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Draft of the Insolvency Law

Part 1: General

1. Title

The law may be cited as "the Insolvency Law No. 1 of 2003

2. Legislative authority

The Law is made by the Chairman in accordance with the authority given to him by Dubai Law No. 3 of 2002.

3. Application of the Law

The Law applies in the jurisdiction created under Dubai Law No. 3 of 2002.

4. Date of enactment

The Law is made on [insert date of enactment].

5. Commencement

The Law comes into force on the date that the Law is enacted.

6. Interpretation

Schedule 1 contains:

(a) interpretative provisions which apply to the Law; and
(b) a list of defined terms used in the Law.

Part 2: Company Voluntary Arrangements

7. Company arrangements

(1) The Directors of a company incorporated under the DIFC Companies Law may make a proposal under this Part to the company and to its creditors for a scheme of arrangement of its affairs (a "voluntary arrangement").
(2) The Directors shall appoint a Person (the "nominee") to act in relation to the voluntary arrangement for the purpose of supervising its implementation.
(3) The nominee must be a Person who is qualified under Part 8 of this Law.

8. Moratorium

(1) Where the Directors of an eligible company intend to make a proposal for a voluntary arrangement, they may take steps to obtain a moratorium for the company.
(2) The Committee shall make such order as it sees fit in respect of the moratorium. Such order may provide in particular for:
(a) companies eligible for a moratorium under this Article 8;
(b) the procedure for obtaining such a moratorium;
(c) the effects of such a moratorium; and
(d) the procedure applicable (in place of Articles 9 to 12) in relation to the approval and implementation of a voluntary arrangement where such a moratorium is or has been in force.

9. Summoning of meetings

(1) The nominee shall summon meetings of the company and of its creditors to consider the proposal.
(2) The persons to be summoned to a creditors' meeting under this Article 9 are every creditor of the company of whose claim and address the Person summoning the meeting is aware.
(3) The company meeting shall be held in accordance with the Companies Law.

10. Decisions of meetings

(1) The meetings summoned under Article 9 shall decide whether to approve the proposed voluntary arrangement (with or without modifications).
(2) A meeting so summoned shall not approve any proposal or modification which affects the right of a preferential creditor or a secured creditor of the company to enforce his rights or his Security, except with the concurrence of the creditor concerned.

11. Effect of approval

(1) This Article 11 has effect where each of the meetings summoned under Article 9 approves the proposed voluntary arrangement either with the same modifications or without modifications.
(2) Where the proposed arrangements approved by the meetings differ from each other, the Court shall determine which of the proposed arrangements is to be taken to be the approved arrangement.
(3) The approved voluntary arrangement:
(a) takes effect as if made by the company at the creditors' meeting; and
(b) binds every Person who in accordance with the rules had notice of, and was entitled to vote at, that meeting (whether or not he was present or represented at the meeting) as if he were a party to the voluntary arrangement.
(4) If the company is being wound up or an administration order is in force, the Court may do one or both of the following, namely:
(a) by order stay all proceedings in the winding up or discharge the administration order; and/or
(b) give such directions with respect to the conduct of the winding up or the administration as it thinks appropriate for facilitating the voluntary arrangement.

12. Implementation of proposal

(1) This Article 12 applies where a voluntary arrangement approved by the meetings summoned under Article 9 has taken effect.
(2) The Person who is for the time being carrying out in relation to the voluntary arrangement the functions of the nominee shall be known as the supervisor of the voluntary arrangement.
(3) The supervisor must be a Person who is qualified under Part 8 of this Law.
(4) If any of the company's creditors or any other Person is dissatisfied by any act, omission or decision of the supervisor, he may apply to the court; and on the application the Court may:
(a) confirm, reverse or modify any act or decision of the supervisor;
(b) give him directions; or
(c) make such other order as it thinks fit.
(5) The supervisor:
(a) may apply to the Court for directions in relation to any particular matter arising under the voluntary arrangement; and
(b) is included among the persons who may apply to the Court for the winding up of the company or for an administration order to be made in relation to it.
(6) The Court may make an order appointing a Person who is qualified under Part 8 of this Law to act as an insolvency practitioner in relation to the company either in substitution for the existing supervisor or to fill a vacancy.

Part 3: Receivership

13. Powers of receivers and administrative receivers

(1) Where a company grants a Person powers contained in an Instrument to appoint an office-holder to get in and sell any part of its Property and to apply the proceeds in reduction of a debt due to that other Person, the office-holder, once appointed, shall be a receiver and shall be subject to this Law in his performance of that function.
(2) A receiver of the Property of a company may be appointed under, and has all of the powers conferred upon him by, such Instrument save as provided in this Law.
(3) A receiver of the Property of a company appointed under powers contained in an Instrument, or the persons by whom or on whose behalf a receiver has been so appointed, may apply to the Court for directions in relation to any particular matter arising in connection with the performance of the functions of the receiver.
(4) On such an application, the Court may give such directions, or may make such order declaring the rights of persons before the Court or otherwise, as it thinks just.
(5) Where a receiver is appointed in respect of the Property of a company under powers contained in an Instrument, and the Property over which he is appointed consists of all or substantially all of the Undertaking of the company, that receiver, once appointed, shall be an administrative receiver. An administrative receiver has, in addition to the powers contained in the Instrument, the powers set out in Schedule 2 to this Law.
(6) In the application of Schedule 2 to the administrative receiver of a company:
(a) the words "he" and "him" refer to the administrative receiver, and
(b) references to the Property of the company are to the Property of which he is or, but for the appointment of some other Person as the receiver of part of the company's Property would be, the receiver.
(7) A receiver or an administrative receiver appointed over Property of a company in the DIFC must be a Person who is qualified under Part 8 of this Law.

