 
1. Any trustee and any expert to be appointed in accordance with the provisions of this Part 
shall receive his fees in return for the tasks carried out by him and receive the required 
expe nses incurred by him from the debtor's assets known by the Court. A payment may  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  43 
 be made, under a decision of the Court, on account of such fees and expenses.  
2. If the debtor has no known assets or such assets are not sufficient to cover the fees and 
expenses, the trustee or the expert may apply to the President of the Court for receiving 
his dues from the Court's treasury. In case of payment of any dues from the Court's 
treasury, the amounts paid shall be recovered, by taking priority over debts of all 
creditors, from the first amounts to be added to the debtor's assets.  
3. Each stakeholder may file a complaint with the Court about the estimation of the fees 
and  expenses of the trustee or the expert appointed in accordance with the provisions of 
this Part and filing such complaint shall not cause the suspension of the proceedings. 
The Court shall adjudicate on the complaint within five (5) working days from the f iling 
date thereof and its decision shall be final in this regard.

Article (86) 
1. The Court may, at any time, substitute the trustee appointed in accordance with the 
provisions of this Part or any expert or appoint further trustees or experts as requi red. 
Further, the debtor shall be entitled to request the Court to substitute the trustee or the 
expert if it is proved that the continuation of his appointment could damage the interests 
of the creditors. Such request shall not cause the suspension of the  proceedings. Any 
substitute trustee or expert shall be appointed in the same manner of the appointment 
of the original trustee or expert in accordance with the provisions of this Decree -Law, 
and the original trustee shall cooperate to the extent necessary  to enable the substitute 
trustee to assume his duties.  
2. The trustee may request the Court to relieve him of his duties, and the Court may accept 
the same and appoint a substitute for him. The Court may determine fees for the trustee 
whose request has been accepted in return for services provided thereby.

Article (87) 
The Court shall appoint controllers and the provisions contained in Part III of this Decree -
Law shall apply to their appointment and determination of their fees.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  44 
 Chapter Four  
Preparation of the List of Creditors

Article (88) 
1. The Court shall notify the trustee of his appointment decision no later than the day 
following the issuance date of the decision. It shall provide the trustee, when appointed, 
with all the information available about the debtor.  
2. The trustee shall, wit hin five (5) working days from the date of notifying him of the 
appointment decision:  
A. publish a summary of the decision initiating the proceedings in two local widely 
circulated daily newspapers , one published in Arabic and the other in English, 
prov ided that the publication includes calling the creditors to file their claims and 
supporting documents and to deliver the same to him within no more than twenty 
(20) working days from the date of publishing.  
B. Notify all the creditors whose addresses ar e known to provide him with the claims 
and documents within twenty (20) working days from the date of publishing the 
summary of the decision initiating the proceedings.  
3. The debtor shall provide the  trustee, within the time limit specified by the trustee, with 
any additional details of which he has not informed the Court, whether in respect of his 
creditors or the debt amounts and the details of any contracts under implementation 
and any pending or o ngoing legal proceedings to which the debtor is a party.

Article (89) 
1. The trustee shall prepare a register in which all the creditors of the Debtor known to the 
trustee shall be entered, and the trustee shall submit an updated copy of the register's  
entries to the Court.  
2. The trustee shall enter the following information on the register:  
a. The address of every creditor, the amount of each creditor's claim and the due date 
thereof.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  45 
 b. The identification of the creditors who hold secured debts and the Creditors having 
preferential debts, with the details of the securities allocated for each of them and the 
estimated amount of such securities in case of Enforcement.  
c. Any set -off appli cation submitted pursuant to the provisions of Section Five of 
Chapter Five of this Decree -Law.  
d. Any other details that may be considered necessary by the trustee for the 
performance of its duties.

Article (90) 
1. The trustee may request any data or information relevant to the debtor's assets or 
business from any person who may have such information.  
2. Whoever has information about the debtor's assets or business shall be obligated to give 
the trustee the necessary information requested thereby within reasonable limits, 
including any documents and books of accounts related to the debtor. The trustee shal l 
maintain the confidentiality of any information related to the debtor if the disclosure 
thereof affects the value of the debtor's assets, and shall refrain from any disclosure 
outside the framework of the restructuring proceedings.  
3. In case that such  person refuses to cooperate with the trustee and provide him with the 
required information, the trustee may refer the matter to the Court to determine the 
amount of information that may be requested and order to be provided to the trustee.

Article (91) 
1. All creditors, even those who hold debts not yet due, secured debts, preferential debts or 
debts established by final judgments, shall deliver to the trustee, within the timeframe 
specified in the call for meeting issued pursuant to the provisions Art icle (88) of this 
Decree -Law, the supporting documents of their debts together with the statement on 
their debts, securities, due dates and the amounts denominated in the National Currency 
on the basis of the Exchange Rate prevailing at the date of the dec ision.  
2. The trustee may request the creditor who has filed his claims to provide explanatory  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  46 
 notes of the debt claim or supplementary documents or to specify the amount or nature 
thereof. Further, the trustee may require the ratification of any claims by the creditor's 
accountant or auditor.

Article (92) 
The creditor who receives an advance payment, on account of his claim, from the debtor's 
sureties shall deduct the received amount from any claim to be submitted to the trustee. Any 
debtor's surety may submit his claims to the trustee within the limits of the amount paid for 
the debtor's debt.

Article (93) 
1. The trustee shall, after the expiry of the time limit set out in article (88) of this Decree -
Law, provide a list of the creditors who have filed their claims, a statement of the amount 
of each debt  separately, the supporting documents and its securities, if any, his opinion 
on accepting, modifying or rejecting the same, and his proposals on the payment 
method, if possible. The trustee shall deposit such list with the Court within ten (10) 
working da ys from the expiry date of the time limit specified for the creditors to file their 
claims. This time limit may, if necessary, be extended once for a similar period under a 
decision of the Court.  
2. The trustee shall, within three (3) working days follow ing the deposit, publish the debt 
list and the statement of the accepted amounts of each debt in two local widely 
circulated daily newspapers, one published in Arabic and the other in English.  
3. Debts owed to the government for taxes or fees of differen t types shall be deemed 
accepted debts without the need to the audit by the trustee.

Article (94) 
1. The debtor and each creditor, whether or not named in the debt list, may file a complaint 
with the Court about the claims contained in the list within seven (7) working days from  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  47 
 the date of publishing the list in the newspapers.  
2. The Court shall decid e on the complaint filed pursuant to the provisions of Clause (1) of 
this Article within ten (10) working days from the filing date.  
3. The Court's decision may be appealed before the competent Court of Appeal. The appeal 
shall not cause the suspension of the proceedings, and the decision on the appeal shall 
be final.  
4. The Court may, before adjudicating the complaint, decide to accept the debt temporarily 
in an amount to be estimated thereby and shall notify the trustee thereof.  
5. The debt shall not be temporarily accepted if a criminal action is instituted.  
6. If the complaint is related to the debt securities, it shall be tempora rily accepted as an 
ordinary debt.  
7. The share  of the debt accepted temporarily shall be retained from the sale proceeds of 
the debtor's assets and upon any distribution to creditors in accordance with the 
provisions of this Decree -Law. If the Court decides not to recognize the debt accepted 
temporari ly or it is reduced, the retained share shall be returned, as per its ratio to the 
general security, to the creditors.  
8. The Court shall approve a list of names of the creditors whose debts are accepted, 
whether finally or temporarily

Article (95) 
The  creditor who has failed to provide his debt documents within the time limit set out in 
article (88) of this Decree -Law may submit the same to the trustee to accept the debt's 
supporting documents and take part in the proceedings, for acceptable reasons. T he 
approval granted by the trustee in this regard shall be approved by the Court. In case of the 
trustee's rejection or failure to respond within three (3) working days from the date of the 
request, the creditor may submit a request to the Court for accept ing the submission of the 
debt's supporting documents and the Court shall consider the request as soon as possible 
after consultation with the trustee, and issue its decision within (7) seven working days from 
the date of the request. If the Court orders t o accept the debt, it may charge the trustee with  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  48 
 submitting a report on the impact of the new debt on the draft scheme, and refer the 
findings to the Court for approval. In all cases, the proceedings set forth in this Clause shall 
not suspend the proceedi ngs of restructuring, declaration of bankruptcy and liquidation of 
assets, as the case may be.  
  
Chapter Five  
Report of the Trustee

Article (96) 
The trustee shall prepare a report on the debtor's business and submit a copy thereof to the 
Court within the period it specifies, in accordance with the following:  
1. His opinion on the possibility of restructuring the debtor's business and whether it is 
required to submit a scheme of restructuring to the creditors of the debtor, in this case 
the report shall b e accompanied with a statement indicating the debtor's readiness to 
continue his business.  
2. His opinion on the possibility of selling the debtor's business in whole or in part as an 
"existing and practiced activity" in the case of bankruptcy and liquidation of the debtor's 
assets.

Article (97) 
1. The Court shall review the report of the trust ee within ten (10) working days from the 
date of submitting it to ensure that the report covers all claims.  
2. The period set out in Clause (1) of this Article shall be interrupted if the Court requests 
the trustee, during such period, to make any necess ary amendments to the report and 
the trustee makes such amendments within a period of no more than ten (10) working 
days from the date of being notified of the Court's request, to be renewal for a similar 
period once, under the Court's decision.  
3. The trustee shall provide the creditors whose debts are finally or temporarily accepted 
with a copy of the report within three (3) working days from the expiration date of the  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  49 
 period stipulated in Clause (2) of this Article, in order to submit their observ ations about 
the report.  
  
Chapter Six 
Deciding on the Report

Article (98) 
1. The Court shall order the trustee to call the debtor, the creditors whose debts are finally 
or temporarily accepted and any controller appointed to attend one or more meetings to 
consider the report within (10) ten working days following the period set for th in Clause 
(3) of article (97) of this Decree -Law.  
2. Calling for the meeting shall be by publishing the call notice in two widely circulated 
local daily newspapers, one published in Arabic and the other in English. In addition, the 
Court may order the  trustee to send the notice of the meeting by all possible means of 
communication.  
3.  The Court shall decide:  
a. Either to Proceed with the restructuring procedures and instruct the trustee to 
prepare a plan for the restructuring of the Debtor's Busin ess pursuant to Section 
Seven of this Chapter; or  
b. To dismiss the application submitted pursuant to this Chapter. In this case, the Court 
shall issue a judgment declaring Bankruptcy and the liquidation of the assets of the 
Debtor pursuant to the provisions of Section Twelve of this Chapter.b.  
4. The Cour t shall not decide to prepare a Restructuring Plan for the Debtor's Business, 
unless the Debtor expresses its capability and ability to continue the business and it 
appears to the Court, based on the documents and details available and upon hearing 
the Tru stee's statement, that it is possible for the Debtor's business to be profitable again 
within a reasonable period of time appropriate to the volume and nature of the Debtor's 
Business and the amount of the Debtor's indebtedness.  
5. The trustee shall publ ish the Court's decision initiating the proceedings, within five (5)  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  50 
 working days from the date of its issuance, in two local widely circulated daily 
newspapers, one published in Arabic and the other in English.  
  
Chapter Seven  
Initiating the Restructuring  Proceedings

Article (99) 
If the Court issues a decision initiating the restructuring proceedings, the appointed trustee 
shall perform his duties and shall begin to prepare and develop the scheme, with the 
assistance of the debtor, within a period not exce eding three (3) months from the date of the 
decision, and the Court may extend this period at the request of the trustee once or for 
several times, provided that such periods do not exceed, in the aggregate, three (3) 
additional months.

Article (100) 
The trustee shall notify the Court, on a regular basis, every twenty one (21) working days at 
most, of the progress of preparing the draft scheme of restructuring.

Article (101) 
1. The trustee shall deposit a copy of the draft scheme of restructuring with the Court, 
accompanied with a summary of the scheme of restructuring, which indicates the 
probability of accepting the draft scheme by the creditors, and whether it is feasible to 
call them for a meeting to study the draft scheme.  
2. The draft scheme of restructuring shall indicate the following:  
A. To what extent the debtor's business might re -achieve profits;  
B. The debtor's activities to be suspended or terminated;  
C. Term s and conditions of the settlement of any obligations;  
D. Any performance bonds to be provided by the debtor, if any;  
E. Any offer for buying all or part of the debtor's assets, if any;   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  51 
 F. Grace periods and payment discounts;  
G. The possibility of converting the debt into shares in the capital of any project;  
H. The possibility of consolidating, creating, redeeming, selling, or substituting any 
securities if it is necessary to implement the draft scheme;  
I. Proposing a period or periods for repaying the whole debt.  
3. The trustee may include in the draft scheme of restructuring any other matters deemed 
useful in the implementation of the scheme.

