Issue 256 I February 2013 UPDATE LATEST LEGAL NEWS AND DEVELOPMENTS BY AL TAMIMI & COMPANY
Build it and they
Kuwait: New will come... Companies Law Developer registration requirements in the UAE
Are SWIFT messages legally binding?
Social Media Legal Issues – Part I Regional Footprint
Al Tamimi & Company Offices
Iraq
Jordan Kuwait
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DUBAI - DIFC BAGHDAD, IRAQ AMMAN, JORDAN 6th Floor, Building 4 East Al Harthiya,Kindi St., Dist 213 PO Box 18055 Dubai International Financial Centre Building no. 106 Amman, Jordan Sheikh Zayed Road PO Box: 605 Zip 11195 PO Box 9275, Dubai, UAE Baghdad, Iraq T: +962 6 577 7415 T: +971 4 3641 641 T: +964 1 542 0558 F: +962 6 577 7425 F: +971 4 3641 777 F: +964 1 542 0598 [email protected] [email protected] [email protected]
DUBAI WORLD TRADE CENTRE SHARJAH RIYADH, KSA 9th Floor, Sheikh Zayed Road Al Reem Plaza 2nd Floor, Sky Tower, PO Box: 9275 3rd Floor, Suite 306 (South Tower S.2.A) Dubai, UAE Khaled Lagoon King Fahad Rd. T: +971 4 331 7161 PO Box 5099 Al Olaia Area F: +971 4 331 3089 Sharjah, UAE PO Box 300400 [email protected] T: +971 6 572 7255 Riyadh, KSA F: +971 6 572 7258 T: +966 1 4169 666 DUBAI INTERNET CITY [email protected] F: +966 1 4169 555 Building No.5, G 08 [email protected] PO Box: 500188 Dubai, UAE DOHA, QATAR KUWAIT CITY, KUWAIT * T: +971 4 391 2444 Adv. Mohammed Al Marri in association Khaled Ben Al Waleed Street F: +971 4 391 6864 with Al Tamimi & Company Sharq [email protected] Al Jazeera Tower, 7th Floor Al Dhow Tower PO Box 23443 16th Floor Doha, Qatar PO Box 29927, Safat 13160 ABU DHABI T: +9744 572 777 Kuwait City, Kuwait Al Sila Tower, 26th Floor F: +9744 360 921 T: +965 2 246 2253 Sowwah Square, Sowwah Island [email protected] F: +965 2 246 2258 PO Box 44046, AD, UAE [email protected] T: +971 2 813 0444 F: +971 2 813 0445 [email protected] * Al Tamimi & Company International Ltd. provides services in Kuwait through a joint venture with Yaqoub Al Munayae. Yaqoub Al Munayae is a registered and licensed lawyer under the laws and regulations of Kuwait.
The contents of Law Update are not intended to be a substitute for specific legal advice on individual matters. Reproduction of part, or all of the content in any form, is prohibited other than for individual use only and may not be recopied and shared with a third party. The permission to recopy by an individual does not allow for incorporation of material in part or in whole in any work or publication, whether in hard copy, electronic or any other form, unless specific mention is made to the source, “Law Update published by Al Tamimi & Company”, and written permission is granted from the firm. For more information, please contact us. Contents
DIFC Litigation 4 Security for costs in the DIFC Courts
Dispute Resolution 6 Powers of Attorneys submitted to Banks 8 UAE Court’s Jurisdiction in Commercial Agency Agreements 10 Fidelity Policy 12 Dubai Cassation Court Emphasises its strict Compliance to the New York Convention
14 Litigation The Centre for Amicable Resolution of Disputes in Dubai
Construction & Engineering 16 The Middle East, Construction and the Law 18 Performance Bonds in Qatar
Property 20 Build it and they will come…
Intellectual Property 24 Trademark Registration in Southern Sudan 25 Dubai Court subpoena recognised by a U.S. domain names registry
Corporate Commercial 26 Bonds issue under the UAE local laws 29 Kuwait: New Companies Law
Special Projects 31 The correlation of money laundering and fraud from a practical perspective
35 News and Events
Banking & Finance 39 Are SWIFT messages legally binding? 40 Qatar: Assignment of Rights and Obligations under the Qatari Civil Code
Employment 42 Amendments to Employment Law in the DIFC
Technology, Media & Telecommunications 44 Social Media Legal issues – Part I 47 Advertising standards for the UAE
50 Legislative Update AL TAMIMI & COMPANY ARE PROUD WINNERS OF THE FOLLOWING ACCOLADES PRESENTED AT THE ALB THE BRIEF MIDDLE EAST LAW AWARDS 2012:
• MIDDLE EAST LAW FIRM OF THE YEAR • MANAGING PARTNER OF THE YEAR - HUSAM HOURANI • LITIGATION LAW FIRM OF THE YEAR • ISLAMIC FINANCE DEAL OF THE YEAR • M&A DEAL OF THE YEAR
2 Law Update IN THIS ISSUE
Welcome to the February edition of Law Update.
We are now settled into business for 2013 and it looks to be an exiting year ahead for the legal sector. We are already aware of new laws coming into effect, many of which have been in the drafting for sometime.
In this edition, you can read more about development registration requirements in the UAE. We are seeing a strong revival of the property market in general in the UAE and this article highlights the regulatory requirements to register as a developer in Dubai, Abu Dhabi, Ajman, Sharjah and Ras Al Khaimah. You can read more on page 20.
Our TMT team, this month, highlights the prevailing risks associated with the use of social media in the workplace. The article outlines and discusses key legal issues which typically arise out of the use of social media relate to offensive content and privacy and confidentiality. Read more on page 44.
There have been some key amendments made by the Dubai International Financial Centre Authority with regards to the Employment Law. Our employment lawyers were involved in the consultation phase and also in the drafting of the amendments on behalf of the DIFC Authority. The amendments to the DIFC Employment Law offer clarification on many of the rules and have also sought to develop some important employee rights. Read more on page 42.
From elsewhere in the region, a new Companies Law has been passed in Kuwait. The new and updated law, which offers a more practical perspective than the previous law, reforms outdated practices and offers investors a more attractive investment environment. Read more on page 29.
Editor: As always, there are many more interesting articles and updates within our magazine Angela Maglieri and I do trust you will find the information useful.