14. Notification that receiver appointed

When a receiver of any Property of a company has been appointed, every invoice, order for goods or business letter issued by or on behalf of the company, being a document on or in which the company's name appears, shall contain a statement that a receiver has been appointed.

15. Interaction of receivers

When an administrative receiver is appointed in respect of the Property of a company, any other receiver or receivers appointed prior to the date of appointment of the administrative receiver shall immediately vacate office. Once an administrative receiver has been appointed, no subsequent receiver of any part of the Property of the company may be appointed.

16. No duty to enquire as to power of administrative receiver

A Person dealing with an administrative receiver in good faith and for value is not concerned to enquire whether the administrative receiver is acting within his powers.

17. Power to dispose of charged Property, etc

(1) Where, on an application by the administrative receiver, the Court is satisfied that the disposal (with or without other assets) of any relevant Property which is subject to a Security interest would be likely to promote a more advantageous realisation of the company's assets than would otherwise be effected, the Court may by order authorise the administrative receiver to dispose of the Property as if it were not subject to the Security interest.
(2) Article 17(1) does not apply in the case of any Security interest held by the Person by or onwhose behalf the administrative receiver was appointed, or of any Security interest to which a Security interest so held has priority.
(3) It shall be a condition of an order under this Article 17 that:
(a) the net proceeds of the disposal; and
(b) such sum as may be required to make good the deficiency between the net proceeds of the disposal and the net amount which would be realised on a sale of the Property in the open market by a willing vendor
shall be applied towards discharging the sums secured by the Security.
(4) Where a condition imposed in pursuance of Article 17(3) relates to two or more Security interests, that condition shall require the net proceeds of the disposal and, where paragraph (b) of that Article applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those Securities in the order of their priorities.

18. Agency and liability for contracts

The administrative receiver of a company is deemed to be the company's agent unless and until the company goes into liquidation.

19. Vacation of office

An administrative receiver of a company may at any time be removed from office by order of the Court (but not otherwise) and may resign his office by giving notice of his resignation in the prescribed manner to such persons as may be prescribed.

20. Report by administrative receiver

(1) Where an administrative receiver is appointed, he shall, within 3 months (or such longer period as the Court may allow) after his appointment, send to all creditors of the company (so far as he is aware of their addresses) a report as to the following matters, namely:
(a) the events leading up to his appointment, so far as he is aware of them;
(b) the disposal or proposed disposal by him of any Property of the company and the carrying on or proposed carrying on by him of any business of the company;
(c) the amounts of principal and interest payable to the Debenture holders by whom or on whose behalf he was appointed and the amounts payable to preferential creditors; and
(d) the amount (if any) likely to be available for the payment of other creditors.
(2) The administrative receiver shall within 3 months (or such longer period as the Court may allow) after his appointment, publish in the prescribed manner a notice stating an address to which unsecured creditors of the company should write for copies of the report to be sent to them free of charge
(3) The administrative receiver shall summon a meeting of the company's unsecured creditors summoned for the purpose on not less than 14 days' notice, for the purpose of discussing the report.

21. Committee of creditors

(1) Where a meeting of creditors is summoned under Article 20(3), the meeting may, if it thinks fit, establish a committee (the creditors' "committee") to exercise the functions conferred on it by or under this Law or rules made by the Committee.
(2) If such a committee is established, the committee may, on giving not less than 7 days'notice, require the administrative receiver to attend before it at any reasonable time and furnish it with such information relating to the carrying out by him of his functions as it may reasonably require.

Part 4: Winding Up

Chapter 1 General

22. Alternative modes of winding up

(1) The winding up of a company incorporated in the DIFC may be either voluntary or by the Court.
(2) This Chapter relates to winding up generally, except where otherwise stated.

23. Regulations

The Council may make such Tier 4 Legislation as it sees fit in relation to the obligations of Members, former Members, Directors, former Directors, and other persons to contribute to the assets of a company which is being wound up.

24. Powers of liquidator

Any liquidator appointed in a winding-up shall have the powers set out in Schedule 2.

Chapter 2 Voluntary Winding Up

25. Circumstances in which a company may be wound up voluntarily

A company may be wound up voluntarily:

(a) when the articles of the company provide that the company should be wound up;
(b) if the company resolves that it should be wound up voluntarily; or
(c) if the company resolves that it cannot by reason of its liabilities continue its business, and that it is advisable to be wound up.

