DIFC To Issue Preferential Credit Regulations
The Dubai International Financial Centre (DIFC) has issued a consultation paper
seeking comment on new Preferential Creditor Regulations under the DIFC Insolvency
Law of 2004.
The Regulations are designed to protect the employees of any company at the
DIFC that becomes insolvent, by ensuring that they receive a preferential right
to payment upon the company's bankruptcy. The proposed changes, drafted in consultation
with an internationally renowned law firm, are aimed at making the Insolvency
Law practical and comprehensible to all practitioners. Dr Omar Bin Sulaiman, Governor of the DIFC commented: "As the DIFC continues
to be a catalyst for regional economic growth, development and diversification,
we are committed to improving and expanding the legal and regulatory infrastructure
in order to better serve our clients and their employees." The new Regulations apply to only one class of preferential creditors, namely
the employees in a DIFC-registered company which goes into liquidation. The Insolvency Law, issued in September 2004, set out provisions for preferential
creditor regulations (Article 67 (2)) to be passed at a subsequent date, and
it is in this context that these Regulations have been drawn up. The proposed
Regulations will apply to all pending and future liquidations in the DIFC. The proposed Regulations have been posted on the DIFC web-site from March 20th
for a period of 30 days for public consultation. .
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