We always welcome your feedback, so if you have any comments, please do not Graphic Design: hesitate to contact me directly via email [email protected] Waad Barghouthi
For further information Husam Hourani Managing Partner on Law Update please contact: [email protected]
Law Update 3 DIFC Litigation
SECURITY FOR COSTS IN THE
TAREK SHRAYH Litigation DIFC COURTS [email protected]
Most jurisdictions are familiar with ambitious Claimants From a Defendant’s perspective, the scenario outlined above represented by law firms with unconventional billing practices. gives rise to the possibility of relatively risk-free litigation on the Claimants in the Courts of the Dubai International Financial part of a Claimant with a weak claim and who may have few if Centre (DIFC Courts) do not need to be based in the DIFC (or any assets. One option available to a Defendant in the DIFC indeed anywhere in the UAE), nor do they need to set out their Courts to lessen the risk of being left to bear significant costs financial position when they file a claim. The Defendants they even if it wins a trial is to make a security for costs application are suing in such proceedings will, however, often be located against the Claimant pursuant to Part 25 of the Rules of the DIFC in the DIFC and have assets there or elsewhere in the UAE, Courts (RDC). Such an application, if successful, involves the making them susceptible to enforcement proceedings brought Respondent (Claimant) paying specified funds into the Court’s by successful Claimants. Although it is usually only worth suing account to ensure that its costs liabilities can and will be met Defendants who are solvent, there is less to stop a financially should the Court order it to pay a portion of the Applicant’s fragile Claimant with no assets in the DIFC (or anywhere else in (Defendant’s) costs following a trial. Apart from providing the UAE) from filing a claim in the DIFC Courts. Defendants with the intended costs security, such applications also help to weed out weak claims at a relatively early stage When it comes to parties’ legal costs, the DIFC Courts follow because Claimants will need to think long and hard before the common law principle that the successful party at trial is parting with significant funds relatively soon after filing a claim usually entitled to recover a significant share, sometimes the they may themselves not have full confidence in. entire share, of its costs from the losing party following the trial. If a losing Claimant does not have the funds to satisfy a The DIFC Courts will consider a number of factors when resulting costs order or simply refuses to comply with it and determining a security for costs application and will order the winning Defendant is unable to enforce the costs order in security for costs to be provided if they are satisfied, having another jurisdiction (where the losing Claimant has assets), regard to all the circumstances of the case, that it is just to make the Defendant’s trial victory may be pyrrhic if the considerable such an order and if one or more of the conditions set out in financial cost of achieving it cannot be recovered from the Rule 25.102 of the RDC are met. The key conditions are that the Claimant in practice. The enforceability of Court judgments and Respondent: (1) is resident outside the UAE; (2) is a company or orders in other jurisdictions is, even if possible, often complicated other body and there is reason to believe it will be unable to pay and slow. This is particularly relevant to proceedings before the the Applicant’s costs if ordered to do so; (3) the Respondent has DIFC Courts, given the relatively transient nature of Dubai and changed addresses since the claim was filed in order to evade the ease with which assets can be moved out of the jurisdiction the consequences of litigation; (4) the Respondent did not include at short notice if a party feels its assets are vulnerable to a Court its (correct) address in the claim form; or (5) the Respondent has judgment or order. taken steps in relation to its assets that would make it difficult to enforce a costs order against it.
4 Law Update DIFC Litigation
It is clear that these conditions give the DIFC Courts a wide enforcing a costs order (in another jurisdiction) is a material discretion to grant security for costs, but this discretion must consideration. The Claimants in Al Khorafiare Kuwaiti nationals be exercised in accordance with established principles and and the applicant Defendant had not met the burden of proving with regard to the underlying purpose of such orders. This was that a costs order could not be enforced against the Claimants in stated by the DIFC Court of Appeal in Rafed Abden Mohsen Kuwait, according to the DIFC Court of Appeal. The “conflicting Bader Al Khorafi, Mrs Amrah Ali Abdel Latif Al Hamad and Mrs evidence” on this particular question included the Riyadh Arab Alia Mohamed Sulaiman Al Rifa v Bank Sarasin-Alpen Limited Agreement for Judicial Cooperation (commonly known as the (CA 001/2010 and CA 002/2010), where the following passage of Riyadh Convention), pursuant to which a costs order of the DIFC the judgment in the English case of De Bry v Fitzgerald ([1990] 1 Courts should be enforceable by the Kuwaiti Courts, although WLR 352) was cited with approval: the DIFC Court of Appeal itself was not able to reach any conclusion as to the risk that such enforcement would not in fact “a defendant should be entitled to security if there is reason to be possible. In Al Khorafi, the DIFC Court of Appeal also stated believe that, in the event of his succeeding and being awarded that applicants for security for costs are required to provide a the costs of the action, he will have real difficulty in enforcing detailed schedule showing the breakdown of their total figure for that order…..If this difficulty [in enforcing the order] would arise the requested security. from the impecuniosity of the plaintiff, the court will of course have to take an account of the likelihood of his succeeding in In summary, while few parties have a desire to be sued, the his claim, for it would be a total denial of justice that poverty DIFC Courts do at least provide a Defendant with the useful tool should bar him from putting forward what is prima facie a good of a security for costs application to: (a) help protect its costs claim…..If, on the other hand, the problem is not that the plaintiff position should it choose to see a claim through to trial; and is impecunious but that, by reason of the way in which he orders (b) make a Claimant consider the costs and merits of its claim his affairs, including where he chooses to live and where he more thoroughly than it may have otherwise done. However, the chooses to keep his assets, an order for costs against him is prospects of succeeding with such an application will depend, likely to be unenforceable, or enforceable only by significant in particular, on the location of the Claimant and its assets, its expenditure of time and money, the defendant should be entitled financial standing and the legal and practical difficulties faced to security.” by the Defendant in enforcing any eventual costs order against the Claimant. In overturning the order of DIFC Court of First Instance requiring security for costs from the Claimants, the DIFC Court of Appeal stated that the burden of establishing facts sufficient to justify such an order rests on the applicant and that the difficulty of
5 Law Update Dispute Resolution
Law Update Judgment
Each month Law Update highlights recent significant judgments issued from the local courts in our Law Update Judgments feature. Al Tamimi & Company’s lawyers translate, simplify and comment on these judgments providing our Law Update readers with an overview which they should find useful and insightful in terms of understanding the workings and developments of the local courts.
If you have any queries relating to the Law Update Judgments please contact [email protected]
SUPREME COURT DECISION: POWERS OF ATTORNEYS
SUBMITTED TO EL-AMEIR NOOR Zane Anani Partner [email protected] Dispute Resolution BANKS [email protected]
In a recent and unusual Supreme Court decision, it was held that unauthorized transactions. The Bank’s alleged error was that where several power of attorneys (giving authority to different it allowed the Second Defendant (an individual) to unilaterally individuals) are submitted to a bank at different times, the last withdraw funds from the account despite the existence of the last power of attorney submitted to the bank would automatically power of attorney requiring the joint signatures of the Claimant revoke all previous powers of attorneys regardless of whether or and the Third Defendant (another individual) to manage the not the bank was notified of the revocation. account.