26. Notice of resolution to wind up

When a company has passed a resolution for voluntary winding up, it shall, within 14 days after the passing of the resolution, give notice of the resolution by advertisement in [ ].

27. Commencement of winding up

A voluntary winding up is deemed to commence at the time of the passing of the resolution for voluntary winding up.

28. Effect on business and status of company

(1) In case of a voluntary winding up, the company shall from the commencement of the winding up cease to carry on its business, except so far as may be required for its beneficial winding up.
(2) However, the corporate State and corporate powers of the company, notwithstanding anything to the contrary in its articles, continue until the company is dissolved.

29. Avoidance of share transfers, etc after winding-up resolution

Any transfer of Shares, not being a transfer made to or with the sanction of the liquidator, and any alteration in the status of the company's Members made after the commencement of a voluntary winding up, is void.

30. Statutory declaration of solvency

(1) Where it is proposed to wind up a company voluntarily, the Directors (or, in the case of a company having more than two Directors, the majority of them) may at a directors' meeting make a statutory declaration to the effect that they have made a full inquiry into the company's affairs and that, having done so, they have formed the opinion that the company will be able to pay its debts in ftill within such period, not exceeding 12 months from the commencement of the winding up, as may be specified in the declaration.
(2) Such a declaration must be made within the 5 weeks immediately preceding the date of the passing of the resolution for winding up, or on that date but before the passing of the resolution.
(3) A Director making a declaration under this Article 30 without having reasonable grounds for the opinion that the company will be able to pay its debts in full, together with interest at the official rate, within the period specified is liable to imprisonment or a fine, or both.
(4) If the company is wound up in pursuance of a resolution passed within 5 weeks after the making of the declaration, and its debts are not paid or provided for in ftill within the period specified, it is to be presumed (unless the contrary is shown) that the Director did not have reasonable grounds for his opinion.

31. Distinction between "members"' and "creditors voluntary winding up"

A winding up in the case of which a directors' statutory declaration under Article 31 has been made is a "members' voluntary winding up"; and a winding up in the case of which such a declaration has not been made is a "creditors' voluntary winding up".

32. Appointment of liquidator

(1) In a members' voluntary winding up, the company in general meeting shall appoint one or more liquidators for the purpose of winding up the company's affairs and distributing its assets.
(2) On the appointment of a liquidator all the powers of the Directors cease, except so far as the company in general meeting or the liquidator sanctions their continuance.

33. General company meeting at each year's end

(1) In the event of the winding up continuing for more than one year, the liquidator shall summon a general meeting of the company at the end of the first year from the commencement of the winding up, and of each succeeding year, or at the first convenient date within 3 months from the end of the year or such longer period as the Court may allow.
(2) The liquidator shall lay before the meeting an account of his acts and dealings, and of the conduct of the winding up, during the preceding year.

34. Final meeting prior to dissolution

(1) As soon as the company's affairs are fully wound up, the liquidator shall make up an account of the winding up, showing how it has been conducted and the company's Property has been disposed of, and thereupon shall call a general meeting of the company for the purpose of laying before it the account, and giving an explanation of it.
(2) The meeting shall be called by advertisement according to Tier 4 Legislation laid down by the Council specibting its time, place and object and published at least one month before the meeting.

35. Effect of company's insolvency

(1) This Article 35 applies where the liquidator is of the opinion that the company will be unable to pay its debts in full within the period stated in the directors' declaration under Article 30.
(2) The liquidator shall summon a meeting of creditors for a day not later than the 28th day after the day on which he formed that opinion, and send notices of the creditors' meeting to the creditors by post not less than 7 days before the day on which that meeting is to be held.
(3) The liquidator must ftimish creditors free of Charge with such information concerning the affairs of the company as they may reasonably require, and the notice of the creditors' meeting shall State this duty.
(4) The liquidator shall also make out a statement of the affairs of the company and lay that statement before the creditors' meeting.

36. Conversion to creditors' voluntary winding up

As from the day on which the creditors' meeting is held under Article 35, this Law has effect as if:

(a) the directors' declaration under Article 30 had not been made; and
(b) the creditors' meeting and the company meeting at which it was resolved that the company be wound up voluntarily were the meetings mentioned in Article 38 in Chapter 3
and accordingly the winding up becomes a creditors' voluntary winding up.

Chapter 3 Creditors' Voluntary Winding Up

37. Application of this Chapter

(1) Subject as follows, this Chapter applies in relation to a creditors' voluntary winding up.
(2) Articles 38 and 39 do not apply where, under Article 36 in Chapter 2, a members' voluntary winding up has become a creditors' voluntary winding up.

