1. Provisions of Bankruptcy Law in the UAE for Appointing Trustees

       Article 82: This article of the bankruptcy law covers who the trustee can be, how many trustees can be appointed, their method of operations, and the decision of continuation or dismissal of the trustee.

• If a court agrees to accept the application presented by the bankruptcy law’s rules, it will appoint a trustee from a panel of experts. If a person with the appropriate experience cannot be found on the roster, the court may appoint an expert from outside the roster.
• The court may appoint more than one trustee on its initiative or at the request of a debtor, creditor, or inspector, provided that no more than three trustees are appointed at any given time.
• If more than one trustee is selected, they must work together to complete their tasks, and decisions will be made by a majority vote. If there is a tie, or if an equal number of people have decided on different things, the court will make the final decision. The court will assign tasks to the trustees and explain how they will carry them out, whether collectively or separately.
• If the court agrees to designate a legal person as a trustee, he must appoint one or more representatives to carry out the trustee’s various obligations, provided that the representative or representatives are registered in the panel of experts as required by UAE bankruptcy law.
• The court has the authority to keep the preventive composition trustee in place to carry out the duties of a trustee by the laws and appoint additional trustees. Under the provisions of the Bankruptcy Code, the court can also dismiss any of them.
• The trustee must be notified of the court’s decision regarding his appointment no later than the next business day after the ruling is issued.
• Experts are appointed to assist the Trustee.

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Any application that aids or assists the newly appointed trustee in his duties might be submitted to the court. This may include, for example, an application to appoint one or more experts under his wing, who would be registered as the panel of experts, to assist him in any subjects falling within his competence and jurisdiction. When necessary, the expert may be appointed from outside the roster of experts with the agreement of the court. The court should decide the expert’s task and costs based on the trustee’s suggestion.

• Individuals who are not eligible to serve as Trustees or Experts

The following people are ineligible to serve as trustees or experts:

• The debtor’s creditors are a group of people who are owed money by the debtor.
• Anyone with whom the debtor has a close relationship, such as his spouse, in-laws, or relatives up to the fourth degree.
• Even if he was rehabilitated, anyone who has been sentenced for embezzlement, theft, fraud in commercial transactions, breach of trust, deception, forgery, or any of the crimes listed in the bankruptcy law, as well as bribery or any other offense that has harmed the national economy, has been in breach of trust, deceit, forgery, or any of the crimes listed in the bankruptcy law, as well as bribery or any other offense that has
• Anyone who was a debtor’s business partner, past employee, agent, or auditor two years before the procedure’s start.
• Provisions for Fees Paid to the Trustee for Tasks Completed

According to bankruptcy legislation, the fees for duties performed by trustees or experts must be paid from the debtor’s assets that are known to the court. The court has the authority to order that this amount plus fees be paid in advance.

If the debtor has no assets or his assets are insufficient to support the trustees’ fees and expenses, the debtor can apply to the President of the Court to have the fees and expenses paid from the Court’s Treasury. If any fees are paid from the Court’s treasury, the amounts paid are redeemed by the court and given priority over all other creditors, i.e. from the first sums in the debtor’s assets.

If an individual is unhappy with the appointed trustee’s or experts’ estimations or expenses, he should make a complaint under bankruptcy law. It’s crucial to understand that filing such a complaint does not result in the bankruptcy proceeding being halted. Within 5 working days after receiving the grievance, the court will review it and make a ruling, and the decision will be regarded as final.

• The Court’s decision to appoint a new trustee

According to Article 86 of the Bankruptcy Code, the court can change the existing trustee or expert at any moment and appoint a new one based on the bankruptcy code’s provisions. The debtor also has the right to ask the court to remove the trustee or expert if they can show that their continued presence is detrimental to the creditors’ interests. This request is not subject to a stay of proceedings, and the new trustee or expert will be appointed by the law’s provisions. Cooperation from the replacement trustee is also required for the substitute to complete their duties.

• Inspectors are appointed.

Article 29 of the bankruptcy legislation has been replaced by Article (1) of Federal Decree-Law No 23, (2019/09/04), which reads as follows:

• To oversee the implementation of the preventative composition processes, the court will appoint one or more inspectors from among the creditors who nominate themselves. If the nominated creditors are holders of mortgage-backed obligations with preferential rights, at least one creditor for each group must be appointed.
• If more than one creditor applies for each group, the court will choose the best candidate based on the number of creditors represented and the amount of debt represented by each candidate to be appointed as inspector.
• Each inspector may be represented by one of his or her legal agents or employees.
• If the debtor requires a competent supervisory authority, the court may decide to appoint one of the above inspectors at the debtor’s request.
• The designated inspector cannot be the debtor’s spouse, in-law, or fourth-degree relative.

The inspector will not be paid and will only be held responsible for substantial or purposeful errors made while carrying out his duties or tasks.

• The debtor or creditor can file a complaint with the court about any issues he or she has with the designated inspector or representative. The filing of a grievance does not imply that the procedures will be suspended. Each inspector may be represented by one of his or her legal agents or employees.
• If the debtor requires a competent supervisory authority, the court may decide to appoint one of the above inspectors at the debtor’s request.
• The designated inspector cannot be the debtor’s spouse, in-law, or fourth-degree relative.
• Inspector’s Role in Bankruptcy Proceedings

The appointed inspector must ensure that he aids the trustee and the court in serving the creditors’ public interests. He is responsible for overseeing the implementation of the preventative composure plan’s conditions and informing the court if any violations occur.

Conclusion:

When it comes to the outcome of your bankruptcy case, the court’s designation of a trustee and inspector is critical. At HHS, we have the top Bankruptcy lawyers in Dubai and throughout the UAE who can assist you in achieving a positive outcome. Give us a call right now!