## **Commercial courts are one form of reform undertaken in some MENA countries to promote specialization, with varying success in improving institutional knowledge and performance** _._ Among

the countries surveyed, Morocco, Tunisia and Egypt have recently created commercial courts, and provided specialized training.<sup>cix</sup> While there are still complaints about judge expertise, the situation improves as training continues. In Saudi Arabia, there is not a commercial court per se, but a two-tier court system, the shari‟a courts, and the Diwan al Mazalim, which has a commercial circuit. The training of the judges appears to be in shari‟a principles, rather than statutory law or commercial principles. Due to the requirements that transactions follow shari‟a principles, the courts in Saudi Arabia may examine the entire transaction for compliance with shari‟a and rewrite it, which makes parties apprehensive to use these courts. In DIFC, Oman and Lebanon, there are specialized insolvency judges that hear bankruptcy cases. In Kuwait, judges are also specialized and cases are heard by a bankruptcy circuit.<sup>cx</sup> Given the number of countries such as Oman reporting low usage of the bankruptcy system, the number of countries reporting that there are designated insolvency experts, or commercial courts, to hear cases may sound curious. But as stated above, the designation of special courts, while a step in the right direction, does not in itself ensure an efficient bankruptcy system.

# _4.2. Insolvency Administrators (Trustees): adequate selection and supervision procedures to ensure competence and integrity; sufficient powers to effectively administer estate._

**Insolvency administrators play a central role in a bankruptcy case** _._ They are also called trustees, administrators, receivers, liquidators, insolvency representatives. Insolvency Administrators are usually given control over assets and significant authority to decide how and when assets are distributed. It is essential that insolvency administrators be skilled, efficient, and credible/trustworthy.<sup>cxi</sup> The Doing Business 2009 report also highlighted the fact that countries that had instituted certain minimum qualifications for trustees had higher recovery rates in an insolvency proceeding.<sup>cxii</sup> This element of the insolvency system is underdeveloped in many less developed insolvency systems, crippling them at a critical point in the implementation infrastructure.

**The reputation of insolvency administrators in MENA is weak** _._ They are by and large not viewed as competent, skilled or efficient. In addition to a lack of qualification standards and training, they have incentives to prolong procedures. These incentives include the vast range of responsibilities and the potential for liability for intended or unintended negligence, and their ability in many cases to charge more fees by prolonging the insolvency proceedings.<sup>cxiii</sup> Moreover, the methods by which insolvency administrators calculate their feeds is not closely regulated and can sometimes lead to incentives, for the administrators, to needlessly prolong proceedings. As such, a clear framework for the basis on which fees will be calculated should be included as part of a regulatory framework.

**In the MENA region, there are no countries, other than DIFC, that report that insolvency administrators receive training in the economics, or legalities of the insolvency process** . Nor are there significant qualifications necessary to become an insolvency administrator. In Morocco and Egypt, the insolvency administrators have law degrees or are accountants, and are appointed by the court but

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