38. Meeting of creditors

(1) The company shall:
(a) cause a meeting of its creditors to be summoned for a day not later than the 14th day after the day on which there is to be held the company meeting at which the resolution for voluntary winding up is to be proposed;
(b) cause the notices of the creditors' meeting to be distributed to all creditors of whose identity it is aware and published in an appropriate publication not less than 7 days before the day on which that meeting is to be held; and
(c) propose a Person to act as liquidator of the company.
(2) The creditors may, at the creditors meeting, nominate a Person to be liquidator.
(3) In the case of different persons being nominated, the liquidator shall be the Person nominated by the creditors.
(4) The powers of the liquidator nominated by the company shall not be exercised, except with the sanction of the Court, during the period before the holding of the creditors' meeting

39. Appointment of liquidation committee

(1) The creditors at the meeting to be held under Article 38 or at any subsequent meeting may, if they think fit, appoint a committee (the "liquidation committee") of not more than 5 persons to exercise the functions conferred on it by or under this Law.
(2) If such a committee is appointed, the company may, either at the meeting at which the resolution for voluntary winding up is passed or at any time subsequently in general meeting, appoint such number of persons as they think fit to act as Members of the committee, not exceeding 5.
(3) However, the creditors may, if they think fit, resolve that all or any of the persons so appointed by the company ought not to be Members of the liquidation committee; and if the creditors so resolve:
(a) the persons mentioned in the resolution are not then, unless the Court otherwise directs, qualified to act as Members of the committee; and
(b) on any application to the Court under this provision the Court may, if it thinks fit, appoint other persons to act as such Members in place of the persons mentioned in the resolution.

40. Directors' powers

On the appointment of a liquidator, all the powers of the Directors cease, except so far as the liquidation committee (or, if there is no such committee, the creditors) sanction their continuance.

41. Vacancy in office of liquidator

If a vacancy occurs, by death, resignation or otherwise, in the office of a liquidator (other than a liquidator appointed by, or by the direction of, the court) the creditors may fill the vacancy.

42. Meetings of company and creditors at each year's end

If the winding up continues for more than one year, the liquidator shall summon a general meeting of the company and a meeting of the creditors at the end of the first year from the commencement of the winding up, and of each succeeding year, or at the first convenient date within 3 months from the end of the year, and shall lay before each of the meetings an account of his acts and dealings and of the conduct of the winding up during the preceding year.

43. Final meeting prior to dissolution

As soon as the company's affairs are ftilly wound up, the liquidator shall make up an account of the winding up, showing how it has been conducted and the company's Property has been disposed of, and thereupon shall call a general meeting of the company and a meeting of the creditors for the purpose of laying the account before the meetings and giving an explanation of it.

Chapter 4 Provisions Applying to both kinds of Voluntary Winding Up

44. Distribution of company's property

Subject to the provisions of this Law as to preferential payments, the company's Property in a voluntary winding up shall on the winding up be applied in satisfaction of the company's liabilities pari passu and, subject to that application, shall (unless the articles otherwise provide) be distributed among the Members according to their Rights and Interests in the company.

45. Appointment or removal of liquidator by the court

(1) If from any cause whatever there is no liquidator acting, the Court may appoint a liquidator.
(2) The Court may remove a liquidator and appoint another.

46. Reference of questions to court

(1) The liquidator or any shareholder or other Person liable to contribute to the assets of the company or creditor may apply to the Court to determine any question arising in the winding up of a company, or to exercise, as respects the enforcing of calls or any other matter, all or any of the powers which the Court might exercise if the company were being wound up by the Court.
(2) The Court may make such order on the application as it thinks just.

47. Expenses of voluntary winding up

All expenses properly incurred in the winding up, including the Remuneration of the liquidator, are payable out of the company's assets in priority to all other claims.

48. Saving for certain rights

The voluntary winding up of a company does not bar the right of any creditor or other Person to apply to have it wound up by the Court.

Chapter 5 Compulsory Winding Up

49. Circumstances in which company may be wound up by the court

(1) A company may be wound up by the Court if:
(a) the company has resolved that the company be wound up by the court;
(b) the company is unable to pay its debts;
(c) at the time at which a moratorium for the company under Article 8 comes to an end, no voluntary arrangement approved under Part 2 has effect in relation to the company; or
(d) the Court is of the opinion that it is just and equitable that the company should be wound up.

50. Definition of inability to pay debts

(1) A company is deemed unable to pay its debts:
(a) if a creditor to whom the company is indebted in a sum exceeding AED[ ] then due has served on the company a written demand requiring the company to pay the sum so due and the company has for 3 weeks thereafter neglected to pay the sum or to agree terms in relation to its payment to the reasonable satisfaction of the creditor; or
(b) if execution or other process issued on a judgment, decree or order of any Court in favour of a creditor of the company is returned unsatisfied in whole or in part; or
(c) if it is proved to the satisfaction of the Court that the company is unable to pay its debts as they fall due.
(2) A company is also deemed unable to pay its debts if it is proved to the satisfaction of the Court that the value of the company's assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities.

51. Application for winding up

An application to the Court for the winding up of a company may only be presented by the company, or the Directors, or by any creditor or creditors (including any contingent or prospective creditor or creditors).

