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Security & Collateral

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In Brief One of the prominent forms of collateral for creditors nowadays is obtaining a transfer of a client’s accounts receivables. This form of collateral is often referred to as an ‘assignment of receivables’ (“Assignment”), under which the creditor (the “Assignee”) becomes permitted to collect from any pre-existing or future debtors that the client (the “Assignor”) has receivables. The Assignment, although never codified in law (unlike the Novation codified under Articles 1106 et seq. of…

Background Just when creditors in the UAE got used to Law No. 20 of 2016 concerning the Pledge of Moveable Assets as Security (“Old Pledge Law”), and the amendment that was introduced in 2019, the winds slightly changed course when Law No. 4 of 2020 on the Pledge of Rights in Moveable Assets (“New Pledge Law”) was introduced  in May 2020. Since then, creditors were not so sure in what direction the new breeze was…