MUSCAT: The new Bankruptcy and Insolvency Law which will come into force on July 2020 will provide relief to investors and creditors, according to a top official at Ministry of Commerce and Industry (MoCI).

Setting the date and conditions for implementing the much-anticipated law, Mohammed bin Rashid Al Badi, the Acting Director of Legal Department at MoCI also said companies that declare bankruptcy can pay back their creditors through a payment restructuring plan. ““The aforementioned bankruptcy law allows the debtor to request a protective settlement if his financial business is disturbed which would lead to the suspension of payment of his debts and his heirs may also apply for protective reconciliation if they decide to continue trading,” Al Badi said in a statement issued to the media. 

According to Al Badi, the bankruptcy law also grants the right of every trader to file for bankruptcy, in case he stops paying his commercial debts following the disruption of his business activities. “A bankruptcy case shall not arise except by a court ruling without which the cessation of the payment of debts shall have no effect, unless the law provides otherwise,” he pointed out. 

According to financial experts, the new Bankruptcy & Insolvency Law is part of a suite of new statutes planned by the government to help boost the investment climate and business environment in the Sultanate. The law which was issued under Royal Decree number 53/2019 and will come into effect on July 1, 2020.