Article (102) 
The scheme of restructuring shall include a timetable for its implementation, which shall not 
exceed five (5) years from t he date of the scheme ratification by the Court, and it may be 
extended for a further period of no more than three years with the consent of the majority of 
creditors who hold two -thirds of the debts unpaid in accordance with the scheme and any 
amendments thereto.

Article (103) 
1. The Court shall, within ten (10) working days from the submission date of the draft 
scheme of restructuring, review the draft scheme to ensure that it is in the interest of all 
parties. The Court may request, during such perio d, the trustee to make any necessary 
amendments to the draft scheme and return the same to the Court within no more than 
five (5) working days from the notification date of the Court's decision, and such period 
shall be renewable for a similar period.  
2. The Court shall, within five (5) working days from the date of submission of the draft 
scheme or the date of re -submission thereof, as the case may be, request the trustee to 
call the creditors, within five (5) working days, for a meeting to discuss the d raft scheme 
of restructuring and vote thereon, and the trustee shall provide the creditors whose 
debts are accepted with a copy of the draft scheme of restructuring.  
3. The call for the meeting referred to in Paragraph (2) of this Article shall be publis hed in 
two widely distributed local daily newspapers, one of which is published in Arabic and  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  52 
 the other in English. The call for meeting shall specify the place, date and time of the 
meeting. In addition, the Court may instruct the trustee to send the call  for the meeting 
by all available methods of communication, including the notification by electronic 
means.  
4. The meeting shall be held not less than three (3) and not more than fifteen (15) Business 
Days from the date of the publication of the call for meeting, as the Court may consider 
appropriate and proper in the interest of the Restructuring Procedure. The el ectronic 
means may be used to organize the meeting and discuss the plan or vote thereon, so that 
any of the creditors may easily communicate as appropriate to the procedures based on 
the trustee's recommendation.  
5. The Court may request the trustee to c all the creditors for other meetings during the 
same proceedings set forth in this Article, taking into account the number of the known 
creditors and any other circumstances of importance to the holding of the meeting.  
6. If the debtor is subject to a co mpetent regulatory authority, the Court shall call such 
authority to attend the meetings.  
  
Chapter Eight  
Creditor Committees

Article (104) 
1. The Court may, based on the request of a group of creditors or sua sponte after 
consulting the Trustee, issue a decision to establish one or more committees of creditors 
of different categories, one or more committees of creditors holding secured debts and  
one or more committees of creditors holding preferential debts. The Court may also form 
one or more committees of holders of bonds or Sukuk for the purposes of discussing the 
plan and proposing, if necessary, any amendments to it at the meetings organized  
pursuant to article (103) of this Decree -Law.  
2. Each committee may select a representative from among the creditors or their legal and 
financial consultants, and specify the matters delegated to such representative pursuant  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  53 
 to this Decree -Law, including authorizing him on behalf of the creditors in this  
committee to vote on the reconstructing plan.  
3. The representative of each committee shall be notified of all correspondence related to 
the meeting, minutes and proceedings and such representative shall be responsible for 
notifying the creditors repres ented by the committee.  
4. The Court may, based on the proposal of the trustee, restrict the selected representative's 
powers or relieve him of his duties if it finds that the powers granted to him are broad 
and harmful to the interests of all the credit ors or the creditors represented by the 
committee.  
5. The Court may re -form any of the committees referred to in Clause (1) of this Article, if 
deemed necessary.  
6. The committees formed under the provisions of this Article shall be equally treated.

Article (105) 
1. The trustee and the debtor shall provide an explanation of the items of the scheme of 
restructuring during the meetings held to discuss the scheme.  
2. Any creditor may, at the meetings held to vote on the draft scheme of restructuring,  
make any amendments thereto, and the committee before which the amendment is 
proposed and any other committee affected by the proposed amendment shall express 
the opinion thereof on such amendments.  
3. The Court may call the creditors who might be affec ted by the proposed amendments for 
further meetings to consider the proposed amendments, and it may decide to approve or 
reject any of the proposed amendments in preparation for ratifying the draft scheme of 
restructuring in accordance with the provisions of Chapter IX of this Part.

Article (106) 
1. The right to vote on the draft Restructuring Plan shall be limited to the ordinary creditors 
and preferential debts creditors whose debts are finally accepted.  
2. The Court may authorize the secured credit ors to vote on the Restructuring Plan based  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  54 
 on the value of their secured debts without impacting the security right if the plan affects 
its secured rights. The secured creditors shall not vote in situations other than the 
abovementioned one, unless they w aive those securities in advance. Such waiver shall 
be recorded in the minutes of the meeting and if the Restructuring Plan is rejected, the 
waived security shall be reinstated.  
3. Notwithstanding the provisions of Paragraph (1) of this Article, the Court may, upon the 
recommendation of the trustee, permit the creditors whose debts are provisionally 
accepted to vote on the draft Restructuring Plan. The Court shall specify in its deci sion 
the terms and limits of such permission.

Article (107) 
1. The draft Restructuring Plan shall be approved by a majority vote of the creditors whose 
debts are finally accepted or those whose debts provisionally accepted and permitted to 
vote, provid ed that such majority holds in the aggregate at least two thirds of the 
accepted value of the total debts.  
2. If one of the two majorities referred to in Clause (1) of this Article is not achieved, the 
meeting shall be postponed for seven (7) working day s. 
3. If one of the two majorities is not achieved after the extension in accordance with Clause 
(2) of this Article, it shall be deemed a rejection of the scheme of restructuring.  
4. The creditors who have attended the first meeting or been represented therein, and 
voted for approving the scheme of restructuring may be absent from the second 
meeting. In such case, their approval of the scheme of restructuring at the first meeting 
shall  remain valid and effective and their votes shall be counted in the quorum at the 
second meeting unless they attend the second meeting and change their previous votes 
or there is a change made to the scheme of restructuring.  
5. Minutes of the meeting hel d to vote on the draft scheme of restructuring shall be written 
and signed by the restructuring trustee, the debtor and the present creditors permitted to 
vote. If one of them refuses to sign the same, his name and the reason for refusal shall be 
mentioned  in the minutes.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  55 
 6. All the creditors who participate in voting on the draft scheme of restructuring shall 
inform the trustee of their elected addresses for receiving notices, including the 
addresses to which notices by electronic means are sent. Giving notice using such means 
shall be effective in respect of all subsequent proceedings.  
7. Items of the scheme of restructuring shall apply to the creditors voting against the 
scheme.  
  
Chapter Nine  
Ratification of the Scheme of Restructuring

Article (108) 
1. The trustee shall, within three (3) working days from the date of the meeting at which 
the required majority vote for approving the scheme of restructuring, submit the draft 
scheme to the Cour t, so as to render its decision ratifying or rejecting the scheme of 
restructuring.  
2. Any creditor whose debt is accepted and who does not approve the scheme of 
restructuring when voting thereon may object to the draft scheme submitted to the 
Court with in three (3) working days from the expiry date of the time limit specified in 
Clause (1) of this Article. The Court shall decide on the objection submitted within five 
(5) working days from the date of submission of the objection and its decision in this 
regard shall be final.  
3. The Court shall summarily issue its decision ratifying the scheme of restructuring after 
ensuring the fulfillment of all the conditions, and it may decide to accelerate the maturity 
of the debts due to the creditor who accepts to  reduce his debts, in the best interest of 
the scheme of restructuring. The Court's decision shall be binding on all creditors at 
meetings of the Creditor Committee or Committees.  
4. The Court shall verify that the scheme guarantees that all the creditor s who are affected 
by the scheme will receive at least what they would have received had the debtor's 
assets been liquidated on the date of voting on the scheme, as per the Court's estimation  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  56 
 of such assets.  
5. The Restructuring Plan shall not affect the  priority rights established for secured debts or 
preferential debts as provided in this Decree -Law.

Article (109) 
1. If the Court rejects to ratify the scheme of restructuring, it may return the scheme to the 
trustee to amend the same within ten (10) working days from the date of rejection and 
re-submit it thereto for ratification or may decide to initiate the proceeding s of the 
deceleration of bankruptcy and liquidation of the debtor's assets in accordance with the 
provisions of this Decree -Law.  
2. The debtor or any of the creditors whose debts are finally accepted may file a complaint 
with the Court about its decision r ejecting the ratification or the amendment of the 
scheme of restructuring. The Court shall adjudicate on the complaint within ten (10) 
working days from the date of filling the complaint and its decision shall be final.

Article (110 ) 
1. The trustee shall ensure that the sale of any of the debtor's assets to be sold in 
accordance with the scheme of restructuring shall be at the best price in light of the 
prevailing market conditions at the selling date. The trustee shall deposit the sale 
proceeds, which rep resent the value of the claims secured by the sold assets in the bank 
account determined by the Court.  
2. The trustee shall pay the creditors whose debts are secured by the assets sold in 
accordance with Clause (1) of this Article, their debts when due fro m the sale proceeds 
of such assets, as per their prioritization.

Article (111 ) 
1. The trustee or the debtor may offer the creditors an alternative security to be equivalent 
to the existing security. In case of non -acceptance of such offer, the Court may decide to  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  57 
 substitute the security if it finds that the alternative security is not l ess than the value of 
the existing security and does not constitute harm to the interests of the creditor to 
whom the alternative security is offered.  
2. The Court's decision may be appealed before the competent Court of Appeal within five 
(5) working days from the issuance date of the Court's decision. The appeal shall not 
cause the suspension of the proceedings, and the decision on the appeal shall be fin al.

Article (112 ) 
1. If any of the Debtor's Assets is inevitably essential to the continuation of the Debtor's 
Business, the Court may decide, either sua sponte or at the request of any Creditor or any 
Interested Party, that such Assets be not disposed  of without the approval of the 
creditors, and the same shall be subject to the approval of the Court for a specified 
period that shall not exceed the term of implementation of the Restructuring Plan. If 
such Assets were the subject of a security, the Cour t may decide to replace the security in 
accordance with the provisions of this Decree -Law.  
2. Any Interested Party may apply to the Court seeking the nullification of any act that may 
have been committed in violation of the provisions of Paragraph (1) of  this Article, 
within three (3) years from either the date of issuance of the Court's decision or the date 
of ratification of the Restructuring Plan, whichever is later.  
  
Chapter Ten  
Publishing and Implementation of the Ratified Scheme of Restructuring

Article (113 ) 
The trustee shall, within seven (7) working days from the date of ratifying the scheme of 
restructuring, record the Court's decision ratifying the scheme of restructuring in the 
commercial or professional register of the debtor, as the case may  be, and publish the same 
in two local widely circulated daily newspapers , one published in Arabic and the other in 
English, provided that it contains a summary of the most important condition of the scheme  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  58 
 of restructuring, the debtor's name, place of re sidence and Registration No. in the 
commercial or professional register, as the case may be, and the date of the decision 
ratifying the scheme of restructuring.

Article (114 ) 
1. The trustee shall supervise the scheme of restructuring throughout its implementation 
period.  
2. The trustee shall:  
a. Monitor the progress of the plan and report any default in its implementation to the 
Court;  
b. Submit a report to the Court on the progress of the implementation of the plan every 
three (3) months, and provide every creditor with a copy of the report.  
c. Cooperate with the creditors and provide them with the required details relating to 
their own in terests, if available, in accordance with the provisions of this Decree -
Law.  
3. If the trustee deems it is necessary to make any amendments to the scheme of 
restructuring and such amendments cause changes in the rights or obligations of any 
party thereto, he shall request the Court to approve such amendments. The Court shall, 
prior to deciding on the request, notify all the parties taking part in voting on the scheme 
and the creditors whom it deems necessary to be notified, within five (5) working days 
from  the date of the request of the trustee, in order to submit any observations about the 
required amendments within ten (10) working days from the date of notification. The 
Court may issue its decision approving the amendment in whole or in part or rejecting  it.

