Federal Law Regarding Securing the Rights in Movables
Formal Name: Formal Name Federal Law No. (4) of 2020 Regarding Securing the Rights in Movables
We Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates;
- Having reviewed the Constitution;
Federal Law No. (1) of 1972 concerning the Competences of the Ministries and the Powers of the Ministers, as amended;
- Federal Law No. (5) of 1975 concerning the Commercial Register;
- Federal Law No. (26) of 1981 on Maritime Trade Law, as amended;
- Federal Law No. (5) of 1985 Promulgating the Civil Transactions Law, as amended;
- Federal Law No. (3) of 1987 Promulgating the Penal Code, as amended;
- Federal Law No. (10) of 1992 Promulgating the Law of Evidence in Civil and Commercial Transactions, as amended;
- Federal Law No. (11) of 1992 Promulgating the Civil Procedure Code, as amended;
- Federal Law No. (35) of 1992 Promulgating Penal Procedures Code, as amended;
- Federal Law No. (37) of 1992 On Trademarks, as amended;
- Federal Law No. (18) of 1993 on Promulgating the Commercial Transactions Law, as amended;
- Federal Law No. (17) of 2002 Regulating and Protecting Industrial Property Rights for Patents, Industrial Drawings and Designs, as amended;
- Federal Law No. (1) of 2006 concerning the Transactions and Electronic Commerce;
- Federal Law No. (6) of 2010 concerning Credit Information;
- Federal Law No. (2) of 2015 on Commercial Companies, as amended;
- Federal Law by Decree No. (9) of 2016 on Bankruptcy, as amended;
Federal Law No. (20) of 2016 on Mortgaging of Movables as Security for Debts;
- Federal Law No (8) of 2018 concerning Finance Leasing;
- Federal Law by Decree No. (14) of 2018 concerning the Central Bank and the Regulation of Financial Institutions and Activities;
- Federal Law by Decree No. (19) of 2019 on Insolvency;
- Federal Law by Decree No. (26) of 2019 on Public Finance;
- And pursuant to the proposal presented by the Minister of Finance, and approval of the Cabinet and the Federal National Council, and ratification of the Supreme Federal Council;
Have promulgated the following Law:
Article (1) Definitions
In application of the provisions of this Law, the following words and expressions shall have the meanings ascribed thereto unless the context requires otherwise:
State: United Arab Emirates
Ministry: Ministry of Finance
Minister: Minister of Finance
Security Right: An in-kind right on a movable that is established under a security contract for securing the fulfilment of a liability, even if not explicitly described as a security right, regardless the type of property or status of Pledgor or Pledgee or nature of secured liability. It shall include the right of Pledgee in a mortgage contract, right of lessor resulting from a finance leasing, right of ownership of a seller to the movable sold under contracts of sale and transfer of the movable for the security and the right of transferee in the security by transfer.
Pledge: Material or moral movable, whether current or future, on which the security right is established.
Pledge Returns: Any in-kind or cash allowance resulting from the disposal of the Pledge or replacing it with another one, or any compensation obtained by the Pledgor due to the reduction in the Pledge value, its damage or any other similar compensation.
Pledgee: Beneficiary creditor from the security right.
Pledgor: A person having a right or authority in disposing of the Pledge and establishing the security right to Pledge his liabilities or liabilities of third party.
Pledged Person: A debtor of secured liability if he is not a Pledgor.
Security Contract: A contract between the Pledgor and the Pledgee to establish the security right.
Register: An electronic register designated for registering the rights on the movables.
Registration: Recording the rights provided on the movables in the Register. Such recording shall include any amendment or cancellation thereto.
Accounts Receivable: The right to fulfil amounts of money for the Pledgor owed by a third party. Such right shall not include the payments established in the endorsable bonds, the right in the payments deposited in the credit accounts with banks or the right in the payments under the securities.
The Court: Court of Appeal or the court which the Pledge falls within its jurisdiction, as the case may be.
Security Right for Purchase Financing: A security right on a material movable, intellectual property right or the right of licensee under an intellectual property licensing that is established to secure the liability of settling the part unpaid from a price of a movable or any other credit granted for enabling the Pledgor from obtaining rights in a movable.
Enforcement against Third Party: Completion of procedures required for enabling the Pledgee from insisting on the security right against a third party, whether by registering a registration in the Register according to provisions of this Law or by enabling the Pledgee to possess the Pledge or acquiring the Pledgee to control the Pledge.
Article (2) Scope of Application of the Law
1. Provisions of this Law shall apply to any security right established under its provisions within the framework of commercial or civil transactions.
2. For purposes of this Law, the right of transferee in selling the accounts receivable shall be deemed a security right and shall be subject to provisions of this Law, save the provisions of Chapter Seven therefrom.