FNC wants say on insolvency

Members are willing to give up summer break time to debate bankruptcy law as the Government speeds it into effect.

FNC members are ready to go back to council early to debate a new business bankruptcy law. Delores Johnson / The National
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ABU DHABI // Members of the Federal National Council are hoping to break their summer break time to take up a debate on a proposed bankruptcy law.

The council is not scheduled to meet until the third week of October, but the law, which will give protection to companies, their directors and employees in cases of insolvency, could be passed before then if it receives a presidential decree.

Members said they understood the Government’s haste with an important law but they believed they should be allowed to discuss it.

Dr Saeed Al Mutawa, a member from Sharjah, said that if the Government did not want to wait until the FNC reconvened, it had the right to issue the law without the council’s approval.

“Maybe they see a need [to rush] because of the fast pace economic developments,” said Dr Al Mutawa.

“Revision always enhances it, makes it better.”

He said the FNC’s role was to “help improve laws and aid the Government on which articles need to be enhanced”.

“Everyone will benefit from the bankruptcy law, so it is a better way to enhance it if we look at it,” he said.

If there was “a need for it to be rushed, there is no harm in issuing it”.

He said that introducing the law was essential for the country because current bankruptcy legislation was under a civil code and did not have a law dedicated to it.

“It is a very good law,” Dr Al Mutawa said.

“It will give a better positive investment atmosphere for everybody – foreigners and locals.

“It is the kind of law that complements the economic boom in the UAE.

“It will have two pluses – legislative and financial.”

Salem Al Shehhi, representing Ras Al Khaimah, said the Government could quickly pass the law if it would benefit the country “and then it could be presented in front of the council again for amendments”.

“Depending on the situation, there could be a pressing need to issue it [while the council is on break time].”

Nevertheless, such a decision would later be discussed at the council and the reasons for its urgency would be cited.

“If there are some issues that need to be added or amended the council could intervene,” said Mr Al Shehhi.

Overall, he said the law would preserve the rights of businesses but it should be strict about when a company had the right to announce it had gone bankrupt.

“Some companies could get involved in certain commercial matters and to save themselves from legal observation, they would then announce their bankruptcy,” said Mr Al Shehhi.

The council is waiting to hear if it will debate the proposed dumping draft law, which aims to protect the local market and products against predatory pricing, said Dr Al Mutawa.