UAE Cabinet declares Financial Emergency, suspends creditor bankruptcy filings

On 1 June 2026, the UAE Cabinet issued Resolution No. 94 of 2026 declaring a state of Financial Emergency under Chapter 5 of the Bankruptcy Law in response to regional conflict. The declaration immediately suspends creditor-initiated bankruptcy proceedings against defaulting debtors for the duration of the emergency period. Debtors whose financial distress arose from the declared emergency gain access to flexible restructuring mechanisms, including the possibility of negotiating settlements with creditors that may bind non-participating creditors if approved by two-thirds in value, obtaining new priority funding to continue operations, and avoiding precautionary measures on assets essential to business operations. However, the protection is conditional: debtors must evidence a causal link between their financial difficulty and the declared emergency. Businesses in difficulty for unrelated reasons remain subject to ordinary bankruptcy rules. Creditors retain their right to pursue ordinary civil claims, execute judgments, and obtain precautionary attachments—only the bankruptcy route is suspended. The end date of the emergency has not been fixed and will be determined by a subsequent Cabinet decision.