Article (115 ) 
Once all the obligations stipulated in the scheme of restructuring are fulfilled, the Court 
shall, at the request of the trustee, the debtor or any stakeholder, issue its decision 
completing the implementation of the scheme and the proc eedings of restructuring of the 
debtor. Such decision shall be published in two local widely circulated daily newspapers,  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  59 
 one published in Arabic and the other in English.  
  
Chapter Eleven  
Nullity and Annulment

Article (116 ) 
If an investigation is initiate d against the debtor with regard to any of the crimes set forth in 
Part VI of this Decree -Law, or a criminal action is instituted against the debtor with regard to 
such crimes, after the ratification of the scheme of restructuring, the Court, which has 
ratified the scheme of restructuring, may decide, at the request of any stakeholder, take the 
measures it deems necessary to seize the debtor's assets. Such measures shall be canceled if 
it is decided to close the investigation or if a judgment of acquittal o f the debtor is entered.

Article (117 ) 
1. Every stakeholder may submit a request for nullifying the restructuring proceedings 
within six (6) months from the date of initiating the investigation provided for in Article 
(116) of this Decree -Law; otherwise the request shall be unacceptable. In any ca se, the 
request for nullifying the restructuring proceedings shall not be acceptable if submitted 
after the lapse of two years from the issuance date of the decision ratifying the scheme of 
restructuring.  
2. The restructuring proceedings shall be nullifi ed if a judgment of conviction of any of the 
crimes set forth in Part VI of this Decree -Law is delivered against the debtor, after the 
ratification of the scheme of restructuring, unless the Court decides otherwise to protect 
the interests of the creditors . 
3. Nullity of the restructuring proceedings shall result in discharging the surety acting in 
good faith, who guarantees the implementation of all or some of the conditions of the 
scheme of restructuring.  
  
  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  60

Article (118 ) 
1. Any stakeholder may request the Court ratifying the scheme of restructuring to annul the 
scheme if the debtor fails to fulfill the conditions thereof or if the debtor dies and it 
becomes clear that it is impossible to implement the same for any reason.  
2. Annulment of the scheme of restructuring shall not result in discharging the surety, who 
guarantees the implementation of its conditions and he shall be summoned to attend 
the hearing at which the request for annulment is heard.

Article (119 ) 
The Court may include in its judgment of nullity of the restructuring proceedings or 
annulment of the scheme of restructuring, an order of sealing the debtor's assets, except for 
the assets that may not be attached by law and the living expenses prescribed  for the debtor 
and his dependents. The Court shall charge the trustee, within five (5) working days from 
the date of the nullity or annulment judgment, with publishing a summary of the judgment 
in two local widely circulated daily newspapers, one publishe d in Arabic and the other in 
English, and the trustee shall conduct a supplemental inventory of the debtor's assets.

Article (120 ) 
If the Court rules to nullify the restructuring proceedings or annul the scheme of 
restructuring, the trustee shall call th e new creditors to provide their debt documents to be 
admitted in accordance with the admission of debts procedures, and the debts already 
accepted shall not be readmitted. The trustee shall exclude the debts which were fully 
settled and reduce the debts w hich were partially settled by the part that has been settled.

Article (121 ) 
Dispositions of the debtor after the issuance of the decision ratifying the scheme of 
restructuring and before the nullity of the proceedings or the annulment of the scheme of 
restructuring shall be effective against the creditors, and they may request to rescind the  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  61 
 same only in accordance with the rules stipulated in the Civil Transactions Law in respect of 
the Paulian Action. Such action shall not be heard after the lapse of t wo years from the date 
of nullity of the proceedings or annulment of the scheme of restructuring.

Article (122 ) 
The nullity of the proceedings or the annulment of the scheme of restructuring shall not 
require the creditors to refund the amounts received before the nullity or annulment 
judgment and such amounts shall be deducted from the value of their debts.

Article (123 ) 
The Court may, at the request of any stakeholder, after hearing the opinion of the trustee, 
rule to terminate the restructuring proce edings if the debtor dies during hearing such 
proceedings, taking into account the interests of the creditors and the Court shall rule, in the 
same judgment, to declare the bankruptcy of the deceased debtor and the liquidation of his 
assets, subject to the  provisions of article (150) of this Decree -Law.  
  
Chapter Twelve  
Delivering a Judgment of Bankruptcy and Liquidation

Article (124 ) 
The Court shall deliver a judgment declaring the debtor's bankr uptcy and ordering the 
liquidation of his assets in any of the following cases:  
1. If the Court adjudges to terminate the composition proceedings in accordance with the 
provisions of article (64) of this Decree -Law.  
2. If the debtor is the applicant an d acts in bad faith or the application is intended for 
procrastination or evasion of financial obligations.  
3. If the restructuring proceedings are inappropriate for the debtor, based on the data and 
documents submitted with the application, or due to th e impossibility of restructuring as 
per the report prepared by the expert in accordance with the provisions of article (77) of  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  62 
 this Decree -Law or the report of the trustee in accordance with article (96) hereof.  
4. If one of the two majorities provided f or in article (107) of this Decree -Law is not 
constituted.  
5. If the Court decides to reject the scheme of restructuring in accordance with article (109) 
of this Decree -Law.  
6. If the Court renders a judgment nullifying the proceedings or annulling the scheme of 
restructuring in accordance with the provisions of Articles (117) and (118) of this 
Decree -Law.

Article (125 ) 
The Court shall obligate the debtor who has been declared bankrupt to abstain from 
participation in the management of any company or engaging in any commercial activity if 
he breaches the obligation provided for in article (68) of this Decree -Law and if it is proved 
that his act or omission leads to the declarati on of his bankruptcy and liquidation of his 
assets, for a period not beyond the date of the debtor's rehabilitation in accordance with the 
provisions of this Decree -Law.

Article (126 ) 
If the Court rules to initiate the proceedings of declaration of the d ebtor's bankruptcy and 
liquidation of his assets, it shall appoint, in its judgment, a trustee to assume conducting the 
proceedings of declaration of the debtor's bankruptcy and liquidation of his assets, unless 
the Court adjudges the continuation of the a ppointment of any trustee or any controller 
appointed during the restructuring or composition proceedings.

Article (127 ) 
The Court may reduce the time limits set forth in this Chapter in cases it deems appropriate.  
 
  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  63

Article (128 ) 
The trustee shall, with in three (3) working days from the date of the judgment declaring the 
debtor's bankruptcy and liquidation of his assets, publish the judgment in two local widely 
circulated daily newspapers, one published in Arabic and the other in English.

Article (129 ) 
1. The trustee shall request the creditors to file any final claims that have not been filed 
before, provided that they are filed within ten (10) working days from the date of 
publishing the judgment. Any claims received after such date shall be disregarded, 
unless delay is for some reason acceptable to the Court.  
2. Any claims rejected by the Court shall be disregarded in accordance with the provisions 
of this Part.

Article (130 ) 
The trustee shall carry out a final audit of the creditors' claims but shall not make or 
complete such audit if he finds that the proceeds of the sale of the Debtor's Assets will be 
entirely spent for legal fees or for payment of the secured debts.

Article (131 ) 
The Court may permit the debtor, at the request of the trustee and under his supervision, to 
practice some or all of his business in order to sell such business at the best possible price, 
provided that the permission period is not more than six ( 6) months from the date of 
granting permission, and it may be extended for a further period not exceeding two (2) 
months, if the continuation of his business serves the interests of creditors or the public 
interest.

Article (132 ) 
1. The trustee shall u ndertake to liquidate all the debtor's assets, except for the assets  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  64 
 which he may retain in accordance with the provisions of this Decree -Law.  
2. If the debtor inherits or any assets devolve thereto for any reason during the bankruptcy 
proceedings, he sh all disclose the same, and the trustee shall liquidate such assets.  
3. The trustee shall sell the debtor's assets in a public auction under the Court's approval 
and under its supervision and control.  
4. The Court may authorize the trustee to sell some or all of the debtor's assets in a public 
auction in accordance with the conditions determined by the Court.  
5. The trustee shall use the liquidation proceeds of the debtor's assets to settle any claims 
against the debtor under the supervision of the Court, and any surplus proceeds shall be 
delivered to the debtor.

Article (133 ) 
All correspondence of the debtor's business during the bankruptcy proceedings shall include 
an indication that the debtor is subject to the proceedings of declaration of bankruptcy and 
liquidation of assets.

Article (134 ) 
1. The trustee shall not ify the Court and the debtor every month of the progress of the 
proceedings of bankruptcy and liquidation.  
2. The trustee shall notify the Court, the debtor and the controllers of the content of any 
offers he receives for the sale of all or some of the debtor's business. The Court shall 
decide promptly on any objection to the sale terms filed by any stakeholder, a nd the 
Court's decision shall be final in this regard.

Article (135 ) 
1. Upon issuance of a judgment declaring the bankruptcy of the Debtor and the liquidation 
of the Debtor’s Assets, the time limits of all debts of the bankrupt Debtor, whether they 
wer e ordinary debts, debts secured by a lien or preferential debts, shall lapse.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  65 
 2. The Court may deduct from the deferred debt for which no interest is required an 
amount equivalent to the legal interest for the period extending from the date of the 
Court's judgment initiating the proceedings of declaration of bankruptcy and liquidation 
of assets to the date of maturity.  
3. If the claims are denominated in a foreign currency, their value shall be converted into 
the national currency at the exchange rate prevailing at the date of the judgment 
declaring the debtor's bankruptcy and liquida tion of his assets, unless otherwise agreed 
upon.

Article (136 ) 
1. The following persons may  not, directly or through an agent, purchase or submit a 
proposal for purchasing all or some of the debtor's assets offered for sale in accordance 
with the provisions of article (131) of this Decree -Law:  
A. The debtor;  
B. The debtor's spouse or brother -in-law or one of his relatives to the fourth degree;  
C. Any person who has been a partner, employee, accountant or agent of the debtor 
during the two years preceding the date of the judgment initiating the proceedings of 
declaration of the debtor's bank ruptcy and liquidation of his assets.  
D. Any person who assumes or has assumed the role of the controller after initiating the 
bankruptcy proceedings.  
2. Notwithstanding the provisions of Clause (1) of this Article, the persons referred to in 
Paragraphs (B), (C) and (D) of Clause (1) of this Ar ticle may purchase the debtor's assets 
under the approval of the Court if it serves the interest of creditors.

Article (137 ) 
1. Taking into account any claims filed before the Court, the trustee shall distribute the 
liquidation proceeds, as per the ord er of priority, to the creditors in accordance with the 
provisions of Chapter VI of Part V of this Decree -Law, after obtaining the approval of the 
Court.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  66 
 2. The trustee may distribute the liquidation proceeds after each sale or after the 
accumulation of funds generated by the total sales.  
3. The trustee shall, after each sale, submit a distribution list to the Court for approval.  
4. The creditor shall receive his share of the proceeds in the place where the trustee 
performs his mission, unless otherwise agreed upon between the trustee and the 
creditor.  
5. Portions of the debts which have not been finally accepted and those to which 
objections are filed in accordance with the provisions of this Decree -Law shall be set 
aside and deposited in the Court's treasury until they are finally decided on.  
6. The secured creditor shall be paid the proceeds of the sale of the Assets securing th e 
debt. If the value of the assets used as security is insufficient to pay the full amount of the 
debt secured by mortgage or preference, the outstanding balance of the debt shall be 
ranked as an ordinary debt.  
7. The trustee shall deliver the debtor any  surplus of the liquidation proceeds after fulfilling 
all his liabilities.

Article (138 ) 
1. After completion of the final distribution of the debtor's assets to the creditors, the Court 
shall issue a decision closing all proceedings, which shall contain a list of creditors whose 
debts are accepted, the amount thereof and the unpaid debt, and shal l order the trustee 
to publish such decision in two local widely circulated daily newspapers, one published 
in Arabic and the other in English.  
2. The trustee shall return all the documents in his custody to the debtor after the 
completion of the proceedings and his mission.  
3. The proceedings of declaration of bankruptcy and liquidation of assets may be 
terminated at the request of the debtor at a ny time if the reasons leading to the 
declaration of the debtor's bankruptcy and liquidation of his assets disappear.  
4. After closing the proceedings of declaration of the debtor's bankruptcy and liquidation of 
his assets, each creditor whose debt is ac cepted and not fully paid shall be entitled to  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  67 
 execute on the debtor's assets to obtain the outstanding debt. Acceptance of the debt 
referred to in Clause (1) of this Article shall be deemed as a final judgment with respect 
to such execution.  
  