52. Petition for winding up on grounds of public interest

Where it appears to the Regulatory Authority that it is expedient in the public interest that a company should be wound up, it may present a petition for the company to be wound up if the Court thinks it just and equitable for it to be so.

53. Voiding of Property dispositions, etc

In a winding up by the Court, any disposition of the company's Property, and any transfer of Shares, or alteration in the status of the company's Members, made after the commencement of the winding up is, unless the Court otherwise orders, void.

54. Voiding of attachments, etc

Where a company is being wound up by the Court, no Person may attach, sequester or otherwise appropriate the assets of the company after the commencement of the winding up, and any such activity is, unless the Court otherwise orders, void.

55. Consequences of winding-up order

When a winding-up order has been made, no action or proceeding shall be proceeded with or commenced against the company or its Property, except by leave of the Court and subject to such terms as the Court may impose.

56. Investigation procedures

The Council shall make such Tier 4 Legislation as it sees fit as regards the procedures to be implemented by a liquidator appointed by the Court, in relation to responsibilities of officers of the company and others to co-operate with the liquidator.

57. Choice of liquidator at meetings of creditors and contributories

(1) Where the Court orders that a company be wound up, the Court shall identify in the order the Person who is to act as liquidator of the company, and that Person shall take office immediately upon the order being made. That Person may either continue the liquidation or summon meetings of the company's creditors and contributories for the purpose of choosing a Person to be liquidator of the company.
(2) The creditors and the contributories at their respective meetings may nominate a Person to be liquidator.
(3) The liquidator shall be the Person nominated by the creditors or, where no Person has been so nominated, the Person (if any) nominated by the contributories.
(4) In the case of different persons being nominated, any shareholder or other Person liable to contribute to the assets of the company or creditor may, within 7 days after the date on which the nomination was made by the creditors, apply to the Court for an order either:
(a) appointing the Person nominated as liquidator by the contributories to be a liquidator instead of, orjointly with, the Person nominated by the creditors; or
(b) appointing some other Person to be liquidator instead of the Person nominated by the creditors.

58. Appointment of provisional liquidator

The Court may, at any time after the presentation of a winding-up petition, appoint a liquidator provisionally. The powers of such a liquidator may be limited by the order appointing him.

59. Liquidation committee

(1) The creditors at the meeting to be held under Article 57 or at any subsequent meeting may, if they think fit, appoint a committee (the "liquidation committee") of not more than 5 persons to exercise the functions conferred on it by or under this Law.
(2) If such a committee is appointed, the company may, either at the meeting at which the resolution for voluntary winding up is passed or at any time subsequently in general meeting, appoint such number of persons as they think fit to act as Members of the committee, not exceeding 5.
(3) However, the creditors may, if they think fit, resolve that all or any of the persons so appointed by the company ought not to be Members of the liquidation committee, and if the creditors so resolve:
(a) the persons mentioned in the resolution are not then, unless the Court otherwise directs, qualified to act as Members of the committee; and
(b) on any application to the Court under this provision the Court may, if it thinks fit, appoint other persons to act as such Members in place of the persons mentioned in the resolution.

60. General functions in winding up by the court

The functions of the liquidator of a company which is being wound up by the Court are to ecure that the assets of the company are got in, realised and distributed to the company's creditors and, if there is a surplus, to the persons entitled to it.

61. Vesting of company Property in liquidator

(1) When a company is being wound up the Court may direct that all or any part of the Property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator.
(2) The liquidator may bring or defend any action or other legal proceeding which relates to that Property or which it is necessary to bring or defend for the purpose of effectually winding up the company and recovering its Property.

62. Power to stay winding up

The Court may at any time after an order for winding up, on the application either of the liquidator or any creditor or shareholder or other Person liable to contribute to the assets of the company, and on proof to the satisfaction of the Court that all proceedings in the winding up ought to be stayed make an order staying the proceedings, either altogether or for a limited time, on such terms and conditions as the Court thinks fit.

63. Power to exclude creditors not proving in time

Provided that it satisfied that all necessary steps have been taken to draw the liquidation of the company to the attention of creditors, the Court may fix a time or times within which creditors are to prove their debts or claims or to be excluded from the benefit of any distribution made before those debts are proved.

64. Payment of expenses of winding up

The Court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the expenses incurred in the winding up in such order of priority as the Court thinks just.

65. Removal, etc of liquidator

(1) This Article 65 applies with respect to the removal from office and vacation of office of the liquidator of a company which is being wound up voluntarily.
(2) The liquidator may be removed from office only by an order of the Court or, in the case of a members' voluntary winding up, by a general meeting of the company summoned specially for that purpose, or, in the case of a creditors' voluntary winding up, by a general meeting of the company's creditors summoned specially for that purpose in accordance with the rules.

66. Preferential debts

(1) In a winding up the company's preferential debts shall be paid in priority to all other debts.
(2) The Council may make such Tier 4 Legislation as it sees fit to designate certain types of claim on a company as preferential debts.