This decision is considered controversial particularly as the Civil Three powers of attorneys were submitted to the Bank in Code provides that the principal’s express notification to the total, the first power of attorney authorized only the Second agent/third party is required to revoke a power of attorney. Defendant to manage the account, the second power of attorney authorized the Second Defendant and the Claimant jointly and BACKGROUND the third power of attorney authorized the Claimant and the Third Defendant jointly. The Bank (the First Defendant) in this case was held liable for unauthorized transactions and was ordered to pay damages The Court of First Instance and Court of Appeal rejected the in the amount of AED 3.2 million (the Claim amount was AED Claimant’s case on the basis that the Bank had the discretion to 8.3 million) representing the loss suffered as a result of the accept any transaction based on any signature of the authorized
6 Law Update Dispute Resolution
attorneys together as long as the Bank had not been notified of Appeal judgment and sent the matter back for retrial. Upon the revocation of the power of attorney. In these circumstances, retrial, the Court of Appeal ruled in favour of the Claimant and the Bank had not been notified of any revocation and as a ordered the bank to pay AED 2.7 million plus 5% interest in result, all the powers of attorneys submitted to the Bank were compensation for unauthorized transactions. binding. RECOMMENDATIONS TO BANKS IN LIGHT OF SUPREME THE FEDERAL SUPREME COURT’S DECISION AND ITS COURT DECISION RELIANCE ON 933 (2) OF THE CIVIL CODE The Supreme Court overruled the Court of Appeal’s decision The argument by the Bank, although successful at the lower and held that if a number of attorneys are appointed in one two levels, failed at the final level. The Federal Supreme Court power of attorney they have to act jointly, irrespective of the rejected the Bank’s argument and ruled that the bank was fact that one of them has been appointed to act individually mistaken in accepting transactions based on the first power in a separate previous power of attorney. In the event there of attorney as the last power of attorney issued, provides very is a material difference in either the terms of authorisation or clearly that two people should sign together. the names of the individual attorneys in the powers of attorney submitted, the court will only look at the last power of attorney. The court relied on Article 933(2) of the Civil Code, which provides: As a result of this decision, it is recommended that banks carefully check the wording of powers of attorneys particularly “if the attorneys are appointed in one contract without any of when several powers of attorneys are submitted at different them being given the power to act individually, they must act times since it can be argued that the later power of attorney jointly unless the work is such that it cannot be done jointly with amends the former one even though the former has not been another such as legal representation, but provided that (the expressly revoked. person acting on his own) must consult the others appointed with him, or unless it is a matter which does not require the Notwithstanding the above and pursuant to Article 954 of the exchange of views such as the collection or payment of a debt.” Civil Code, a power of attorney still needs to be expressly revoked. The Federal Supreme Court therefore overruled the Court of
Law Update 7 JudgmentDispute Resolution
UAE COURT’S JURISDICTION IN COMMERCIAL AGENCY KHALED GAMALELDEEN MARWA EL MAHDY Litigation [email protected] AGREEMENTS [email protected]
When it comes to Arbitration in the UAE, the general rule and agencies register, according to their agreement the parties practice of UAE Courts is that courts would not entertain any agreed to refer any disputes arising thereof to arbitration. action related to a dispute arising from the execution of an agreement in which the parties have agreed to arbitrate. However, • The Claimant commenced performing its obligations set forth if either party decided to proceed in court despite the presence in the agreement; however the Respondent abstained from of the arbitration clause and the other party does not object at providing the required documents and further unilaterally the first hearing, the action may be heard, and the arbitration affected deletion of the commercial agency agreement from clause shall be deemed inoperative. The UAE Legislator applied the commercial register. certain restrictions on the parties’ freedom to agree to arbitrate when entering into Commercial Agency Agreements. • The Claimant therefore requested appointing an arbitrator We will address this exception below in light of a judgment who issued his arbitral award obligating the Respondent to rendered by Dubai Court of Cassation; the highest court in the pay a sum of AED 328,850 with damages and arbitration Emirate of Dubai, whose judgments interprets the application of costs. Consequently, the Claimant filed a commercial action the law to lower courts. against the Respondent before the Dubai Court of First Instance requesting the court to ratify and authenticate the SUMMARY OF FACTS: arbitral award.
• The Claimant (a commercial agent registered with the PROCEDURAL HISTORY: UAE commercial agents register) entered into an agency agreement with the Respondent. The parties agreed that the The First Instance Court rendered its judgment ratifying the Claimant will market, distribute and sell the Respondent’s arbitral award; the Respondent appealed the judgment before products within the UAE. the Court of Appeals which in turn upheld the judgment. The Respondent challenged the Appeals Court Judgment before the • The agreement was duly registered in the commercial Court of Cassation.
Law Update 8 8 Law Update Dispute Resolution
COURT OF CASSATION: commercial agency agreement is registered in the commercial agencies register. The Respondent argued that the lower court’s decision contradicted provisions of Article 6 of the Commercial Agency Whereas the appealed judgment construed that the Commercial Law. Agency Law no. 18 permitted the parties to the agreement to agree to arbitrate, which contradicts with provisions of Article 6 Article 6 provides that in Commercial Agency Agreements of the same law and the court therefore erred in its reasoning of the State’s Courts shall rule in any disputes which may arise that article. between the Principaland the Agentdue to its implementation. Any agreement to the contrary shall be void. The court further held that the commercial agency was Application of Article 6 to the case before hand renders the registered in the commercial agencies register and the fact arbitration agreement void and consequently the court’s that the Claimant unilaterally deleted/canceled the agreement judgment issued ratifying the arbitral award is in contradiction does not impact the former legal existence and registry of the with the law. agreement in the Commercial Agencies Register. Moreover the Claimant in his action requested appointing the requisite number The Court held that the Respondent’s argument was with grounds, of arbitrators to hear its claim to continue existence of the according to Article 6 “The Commercial Agency agreement shall commercial agency between the parties thereto and to demand be deemed to be for the joint interest of the contracting parties the principal for the commission and damages suffered from and the State’s Courts shall rule in any disputes which may arise striking the commercial agency unilaterally by the Respondent. between the Principal and the Agent due to its implementation. Thus, Article 6 of the aforementioned law is applicable and the Any agreement to the contrary shall be void.” Article 3 of the same appealed judgment therefore contradicted the law and therefore law provides that “Trade agency activities are not permitted to the court overturned the lower court’s judgment. be practiced inside the state except by such commercial agents registered in the Specified register maintained for this purpose PRACTICE NOTE: by the ministry (the Ministry of Economy and Commerce). Any trade agency not registered in the above register shall not be Based on the above, it is crucial for the contracting parties in a considered, nor legal cases there for shall be heard”. commercial agency relationship to be aware that they may not resolve their dispute through arbitration. Due to the sensitivity It is construed from the above two articles that the legislator held of the commercial agencies contracts and their effect on the the jurisdiction for the UAE Courts to hear disputes arising from economy and the trade, the legislator reserved the jurisdiction the performance of commercial agency agreements between the solely to the national courts. agent and the principle and to vitiate any agreement otherwise. This includes the parties’ agreement to arbitrate so long as the
LawLaw Update Update 9 9 JudgmentDispute Resolution Dispute Resolution
FIDELITY
RAMI AL TAL Transport & Insurance POLICY [email protected]
The Claimant is a money exchange company (“Claimant”) been debited accordingly. and the Defendant, an insurance company (“Defendant”). The Claimant signed an insurance policy with the Defendant to cover 4. The cheque bounced when presented due to insufficient any loss resulting solely and directly from dishonest or fraudulent funds. acts by employees; 5. The Branch Manager jumped off a tower building killing BACKGROUND himself and on the same day the Claimant reported the bounced cheque to the police. 1. The Branch Manager received a request from an unlisted client (“Branch Manager”), for a bankers draft for COURT OF FIRST INSTANCE 236,000,000 Indian Rupees (“Draft”) to be made out to an Official Receiver. The Claimant filed a claim against the Defendant to claim the limit of the insurance policy, due to the fact that the Claimant 2. Despite the Claimant protocols and the Foreign is entitled to indemnity under the policy, up to the policy limit Exchange and Cheque Expectance Procedure, requiring for employee infidelity. As the Branch Manager breached the confirmation from the bank that proceeds of cheques are trust by not following established procedures and transferred the received and credited to the Claimant account prior to the money before confirming with the bank that there was money in bank drafts being delivered, the Branch Manager drew the account. the drafts in excess of his personal limit and did not wait until the cheque cleared prior to forwarding the drafts to The court has decided to refer the matter to an expert in order to: the receiver. • Review and consider the memos and the supporting 3. The Branch Manager drew 20 bank drafts for a total documents which were submitted by both parties. sum of AED 21,320,340 and increased his own personal authorization by instructing another employee to change • The court allowed the expert to attend the Claimant his authorization level on the allegation that he was premises to check the original documents related to this authorized to do so by head office, presumably to get matter. over the individual authorization limit for a draft for an unapproved customer. The drafts were signed by another • To determine whether the Branch Manager made a employee and counter-signed by the Branch Manager. mistake or exceeded his authority and if he did make The drafts were presented and the Claimant account has a mistake to clarify the type of mistake, determine the
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damage and the value of the compensation.
• The court allowed the expert to attend at any governmental authority to check documents if need be.
