Emergency Financial Crisis period activated under UAE Bankruptcy Law

The UAE Cabinet has issued Cabinet Decision No. 94/2026 implementing Title 5 of Federal Decree-Law No. 51/2023 (the Financial Reorganisation and Bankruptcy Law). The Emergency Financial Crisis period applies to preventive settlement, restructuring and bankruptcy adjudication proceedings where financial distress was caused by the declared emergency, effective from 28 February 2026 until the Cabinet determines an end date.

Key provisions include: The Bankruptcy Court may approve applications without appointing a trustee if the debtor demonstrates distress was caused by the emergency. Debtors may request up to 40 days to negotiate settlements with creditors, with agreed periods not exceeding 12 months. A settlement approved by creditors representing two-thirds of debt value binds all creditors. The Court shall postpone creditor applications to open proceedings during the emergency period. Precautionary measures cannot be imposed on assets necessary for business continuity unless unrelated to the debtor's business conduct. Board members and managers are not liable for using debtor assets to pay wages needed for business continuity, provided they update accounts, act with good faith and protect company objectives. The Court may authorise new financing with or without security, ranking ahead of existing ordinary debt and secured against unmortgaged or mortgaged assets.