2. Legal Developments in the UAE
Jody Waugh
Partner

3. New UAE Bankruptcy Law Came into force 29 December 2016
Largely amends existing regime (as opposed to adopting Western regime)
Applies to all traders operating in UAE with certain exceptions
Three options within the law:
Financial Reorganisation Committee
Preventative Composition
Bankruptcy, which leads to
(i) Restructuring; or
(ii) Liquidation
Greater focus on restructuring
Does provide for suspension of legal proceedings, including
criminal action on bounced cheques

4. How does it impact trade finance?
Should not have material impact on the way trade finance is structured
It will however be relevant to:
Any set off or netting provisions
Who security cheques are taken from
Acceleration provisions
Secured positions
Approach to enforcement and remedies available

5. New Mortgage over Movables Law
Comes into force 90 days after publication (mid-March), but waiting on Cabinet Resolution for detail on the security register
Creates public security register to file security interests
Allows for public searches
Movable assets include (without limitation):
accounts payable and bank accounts
documents of title, including bills of lading
goods, equipment, machinery and other movable assets
tangible and intangible elements of a business
fungible assets
Provides for existing or future assets
Removes possessory requirement
Creates direct execution enforcement rights

6. How will it impact trade finance?
Create visibility for financiers, and certainty with regard to priority of security interests
Will allow financiers to take much wider range and scope of security, including assets not previously possible
May offer something close to a debenture/floating charge
Inclusion of account payable and documents of title will create more flexibility in structuring
Position on fungible assets will materially improve commodity finance
Consideration between ownership versus security (including Islamic structures)
Securitisation and receivables purchase
The end of trust receipts?
Quicker and easier enforcement option

7. What else is in the pipeline?
UAE Netting Law
Finance Company Law
Union Law (amendment)
Leasing Law
VAT
More regulation from Central Bank and SCA.

8. QUESTIONS?