The expert reached the following conclusions:
1. Beneficiary received an amount of 236,000,000 Indian rupees from the Claimant bank account.
2. The Claimant suffered losses from the transaction performed by the Branch Manager.
3. The Branch Manager did not follow the normal procedures in transferring the amount, since he issued 20 draws and transferred the amount to the beneficiary before receiving the funds.
The expert did not reply to the court query of whether he deliberately performed the transaction or not. The expert left this point to the court to consider because it is a legal point.
The Claimant confirmed to the court that the Branch Manager committed an intentional mistake to benefit from the funds, which is apparent from the following facts:
1. The Branch Manager had transferred the money in 20 drafts.
2. The Branch Manager had instructed one of the employees to increase his authority to transfer the amount to the beneficiary.
3. The Branch Manager should have followed the strict procedures before transferring the amount.
4. The Branch Manager had not informed the Claimant that the cheques have bounced.
5. The Branch Manager had very good experience regarding following the correct procedures before transferring the amount, being a Branch Manager.
6. The Branch Manager’s suicide when he failed to obtain his passport and leave the country.
7. The Branch Manager had used fraudulent methods to conclude the transaction; despite the fact that the Claimant has a very good security system.
The Court of First Instance rendered its judgment in favor of Claimant by ordering the Defendant to pay the Claimant the amount of USD $ 1,975,000 with 9% interest from the date of filing the claim until the full payment, in addition to all expenses and fees.
The Defendant has filed an appeal before the Court of Appeal to challenge the Court of First Instance judgment. The Court of Appeal has not rendered a judgment yet.
The abovementioned judgment is currently under the appeal, and we will publish a further article once we receive the outcome of the appeal court judgment.
Law Update 11 JudgmentDispute Resolution
DUBAI CASSATION COURT EMPHASISES ITS STRICT COMPLIANCE TO THE NEW YORK HASSAN ARAB MARWA EL MAHDY Regional Head of Litigation [email protected] CONVENTION [email protected]
In a recent judgment issued on 18 September 2012, Dubai The Respondent for the court to set aside the two arbitral awards Court of Cassation confirmed to the international society its on the following grounds: determination and commitment to strictly complying with the New York Convention of 1958 on the Recognition and Enforcement a- The signatory of the arbitration agreement did not posses of Foreign Arbitral Awards. The ruling is the latest in a series required authority to agree to arbitrate on behalf of the of positive decisions rendered pursuant to the UAE acceding to Respondent nor the authority required to dispose of the right the New York Convention in November 2006. It tackles different which is the subject of the dispute. arguments relating to the scope of jurisdiction of local courts with respect to foreign awards, the burden of proof for setting aside b- Procedures of appointing the arbitrator were invalid. the award and the scope of review allowed from the lower courts. c- The two arbitral awards were issued without an arbitration SUMMARY OF FACTS: deed as required by Article 216 of the UAE Civil Procedures Law (CPL) and Article 5 (c) of the New York Convention. The Claimant (an international steel trader) entered into a purchase agreement with the Respondent (a contractor d- The arbitration proceedings were invalid as the arbitral awards domiciled in Dubai) under which the Respondent purchased a were rendered by application of the English law in contradiction consignment of steel sheeting from the Claimant. with the parties’ agreement to arbitrate under DIFC rules.
The Parties agreed to refer any dispute arising from their e- The Arbitrator failed to administer the oath to the witnesses as agreement to be resolved by way of DIFC-LCIA arbitration required by Article 211 of CPL. seated in London. The Court of First Instance ruled the following: A payment dispute arose between the parties which was referred to arbitration according to their agreement. The arbitration - In the main action: to recognise the two arbitral awards subject tribunal rendered two awards for the Claimant, the first award of dispute and to confirm the precautionary attachment filed by concerned damages under the agreement and the second the Claimant. award concerned arbitration and legal costs. Consequently, the Claimant initiated legal action before Dubai Court of First - In the counter action: to dismiss the counter claim filed by the Instance seeking enforcement of the two arbitral awards issued Respondent for lack of jurisdiction. against the Respondent, and requested that the precautionary attachment be confirmed as enforceable. The Respondent appealed to the Court of Appeal which upheld the lower court’s judgment; consequently the Respondent PROCEDURAL HISTORY challenged the judgment before the Court of Cassation.
- First Instance Court: JUDGMENT:
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The appeal is based on five grounds. to ensuring they do not contravene the required procedural and substantive forms for awards as per articles 4 and 5 of the New 1. The agreement between the parties was invalid, it York Convention. The Court of Cassation confirmed that the two was not signed by the manager of the company who arbitral awards fulfilled these requirements. is the authorised signatory. The Respondent, during proceedings before the lower court, requested that the 3. The Respondent argued the invalidity of the arbitration Claimant produces original of the agreement, however clause included in the agreement as well as the invalidity the latter failed to produce the original and merely of the procedures by which the arbitrator was appointed submitted a faxed copy alleging that the agreement was in accordance to Article 44/7 of the DIFC arbitration rules. concluded via fax. Furthermore, The Arbitrator failed to administer the oath to the witnesses as per Article 211 of CPL. The Court of Cassation rejected this argument. The lower courts allowed the Respondent to realise its defence by identifying The Court of Cassation rejected this argument. As mentioned its employee who signed the contract in order to determine above, Article 5 of the New York Convention placed the burden whether or not such employee was granted the authority to sign of proof on the party claiming nullity of an arbitration award. The agreements on behalf of the manager. However, the Respondent Respondent in this case requested to set aside the arbitral award denied knowing the identity of the employee and denied having failed to produce any evidence to support the above allegations. concluded the agreement contrary to its admissions in its memorandum before the lower courts in which the Respondent 4. The Respondent further claimed that the jurisdiction to admitted having concluded the agreement and only concerned hear this case was for the DIFC courts as per the parties’ its defence around irregularity in the arbitration proceedings. agreement. Furthermore, Article 5 of the New York Convention of 1958 placed the burden of proof on the party claiming nullity of an The Court of Cassation held that these arguments were arbitration award in this case the Respondent who merely denied inadmissible. The effect of Federal Decree no. 43 of 2006, is the documents without furnishing any evidence supporting its that all UAE courts have the jurisdiction to recognise and enforce allegations. foreign arbitral awards which means that parties can resolve to any court in the UAE to request enforcing a foreign arbitral 2. The First Instance Court dismissed the Respondent’s award. counter claim for lack of jurisdiction on grounds that such jurisdiction belonged to the arbitrator who issued the 5. The arbitral awards were issued in contradiction to two arbitral awards and that the court’s supervision is Islamic Sharia and public policy in the UAE as it awarded limited to ensuring that the arbitral awards were issued in usurious interests. compliance with Federal Decree no. 43 of 2006 (by which the UAE acceded to the New York Convention of 1958 The Court of Cassation rejected this argument. Prohibition on on the recognition and enforcement of foreign arbitral agreeing to usurious interest in any type of civil or commercial awards). The Respondent further stated that the New transaction under Article 409 of the Penal Law and Article York Convention provisions do not preclude an action 714 of the Civil Transactions Law is limited to transactions for setting aside an arbitral award. The Respondent between individuals without extending to transactions between requested setting aside the arbitral awards as per Article individuals and corporate entities which can agree with other 206 of the CPL which states that it is permissible for corporate entities or individuals on conventional interest. As per parties to request setting aside arbitral awards while the the documents, the parties to the agreement subject of dispute action to ratify such award is being heard before courts. in question are corporate entities; therefore any interest awarded is permissible. The Court of Cassation rejected this argument. It is concluded from provisions of the CPL in relation to arbitration and the Accordingly, the petition to cassation was dismissed. procedures to be followed by the court when ratifying arbitral awards, in particular articles 212, 213 and 215 that the national PRACTICE NOTE courts have the jurisdiction to either ratify/recognise or set aside an arbitral award that was issued within the UAE, otherwise the The judgment in study has affirmed several important principals court is compelled to apply rules concerning arbitral awards concerning commercial international arbitration. At the issued in a foreign state. international level, the judgment as mentioned earlier confirmed the UAE Courts’ determination to comply with the New York It is also construed from Article 238 of CPL that rules of Convention. On the domestic level, the judgment confirmed the international conventions which were ratified by the UAE principle that all UAE courts shall have the jurisdiction to hear are considered as internal legislation within the UAE and it is actions in relation to confirmation and enforcement of foreign compulsory for the national courts to apply such rules to all arbitral awards. disputes arising in relation to the execution of foreign arbitral awards and foreign judgments.
