United Arab Emirates: Federal Cabinet Resolution Number 4 Of 2018 Establishing The Financial Restructuring Committee

Last Updated: 24 May 2018
Article by STA Law Firm
Most Read Contributor in United Arab Emirates, September 2019

On issuance of Federal Bankruptcy Law under the Federal Decree No. 9 of 2016 for various bankruptcy cases. On 19 October 2017, the current Cabinet members have been reshuffle by H.H. Sheikh Mohammad bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.  Cabinet Resolution, Number 4 of 2018, establishes a Financial Restructuring Committee (FRC) and it was first published in Official Gazette on 28 February 2018 and was enforced on 1 March 2018.

The Resolution lays down the terms about its members and their relevant functions. FRC is responsible for the following:

  1. Directing the execution of the government for UAE Federal Bankruptcy Law and dealing with the different registers reviewing that law. It additionally comprises bankruptcy master to explore the indebtedness of the financial establishment.
  2. It is in charge of overseeing out of court rebuilding forms for authorized budgetary foundations.

Part of the Financial Resolution Committee

The Financial Resolution Committee (FRC) will have the following functions:

  1. The administering the administration of out of court rebuilding of money related establishments.
  2. approving and managing the role of experts and trustees who will oversee bankruptcy processes.
  3. maintaining the registers of disqualified directors and bankrupt companies inspected under the UAE Bankruptcy Law.
  4. Detailing back to the Minister of Finance on crafted by the FRC.
  5. A raising voice of open consciousness of the UAE Bankruptcy Law.

Who will accommodate on the Financial Resolution Committee?

The FRC is required to contain nine individuals, which incorporates delegates of every one of the Ministry of Finance, the Ministry of Economy, the Ministry of Justice, the Central Bank, the Securities and Commodities Authority, and the Governments of Abu Dhabi and Sharjah.

When can an organization apply for a financial restructuring?

A financial institution can apply to FRC if it:

  1. is in financial distress but is not yet insolvent for the UAE Bankruptcy Law.
  2. is not in a preventative composition or bankruptcy process under the UAE Bankruptcy Law.
  3. has not been subject to a financial restructuring in the preceding year.

The application process for restructuring entails that, a financial institution must submit specific information to the FRC, including assessment of institution's funding needs for next 12 months. The institution may appoint an expert from the role of experts to oversee its financial restructuring.

Consequences of accepting FRC application

Once the FRC application is approved then following are the consequences:

  1. A specialist will be designated to manage the rebuilding procedure.
  2. An account holder will keep on managing business all through the money related rebuilding process.
  3. On acknowledgment of FRC use of monetary rebuilding, at that point, any commitment on the money related establishment to petition for chapter 11 under the arrangements of the New Bankruptcy Law will be suspended.

Part of the master in a budgetary rebuilding

The ace assigned to oversee the modifying of a cash-related association will:

  1. survey the monetary and fiscal status of the borrower.
  2. encourage a consensual assertion between the borrowers and banks.
  3. Give the account holder proposition to proceed with its business and hold its representatives.
  4. Display the month to month reply to the FRC to keep it instructed of progress.
  5. grasp some different endeavors designated by the FRC.

Exactly when will the cash relate revamping end?

On coming to upon the consensual assertion between the advance managers and record holders, the cash related settlement will end if the record holder fails to pay the necessary charges and expenses.

Who are the specialists?

Specialists can be characteristic or legitimate people. Anybody can apply for the post of specialists on accommodation of an application to the secretariat of the FRC. FRC is engaged to expect specialists to pass specific courses in the field of rebuilding and the enrolment of chapter 11 on the part of specialists. The record of master's qualification will be in an electronic enroll. To wrap things up, both the determination and the UAE insolvency Law sets out conditions when a specialist can't act regarding a specific rebuilding.

Procedures of the Federal Resolution Committee


The FRC is relied upon to involve nine individuals, being agents of every one of the Ministry of Finance, the Ministry of Economy, the Ministry of Justice, the Central Bank, the Securities and Commodities Authority, and the Governments of Abu Dhabi, Dubai, and Sharjah. At least seven individuals are required consistently.

The Chair of the FRC will be the Deputy Minister, and the arrangement of the Vice Chair will be by the FRC's individuals at its inaugural gathering. In a further determination of the Cabinet enrollment of FRC will be endorsed.

  A term

Each part will be delegated for an underlying condition of three years or long haul as is required to procure a substitution agent. Cabinet Resolution renews the appointment.


Once at regular intervals.


A more significant part of individuals including the Chair and Vice Chair.


One vote for each part. Resolutions go by a more significant role, subject to seat throwing a tally.


The minutes of the gatherings will be recorded, and it might flow all the more broadly at the FRC's caution.


The FRC will have a secretariat capacity to deal with it's authoritative, money related and specialized issues.


The FRC may invite advisors to attend meetings on a non-voting basis.


The FRC will have a secretariat function to manage it's administrative, financial and technical affairs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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