Chapter Thirteen  
Provisions of Corporate Bankruptcy

Article (139 ) 
The provisions of Articles contained in this Part in addition to the provisions of Articles (172) 
and (173) of Part V of this Decree -Law shall apply to the Corporate Bankruptcy.

Article (140 ) 
Once a judgment declaring bankruptcy is delivered, the company may not be liquidated 
outside the framework of this Decree -Law or placed under receivership.

Article (141 ) 
1. The company's creditor may petition for bankruptcy even if he is a partner. How ever, the 
non -creditor partners may not, in their individual capacities, petition for the bankruptcy 
of the company.  
2. The Court may, on its own initiative, or at the request of the debtor company or the 
competent regulatory authority, postpone declarin g the bankruptcy of such company for 
a period not exceeding one year if its financial position is likely to be consolidated and 
the interests of the national economy so require. In this case, the Court shall decide to 
take the measures it deems appropriate  to preserve the company's assets.

Article (142 ) 
1. If the court adjudges to declare the company's bankruptcy and liquidation of its assets, 
all the joint partners therein, including the joint partner who has been withdrawn from 
the company after the c essation of payment, shall be declared bankrupt, provided that a  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  68 
 period of no more than one year elapses after registration of his withdrawal from the 
company in the commercial register.  
2. The Court shall, by virtue of one judgment, declare the bankrupt cy of the joint partners, 
even if it has no jurisdiction to declare the bankruptcy of such partners.  
3. The Court shall appoint, in addition to the trust ee appointed in accordance with the 
provisions of this Decree -Law for the company's bankruptcy proceedings, one or more 
trustees for the bankruptcy of the joint partners therein. Their bankruptcy shall be 
independent in terms of its administration, verific ation of its debts and the manner of its 
termination.

Article (143 ) 
If the court adjudges to declare the co mpany's bankruptcy, it may, on its own initiative or at 
the request of any stakeholder, adjudge to declare the bankruptcy of each person who has 
carried out commercial activities in its name and for his own account and has disposed of 
the company's assets as if they were his own.

Article (144 ) 
1. If the Court decided to declare the company's bankruptcy, and the company's assets are 
not sufficient to cover at least (20%) twenty percent of its debts, the Court may order 
members of the board directors or m anagers or any of them, to pay the remainder or 
part of the company's debts, each within the limit of his responsibility of these debts, 
whenever it is proven for the court that any of them had committed the acts stipulated in 
sub-clauses (a), (b) and (c) of Article 147 of this Decree by Law, without prejudice to the 
texts of clauses (2 and 3) of that article.  
2. Any member of the board of directors or managers, against whom a judgment was 
issued in accordance with the provision of clause (1) of this arti cle, may appeal this 
judgment in accordance with the provisions stipulated in the Civil Procedures Code.  
3. The appeal of the judgment issued against members of the board of directors or 
managers shall not result in suspending the execution of the decisi on to declare the  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  69 
 company's bankruptcy or in contesting its res judicata.

Article (145 ) 
The legal representative of the company declared bankrupt shall act on its behalf within the 
limits of his powers in any matter where the law requires the opinion of the company or his 
presence. Further, the company's representative shall appear before the  Court or the trustee 
whenever requested and shall give any information or explanations required from him.

Article (146 ) 
The Court may, at the request of the trustee, order the partners or shareholders of the 
company to pay the outstanding balance of the ir shares, even before maturity. The Court 
may decide to limit such claim to the amount necessary for the payment of the debts of the 
company.

Article (147 ) 
1. If the bankruptcy is declared, the Court may obligate the members of the board of 
directors,  managers, or liquidators in the liquidation proceedings, which are conducted 
outside the framework of this Decree -Law, to pay an amount to cover the debtor's debts 
if it is proved that any of them commits any of the following acts during the two years 
following the date of initiating proceedings pursuant to this Part:  
A. Use of commercial methods of ill -considered risks, such as disposing of goods at 
below the market value to acquire the assets with a view to avoiding the bankruptcy 
proceedings or delayi ng the initiation thereof.  
B. Entering into transactions with a third party to dispose of the assets at no charge or 
for inadequate consideration without certain benefits or without benefits 
proportionate with the debtor's assets.  
C. Paying the debts of any creditors with intent to cause damage to other creditors, 
during the period of his cessation of payment or the period of his debit estate.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  70 
 2. The Court shall not deliver its judgment provided for in this Article if it is convinced  that 
the natural or legal person has taken all the possible precautions to reduce the potential 
losses on the debtor's assets and his creditors.  
3. The persons referred to above shall be relieved of liability for the acts set forth in this 
Article if it  is established that the any entity's board members, manager or liquidators do 
not involve in the acts set forth in this Article or that they have reservations about the 
decision issued thereon.

Article (148 ) 
Debentures and Sukuk issued by the company as  set out in the Commercial Companies Law 
shall not be subject to the procedures set for verification of debts. However, such 
debentures and Sukuk shall be accepted at their nominal values within the debtor's debts 
after deducting what the company has paid therefrom.  
  
Chapter Fourteen  
Bankruptcy of the Debtor after his Demise, Retirement from business or 
Incapacitation

Article (149 ) 
The creditor may petition for initiating the proceedings of the debtor's bankruptcy and 
liquidation of his assets after the debtor's demise, retirement from business or incapacitation 
if the conditions of declaration of bankruptcy and liquidation are satis fied in accordance 
with the provisions of this Decree -Law. The petition for bankruptcy in these cases may not 
be filed after the lapse of one year as of the date of his demise, the date of striking his name 
off the Commercial Register in case of his retire ment from business or the date of judgment 
declaring his incapacitation.

Article (150 ) 
1. The Court shall declare the bankruptcy of the deceased debtor and liquidation of his  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  71 
 assets if his heirs do not provide an in -kind security, bank guarantee issued  by a bank 
operating in the State or any other guarantee accepted by the Court and sufficient to 
guarantee the settlement of the creditor's debt within the period specified by the Court.  
2. Heirs of the deceased debtor may petition for declaration of his  bankruptcy and 
liquidation of his assets within the period provided for in article (149) of this Decree -
Law, if some heirs object to the declaration of bankruptcy, the Court shall hear their 
statements and then adjudicate on the petition summarily accordi ng to the interests of 
the deceased debtor's creditors and heirs.  
3. All the provisions set forth in this Decree -Law shall apply to the proceedings of 
declaration of the deceased debtor's bankruptcy and liquidation of his assets in 
accordance with this A rticle, taking into account the following:  
A. The notice of petition for declaration of bankruptcy in the event of the trader's 
demise shall be served at his last domicile without the need for naming the heirs.  
B. The heirs of the debtor declared bankr upt shall replace him in the proceedings of 
bankruptcy and liquidation of assets.

Article (151 ) 
The heirs of the deceased debtor or their legal agents shall appoint the representative acting 
on their behalf in the proceedings of bankruptcy and liquidation of assets. If they fail to 
appoint their representative within seven (7) working days from the d ate of being notified 
by the trustee, the Court shall, at the request of the trustee, appoint one of them. The Court 
may dismiss the representative of the heirs and appoint another from among the heirs or 
their legal agents.  
  
Chapter Fifteen  
Common Provis ions

Article (152 ) 
The provisions contained in this Chapter shall apply to the restructuring or bankruptcy and  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  72 
 liquidation of assets, as the case may be, unless otherwise provided for herein.  
  
Section  One  
Reclamation

Article (153 ) 
1. The goods held in the debtor's possession on deposit, or to be sold for the account of its 
owner, or for the purpose of delivering the same to him may be reclaimed. The price of 
the goods may be reclaimed from the selling debtor if not delivered to the buy er and not 
paid in cash, by virtue of a commercial paper, through setting off, by entering it in a 
current account between the debtor and the buyer.  
2. If the debtor deposits goods with third parties, such goods may be reclaimed therefrom.  
3. Commercial papers and other Sukuk of value delivered to the debtor for collection of 
their value or profits, or for having them allocated for a particular settlement may be 
reclaimed if they exist in the inventoried assets and their value is not paid upon 
declaration of bankruptcy. Nevertheless, they may not be reclaimed if entered in a 
current account between the applicant for reclamation and the debtor.  
4. Money deposited with the debtor may not be reclaimed unless the reclaimer establishes 
his title th ereto by specifying the same.  
5. In the cases provided for in this Article, the reclaimer shall pay to the trustee any rights 
owed to the debtor.

Article (154 ) 
If the sale contract is terminated by virtue of a final judgment before the issuance of the 
decision initiating the proceedings, the seller may request the Court to reclaim the sold items 
in whole or in part from the assets that have been inventoried, provided that they are in 
kind.  
  
  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  73

Article (155 ) 
1. If it is decided to initiate the bankruptcy proceedings against a debtor before paying the 
price of goods bought before initiating the proceedings and the goods are still in the 
possession of the seller, the latter may retain the same.  
2. If it is decided to initiate the bankruptcy proceedings after dispatching the goods to the 
debtor and before their entry into his stores or the stores of his agent charged with the 
sale thereof, the seller may recover the possession thereof. Nevertheless, the recovery 
may not be possible if the goods lose their identity or if the debtor disposes thereof 
before their arrival, without fraud, under the title documents or transport documents, to 
a bona fide buyer.  
3. In all cases, the trustee may, under the a pproval of the Court, request the receipt of 
goods, provided that he pays to the seller the agreed price, failing which, the seller may 
assert his right to termination and claim for damages.

Article (156 ) 
Without prejudice to the provisions of article (4 8) of the Commercial Transactions Law, if it 
is decided to initiate the proceedings against the debtor before paying the price and after the 
entry of the goods into his stores or the stores of his agent charged with the sale thereof, the 
seller may not req uest the termination of the sale contract or the reclamation of the goods, 
and every clause that may enable the seller to reclaim the goods shall not be invoked vis a' 
vis the creditors.  
  
Section  Two  
Deprivation of the Right to Management and Disposition

Article (157 ) 
1. The debtor shall be prohibited from performing any of the following acts as of the date 
of the decision initiating the proceedings:  
A. Managing the d ebtor's business or paying any claims arising prior to the issuance of  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  74 
 the decision initiating the proceedings except for any set -off payments made in 
accordance with the provisions of Chapter V of Part V of this Decree -Law;  
B. Disposing of any of his as sets or paying or borrowing any amounts unless this is in 
accordance with the provisions of this Decree -Law. The dispositions performed at 
the issuance date of the decision initiating the proceedings shall be deemed as if 
performed after its issuance;  
C. If the debtor's disposition is one of those which shall not be legally valid or 
enforceable vis a' vis third parties except by registration or other procedures, it shall 
not apply to the creditors unless the procedures are conducted prior to the issuance 
of the decision initiating the proceedings.  
D. Disposing of the company's shares or stocks or making a change in its ownership or 
legal form, if the debtor is a legal person.  
2. The Court may, at the request of any stakeholder, decide the invalidity of  any disposition 
by the debtor vis a' vis the creditors, if performed in violation ofthe provisions of Clause 
(1) of this Article.

Article (158 ) 
1. Prohibiting the  debtor from management and disposition shall include all the assets 
owned by him at the date of issuance of the decision initiating the proceedings and the 
assets which devolve thereupon after the issuance of the decision initiating the 
proceedings, and t he Court may rule not to enforce the dispositions at the request of any 
stakeholder.  
2. Notwithstanding the provisions of Clause (1) of this Article, prohibiting the debtor from 
management and disposition shall not include the following:  
A. Assets that  may not be attached by law and living expenses prescribed for the debtor 
and his dependents;  
B. Assets owned by third parties;  
C. Rights relating to the personal status of the debtor.  
3. Prohibiting the debtor from management and disposition as referred to in Clause (1) of  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  75 
 this Article shall not include the rights relating to his person or in his capacity as head of 
the family or the rights relating to a purely moral interest.