The two arbitral awards subject of dispute were issued in London in accordance to the New York Convention on recognition and execution of foreign arbitral awards, therefore the UAE courts jurisdiction in relation to foreign arbitral awards is only limited
Law Update 13 JudgmentLitigation
THE CENTRE FOR AMICABLE RESOLUTION OF
ABIGAIL POWELL Dispute Resolution DISPUTES IN DUBAI [email protected]
His Highness Sheikh Mohammed bin a part of the court process. The Centre light of global developments. In recent Rashid Al Maktoum, Vice President and is currently able to consider the following years, the use of mediation has increased Prime Minister of the UAE and Ruler of disputes: exponentially in common law jurisdictions Dubai, created the Centre for Amicable and the inauguration of the Centre shows Settlement of Disputes in Dubai (the 1. Commonly-owned property; an important development within the civil “Centre”) under Dubai law Number 16 of 2. Debt of a maximum value of AED law jurisdiction. 2009. 50,000; 3. Disputes agreed to be settled The Centre presently has limited The inauguration of the Centre for before the centre by virtue of an application and the following disputes are Amicable Resolution of Disputes in April agreement entered into between excluded from the Centre’s jurisdiction: 2012 has proven to be a great success the parties so far. The Centre was launched by the 1. Urgent claims; Department of Economic Development All disputes of this nature must now be 2. Claims where the Government is in co-operation with the Dubai Courts reviewed by members of the Centre one of the parties; to provide a mediation alternative to the before they may be filed as law suits 3. Claims which are not subject to the judicial process. The Centre aims to before the relevant Dubai courts. If the jurisdiction of the courts; facilitate the amicable and affordable dispute is referred to the Centre then the 4. Claims which were registered in settlement of disputes via mediation within facts of the dispute will be reviewed and the courts before this law came a period of one month before referring the handled by a number of mediators under into force; matters to the courts to proceed via the the direct supervision of the concerned 5. Labour disputes; usual court process. judge. 6. Family disputes.
Mediation is a voluntary process. It It is important to mention that all limitation The benefits of the work carried out by the is therefore not possible without full periods and prescription periods for the Centre are significant. Disputes which participation and commitment from claim will be put on hold until the Centre are referred for amicable settlement are all parties. All parties must therefore issues its verdict to transfer the claim usually mediated and settled within a agree to enter into the process with to the relevant court. This provides an maximum period of one month from the the right mindset, although in some invaluable incentive for those who may be date when the parties first appear before jurisdictions this may only be after judicial worried about impending time bars, due the Centre, opposed to the 3 staged Dubai recommendation with associated risks to the expiration of limitation periods, to Court system which can see disputes in of costs sanctions against the party who explore mediation before instigating legal the courts for 18 to 24 months. Mediation refused to mediate. proceedings. is a process which allows the parties to focus on the commercial aspects of their The opening of the Centre demonstrates The Centre provides an alternative avenue dispute rather than the legal issues which the government’s commitment to for the resolution of disputes which will can sometimes take the parties focus encourage and increase the use of save time and costs. It also shows judicial away from the real cause of the dispute. mediation in Dubai, by making it available pioneering and an innovative attitude in
14 Law Update Litigation
by a court. The mediation process enables The the parties to agree their own terms of one settlement and this allows for ingenuity COLLABORATION month and extra legal solutions. resolution period WITH THE for the centre may be ROYAL INSTITUTE OF REGISTERING A DISPUTE AT THE CHARTERED SURVEYORS extended for a further month CENTRE by court order if required but if (“RICS”) MEDIATION PANEL settlement is reached a settlement 1. The claimant must submit two Since its official UAE launch in October agreement will be prepared by the Centre copies of a request in writing to signed by the parties. This signed 2012, the RICS Mediation Panel has been the court including, names of collaborating with the Dubai Courts and settlement agreement will be attested by claimant and defendant, email a Dubai Court judge and can be enforced the Dubai Land Department in order to addresses for all parties, postal promote further public understanding of immediately. The Centre provides a address and subject of the claim. very quick route to obtain an enforceable the advantages of the mediation process The requesting party must pay all as alternative dispute resolution. judgment in the UAE. registration fees. The meeting of minds by these highly If settlement is achieved, 50% of the paid 2. The court will refer the request court fees will be returned to the parties. respected government departments and to the Centre. The dispute will the globally respected RICS has enabled If settlement is not achieved however, the be reviewed and considered by dispute will be referred to the relevant many experienced parties to work together the Centre. Once completed, the and discuss the evolution of mediation court and will proceed as a normal court Centre will either issue a decision case. and the Centre for Amicable Resolution of approval to mediate or refer the of Disputes in the region. The Centre matter to the relevant court. The terms of any settlement achieved has already demonstrated an unrivalled success in achieving settlement of a large during the mediation process are 3. A hearing session will be confidential, however the parties are free percentage of disputes that have been scheduled for first deliberation of referred to it so far by the Dubai Court. to agree to an alternative agreement if the claim and the claimant will be they so wish. Mediation aims to resolve a notified of the date and time for The Centre is currently working with the dispute by maximizing all parties’ interests attendance. and achieving a “win-win” outcome so RICS to implement further training from the RICS Mediation Panel in order that that the parties do not feel compromised. 4. The defendant will be notified of the It aims to resolve a dispute swiftly so that the already experienced mediators from first hearing session via the usual the Centre may benefit from training in the parties can move on from the dispute and court notification procedures. preserve commercial relationships which standard model of mediation which is so regularly used in the global arena. the court process so often destroys. 5. Parties may attend by themselves The parties get to agree the terms of or they may send a representative the settlement themselves and hence duly authorised by Power of the results achieved are such that they Attorney. may never be considered or imposed
Law Update 15 Construction & Engineering
THE MIDDLE EAST, CONSTRUCTION AND THE LAW
16 Law Update Construction & Engineering
An equivalent remedy to damages in tort for economic loss is generally available while serious complications can arise if a contract is terminated other than by mutual consent, by court order or at law. This has obvious implications for some customary clauses like termination for convenience. There are, of course, many other features of the law in Middle Eastern countries that have an important bearing on matters ADAM BALCHIN of contract and law to parties involved in construction projects Regional Head of Construction that we have not touched on this short note. and Engineering [email protected] Differences in concept and approach may come as a surprise to those unfamiliar with the nuances of the Middle East. When things go wrong, how are disputes resolved? Arbitration is The construction industry across the Middle East is showing the most common form of dispute resolution in contracts very encouraging signs of sustained recovery from the global involving international parties (Saudi Arabia is a notable economic crisis. As well as increased activity in the private exception to this for a number of reasons) and, as well as sector, governments across the region are recognising an arbitration pursuant to international rules of arbitration, there urgent need for updated social and economic infrastructure in are a number of well respected local arbitral bodies including sectors including health, housing, transport, water/wastewater, the Dubai International Arbitration Centre and the DIFC/LCIA hospitality and tourism and energy. Arbitration Centre. In the absence of an arbitration clause, the default position is that disputes are resolved by local courts, Against this backdrop, this article briefly considers some of the where proceedings are conducted in Arabic, in a civil law key legal characteristics of the Middle East construction market. setting. There is no system of precedent, although decisions of the highest court typically have persuasive authority. Apart from a few exceptions (such as Saudi Arabia and Oman), Middle Eastern legal systems are founded upon principles of Alternative dispute resolution is in its relative infancy in the civil law (primarily derived from Egyptian law which, in turn, Middle East, with methods such as mediation rarely used. was heavily influenced by the French legal system) and are There are reasons for this, including a lack of confidence in therefore codified. In the UAE, for example, the UAE Civil Code the application of the concept of “without prejudice”, which is has a specific chapter entitled “Muqawala”, which contains obviously enshrined in common law countries. Methods tend provisions governing the relationships between the participants to be generally more conservative than those employed in the in a construction project. common law world.