67. Power to disclaim onerous property

(1) The liquidator may, by the giving of the prescribed notice, disclaim any onerous Property and may do so notwithstanding that he has taken possession of it, endeavoured to sell it, or otherwise exercised rights of ownership in relation to it.
(2) The following is onerous Property for the purposes of this Article 67:
(a) any unprofitable contract, and
(b) any other Property of the company which is unsaleable or not readily saleable or is such that it may give rise to a liability to pay Money or perform any other onerous act.
(3) A liquidator in a members' voluntary winding-up may not disclaim Property.

68. Notification that company is in liquidation

When a company is being wound up, whether by the Court or voluntarily, every invoice, order for goods or business letter issued by or on behalf of the company, or a liquidator of the company, or a receiver of the company's Property, being a document on or in which the name of the company appears, shall contain a statement that the company is being wound up.

69. Information as to pending liquidations

If the winding up of a company is not concluded within one year after its commencement, the liquidator shall, at such intervals as may be prescribed, until the winding up is concluded, send to the Council a statement in the form prescribed under Tier 4 Legislation and containing the prescribed particulars with respect to the proceedings in, and position of, the liquidation.

70. Dissolution

(1) This Article 70 applies, in the case of a company being wound up, where the liquidator has sent to creditors his final account and Return.
(2) On the expiration of 3 months from the date of despatch of the final account and Return the company is deemed to be dissolved.
(3) The Court may, on the application of any other Person who appears to the Court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the Court thinks fit.

71. Early dissolution

(1) Where the realisable assets of the company are insufficient to cover the expenses of the winding up, and the affairs of the company do not require any further investigation, the liquidator may at any time apply to the registrar of companies for the early dissolution of the company.
(2) Before making such an application, the liquidator shall give not less than 28 days' notice of his intention to do so to the company's creditors and contributories.

Part 5: Protection of Company Assets in Liquidation

72. Fraud, etc in anticipation of winding up

When a company is ordered to be wound up by the Court, or passes a resolution for voluntary winding up, Article 79 shall apply in respect of any Person, being a past or present officer of the company, who, within the 12 months immediately preceding the commencement of the winding up, has:

(a) concealed any part of the company's Property to the value of AED[ ] or more; or concealed any debt due to or from the company;
(b) fraudulently removed any part of the company's Property to the value of AED[ ] or more;
(c) concealed, destroyed, mutilated or falsified any book or paper affecting or relating to the company's Property or affairs;
(d) made any false entry in any book or paper affecting or relating to the company's Property or affairs;
(e) fraudulently parted with, altered or made any omission in any document affecting or relating to the company's Property or affairs; or
(f) pawned, pledged or disposed of any Property of the company which has been obtained on credit and has not been paid for (unless the pawning, pledging or disposal was in the ordinary way of the company's business)
in each case with the intention of defrauding the creditors of the company or concealing the State of the company from any Person.

73. Transactions in fraud of creditors

(1) When a company is ordered to be wound up by the Court or passes a resolution for voluntary winding up, Article 79 shall apply in respect of any Person, being at the time an officer of the company, who
(a) has made or caused to be made any gift or transfer of, or Charge on, or has caused or connived at the levying of any execution against, the company's Property, or
(b) has concealed or removed any part of the company's Property since, or within 2 months before, the date of any unsatisfied judgment or order for the payment of Money obtained against the company.
(2) Article 79 shall not apply to any Person if he proves that, at the time of the conduct constituting the offence he had no intent to defraud the company's creditors.

74. Falsification of company's books

When a company is being wound up, Article 79 shall apply to an officer or shareholder or other Person liable to contribute to the assets of the company of the company if he destroys, mutilates, alters or falsifies any books, papers or Securities, or makes or is privy to the making of any false or fraudulent entry in any register, book of account or document belonging to the company with intent to defraud or deceive any Person.

75. Material omissions from statement relating to company's affairs

When a company is being wound up, whether by the Court or voluntarily, Article 79 shall apply to any Person, being a past or present officer of the company, who makes any material omission in any statement relating to the company's affairs with intent to defraud any Person.

76. False representations to creditors

(1) When a company is being wound up, whether by the Court or voluntarily, Article 79 shall apply to any Person, being a past or present officer of the company, who makes any false representation or commits any other fraud for the purpose of obtaining the consent of the company's creditors or any of them to an agreement with reference to the company's affairs or to the winding up.
(2) A Person of the kind specified in Article 76(1) is deemed to have made such false representation if, prior to the winding up, he has made any false representation, or committed any other fraud, for that purpose.

77. Fraudulent trading

If in the course of the winding up of a company it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other Person, or for any fraudulent purpose, Article 79 shall apply to any persons who were knowingly parties to the carrying on of the business in the manner mentioned above.

78. Wrongful trading

If in the course of the winding up of a company it appears that the company has gone into insolvent liquidation and at some time before the commencement of the winding up of the company one or more Directors of the company knew or ought to have known of that there was no reasonable prospect of the company avoiding going into insolvent liquidation, Article 79 shall apply to such Person.

