UAE Launches Specialized Bankruptcy Court to Expedite Financial Disputes

In a landmark move to strengthen financial justice and support distressed businesses, the UAE Ministry of Justice has officially inaugurated a specialised Bankruptcy Court, headquartered at the Abu Dhabi Federal Court of First Instance. The announcement was officially shared by the Ministry on X, signalling a proactive step in fostering economic resilience and legal reform within the UAE’s judicial landscape.

The initiative, announced by His Excellency Abdullah Sultan bin Awad Al Nuaimi, Minister of Justice and Chairman of the Federal Judiciary Council, is part of a broader strategy to foster economic resilience and modernise the UAE’s judicial infrastructure. The court was established by a resolution of the Federal Judiciary Council in 2025, which will adjudicate matters arising under Federal Decree Law No. 51 of 2023 on Financial Reorganisation and Bankruptcy, offering a more structured and specialised legal forum for insolvency proceedings.

 

A Centralised Framework for Bankruptcy Disputes

The new court will adjudicate on requests and disputes arising from insolvency matters. In addition to the central headquarters in Abu Dhabi, branches may be established in other emirates to handle related cases, ensuring access and uniformity across the country. All branches will hold equal jurisdiction to that of the main court.

 

The initiative is aligned with Federal Decree-Law No. (51) of 2023, which governs financial and bankruptcy proceedings in the UAE. This law outlines several mechanisms aimed at preventing liquidation, including out-of-court financial restructuring, composition procedures, formal financial restructuring plans, the ability to secure controlled borrowing during restructuring, and, where necessary, court-administered liquidation of the debtor’s assets.

 

The law applies broadly to commercial companies, individuals with trader status, and licensed civil companies conducting professional activities.

 

Judicial Design and Operational Scope Across Emirate

• Headquarters & Expansion Flexibility: The court is based in Abu Dhabi, with provisions allowing additional branches in other emirates like Sharjah, Ajman, or Fujairah as needed - each subordinate to the main court but with equivalent jurisdiction over financial reorganisation and insolvency cases.

• Leadership & Specialisation: Led by a Chief Judge of Appellate-level rank or higher, along with a panel of specialised bankruptcy judges appointed by the Federal Judiciary Council. A dedicated Bankruptcy Department - also headed by an Appellate level Judge who manages core administrative functions.
   

• Bankruptcy Department Structure:  Comprising two operational divisions 

  1. 1. Applications, Notifications, Objections & Grievances – manages filings, objections, and stakeholder communications

  2. 2. Oversight & Follow‑Up – monitors compliance with restructuring plans and, where necessary, reports criminal violations to the Public Prosecution.

 

Engagement of Licensed Experts Enhances Technical Support

The court is authorised to appoint qualified bankruptcy professionals and consultants licensed by the Ministry of Justice. These experts aid with:

 

• Managing debtor assets and operational continuity
• Executing precautionary measures
• Facilitating creditor meetings
• Liaising with debtors regarding financial and asset matters

 

All expert contributions are made under court supervision to ensure integrity and procedural fairness.

 

Strategic & Legal Foundation of the Bankruptcy Court

The Ministry of Justice has described the creation of this court as a "significant step toward establishing a legal environment that supports financial stability and economic continuity," emphasizing its role in modernising judicial infrastructure to boost commercial growth while maintaining transparency and procedural fairness.

 

By providing a dedicated judicial pathway for financial distress and insolvency disputes, the court is expected to enhance investor confidence, streamline bankruptcy procedures, and alleviate caseload pressure on general civil courts, collectively fostering a more resilient and healthier business ecosystem

 

 

Broader Institutional Impact

 

• Faster Case Resolution: Centralised procedures significantly reduce delays, ensuring timely restructuring or liquidation outcomes.
• Higher Predictability: Clearly codified rules and judicial hierarchy improve transparency for stakeholders—debtors and creditors alike.
• International Investor Appeal: Meeting global insolvency standards builds confidence among multinational investors and businesses considering the UAE as a restructuring hub.
• National Reach: Branch courts ensure equitable access to specialized insolvency resolution services across all seven emirates, promoting federal coherence.
  
  
   

Key Takeaways

The establishment of the UAE’s Bankruptcy Court represents a defining moment in the nation’s judicial evolution. By institutionalising structured financial dispute resolution, enabling expert involvement, and facilitating expansion across emirates, the UAE is creating a modern, transparent, and globally-aligned insolvency regime. These reforms strengthen economic resilience and affirm the UAE's commitment to maintaining a stable, investor-friendly environment.

 

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