Projects across the Middle East are procured on a variety of It is imperative that stakeholders obtain expert local law advice bases, including lump sum turnkey, construction management prior to entering into contracts in the Middle East. Naturally, and management contracting variants, EPCM and traditional parties should do the same at the earliest possible stage if an direct contracting. FIDIC forms of contract (the standard existing contractual relationship is turning, or has turned, sour. developed by the International Federation of Consulting Engineers) are commonly used as the base project documents Al Tamimi & Company’s Construction & Engineering team but are usually heavily amended to favour the Employer. offers an unrivalled mix of the highest calibre English and Additionally, as there are a large number of common law trained Arabic speaking lawyers who have practiced in numerous lawyers practising in the Middle East, contracts are significantly jurisdictions in the Middle East and across the world and influenced by common law principles. This creates difficulties advised on a wide range of major projects (from inception to as, unless used so widely as to constitute local custom or completion) and project disputes. practice, certain common law principles do not fit neatly under local law and may be unworkable or ultimately, unenforceable. Al Tamimi & Company is the largest law firm in the Middle East that was established in Dubai in 1989. As well as having A good example of this is liquidated damages. In common offices across the UAE, we have fully serviced offices in law jurisdictions, parties are free to commercially agree rates Kuwait, Saudi Arabia, Jordan, Qatar and Iraq. of liquidated damages and the courts will enforce whatever is agreed provided that it is loosely a genuine pre-estimate of All enquires and comments on this article should be the loss suffered. However, in most Middle East jurisdictions, addressed to Adam Balchin, Regional Head of Construction parties may petition the court to either increase or decrease the and Engineering. agreed liquidated damages so as to accurately reflect the true extent of any loss or harm suffered. Published in Asian Legal Business February edition. The concept of “good faith” is a key area of difference. Although “good faith” has doubtful legal meaning in a common law setting, it is an important codified principle in Middle Eastern civil codes and courts have the power (which they frequently use) to prohibit conduct they consider falls short of the standards imposed by this far-reaching principle of law.
Law Update 17 Construction & Engineering
PERFORMANCE BONDS IN QATAR HANI AL NADDAF Partner Qatar Contractors strike back [email protected]
Queries raised by our clients in recent encashment of such instruments. obligations, the Employer has the option months, and discussions in wider industry to recoup some or all of his losses by circles in Qatar would indicate that there THE NATURE OF THE PERFORMANCE making a call on the Performance Bond, is a high incidence of seemingly-arbitrary BOND UNDER QATARI LAW in addition to having recourse to any other calls on Performance Bonds, causing real available contractual or legal remedies. headaches to main and sub-contractors in All standard form construction contracts As such, Performance Bonds are merely this jurisdiction. In light of the importance (and many bespoke contracts) require the intended to operate as guarantees, and not of this topic, this article intends to Contractor to submit a Performance Bond advance payments in respect of monies shed some light on the treatment of to the Employer as a form of guarantee which a court or arbitral tribunal may or Performance Bonds under Qatari law. in respect of the former’s performance may not later award to the Employer at a In particular, we will identify the ways in of the contract works. In the event that merits hearing. which a contractor may resist the arbitrary a Contractor breaches its contractual
18 Law Update Construction & Engineering
In this jurisdiction, it is common arbitrary or fraudulent. Further, the bank urgent basis, which would have the practice for employers to request that is not entitled to refuse to honour a call effect of estopping the bank from a Performance Bond takes the form of on a Performance Bond for any reason making any payment on foot of an “on demand” Letter of Guarantee whatsoever. the Bond until completion of a full from the Contractor’s bank (‘the Bank’) hearing on the merits of the dispute - a document which will unambiguously REMEDIES AVAILABLE TO THE between the parties, assuming stipulate that the Bank will remit the full CONTRACTOR that such proceedings have been, amount of the bond to the Employer upon or are imminently to be filed by the receipt of written confirmation from the A Contractor has two layers of defence Contractor against the Employer. Guarantee’s beneficiary (the Employer) against an arbitrary call by an Employer However, this option often proves that the Contractor has breached its on a Performance Bond, as follows: impractical, depending as it does obligations under the contract. on the speed with which the bank in A. Taking Action Before the Call is Made question reacts to the Employer’s Articles 406 to 413, inclusive, of Qatar’s written demand for payment of Commercial Law (Law No. (27) of If a Contractor has serious concerns the bond’s sum; it may be that the 2006) deal with “on demand” letters of that the Employer may make a call on Contractor will not have sufficient guarantee. Article 406 of the Commercial the Bond, he can seek injunctive relief time to file injunctive proceedings Law stipulates that: from the Court, which would suspend before payment is remitted to the the Employer’s right to encash the bond Employer. “A letter of guarantee is a written, pending the outcome of a hearing on the irrevocable commitment issued by merits of the Contractor’s claim - that is, In light of the foregoing, it is a bank pursuant to the request of if the Contractor has filed, or is about to highly advisable that, where such one of its clients… to pay a specified file, a claim against the Employer on the a call appears imminent, the amount or an amount that can be merits. Contractor undertakes all advance specified later to… the “beneficiary”, preparations required to support if the beneficiary requests it to do For the purposes of increasing the his application for an injunction, so, within the period specified in the likelihood of success in relation to such as executing a Power of letter, without taking any objection into an application for an injunction, the Attorney in favour of his chosen consideration. The letter of guarantee documents submitted by the Contractor in legal representative(s), and shall specify the purpose for which it connection with such application will need translating any documents to be was issued.” (emphasis added) to persuade the Court that there is a prima submitted to the Court into Arabic. facie case to be heard, thus enabling the Thus, where the contractual wording Court to grant interim relief without making 2. If the Contractor fails to obtain confirms that the performance guarantee any determination as to the substance, or an injunction before or after the is to take the form of an unconditional merits, of the dispute at issue. call on the Bond, he may defend on-demand bond - meaning that the full the Employer’s allegations as to amount of same is payable upon written The Contractor should look to convince the contractual breach(es), in addition demand without being subject to any Court, by way of solid, written evidence, to making any claims he may condition - and the beneficiary (Employer) that the Employer is likely abusing his wish to raise under the Contract, submits such demand to the guarantor right to call on the Bond. Of particular by initiating Court or arbitral (the Bank), the Bank is obliged to honour usefulness here would be evidence proceedings (as appropriate). In the call, even if the Contractor disputes confirming that the contract works have the course of such proceedings, liability for the alleged breach, or if the been performed substantially or in full in addition to claiming any Employer does not know or believe that he (such as, for example, interim or practical available contractual or legal is entitled to call on the Bond, or is simply completion certificates), or documents rights or remedies, the Contractor reckless as to whether he is entitled to which would substantiate an assertion may claim the full amount of the payment of the sum demanded. that the Employer’s motivation in making Performance Bond paid to the the call is to gain some leverage over the Employer. The requirements of the aforementioned Contractor. The nature of the supporting Article 406 are further supported by documents will differ from one case to CONCLUSION Article 409 of the Commercial Law, which another; however, this kind of injunctive states that a bank shall not be entitled relief is very rarely awarded by the Qatari Notwithstanding the recent spate of to refuse to pay the beneficiary due to Courts. case law on this issue, the treatment of any reason connected to the Bank’s Performance Bonds in Qatar remains relationship with the applicant (that is, the B. Acting After the Call largely uncertain. While there appears Contractor) or the applicant’s relationship to be a noticeable reticence on the part with the beneficiary (the Employer). After an Employer makes a call on a of the Qatari Courts to issue injunctions Performance Bond, the Contractor may preventing demands against such Based on the above-referenced have recourse to one of the following two guarantees being honoured by banks. provisions of Qatari law, it is clear that a remedies: We have, on occasion, been successful bank does not have discretion to decide in obtaining such injunctive relief for whether or not a call on a Performance 1. The Contractor may seek an contractor clients following an arbitrary Bond is justified, or whether such a call is injunction from the Court, on an bond call by an Employer.
