The terms of the Federal Law No. 10 of 2018 on netting applies to all Qualified Financial Contracts or netting agreements specified under this decretal law or collateral arrangement, which are entered into by any person in the UAE. This decretal law does not apply to financial free zones and financial institutions licensed thereby to the extent where there are similar legislations governing similar cases referred to in this decretal law.
The law identifies the cases of termination, liquidation and/or acceleration of any payment, obligation to deliver entitlement or obligation to make, receive or require payments or deliveries, under a Qualified Financial Contract entered into under a netting agreement, or to which a netting agreement applies. The law outlines the various cases of netting agreements and Qualified Financial Contracts, their obligations and enforcement, as well as the mandate of committee for designation of Qualified Financial Contracts.
The law clarifies the mechanism of enforceability of netting agreements, enforceability of netting during insolvency and bankruptcy proceedings, scope of power of the liquidator and the limits on application of the provisions of the insolvency and bankruptcy laws prohibiting set-off, offset or net out of obligations.
The law outlines the framework for prohibition to limit, suspend, or delay the application of provisions of netting agreements, realization and liquidation of collateral, enforceability of a multi-branch netting agreement in an insolvency of a Foreign Party's branch, and the general provisions of this law.
View the text of the law