Will Dubai think of introducing a safety net in the form of a proper insolvency regime for failing business owners? This was one of the areas that the 11th Arabian Business Forum looked at, reported Arabian Business.
Gary Watts, partner and regional head of corporate commercial at Al Tamimi & Co, cited the example of some of the buildings in, for example, Business Bay, where many projects halted as a result of the downturn, adding: "The property section would have recovered sooner, had they had a proper insolvency law."
The rules and procedures governing insolvency for both individuals and commercial entities in the UAE are currently set out in Book 5 of the Commercial Transaction Law, Federal Law No. 18 of 1993. However, it has proved extremely difficult to enforce and the courts have been reluctant to apply it.
Sarosh Zaiwalla, senior partner at Zaiwalla & Co., noted that Dubai has the potential to become a commercial capital of the Middle East but the courts still had a narrow view when it came to putting rules on bankruptcy into practice.
"New bankruptcy law has to be user-friendly to attract investments and allow for the reorganisation of businesses and not just their bankruptcy," he said.