In a development to the UAE’s financial restructuring and bankruptcy regime, His Excellency Abdullah Sultan bin Awad Al Nuaimi, Minister of Justice and President of the Federal Judicial Council, issued Federal Judicial Council Decision No. 39 of 2025, regarding the Organization of the Bankruptcy Court (the “Decision”). The Decision was issued on 19 June 2025 and came into effect on 15 July 2025.
In a public post, the UAE Ministry of Justice announced that the Decision, “aims at developing judicial infrastructure that supports the national economy and enhancing the effectiveness of the UAE’s judicial system in addressing matters of financial distress and bankruptcy.”
Article 2(1) of the Decision states that “the Bankruptcy Court shall be headquartered in the Abu Dhabi Federal Court of First Instance and will be responsible for adjudicating all applications and disputes arising from the implementation of the Federal Decree-Law on Financial Reorganization and Bankruptcy.” Article 2(2) further states that the Federal Judicial Council may also establish one or more judicial circuits in other Emirates, as needed, to handle applications and disputes. These judicial circuits will operate under the original Court’s jurisdiction.
The Court will be presided over by a judge of no less than the level of an appellate judge, appointed by a decision from the Federal Judicial Council. The decision also addresses the establishment of a Bankruptcy Administration under the Court, headed by a judge of not lower than the level of an appellate judge. Pursuant to Article 5 of the Decision, this administrative body will oversee a range of responsibilities, including receiving applications, objections, and grievances; registering applications; issuing notices to the relevant parties; verifying the completion of the requirements needed for a preventative settlement or restructuring plan and providing instructions on the required documents and disclosures needed from the relevant parties. The Decision defines the responsibilities of the Court and Bankruptcy Administration, ensuring integration of roles and performance efficiency.
The Bankruptcy Administration will consist of two main divisions: (1) Applications, Notifications, Objections and Grievances Division and (2) the Oversight and Follow-up Division. The Decision specifies the role of each Division and, pursuant to Article 9(3), the Oversight and Follow-up Division is tasked with reporting criminal offences committed by any party involved in a preventative settlement, restructuring or bankruptcy, to the Public Prosecution, in accordance with the applicable laws.
The Decision also authorizes the Court to engage bankruptcy experts and advisors, who are licensed by the Ministry of Justice, to assist with various specialized tasks. These experts would manage debtor assets and operations, implement precautionary measures, accelerate the bankruptcy/restructuring process, coordinate meetings with creditors, attend to the concerns and requests of the debtor or their representative, and address related matters - in relation to its debts, assets or operations.
We believe the establishment of a Federal Bankruptcy Court will streamline restructuring and bankruptcy applications emanating from Fujairah, Umm Al Quwain and Ajman and applications that relate to federal entities, in a bankruptcy setting.
Hadef & Partners will provide further updates on the practical aspects and implementation of the Decision, including further clarity on its impact on all the Emirates, ongoing applications and claims made by federally regulated entities.
For any queries on Bankruptcy, Restructuring and Insolvency, please contact:
Ghalib Mahmoud – Co-Head of the Restructuring and Insolvency Team;
Mohammed Al Dhaheri – Co-Head of the Restructuring and Insolvency Team.