Article (159) 
1. With the exception of the case of getting new financing in accordance with the 
provisions contained in Chapter IV of Part V of this Decree -Law, no security taken over 
the debtor's assets after the issuance of the decision initiating the proceedings shall be 
effective unless the Court permits otherwise.

Article (160 ) 
1. The Court may decide to suspend  any of the debtor's business, upon the urgent request 
of the trustee.  
2. The Court shall adjudge the partial suspension based on the report of the trustee within 
a period not exceeding such period needed for the Court's approval or rejection of 
ratifyin g the draft scheme of restructuring in accordance with the provisions set forth in 
this Part.

Article (161 ) 
The trustee may, during managing the proceedings, request the debtor to perform all the 
actions necessary to preserve the interests of his business. Further, the trustee may request 
the debtor to execute the effective contracts to which he is a party, subj ect to the provisions 
of Chapter IX of this Part, and the trustee may perform such actions in person, including the 
exercise of all the powers granted to the trustee of the composition proceedings in 
accordance with the provisions of Part III of this Decre e-Law.  
  
 
 
  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  76 
 Section  Three  
Suspension of Judicial Proceedings and Abatement of the Interest

Article (162 ) 
1. In cases other than those provided for in this Decree -Law, the Court decision to 
commence proceedings pursuant to provisions of article (78) of t his Decree -Law shall 
entail the suspension of judicial proceedings against the Debtor and the judicial 
enforcement proceedings in respect of the assets thereof. Subject to provisions of Article 
(186) of this Decree -Law, suspension of judicial proceedings a nd enforcement 
proceedings provided for in this Clause shall continue until the occurrence of either of 
the following two events whichever is earlier : 
a. Approval of the restructuring plan in accordance with provisions of Articles (108) 
and (109) of this Decree -Law; or  
b. Passage of (10) ten months from the date of issuance of the Court decision to 
commence bankruptcy proceedings pursuant to the provision s of Clause (1) of this 
Article.  
2. Notwithstanding the provisions of Para.  (b) of Clause (1) of this Article, after consulting 
the Trustee, the Court may extend the suspension of judicial proceedings and 
enforcement proceedings for an additional period not exceeding (4) four months.  
3. Creditors of debts secured by movable or immovable assets may require the Court to 
exclude them from the suspension of enforcement provided for in Clause (1) of this 
Article, and the Court may grant this permission if the collateral granted to the Creditor 
requesting permission is not necessary f or proceeding with the restructuring procedures 
or sale of the project as an operating and productive one. Furthermore, the Court may 
give permission if the Creditor requesting permission proves that its collateral is likely to 
be damaged or depreciated qu ickly if it does not obtain proper protection thereof.  
4. The Creditor's application filed pursuant to Clause (3) of this Article shall be served upon 
the Trustee and the Debtor within one business day.  
5. The Debtor may submit a reply to the Creditor' s application and the Trustee shall express  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  77 
 its opinion within three business days from the date of being served the application. The 
Court shall decide on granting the permission within (10) ten business days from end of 
the period granted to the Debtor a nd the Trustee in accordance with this Clause. 
Deciding on the application to obtain the permission does not entail sending notices or 
exchanging submissions. Upon granting the permission, the Court shall verify the 
absence of any collusion between the Deb tor and the Creditor whose debt is secured by 
movable or immovable assets, and the rank of the secured Creditor in the order of 
priority in case of securing more than one creditor by the same asset.  
6. The Court decision dismissing the application for pe rmission may be appealed before 
the competent court of appeal. The appeal shall not result in the suspension of the 
bankruptcy commencement proceedings. The decision made in respect of the appeal 
shall be final.

Article (163 ) 
The Court may decide, at the request of the trustee and after notifying the stakeholder, to 
abate the legal and contractual interest, including the due interest or compensation for late 
payment, as of the date of initiating the proceedings up to the date o f the Court's acceptance 
or rejection of ratifying the draft scheme in accordance with the provisions set forth in this 
Part.  
  
Section  Four  
Performance of Obligations and Contracts

Article (164 ) 
1. The trustee shall ensure that the debtor has the ability to perform his obligations.  
2. The trustee may, in the framework of the implementation of the scheme of restructuring, 
pay any amount due from the debtor to the party contracting therewith under an  
effective contract unless the other contracting party grants the debtor a grace period for 
payment.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  78 
 3. If the trustee does not execute the contract or does not continue its execution, the other 
contracting party may request the Court to terminate the co ntract, and this shall not 
cause the suspension of the proceedings.  
4. If the debtor owns any common property, the trustee or any of the co -owners may 
request to divide the common property, even if there is an agreement not permitting the 
division, and a ny co -owner shall have the priority over others if he wishes to buy the 
debtor's share in exchange for just compensation as determined by Court.

Article (165 ) 
1. The decision initiating the restructuring proceedings shall not cause the expiry of any 
term agreed upon to pay any debt due from the debtor. Any contractual provision which 
provides for otherwise shall be null and void.  
2. Initiating the restructuring p roceedings shall not cause the expiration or termination of 
any contract in force between the debtor and third parties unless it is based on personal 
considerations. The party contracting with the debtor shall fulfill his contractual 
obligations unless he invokes, prior to the issuance date of the decision initiating the 
proceedings, the exception of non -execution due to the debtor's failure to perform his 
obligations.  
3. The Court may, at the request of the trustee, order to terminate any contract in for ce to 
which the debtor is a party if it is necessary to enable the debtor to practice his business 
or if the termination is in the best interests of all creditors of the debtor and does not 
substantially harm the interests of the other contracting party.  
4. In the cases referred to in Clause (3) of article (164) of this Decree -Law and Clause (3) of 
this Article, the contracting party may take part in the restructuring proceedings as an 
ordinary creditor of the compensation, if any, arising from terminatio n, unless the Court 
decides that the compensation shall maintain the preference legally prescribed.

Article (166 ) 
Notwithstanding the provisions of article (26) of the Civil Procedure Code and the provision  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  79 
 of Clause (3) of article (164) of this Decree -Law:  
1. The issuance of the decision initiating the restructuring proceedings shall not cause the 
termination of th e lease or investment contract or the maturity of the rent for the 
remaining period if the debtor leases or invests the property in which he practices his 
business; and any clause to the contrary shall be null and void.  
2. The trustee may terminate the l ease or investment contract of the property that is used 
by the debtor to practice his business prior to the expiration date agreed upon in the 
contract. Accordingly, he shall notify the owner or the lessor of the same by a written 
notice of (45) forty fiv e working days, unless the contract provides for a shorter period.  
3. The owner or the lessor may claim the termination of the lease or investment contract of 
the property that is used by the debtor to practice his business due to his failure to pay 
the due rent if such failure continues for more than three (3) months from the issuance 
date of the decision initiating the proceedings.  
4. The Court may, at the request of the owner or the lessor, rule to terminate the lease or 
investment contract of the property that is used by the debtor to practice his business if 
he proves that the guarantees provided to him to settle the rent are not suf ficient.  
5. If it is decided to terminate or rescind the lease or  investment contract of the property 
that is used by the debtor to practice his business, the owner or the lessor of such 
property shall have a lien on the sale proceeds of the debtor's movable assets which are 
considered the furniture of the leased or inv ested property.  
6. The Court may allow the debtor or the trustee to sell the debtor's movable assets which 
are considered the furniture of the leased or invested property in any of the following 
cases:  
A. If such assets are perishable or susceptible to  impairment and maintaining the same 
requires extremely high cost;  
B. If the sale of such assets does not lead to the debtor's inability to practice his 
business; or  
C. If the sale of such assets does not affect the adequacy of the guarantees establish ed 
for the benefit of the lessor or the owner.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  80 
 7. The trustee may, after obtaining the approval of the Court, sublease the property 
occupied by the debtor to practice his business, even if the lease contract concluded 
between the debtor and the owner or the lessor states otherwise, provided that there is a 
clear and true benefit for the creditors and no damage is caused to the owner or the 
lessor of the property. In this case, the lessor shall be fairly compensated.

Article (167 ) 
Without prejudice to the employee's rights prescribed by law, the Court may terminate the 
valid employment contracts concluded between the debtor whose assets are subject to 
restructuring or who is declared bankrupt and any of his employees, if necessary, 
notwithstanding the provisions contained in such contracts.  
  
Section  Five  
Invalidity of Dispositions

Article (168 ) 
1. The following dispositions may not be invoked vis a' vis the creditors if performed by the 
debtor within the two years preceding the date of initiating the proceedings, unless the 
Court approves the validity of such dispositions for public interest concide rations or for 
the interest of bona fide third party:  
A. Donations, gifts or gratis transactions excluding customary small gifts;  
B. Any transactions where the debtor's obligations significantly exceed the 
counterparty's obligations, whether they are c ash or in -kind liabilities;  
C. Payment of any debt before its maturity date, regardless of the mode of Payment;  
D. Payment of matured debts with something other than the one agreed upon between 
the debtor and the creditor or in a manner different from that usually applied in 
paying such kind of debts. Payment by a commercial paper or a bank transfer shall 
be treated as  payment in cash.  
E. Creating any new security over his assets to secure pre -existing debts.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  81 
 2. The Court may rule the invalidity of any disposition not mentioned in Clause (1) of this 
Article if such disposition is detrimental to the creditors and the  contracting party was 
aware or was supposed to be aware that the debtor has ceased to pay his debts or that 
he was in the state of a debit estate.

Article (169 ) 
1. If a judgment is issued of the invalidity of any disposition in in the rights ofthe creditors, 
the alienee shall be obligated to return what he has received from the debtor by virtue of 
such disposition or the value of such thing at the time of receipt. Fur ther, he shall pay the 
proceeds of what he has received from the date of receipt in addition to the value of the 
benefits derived therefrom.  
2. The alienee shall be entitled to reclaim the consideration given to the debtor if such 
consideration is still available in the debtor's assets; otherwise, he shall be entitled to 
claim from the creditors the benefits gained from such disposition and to participate in 
the proceedings set forth in this Part as an ordinary creditor in respect of any exceeding 
balance .

Article (170 ) 
The Court may dismiss the Paulian Action instituted pursuant to article (168) of this Decree -
Law, if it finds that the debtor acted in good faith and for the purpose of practicing his 
business and that when doing so, there were reasons to  believe that such disposition will 
benefit his business.  
  
Chapter  Fifteen  
BIS 
Bankruptcy Proceedings in Emergency Financial Crisis  
  
  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  82 
 Article (170 )  
BIS 1  
Suspension of Debtor's Obligation to Apply for Commencing Bankruptcy Proceedings:  
1. If the Debtor defaults in paying its debts on their maturity dates for more than (30) thirty 
consecutive business days, or in case that its patrimony becomes debit due t o an 
emergency financial crisis, Debtor's obligation to file an application for commencing 
bankruptcy proceedings provided for in article (68) of this Decree -Law shall be 
temporarily suspended until the end of the emergency financial crisis state.  
2. In the event that the Debtor files the application during the emergency financial crisis, 
the Court may accept the application and take the actions it deeps fit including initiating 
the proceedings without the appointment of an expert or a trustee provided  that the 
Debtor proves that its financial turmoil or debit patrimony has resulted from the 
emergency financial crisis.  
  
Article (170 )  
BIS 2  
Offering a Settlement Agreement with Creditors:  
1. If the Court accepts the Debtor's application in pursuant to Clause (2) of article (170) 
bis(1) of this Decree -Law, the Debtor may require the Court to grant it a grace period not 
exceeding (40) forty business days for negotiating with the Creditors to rea ch an 
agreement to settle its debts.  
2. The Debtor shall publish the summary of the Court decision granting it the grace period 
pursuant to Clause (1) of this Article in two widely circulated local daily newspapers, one 
published in Arabic and one publis hed in English. The publication shall invite Creditors 
to negotiate a settlement agreement with the Debtor within (20) twenty business days 
from the date of publication. The invitation shall specify the place or method of 
conducting the negotiations.  
3. Settlement duration proposed by the Debtor may not be more than (12) twelve months  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  83 
 from the date of the Court approval.  
4. Summary of negotiations conducted between the Debtor and Creditors in addition to a 
summary of the settlement agreement accompanied by exchanged the emails shall be 
documented in writing. In case of reaching a debt settlement agreement with Creditors 
repre senting two thirds of the debts engaged the negotiations, such agreement shall be 
binding to all Creditors including those who refused to engage in the negotiations 
procedures.  
5. The Debtor, and any Creditor who has an interest in the procedures, shall notify the 
Court and all Creditors of the details of the settlement agreement mentioned in this 
Article within (10) ten business days from the date of the written approval of Creditors. 
The Court may issue a decision rejecting the settlement agreement with in (15) fifteen 
business days from the date of being notifying thereof if the Court considers that the 
agreement fails to comply with good faith in the discharge of obligations.  
6. Any Creditor who disagrees to the settlement agreement made pursuant to t his Article 
may file an objection with the Court within (15) fifteen business days from the date of 
being notified of the settlement agreement. The Court shall decide on the objection 
within (5) five business days from the date of filing the same. The Cour t decision shall be 
deemed final and binding to all Creditors.  
  