79. Summary remedy against delinquent Directors, liquidators, etc

The Court may compel any Person to whom this Article 79 applies to Return or pay to the company any Money or other Property of the company which he has misapplied or retained, or become accountable for, or to compensate the company in respect of any misfeasance or breach of any fiduciary or other duty in relation to the company of which he may be guilty or to make such contributions (if any) to the company's assets as the Court thinks proper.

80. Restriction on re-use of company names

(1) Where a company (the "liquidating company") has gone into insolvent liquidation on or after the appointed day and a Person was a Director or shadow Director of that company at any time in the period of 12 months ending with the day before it went into liquidation, that Person may not, within the period of five years following the liquidation of the liquidating company, be a Director of or have any connection with any company whose name is a name by which the liquidating company was known at any time in that period of 12 months, or whose name is so similar to the name of the liquidating company as to suggest an association with that company.
(2) A Person is personally responsible for all the relevant debts of a company if at any time he is involved in the management of the company in contravention of Article 80(1) above.

Part 6: Overseas and Unregistered Companies

81. Proceedings in respect of overseas companies

(1) Where an overseas company is the subject of insolvency proceedings in its jurisdiction of incorporation, the courts of the DlFC shall, upon request from the courts of that jurisdiction, assist that Court in the gathering and remitting of assets maintained within the DIFC.
(2) The Council may make any order in relation to the getting in of assets of overseas companies and other issues arising in the context of such co-operation.
(3) Where an overseas company has been carrying on business in the DlFC and ceases to carry on business in the DIFC, it may be wound up as an unregistered company under this Law, notwithstanding that it has been dissolved or otherwise ceased to exist as a company under or by virtue of the laws of the country under which it was incorporated.

Part 7: Miscellaneous

82. Power to make Tier 4 Legislation

The Council shall make such Tier 4 Legislation as it sees fit in relation to the conduct of proceedings under this Law, and may make such further order as may appear to it to be necessary to amend the powers, duties or responsibilities of any Person under this legislation.

83. Getting in the company's property

(1) This Article 83 applies in the case of a company where:
(a) an administrative receiver is appointed;
(b) the company goes into liquidation; or
(c) a provisional liquidator is appointed
and the "office-holder" means the administrator, the administrative receiver, the liquidator or the provisional liquidator, as the case may be.
(2) Where any Person has in his possession or control any Property, books, papers or records to which the company appears to be entitled, the Court may require that Person forthwith (or within such period as the Court may direct) to pay, deliver, convey, surrender or transfer the Property, books, papers or records to the office-holder.
(3) Where the office-holder:
(a) seizes or disposes of any Property which is not Property of the company; and
(b) at the time of seizure or disposal believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the Court or otherwise) to seize or dispose of that property
the office-holder is not liable to any Person in respect of any loss or damage resulting from the seizure or disposal (except in so far as that loss or damage is caused by the office-holder's own negligence), and has a lien on the Property, or the proceeds of its sale, for such expenses as were incurred in connection with the seizure or disposal.

84. Duty to co-operate with office-holder

(1) This Article 84 applies in the cases mentioned in Article 83(1) and in the case of a company in respect of which a winding-up order has been made by the Court of the DIFC, as if references to the office-holder included the official receiver, whether or not he is the liquidator.
(2) Each of the persons mentioned in Article 84(3) shall:
(a) give to the office-holder such information concerning the company and its promotion, formation, business, dealings, affairs or Property as the office-holder may at any time after the effective date reasonably require;
(b) attend on the office-holder at such times as the latter may reasonably require.
(3) The persons referred to in Article 84(2) are:
(a) those who are or have at any time been officers of the company;
(b) those who have taken part in the formation of the company at any time within one year before the effective date;
(c) those who are in the employment of the company, or have been in its employment (including employment under a contract for services) within that year, and are in the office-holder's opinion capable of giving information which he requires;
(d) those who are, or have within that year been, officers of, or in the employment (including employment under a contract for services) of, another company which is, or within that year was, an officer of the company in question; and
(e) in the case of a company being wound up by the Court, any Person who has acted as administrator, administrative receiver or liquidator of the company.
(4) For the purposes of Articles 84(2) and (3), the "effective date" is whichever is applicable of the following dates-
(a) the date on which the administration order was made;
(b) the date on which the administrative receiver was appointed or, if he was appointed in succession to another administrative receiver, the date on which the first of his predecessors was appointed;
(c) the date on which the provisional liquidator was appointed; and
(d) the date on which the company went into liquidation.

85. Inquiry into company's dealings

The Court may order any Person involved with the company to produce to it or to the office holder an account of his dealings with the company or any books, papers or records in his possession relating to the company or to any such dealings.

