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Dubai: The Dubai International Financial Centre (DIFC) yesterday issued a consultation paper to seek comments on the new Preferential Creditor Regulations under the DIFC Insolvency Law of 2004.
The regulations are designed to protect 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 DIFC, said: "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 serve our clients and their employees better."
Application
The new regulations apply to only one class of preferential creditors, namely the employees in a DIFC-registered company that 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 DIFC Preferential Creditor Regulations will be posted on the DIFC website today for a period of 30 days for public consultation.
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