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BSA LAW | UAE Launches Dedicated Bankruptcy Court to Modernize Insolvency Framework
The UAE has introduced a specialized Bankruptcy Court, marking a significant milestone in the nation’s ongoing legal and economic reforms.
The United Arab Emirates has introduced a specialized Bankruptcy Court, marking a significant milestone in the nation’s ongoing legal and economic reforms. Established by the Federal Judicial Council under Resolution No. 39 of 2025, the Court is designed to serve as a centralized, expert forum for all matters relating to financial distress, corporate insolvency, and restructuring.
The Bankruptcy Court is headquartered at the Abu Dhabi Federal Court of First Instance and exercises jurisdiction over all cases arising under the UAE’s updated Bankruptcy Law, Federal Decree-Law No. 51 of 2023. While the main Court is based in Abu Dhabi, the Federal Judicial Council may establish additional branches in other emirates, as needed.
The Federal Decree-Law No. 51 of 2023, which replaced the 2016 bankruptcy framework, brings the UAE’s insolvency regime in line with international standards. The new law emphasizes transparency, creditor protection, and the efficient resolution of distressed situations. The establishment of a dedicated Bankruptcy Court is expected to streamline the handling of complex insolvency and restructuring cases, enhance investor confidence, and provide distressed companies with a clear, structured path to either recovery or orderly liquidation.
The Court is led by a chief judge of at least Appeals Court rank and is supported by a newly created Bankruptcy Department. This department is organized into two main divisions: one responsible for processing applications, notifications, objections, and grievances; and another focused-on compliance and procedural follow-up. This structure is designed to ensure that cases are managed with both judicial rigor and technical expertise, expediting proceedings and improving outcomes for all stakeholders.
A key innovation under the new regime is the formal integration of bankruptcy experts and consultants into the judicial process. The Bankruptcy Court may appoint these professionals to assist in a range of critical functions, including but not limited to ensuring that applications comply with the law, supervising the management of debtor assets and operations, and meeting with creditors. Their involvement is designed to expedite proceedings, enhance the quality of decision-making, and safeguard the rights of all stakeholders. This approach underscores the UAE’s commitment to transparency, specialization, and the adoption of best international practices in financial law and insolvency proceedings.
The establishment of the Bankruptcy Court has been widely welcomed by legal professionals, business leaders, and economic observers. By creating a specialized judicial and administrative infrastructure, the UAE is strengthening its capacity to manage financial risk, protect creditor rights, and support the orderly resolution of corporate distress. This initiative reinforces the country's vision of establishing itself as a leading financial and commercial hub, both regionally and globally. The Bankruptcy Court provides a robust, transparent, and efficient framework for resolving financial distress and insolvency, thereby contributing to a more stable and investor-friendly environment.