Article (170 )  
BIS 3  
Applications Filed by the Creditor:  
1. The Court shall postpone the consideration of accepting any application filed therewith 
by a Creditor or a group or Creditors to commence proceedings pursuant to Chapter 
Four of this Decree -Law if the application is filed during the emergency financial crisis, 
until end of the emergency conditions.  
2. The Court which has accepted the Debtor's application pursuant to article (170) Ter 
shall not take any precautionary measures against any of the Debtor's assets necessary  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  84 
 for the continuity of its business during the period of the emergency financial crisi s, 
including fixing seals on Debtor's business premises or its properties except those 
deemed by the Court to be irrelevant to the running of the Debtor's business.  
  
Article (170 )  
BIS 4  
Existing Proceedings  
If the application for the commencement of proc eedings pursuant to Chapter Three or Four 
of this Decree Law is filed by the Debtor or the Creditor files and the application is accepted 
by the Court before occurrence of the emergency financial crisis, the Court may modify the 
grace periods and deadlines  provided for in this Decree -Law by way of granting additional 
grace periods not exceeding double the period granted in other than the conditions of 
emergency financial crises if this is required to face direct effects of the emergency financial 
crises on the Debtor's business. In addition, the Court may amend the obligations arising 
under Articles (165) through (167) of this Decree -Law.  
  
Article (170 )  
BIS 5  
Responsibility of the Board Members and Managers:  
1. If the Debtor is a legal person who is governed by the provisions of this Decree -Law and 
ceases to repay the debts due pursuant to article (170) Ter hereof, members of the board 
and managers of the legal person shall not be held liable in case of disposing  of the 
Debtor's assets in order to pay unpaid wages and salaries which are paid on regular basis 
(excluding any allowances, bonuses or other casual payments, be them in cash or in 
kind) and are payable to the Debtor's employees, workers and personnel nece ssary for 
the continuity of business during the emergency financial crisis.  
2. Members of the board of the legal person or the directors thereof, as applicable, shall 
update the company's accounts and data in light of the losses incurred due to the  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  85 
 emerg ency financial crisis, and shall act with caution and good faith. They shall work in 
the best way to serve the interests of the legal person to protect its objects and financial 
assets.  
  
Article (170 )  
BIS 6  
Procurement of New Finance:  
In the event that the Debtor's application pursuant to provisions of Clause (2) of Article 
(170)Ter hereof is accepted, the Court, at the request of the Debtor, may permit the Debtor 
to procure new financing, with or without sec urity, subject to the following:  
1. The new financing shall have priority over any ordinary debt owed by the Debtor and 
existing on the date of the decision to commence the proceedings.  
2. The new financing provided may be secured by a mortgage of any of the Debtor's 
unmortgaged assets.  
3. The new financing provided may be secured by a mortgage on any of the Debtor's assets 
that are already mortgaged, provided that the value of said asset exceeds the amount of 
the debt secured by the existing mortgage . In this case, the new mortgage on a given 
asset shall have a lower rank than the existing mortgage thereon, unless the creditors 
whose debts are secured by the existing mortgage agree that the new mortgage shall 
have a rank equal to or higher than the ex isting mortgage on the said asset.  
If the  mortgagee is a licensed financing entity, the same asset may be mortgaged even if the 
value thereof is equal to the value of the debt secured by the existing mortgage, the new 
mortgage shall not exceed 30% of said asset. The Court may issue a decision app roving the 
granting of the new mortgage a rank equal to or higher than the existing mortgage on the 
said asset; especially if the objective of the new financing is to obtain materials or services 
necessary for the continuity of the Debtor's business to ach ieve revenues for the Debtor 
which would assists it in settling its due debts.  
   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  86 
 Article (170 )  
BIS 7  
Issuance of Amending Resolutions  
The Cabinet may issue resolutions extending, as required, any of the time limits or dates set 
out in this Chapter.  
  
Article (170 )  
BIS 8  
General Provisions:  
Where no particular a to hereinabove, shall apply to emergency financial crisis.  
  
Part Five  
General Provisions

Article (171 ) 
The provisions contained in this Part shall apply to the proceedings set forth in Part III and 
Part IV, as the case may be, unless otherwise stated.  
  
Chapter One  
Applications submitted in case of Legal Persons

Article (172 ) 
In case of submitting an appli cation for initiating the proceedings in accordance with the 
provisions of Part III or Part IV of this Decree -Law, such application shall be accompanied 
with the document evidencing the issuance of a resolution by the majority of partners in 
case of the ge neral partnerships and limited partnerships, and by the general assembly at an 
extraordinary meeting in case of other companies.  
  
  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  87

Article (173 ) 
If it is decided to initiate the proceedings against the debtor company, the decision on any 
application concerning the liquidation of the company or placing it under receivership shall 
be suspended. The company, which is under liquidation, shall continue to operate in fact 
until the completion of the proceedings set forth in Part III and Part IV of this Decree -Law.  
  
Chapter Two  
Duties and Powers of the Trustee

Article (174 ) 
1. The trustee appointed in accordance with the provisions of this Decree -Law s hall 
assume his mission under the supervision of the Court, and shall follow up the 
proceedings expeditiously and ensure that he takes all measures providing protection of 
the interests of the debtor and creditors.  
2. Subject to the provisions on the rig hts, powers and duties of the trustee provided for in 
Part III and Part IV of this Decree -Law, the trustee shall, while performing his duties, be 
subject to the same obligations of the expert in accordance with the provisions of 
Federal Law No. (7) of 2012  Concerning the Regulation of the Experts Profession Before 
Judicial Authorities, in matters which do not contradict the provisions of this Decree -
Law.  
3. The trustee may conduct a valuation of the debtor's assets whenever the need arises.  
4. The trust ee, the debtor or any creditor may request the Court to determine the scope of 
the trustee's powers regarding a particular matter, provided that this does not lead to 
suspension or disruption of the proceedings.

Article (175 ) 
1. Once appointed, the trustee shall receive the debtor's correspondence relating to his 
business and review and keep the same. The trustee shall enable the debtor to have 
access to such correspondence.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  88 
 2. The trustee shall deliver as quickly as possible to  the debtor any correspondence of a 
personal nature or which is subject to the rules of professional secrecy and is not related 
to the proceedings.

Article (176 ) 
1. The trustee shall deposit any amount received during the proceedings in the bank 
accoun t determined by the Court within no more than two (2) working days from the 
date of receipt of such amount, and shall submit to the Court a statement of account of 
such amounts within five (5) working days from the date of deposit.  
2. If the trustee dela ys the deposit of any amounts received for the purpose of deposit 
without justification acceptable to the Court, it may require him to pay a delay penalty of 
no more than (12%), for each day of delay on an annual basis, of the value of the 
amounts that hav e not been deposited, and such delay penalty shall be deposited in the 
account referred to in Clause (1) of this Article and shall be included in the general 
security of the creditors.

Article (177 ) 
The trustee shall estimate the reasonable amount required to meet the needs of the debtor 
and his dependents. The Court shall summarily issue its decision approving the estimation 
or amending the same and its decision in this regard shall be final. Such am ount shall not be 
included in the debtor's assets securing his debts.  
  
Chapter Three  
Reclamation

Article (178 ) 
1. Any stakeholder may request from the trustee that the inventory conducted in 
accordance with the provisions of this Decree -Law does not in clude certain items to 
which his title is established and on which the debtor does have any lien at the date of  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  89 
 the Court's decision initiating the proceedings. He shall be entitled to request to reclaim 
such items and the trustee shall issue a decision ap proving or rejecting the request as 
soon as possible.  
2. Any stakeholder may file a complaint about the decision issued by the trustee on the 
reclamation requests before the Court within a period not exceeding three working days 
from the date of being in formed of the decision in order to adjudicate on the request by 
virtue of a final judgment within five working days from the filing date. The complaint 
shall not cause the suspension of the proceedings.

Article (179 ) 
1. The debtor's spouse may determine the contents of the assets owned thereby in the 
inventory in accordance with any rules laid down in the financial system adopted in the 
marriage.  
2. The debtor's spouse may, within two months from the date of publishing the decision 
initiating the proceedings, summarily request from the Court the reclamation of the 
movables or immovables owned thereby from the debtor's assets.

Article (180 ) 
The trust ee may apply for obtaining permission from the Court to include any asset 
purchased by the debtor's spouse in the debtor's assets or the donations determined by the 
debtor to such spouse during the three (3) years prior to the issuance of the decision 
initiating the proceedings and consider the same part of the debtor's assets.  
  
Chapter Four  
Obtaining New Financing

Article (181 ) 
The Court may, at the request of the debtor or the trustee in the composition proceedings or 
the restructuring proceedings, permi t the debtor to obtain new financing with or without  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  90 
 security, in accordance with the following:  
1. Any new financing shall take precedence over any ordinary outstanding debt due from 
the debtor at the date of the decision initiating the proceedings in a ccordance with the 
provisions of Part III or Part IV of this Decree -Law.  
2. The new financing may be secured by mortgaging any of the debtor's unencumbered 
assets.  
3. The new financing may be secured by creating mortgage on the debtor's encumbered 
assets estimated at value higher than the value of the debt secured by the former 
mortgage. In such case, the new mortgage shall rank below the existing mortgage on the 
same a ssets, unless the creditors whose debts are secured by the mortgaged assets agree 
that the new mortgage ranks equal to or higher than the existing mortgage on the same 
assets.

Article (182 ) 
The Court may allow the debtor, during the composition or restru cturing proceedings, to 
obtain new financing with security that ranks higher than or equal to any existing security 
over his assets if the Court finds that the new financing does not affect the interests of the 
holder of the existing security.  
  
Chapter Five 
Offsetting

Article (183 ) 
1. It is permissible to make an offset between the debtor and the creditor if its conditions 
are met before initiating the proceedings in accordance with the provisions of Part III or 
Part IV of this Decree -Law.  
2. The debts incurred after initiating the pr oceedings in accordance with the provisions of 
Part III or Part IV of this Decree -Law may not be offset unless it is based on the scheme of 
composition, the scheme of restructuring or the Court's decision.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  91 
 3. The remaining balance of the debt owed to the creditor after offsetting shall be added to 
the debtor's debts and shall have the ranking of the original debt. The remaining balance 
owed to the debtor shall be added to the debtor's assets, and shall be paid to any trustee 
to be appointed in accordance with the provisions of Part III or Part IV of this Decree -
Law, as the case may be.  
4. In case the creditor assigns his debt to a third party, the offset between the debtor and 
the third party shall not be appl icable unless the Court finds that this has been made in 
good faith, including the case where the creditor is acquired by a third party.  
  
Chapter Six 
Order of Debt Payment   
Section  One  
Payment of Debts in case of the Composition or Restructuring

Article (184 ) 
Subject to the provisions of the priority of the creditor whose debt is secured by assets used 
as security, the following debts shall be payable when they are due, in the order set forth 
below:  
1. Any court fees or costs or any fees or expenses of any trustee to be appointed in 
accordance with the provisions of Part III or Part IV of this Decree -Law and any expenses 
incurred during the relevant proceedings or transactions in accord ance with the 
provisions of Part III and Part IV of this Decree -Law.  
2. Any fees, expenses or cost s incurred after the issuance of the decision initiating the 
proceedings for the purpose of providing the debtor with goods and services, or the 
continuation of the performance of any contract in accordance with the provisions of 
this Decree -Law, to the ex tent that such fees, costs and expenses achieve benefits for of 
the debtor's business or assets.  
3. Any new unsecured financing obtained in accordance with the provisions of Chapter IV 
of Part V of this Decree -Law, including the amount of the original de bt, and unpaid  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  92 
 related interests and expenses. This shall apply if the value of the security granted to the 
new financing is not sufficient to pay all due amounts to pay such financing.  
  
