War with Iran hits UAE: authorities introduce emergency measures

The UAE has introduced emergency economic measures to protect companies affected by the war with Iran. Authorities activated temporary provisions of bankruptcy legislation to prevent a wave of bankruptcies and give businesses time to recover. Creditors will not be able to force bankruptcy proceedings against companies if they prove a direct link between their financial difficulties and the consequences of the war. Protection applies to companies that filed in court after February 28—the date from which authorities associate with the intensification of hostilities. The measures will remain in effect until the government declares the end of the financial crisis period. Affected businesses receive protection from forced bankruptcy and additional time for debt restructuring. Companies are not obliged to file for their own insolvency due to inability to service debts during the crisis. Companies will be able to apply to court and get time to negotiate with creditors and suppliers. If a recovery plan is supported by two-thirds of creditors, the agreement becomes binding on the rest. The mechanism aims to preserve viable businesses facing temporary cash shortages. The special regime will allow companies to continue operations even during restructuring; the court may retain existing management. Companies will be able to pay salaries and attract additional financing. Simplified court procedures are expected, which will speed up debt negotiations and reduce the likelihood of liquidation. Authorities hope to contain a chain reaction of defaults and maintain the country's investment attractiveness.