Watson Farley & Williams has developed the Global Aviation Restructuring Index (“GARI“), an online tool providing a comparative index of 50 restructuring processes in 25+ key aviation jurisdictions. GARI also assigns ‘debtor and creditor friendliness’ scores to each restructuring procedure, allowing for easy comparison across different procedures in the same or multiple jurisdictions. Please click here to access GARI.
The United Arab Emirates (“UAE”) is not included in GARI as yet, as its bankruptcy law is relatively recent. Its applicability to the aviation industry remains completed untested (UAE-based airlines having historically not been subject to any restructuring proceedings) and local airlines may not even fall under the law’s ambit. It is therefore unclear how, an airline might be restructured in the UAE, making it difficult to assign the GARI scoring system to the jurisdiction.
In line with GARI’s objectives, the following article provides:
- an overview of the current UAE bankruptcy/restructuring regime;
- a summary of the regime’s key processes outlined;
- our view as to its potential applicability to the aviation industry; and
- considerations regarding the issue of sovereign immunity.
Background to the Bankruptcy Law
This article is based on our review of both the English and the Arabic texts of UAE Federal Law No. 9 of 2016 on Bankruptcy (as amended) (the “Bankruptcy Law”) and UAE Federal Law No. 21 of 2020 on amending the Bankruptcy Law (the “Amendment Law”), amongst other things. The Arabic text is especially important as it is the versions of decrees/laws in that language that are definitive and binding, having precedent over those in English. Unless otherwise specified, any reference to an “Article” is to one in the Bankruptcy Law or Amendment Law (as applicable).