Law Update 19 Property
BUILD IT Developer registration requirements in the UAE AND THEY WILL COME…
MOHAMMMED KAWASMI MOHAMMMED Head of Property/ DAVID BOWMAN KAMRAN TAHIR Northern Emirates Property Property [email protected] [email protected] [email protected]
The UAE has witnessed an exponential growth in the development recommence construction activities and to strive forward with of building and infrastructure projects over the past decade. New completion of stalled projects and the development of new ones. communities have developed across the UAE for residential, commercial and leisure purposes. Although construction of Given the recent impetus on development, and following various certain projects were placed on hold or cancelled as a result legislative and regulatory changes, we thought it appropriate to of the global financial crisis, recent announcements of further focus on the regulatory requirements to register as a developer “mega” projects in Dubai and continuing development in other in the Emirates of Dubai, Abu Dhabi, Ajman, Sharjah and Ras Al Emirates show a clear revival of the property market generally Khaimah. in the UAE. The general sentiment amongst developers is to
REGISTERING AS A DEVELOPER FOR PROJECTS IN THE EMIRATE OF DUBAI
The registration of developers in the Emirate of Dubai is The following documents must be submitted to RERA in order to governed by the Real Estate Regulatory Agency (RERA). The apply for a developer registration certificate: registration requirements have evolved over the past few years • Developer registration and project application form through various laws, regulations and policies of RERA. • Copy trade licence from Dubai DED • Title deed of land to be developed At present RERA only allows companies registered with the • Unconditional performance guarantee from a UAE bank Dubai Department of Economic Development (Dubai DED), with for 20% of the project construction costs to be issued in real estate development activities noted in their trade licence, to favour of RERA if units are to be sold prior to completion engage in development activities. Such Dubai DED companies of 20% of construction of the project must be owned 100% by UAE nationals or companies wholly • Units registration certificate from Dubai Land Department owned by them. The registration fee to establish a Dubai DED (DLD) is currently AED 37,000 plus 5% of the office lease rent of the • No Objection Certificate (NOC) from master developer of Dubai DED AED 25,000 of this amount is paid to RERA by Dubai the project sales and marketing plan DED as the developer registration fee. • Letter from the project consultant stating the following: - Main contractor name
20 Law Update Property
- Project name of Dubai as amended (“Pre-registration Law”), Article 3 provides - Project value that no sale of any off plan property shall be valid if not recorded - Start date on the Interim Real Estate Register, known as the “Oqood” - End date system. Failure to register a contract by the developer could • Payment plan linked to construction milestones of project incur a fine of AED 10,000. Article 4 of the Pre-registration Law • Financial report (RT01) also states that a developer shall not commence the sale of off • Project timeline per floor plan units unless the developer has possession of the land to be • Dubai Chamber of Commerce & Industry membership developed and has obtained all necessary approvals from the certificate competent authorities. • Final building permit • Contact details of project manager The Pre-registration Law has been further clarified by the Executive Council Resolution No. 6 of 2010 approving the It follows from the above requirements that RERA requires that executive regulation of Law No 13 of 2008 concerning the the land subject to development should be fully paid and a title regulation of the Interim Real Estate Register in the Emirate of deed should be issued in the name of the owner. Dubai (“Resolution”). Pursuant to Article 4 of the Resolution, no developer may commence construction or sell units off plan Where the owner of the land cannot register as a developer, unless: RERA permits the land owner to enter into a property development contract with an existing registered developer to • possession of the land has been taken and the develop the project on behalf of the land owner. The property demarcation certificate is received; development contract however must be approved by the senior • the developer has actual control of the land where the legal adviser of DLD, to validate such an arrangement and to be project is proposed to be constructed; accepted by RERA. • the developer has obtained the required approvals from the relevant authorities to commence the construction of DEVELOPER WISHING TO SELL UNITS OFF PLAN the project.
Pursuant to Law No 8 of 2007 (“Escrow Law”), where a developer The owner of the land is entitled to mortgage the land, however wishes to sell units off plan, the developer must be a registered all mortgage funds received by the owner must be paid into the developer with RERA (as mentioned above) and apply to RERA escrow account of the project and used towards the construction to open an escrow account. The developer must ensure all costs of the project only as a measure to safeguard investors. proceeds of sale of the units sold off plan are deposited into the escrow account, and are used solely for the purposes of construction of the project. Failure to comply with the Escrow Law can lead to a fine of AED 100,000 or criminal sanctions resulting in a prison sentence (Article 16 Escrow Law).
Once the developer has submitted all the required documents to RERA and the developer is granted the authority to sell units off plan RERA will issue an NOC to allow the developer to open an escrow account with an authorized bank in the UAE. The following documents are required to open an escrow account:
• Dubai Chamber of Commerce and Industry membership certificate • Trade License • Title deed of the land to be developed • Copy of the contract executed by the master developer and the sub-developer • Architectural designs and layouts approved by concerned authorities and the master developer • A financial statement certified by a certified legal accountant, containing the revenues and expenses of the project • An undertaking by the sub-developer to commence the project construction after obtaining the master developer’s approval to sell off plan or an undertaking from the master developer in case a sub-developer does not exist • A sample sale contract between the developer and a buyer
In addition to the above requirements, pursuant to Law No 13 of 2008 Regulating the Interim Real Estate Register in the Emirate Property
REGISTERING AS A DEVELOPER FOR PROJECTS IN THE EMIRATE OF ABU DHABI
The registration of a developer in the Emirate of Abu Dhabi is The developer will need to provide various documents to the Abu governed by the Department of Economic Development (“Abu Dhabi DED in support of its application for a commercial licence. Dhabi DED”). A company intending to carry out real estate These documents will include a copy of its memorandum of development should apply to the Abu Dhabi DED for a commercial association, its lease and passport copies for its shareholders licence which lists “real estate enterprises, investments and and signatories. The developer will also need to supply management” as one of its authorised activities. It is usually an undertaking in a prescribed format confirming that the relatively straightforward for prospective developers to obtain shareholding in the company does not comprise any third party a licence from the Abu Dhabi DED for this activity. There is monies. no restriction for foreigners/GCC nationals or owned by them companies to apply for a license to engage in development At present there are no laws restricting off plan sales or imposing activities with Abu Dhabi DED. escrow account requirements in Abu Dhabi.