Section  Two  
Order of Priority upon Bankruptcy and Liquidation

Article (185 ) 
1. In the event that the Court decides to declare the Debtor bankrupt and to liquidate the 
Debtor's assets in accordance with the provisions of Chapter Four of this Decree -Law, 
the priority given to Creditors whose debts are secured by movable o r immovable assets 
shall have precedence over other preferential creditors and ordinary creditors pro rata 
the value of their securities, followed by preferential creditors based on their ranks in 
their order of priority according to the provisions of this  Decree -Law.  
2. All reasonable charges and expenses incurred by the Trustee in the course of completing 
of procedures of sale of the collaterals securing the debts shall be deducted from the 
proceeds of sale of the same before distribution of such proce eds to secured creditors.

Article (186 ) 
In case of failure of the trustee to proceed with the sale of the assets used as security within 
one (1) month from the date of the judgment declaring bankruptcy and the liquidation of 
the Debtor’s Assets, the secured creditors may apply to the Court for p ermission to Enforce 
on their securities even if they have not yet been accepted. The Court shall decide to grant 
the permission within ten (10) Business Days from the date of the application.

Article (187 ) 
1. Notwithstanding the provisions of article (185) of this Decree -Law, if the trustee finds 
that the proceeds arising from the sale of any encumbered assets are not sufficient to 
cover the trustee's fees and any costs relating to the sale of such assets, he may choose 
not to continue such sale, and t he trustee shall immediately notify the creditor holding  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  93 
 the security in writing of any decision he may take in respect of failure to continue the 
sale of the encumbered assets.  
2. Any creditor may object to the decision of the trustee within three (3) w orking days from 
the date of notification. The Court shall decide on such objection within five (5) working 
days without pleading. Its decision shall be final in this regard.

Article (188 ) 
1. If there are surplus proceeds of the sale of assets securing  the value of the secured debt, 
the surplus shall be delivered to the trustee for the benefit of the debtor.  
2. If the proceeds of the sale of assets securing the deb t are less than the value of the 
secured debt after payment of fees and expenses, the remaining balance of the secured 
debt shall be deemed as an ordinary debt.  
  
Section  Three  
Order of Payment of Preferential Debts

Article (189 ) 
1. The following debt categories shall be considered preferential debts and shall be repaid 
before the ordinary debts in the following order:  
a. Any court costs or fees including the trustee's and expert's fees and any expenses 
disbursed for serving the com mon interest of the creditors in reserving and 
liquidating the Debtor's Assets.  
1. The outstanding end -of-service gratuity, wages and salaries of the Debtor's 
employees, staff and servants which are payable on a regular basis (excluding any 
allowances, b onuses or other casual payments or any other benefits, whether they 
are in cash or in kind), provided that the total thereof shall not exceed the wage or 
salary for (3) three months maximum. The Court may allow payment of the wages 
and salaries payable to the Debtor's employees, staff and servants for a period not 
exceeding (30) thirty days from the funds of the Debtor's Assets available in the  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  94 
 Debtor's possession.  
c. The maintenance debt decided on  the Debtor pursuant to a judgment issued by a 
competent court.  
d. The amounts payable to government authorities.  
e. The fees agreed upon between the creditor and any expert appointed to commence 
the procedures, including the legal counseling fees. The  Court may estimate the fees 
sua sponte or based on a grievance of any creditor. The submission of the grievance 
shall not give rise to suspending the procedures. The Court shall decide on the 
grievance within (5) Business Days from the date of submission and the court 
decision in this regard shall be final.  
f. Any fees, costs or expenses arising after the date of the decision to commence the 
procedures for the purpose of securing commodities and services for the Debtor or 
for continuation of the performa nce of any other contract for the benefit of the 
Debtor's Business or Assets or any fees, costs or expenses arising for the continuation 
of the Debtor's Business after the date of commencement of the procedures in 
accordance with the provisions of this Dec ree-Law.  
2. Subject to the order of priority in accordance with the provisions of Clause (1) of this 
Article, the creditors' rankings in each category of debt referred to above shall be equal 
within such category, unless the debtor's assets are insuffici ent to cover the same; in this 
case, they shall be reduced by equal percentages.  
  
Chapter Seven  
Complaint and Appeal  
Section  One  
Complaints

Article (190 ) 
If the trustee appointed in accordance with the provisions of Part III or Part IV of this Decree -
Law fails to notify any creditor to attend any of the meetings of creditors or the notice is not  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  95 
 served in accordance with the provisions of this Decree -Law, t he aggrieved creditor may file 
a complaint with the Court in accordance with the provisions contained in the following 
Clauses:  
1. The complainant shall file his complaint within (10) ten working days as of the day 
following the date of being aware of th e meeting. The complaint shall not cause the 
suspension of the proceedings.  
2. The Court shall promptly hear the complaint after calling the trustee and shall issue a 
decision accepting or dismissing the complaint. Its decision shall be final in this reg ard.  
3. If the Court issues a decision accepting the complaint, it may order the stay of execution 
or cancellation of any decision previously issued thereby based on the results of the said 
meeting, without causing damage to the other creditors.

Article (191 ) 
1. Each stakeholder may file a complaint with the Court if the trustee:  
A. Proposes any disposition or acts in an unfair manner to cause damage to the 
stakeholder's interests;  
B. Neglects or fails to perform his duties or does not exert due diligence; or  
C. Abuses or seizes any of the debtor's assets or property or violates a ny of his 
obligations in favor of the debtor.  
2. The complaint shall be filed within five (5) working days from the date of being aware of 
such act and the Court shall decide to dismiss the complaint or issue any appropriate 
decision, including the decis ion terminating the appointment of any trustee appointed in 
accordance with the provisions of Part III or Part IV of this Decree -Law and appoint a 
substitute trustee in the same decision. Such complaint shall not cause the suspension of 
the proceedings.  
  
 
  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  96 
 Section  Two:  Appeal

Article (192 ) 
Without prejudice to what is expressly provided for in this Decree -Law, the decisions or 
judgments issued by the Court in any way in accordance with this Decree -Law may not be 
appealed. Likewise, the decisions issued by any trustee to be appointed in accordance with 
the provisions of Part III or Part IV of this Decree -Law may not be appealed.

Article (193 ) 
The Court of Appeal may, at the request of the appellant, decide stay of execution of the 
appealed decision pending  the adjudication of the subject of the appeal. In such case, the 
Court may request the appellant to provide a real security or bank guarantee issued by a 
bank operating in the State or any other guarantee accepted by the Court and sufficient to 
indemnify any damage incurred due to the invalidity of the request within the period 
specified by the Court.

Article (194 ) 
The debtor or the creditor may appeal any decision or judgment issued by the Court on the 
acceptance or rejection of initiating the proceedin gs in accordance with the provisions of 
Part III and Part IV of this Decree -Law.

Article (195 ) 
The debtor, in case of being a natural person, or any of his dependents may appeal the 
decisions issued by the Court on the sale, mortgage or disposition of an y assets allocated for 
their living expenses, in accordance with the provisions of Part III and Part IV of this Decree -
Law.  
  
 
  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  97 
 Part Six 
Penalties and Rehabilitation   
Chapter One  
Penalties

Article (196 ) 
For the purposes of this Part, a manager is any person who works for a legal person that is 
subject to the provisions of this Decree -Law and plays an active role in its decision -making 
process, including the person who directs and instructs the managers.

Article (197 ) 
Whoever is declared bankrupt by virtue of a final judgment shall be punished by 
imprisonment for no more than (5) five years if he commits one of the following acts:  
1. Concealing, destroying or altering all or some of his books with intent to cause dama ge 
to his creditors;  
2. Embezzling or concealing part of his assets with intent to cause damage to his creditors;  
3. Knowingly acknowledging debts undue from him, whether the acknowledgment is 
made in writing or orally, in the balance sheet or by refra ining from submitting papers or 
notes with the knowledge of the consequences of such refrainment;  
4. Obtaining the composition or restructuring by fraud; or  
5. Fraudulently increasing his liabilities, undervaluing his assets or obtaining any other 
settlement by fraud.

Article (198 ) 
The company's board members, managers and liquidators shall be punished by 
imprisonment for no more than (5) five years and a fine of no more than (AED 1,000,000) 
One Million UAE Dirhams if they commit one of the following acts, after the issuance of a 
final decision initiating the proceedings against the company:  
1. Concealing, destroying or altering all or some of the company's books with intent to  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  98 
 cause damage to the creditors;  
2. Embezzling or concealing part of the company's assets;  
3. Knowingly acknowledging debts undue from the company, whether the 
acknowled gment is made in writing or orally, in the balance sheet or by refraining from 
submitting papers or notes in their possession with the knowledge of the consequences 
of such refrainment;  
4. Obtaining the composition or restructuring by fraud;  
5. Declaring false information about the subscribed or paid capital, distributing fictitious 
profits or seizing bonuses exceeding the amount set forth in the law, the memorandum 
of association or articles of association of the company;  
6. The penalty provid ed for in this Article shall not apply to any person who is proven not 
to be involved in the act, subject of the crime, or is proven to have reserved the decision 
issued thereon.

Article (199 ) 
Whoever is declared bankrupt by virtue of a final judgment an d it is proven that the 
declaration of bankruptcy is due to his gross negligence that causes the loss of his creditors 
as a result of committing one of the following acts shall be punished by imprisonment for no 
more than (2) two years and/or a fine of no more than (AED 60,000) Sixty Thousand UAE 
Dirhams:  
1. Spending enormous sums in false speculations not required by his business or 
performing gambling operations;  
2. Paying one of the creditors with the intent to cause damage to the other creditors aft er 
he ceases to pay his debts for a period exceeding (30) thirty consecutive working days or 
he is in case of a debit estate, even if such act aims at achieving the composition or 
restructuring; or  
3. Disposing of his assets in bad faith at an undervalue or resorting to means harmful by 
nature or by practice to cause harm to his creditors with the intent to delay the 
declaration of bankruptcy and liquidation of his assets or delay the nullity of the sch eme  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  99 
 of composition or the scheme of financial restructuring.

Article (200 ) 
Whoever is declared bankrupt by virtue of a final judgment and commits one of the 
following acts shall be punished by imprisonment for no more than one year or by a fine of 
no mor e than (AED 30,000) Thirty Thousand UAE Dirhams:  
1. Failing to keep commercial books sufficient to reflect his financial position or failing to 
make the prescribed inventory in accordance with law;  
2. Making, for the benefit of third parties, without c ompensation, serious commitments as 
to his financial situation when he makes them;  
3. Refraining from providing the data requested by the trustee appointed in accordance 
with the provisions of Part IV of this Decree -Law or by the Court or intentionally 
providing false data thereto;  
4. Allowing, after the cessation of payment, to grant a special benefit to one of the creditors 
in order to obtain the acceptance of the composition or restructuring;  
5. Spending exorbitant sums on his personal or home expenses whether before or after 
cessa tion of payment; or  
6. Paying any debt in contrary to the requirements of the scheme of composition or the 
scheme of restructuring ratified by the Court, or disposing of any assets in contrary to the 
provisions of the schemes.

