Maturing Insolvency Regime: UAE launches new Bankruptcy Court in Abu Dhabi

On 15 July 2025, the UAE's Federal Judicial Council (the "Council") issued the Federal Decision No. 39/2025 On the Regulation of the Bankruptcy Court (the "Decision"), providing that the new specialised bankruptcy court will be in the Abu Dhabi Court of First Instance (the "Bankruptcy Court"), with additional branches of the Bankruptcy Court to be established in other emirates, as the need arises.

The Decision provides further details of the framework of the Bankruptcy Court, the establishment of which was contemplated in the Federal Decree-Law No. (51) of 2023 Promulgating the Financial and Bankruptcy Law (the "Bankruptcy Law"), which became effective in May 2024.

The Decision provides that the Bankruptcy Court will be presided over by a judge of a rank not lower than that of a Court of Appeal Judge, supported by a number of specialist judges. The Bankruptcy Court will be supported by a newly established Bankruptcy Department, which will comprise of two main divisions. The first will be responsible for applications, notifications, objections, and grievances, and the second will be responsible for oversight and follow up.

In addition, the Decision sets out which functions can be undertaken by the specialised bankruptcy experts and advisors appointed by the Bankruptcy Court (as contemplated by the Bankruptcy Law). These include, but are not limited to, ensuring that applications to open rehabilitation or bankruptcy proceedings comply with the Bankruptcy Law and  monitoring the management of the debtor's assets and business.

As yet, it is not clear when the Bankruptcy Court will start accepting and hearing cases given that judicial appointments remain in progress.

The Decision represents another step towards the UAE's goal of establishing a robust and transparent restructuring and bankruptcy regime. The appointment and centralisation of bankruptcy specialist judges within the Bankruptcy Court is expected to enhance consistency in judicial decision-making and develop expertise across the bench.  Further, the establishment of a specialised administrative framework, with clear roles and responsibilities, to support the Bankruptcy Court, is likely to improve the speed and efficiency of case management and resolution. The framework, introduced by the Decision, is designed to enhance the effectiveness of the justice system in dealing with cases of financial distress and bankruptcy.