86. Transactions at an undervalue

(1) This Article 86 applies in the case of a company where;
(a) an administrative receiver is appointed to the company; or
(b) the company goes into liquidation; or
(c) a provisional liquidator is appointed
and the "office-holder" means the administrative receiver, the liquidator or the provisional liquidator, as the case may be.
(2) Where the company has at a relevant time (defined in Article 89) entered into a Transaction with any Person at an undervalue, the office-holder may apply to the Court for an order restoring the position to what it would have been if the company had not entered into that Transaction.
(3) A company enters into a Transaction with a Person at an undervalue if it makes a gift to that Person or otherwise enters into a Transaction with that Person on terms that provide for the company to receive no consideration, or consideration the value of which, in Money or money's worth, is significantly less than the value, in Money or money's worth, of the consideration provided by the company.
(4) The Court shall not make an order under this Article 86 in respect of a Transaction at an undervalue if it is satisfied:
(a) that the company which entered into the Transaction did so in good faith and for the purpose of carrying on its business; and
(b) that at the time it did so there were reasonable grounds for believing that the Transaction would benefit the company.

87. Preferences

(1) This Article applies in the cases in which Article 86 applies.
(2) Where the company has at a relevant time (defined in Article 89) given a preference to any Person, the office-holder may apply to the Court for an order restoring the position to what it would have been if the company had not given that preference.
(3) For the purposes of this Article 87 a company gives a preference to a Person if:
(a) that Person is one of the company's creditors or a surety or guarantor for any of the company's debts or other liabilities, and
(b) the company does anything or suffers anything to be done which (in either case) has the effect of putting that Person into a position which, in the event of the company going into insolvent liquidation, will be better than the position he would have been in if that thing had not been done.
(4) The Court shall not make an order under this Article 87 in respect of a preference given to any Person unless the company which gave the preference was influenced in deciding to give it by a desire to produce in relation to that Person the effect mentioned in Article 87(3)(b).
(5) A company which has given a preference to a Person Connected with the company (otherwise than by reason only of being its employee) at the time the preference was given is presumed, unless the contrary is shown, to have been influenced in deciding to give it by such a desire as is mentioned in Article 87(4).

88. Invalid Security interests

(1) Where a company becomes insolvent, a Security interest in all or substantially all of the company's Property is invalid where:
(a) the Security interest is created in favour of a Person Connected with the company and was created after a date two years prior to the onset of insolvency; or
(b) the Security interest is created after a date one year prior to the onset of insolvency and the company either was at the date of the creation or became pursuant to the Transaction in respect of which the Charge was created unable to pay its debts as they fell due; or
(c) the Security interest was created after the commencement of a company voluntary arrangement.
(2) Article 88(1) does not invalidate a Security interest to the extent of the value transferred to the company or liabilities of the company released as a result of the Transaction giving rise to the grant of the Security interest.

89. Relevant time under Articles 86 and 87

The time at which a company enters into a Transaction at an undervalue or gives a preference is a relevant time if the Transaction is entered into, or the preference given:

(a) in the case of a Transaction at an undervalue or of a preference which is given to a Person who is Connected with the company (otherwise than by reason only of being its employee), at a time in the period of 2 years ending with the onset of insolvency (which expression is defined below);
(b) in the case of a preference which is not such a Transaction and is not so given, at a time in the period of 6 months ending with the onset of insolvency; and
(c) in either case, at a time between the presentation of a petition for the making of an administration order in relation to the company and the making of such an order on that petition.

90. Clearing House rules.

The Council may make Tier 4 Legislation relating to the validity of Clearing House rules to the extent such rules are inconsistent with the Law. Tier 4 Legislation made under this Article 90 may, without limitation, disapply or amend this Law insofar as it relates to Clearing House rules and contracts made with or through a Clearing House.

Part 8: Supervision of Insolvency Practitioners

91. Qualifications etc of insolvency practitioners

The Committee may make such order as they see fit in relation to practice as an insolvency practitioner in the DIFC, and in particular may prescribe

(a) the professional qualifications necessary for a Person to be certified as an insolvency practitioner
(b) the requirements in respect of persons acting as insolvency practitioners
(c) the supervision of such persons, and
(d) the sanctions which may be imposed on any Person in respect of any failure to comply with such requirements.

92. Restriction on service as liquidator

No Person may serve as liquidator under this Law unless he is qualified under rules made under this Part.

Part 9: Protected Cell Companies

93. Application of the Law to protected Cell companies

(1) Parts 2 to 7 of the Law shall apply to Cells of protected Cell companies as if, where the context admits:
(a) each Cell of a protected Cell company were a separate company;
(b) the Cell shareholders of each Cell were the shareholders of the company; and
(c) the Cellular Assets attributable to a Cell, together with the Non-Cellular Assets of the protected Cell company, were the assets of the company.
(2) The Council may make Tier 4 Legislation relating to the application of this Article.

94. Provisions in relation to liquidation of protected Cell company

Notwithstanding any statutory provision or rule of law to the contrary, in the liquidation of a protected Cell company, the liquidator:

(a) shall be bound to deal with the company's assets in accordance with the requirements set out in Article [ ] (Cellular and non-cellular assets) of the Companies Law;
(b) in discharge of the claims of creditors of the protected Cell company, shall apply the company's assets to those entitled to have recourse thereto in conformity with the provisions of this Part.