Article (201 ) 
Members of the board of directors of the company that was declared bankrupt by virtue of a 
final judgment, its managers and liquidators shall be punished by imprisonment for a period 
not exceeding two years and a fine not exceeding (100,000) Hundred Thousand Dirhams or 
with either penalties, if they commit one of the following acts:  
1. Failing to keep commercial books sufficient to reflect the company's financial position or 
failing to make the prescribed inventory in accordance with law with the intent of 
causing the company or its creditors damage.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  100 
 2. Intentionally Refraining from providing the data requested by the trustee appointed in 
accordance with the provisions of Part IV of this Decree -Law or by the Court or 
intentionally providing false data thereto.  
3. Disposing of the company's assets follow ing its cessation of payment with intent to 
prevent the creditors from obtaining such assets.  
4. Paying, after the company's cessation of payment, the debt of one of the creditors with 
intent to cause damage to the other creditors or granting special sec urities or benefits to 
one of the creditors in preference to the others, even if such act aims at obtaining the 
preventive settlement or restructuring.  
5. Disposing of the company's assets at an undervalue or resorting to any methods or ways 
detrimental to the interests of the creditors with the intent to acquire assets to avoid or 
delay the cessation of payment, the declaration of bankruptcy or the nullity of the 
preventive settlement or restructuring.  
6. Spending enormous sums in gambling operations o r false speculation as not required by 
the company's business.  
7. Undertaking, for a benefit other than the company's benefit and without compensation, 
serious commitments with regards to its financial situation when they undertook them.  
The penalty provided for in this Article shall not apply to any person who is proven not to be 
involved in the act subject of the crime or is proven to have reserved the decision issued 
thereon.

Article (202 ) 
1. Any trustee or expert appointed by the C ourt in accordance with the provisions of this 
Decree -Law shall be punished by imprisonment for no more than (5) five years and a 
fine of no more than (AED 1,000,000) One Million UAE Dirhams if he seizes or 
embezzles any of the debtor's assets during the m anagement thereof.  
2. The penalty shall be imprisonment and/or fine if he intentionally provides false 
information regarding the proceedings.  
   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  101

Article (203 ) 
Whoever embezzles, steals or conceals the debtor's assets after the issuance of the decision 
initiating the proceedings in accordance with the provisions of Part III or Part IV of this 
Decree -Law shall be punished by imprisonment and/or a fine, even if such person is the 
bankrupt's spouse or one of his ascendants or descendants, or one of his spouse' s 
ascendants or descendants. The Court shall, on its own imitative, order the recovery of the 
assets even if the judgment of acquittal is rendered and the Court may order, at the request 
of the stakeholders, compensation when necessary.

Article (204 ) 
Any  creditor of the debtor declared bankrupt shall be punished by imprisonment if he 
commits one of the following acts:  
1. Fraudulently increasing the debts due from the debtor;  
2. Require for himself, with the debtor or with the others, special benefits in return for 
voting in the deliberations of the composition or restructuring; or  
3. Intentionally concluding with the debtor, following the cessation of payment, a secret 
agreemen t granting him special benefits causing damage to the other creditors.  
The Court shall, on its own initiative, decide to annul the said agreements, with respect to 
the debtor and anyone else, and obligate the creditor to return what he seizes under the voi d 
agreement, even if the judgment of acquittal is rendered and the Court may order, at the 
request of the stakeholders, compensation when necessary.

Article (205 ) 
Whoever declares, by fraud during the proceedings of composition; restructuring or 
bankrupt cy and liquidation, fictitious debts in his name or in the name of third parties shall 
be punished by imprisonment.  
  
  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  102

Article (206 ) 
Any debtor who:  
1. Deliberately conceals all or some of his assets or overestimates the same with intent to 
obtain the composition or restructuring;  
2. Deliberately enables a creditor, who is fictitious or prohibited from participating in the 
composition or restructuring o r exaggerates his debt, to participate in the deliberations 
and voting, or deliberately allows him to participate therein; or  
3. Deliberately neglects to mention a creditor in the list of creditors,  
Shall be punished by imprisonment for no more than (5) five years.

Article (207 ) 
Any creditor who:  
1. Deliberately overestimates his debts;  
2. Participates in the deliberations or voting on the scheme of compo sition or restructuring 
while knowing that he is legally prohibited from the same; or  
3. Intentionally concludes with the debtor a secret agreement granting him special benefits 
causing damage to the other creditors,  
Shall be punished by imprisonment.

Article (208 ) 
Whoever is not a creditor and intentionally participates in the deliberations of the 
composition or restructuring or voting on the scheme of composition or the scheme of 
restructuring without the permission of the trustee or the Court shall b e punished by 
imprisonment.

Article (209 ) 
If the crime is relevant to an agreement concluded by the debtor with one of the creditors to 
grant the creditor special benefits in return for voting on the scheme of composition or  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  103 
 restructuring, causing damage  to the other creditors, the Criminal Court may, on its own 
initiative, decide to annul such agreement, and to obligate the creditor to return what he 
seizes under the void agreement, even if the judgment of acquittal is rendered. The Court 
may also order,  at the request of the stakeholders, compensation when necessary.

Article (210 ) 
Each controller who deliberately provides false information about the financial situation of 
the debtor or supports such information shall be punished by imprisonment.

Article (211 ) 
1. Any trustee to be appointed in accordance with the provisions of P art III or Part IV of this 
Decree -Law shall submit to the public prosecution, during the investigation or criminal 
trial, all the documents, papers, notes and information required thereby.  
2. The documents and papers shall, during the investigation or cr iminal trial, be kept at the 
Office of the Court's Clerk and may be accessible or an official copy thereof may be 
obtained, unless the Court decides otherwise.  
3. The documents and papers shall be returned against a receipt after the completion of the 
investigation or the trial.

Article (212 ) 
1. If the Court decides to initiate the proceedings of composition or restructuring in 
accordance with the provisions of Part III or Part IV of this Decree -Law, any criminal 
proceedings initiated or to be initiat ed against the debtor shall be suspended, whether 
they are arising from actions of bounced checks drawn by the debtor before initiating 
the proceedings of composition or restructuring.  
2. If the Court orders to suspend the criminal proceedings in accorda nce with Clause (1) of 
this Article, the creditor holding a bounced check shall be included within the creditors 
and his debt shall become part of the total debts of the debtor.   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  104 
 3. The suspension of the criminal proceedings against the debtor shall remain effective 
until the Court hearing the application for composition in bankruptcy or restructuring, as 
the case may be, adjudicates on the application and approves the settlements mad e with 
the creditors of the debtor in accordance with the rules regulating the required 
proceedings set forth in this Decree -Law.  
4. If the Court approves the arrangement reached between the debtor and his creditors in 
accordance with the provisions of t his Decree -Law, such approval shall automatically 
cause the extension of the suspension of the criminal proceedings initiated against the 
debtor until the completion of the composition or restructuring proceedings, as the case 
may be.  
5. If the debtor ob tains a decision from the competent authority on the completion of the 
implementation of the required proceedings and the settlement of the debts due from 
the debtor to the creditor holding the check, the debtor may submit an application to the 
Court havin g jurisdiction to hear the criminal action in accordance with the provisions of 
article (401) of the Penal Code for the issuance of a decision on the abatement of the 
criminal action or stay of execution thereof, as the case may be.

Article (213 ) 
Unless otherwise provided for in the law, any civil or commercial actions or claims relevant 
to the application of the provisions of this Decree -Law shall remain independent of any 
criminal action instituted in accordance with the provisions of this Part. The Cri minal Court 
may not hear such actions and claims and they may not be referred thereto.

Article (214 ) 
The Court may publish all the criminal judgments rendered in the crimes set forth in this 
Decree -Law by the methods prescribed for publishing the judgmen t declaring bankruptcy in 
accordance with the provisions of Part IV of this Decree -Law.  
   
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  105

Article (215 ) 
The Court may, upon conviction of the crimes set forth i n Articles (197), (198), (199), (200) 
and (201) of this Decree -Law, order to deprive the convicted from directly operating, 
managing, controlling or playing any role in the management of any company established in 
accordance with the provisions of the Comm ercial Companies Law or engaging in any other 
commercial activity for a period not exceeding five (5) years from the date of the completion 
of the proceedings of bankruptcy and liquidation. The name of the convicted shall be 
entered in the commercial or pr ofessional register, as the case may be.

Article (216 ) 
The penalties provided for in this Part shall not prejudice any severer penalty provided for in 
any other law.  
  
Chapter Two  
Rehabilitation of the Debtor Declared Bankrupt

Article (217 ) 
Unless otherwise provided for in this Chapter, the rights of which the person declared 
bankrupt under the provisions set forth in this Decree -Law or any special laws is deprived 
shall be regaine d by the expiry of five (5) years from the date of the completion of the 
proceedings of bankruptcy and liquidation of assets.

Article (218 ) 
The debtor declared bankrupt shall be rehabilitated, even if the period set forth in Article 
(217) of this Decree -Law does not expire if he pays all his debts, including the assets, 
expenses and interests for a period of one year, including the part from which he has been 
discharged.  
  
  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  106

Article (219 ) 
The debtor declared bankrupt may be rehabilitated, even if the perio d set forth in Article 
(217) of this Decree -Law does not expire, in the following two cases:  
1. If he obtains a settlement from his creditors and performs its conditions. This provision 
shall apply to the joint partner in a company against which a judgme nt declaring its 
bankruptcy is rendered if the partner obtains a settlement for him and performs its 
conditions.  
2. If it is proven that the creditors have discharged him from al l the outstanding debts due 
from him after the completion of the bankruptcy and liquidation proceedings.

Article (220 ) 
The debtor who is declared bankrupt and against whom a judgment of conviction of any of 
the crimes set forth in article (197) of this Decree -Law is rendered may be rehabilitated only 
after the expiry of three (3) years from the execution of the punishment imposed thereon, 
the granting of a pardon or the lapse by prescription, provided that the debtor pays all his 
debts including assets, interests and expenses or reaches a settlement with the creditors.

Article (221 ) 
The debtor declared bankrupt may be reh abilitated after his demise, at the request of the 
heirs; and the dates set forth in Articles (219) and (220) of this Decree -Law shall be 
calculated as of the date of his demise.

Article (222 ) 
If one of the creditors refrains from receiving his debt or i n case of his absence or failure to 
know his place of residence, the debt may be deposited with the Court's treasury and the 
deposit receipt, with respect to rehabilitation, shall be deemed as an acquittance.

Article (223 )  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  107 
 1. An application for rehabil itation accompanied by supporting documents shall be 
submitted to the Court, which has rendered the judgment declaring the bankruptcy and 
liquidation.  
2. The Court shall send a copy of the application to the Public Prosecution and the 
Department of Commercial or Professional Register where the debtor is registered, as 
the case may be, and shall notify the creditors whose debts have been accepted in the 
bank ruptcy proceedings of the application for rehabilitation.

Article (224 ) 
The Public Prosecution shall submit to the Court, within twenty (20) working days from the 
date of receipt of a copy of the application for rehabilitation, a report containing the da ta of 
the judgments rendered against the debtor declared bankrupt in bankruptcy crimes, trials or 
investigations conducted with him in this regard and its opinion on the acceptance or 
dismissal of the application for rehabilitation, provided that such opin ion is reasoned.

Article (225 ) 
Each creditor whose debts have been accepted and who does not gain his right may file an 
objection to the application for rehabilitation within fifteen (15) working days from the date 
of being notified. The objection shall be filed under a written request to be submitted to the 
Court accompanied with the supporting documents.

Article (226 ) 
The Court shall, after the expiry of the period set forth in article (225) of this Decree -Law, 
notify the creditors who have filed objections to the application for rehabilitation of the date 
of the hearing set for adjudicating the application.

Article (227 ) 
1. The Court shall adjudicate on the application for rehabilitation by a judgment that may  
 
Federal Decree -Law No. (9) of 2016 concerning Bankruptcy  108 
 be appealed before the competent Court of Appeal.  
2. If the application for rehabilitation is dismissed, such application may not be re -
submitted before the lapse of six (6) months from the date of the issuance of the final 
judgment dismissing the application.

Article (228 ) 
If an investigation is initiated , before adjudicating the application for rehabilitation, against 
the debtor declared bankrupt with regard to any of the bankruptcy crimes, or a criminal 
action is instituted against him with regard to such crimes, the Public Prosecution shall 
immediately notify the Court of the same and the Court shall suspend the adjudication of 
the rehabilitation application until the conclusion of the investigations without instituting a 
criminal action, or rendering a final judgment in this regard.

Article (229 ) 
If the debtor is convicted by virtue of a final judgment of any of the bankruptcy crimes, after 
the issuance of the rehabilitation judgment, the latter judgment shall be null and void and 
the debtor may not be rehabilitated again except after satisfying the co nditions referred to in 
article (220) of this Decree -Law.  
  
Part Seven  
Final Provisions