REGISTERING AS A DEVELOPER FOR PROJECTS IN THE EMIRATE OF SHARJAH
The registration of real estate projects and the issue of • The developer must obtain a report from the Planning permission for the sale of units in jointly owned buildings in the and Surveying Department confirming the project’s Emirate of Sharjah is governed by the Department of Real Estate compliance with the rules and requirements of the sale Registration (DRER). Executive Council Decision No 25 of 2011 of units regarding the sale of units in the Emirate of Sharjah defines the • The developer must provide DRER with a bank guarantee rules and requirements for the registration of real estate projects equal to 20% of the construction value if the project is to and the issue of permission for the sale of units. be sold off plan
Article 4 of Decision No.25 of 2011 provides the requirements for DRER has the authority to exempt any developer from the 20% the licensing of developers: bank guarantee requirement provided that 15% of the project is completed, in which case a bank guarantee for 5% of the • The developer must own the project land and there can construction value of the project is required by DRER. be no restrictions on the disposition of the land • The developer must be licensed to undertake the activity DRER issues a standard form of agreement for the sale and of sales and marketing of real estate units purchase of units in the Emirate of Sharjah and developers • Licenses may be issued to UAE and GCC nationals only must link the payment of the purchase price with the progress of unless the Ruler gives an exemption construction if selling off plan. • The developer must sign the undertaking provided by DRER
22 Law Update Property
REGISTERING AS A DEVELOPER FOR PROJECTS IN THE EMIRATE OF AJMAN
The registration of developers and real estate projects in • Sales & marketing plan for the project the Emirate of Ajman is governed by the Ajman Real Estate • Undertaking from the company that all submitted Regulatory Authority (ARRA) pursuant to Amiri Decree No 11 of documents are accurate and that it will submit any 2008 regarding the establishment of ARRA and Amiri Decree No additional documents requested by ARRA 8 of 2008 as amended by Amiri Decree No 12 of 2008. • Developer registration fee (AED 100,000)
The required documents to register as a developer are as follows: The required documents for registration of a real estate project are as follows: • Official request from the company to register with ARRA as a real estate developer • Land registration certificate from Ajman Land Department • Company profile or affection plan from Ajman Municipality & Planning • Copy Trade License Department • Company’s Memorandum of Association (MOA) and the • Approved plans from the master developer, Ajman last Addendums (if applicable) Municipality & Planning Department and project • A Board resolution for the authorized signatory consultant • Valid passport copy of all partners along with “Kholaset • Feasibility study from the project consultant Al-Qaid” for U.A.E. nationals and residency visa for • A sample of the property reservation form expatriates • A sample of the sale and purchase agreement • The company should have an office licensed by Ajman • A detailed list of all units to be sold including names of Municipality & Planning Dept, or an on-site office licensed purchasers unit details and amounts received to be by ARRA to represent the company and communicate provided on CD with ARRA • SPA for the land purchase • Six months bank statements for all the company’s bank • NOC from the project master developer, including accounts (original or stamped copies) payments received to date • Audited financial report (for the last financial year) from • Project completion timeline from project consultant an approved auditing firm in the U.A.E • Contractor agreement approved by consultant • Affection plan from Ajman Municipality & Planning • Project name registration with Ajman Municipality & • Project feasibility study from an approved consultant in Planning Department the U.A.E. • Project registration fee (AED 50,000)
REGISTERING AS A DEVELOPER FOR PROJECTS IN THE EMIRATE OF RAS AL KHAIMAH
The registration of developers and real estate projects in the • Membership Certificate from Ras Al Khaimah Chamber Emirate of Ras Al Khaimah is governed by Ras Al Khaimah of Commerce and Industry (if applicable) Investment Authority (RAKIA) pursuant to Amiri Decree No 22 of 2008 concerning Guarantee Accounts of Real Estate A special register called the “Register of Developers” (Register) Developments in the Emirate of Ras Al Khaimah. This is is maintained by RAKIA which records names of developers applicable to all developers who sell units off plan in real estate licensed to carry out real estate development activities in the development projects in Al Jazeera, Al Hamra or in any other Emirate. No developer may carry out real estate development part of the Emirate supervised by RAKIA. activities unless it is registered in the Register and licensed by the competent authorities. The Register is reviewed and updated A developer wishing to sell units off plan must apply to RAKIA periodically by RAKIA. to open a guarantee account. The application should be accompanied by the following documents: Next month we shall focus on the requirements to register as a developer in Jordan, Kuwait, Kingdom of Saudi Arabia and • Trade License issued by RAKIA or Ras Al Khaimah Qatar. Department of Economic Development
23 Law Update Intellectual Property
TRADEMARK
REGISTRATION IN SHERNAZ DESA Intellectual Property SOUTHERN SUDAN [email protected]
Following the end of the civil war in Sudan in 2005 and the separation of North and South Sudan the continuous worry for trademark owners is the protection of their rights in Southern Sudan. North Sudan continues to be governed by the earlier Trademark Law through the national Trademark Office.
Unfortunately to date there are no laws in Southern Sudan regulating Intellectual Property and needless to say the Trademark Laws of North Sudan no longer prevail. The Ministry of Justice in Southern Sudan has issued directives to officials at the Trademark Office that they adopt certain procedures known as the “Reservation of a Trademark” until issuance of a trademark law. The implication is that Southern Sudan follows a Cautionary Notice approach to the protection of trade marks at the present time.
At present procedures to be followed in respect of the “Reservation of a Trademark” are as follow:
1. A written application needs to be submitted to the Registrar indicating the trademark to be protected, as well as prints of the mark in question.
2. The Registrar will conduct a search in the database of the Registry to ascertain whether the mark is registered or not.
3. If the relevant mark is not registered, the mark will be “reserved” in the applicant’s name, and no other person will be allowed to use the said mark.
It is also to be noted that no official fees have been fixed at this time for the “Reservation of a Trademark” procedure.
As a result of the absence of a specific law dealing with the protection of trademarks in Southern Sudan we are unable to comment on the legal effect or value of the “Reservation of a Trademark” procedure.
24 Law Update Intellectual Property
DUBAI COURT SUBPOENA RECOGNISED BY A U.S. DOMAIN NAMES REGISTRY
MUNIR SUBOH MANEL BEN SAID Intellectual Property Intellectual Property [email protected] [email protected]
Identity Protection in respect of the ownership of the Court, addressed to the registry to disclose details of the domain names is no longer an obstacle in litigation domain name owners and history. before the Dubai Courts. Al Tamimi & Company supervised the process and the When registering a domain name, there is an option to make results of the request were received though a very efficient the registrant’s personal information private by registering process and on an expedited basis. In this case the process the domain name through the name Domains By Proxy. This was completed within a two week period from the date of practice is called ID Protect and the result is that details of requesting the information and at a minimal administrative the domain name owner will not be revealed in searches fee. through “Whois” domain name search providers. It is important to note that the benefits of this procedure ID Protect was originally designed to protect the privacy include to: of domain name owners as it avoided having personal information such as names, addresses, phone numbers 1. overcome the challenges created by ID Protect and to and email addresses published online 24 hours a day on the be able to determine the identity of the domain name internet. However, the ID Protect system has occasionally registration owner(s); been misused by cybersquatters or domain owners who commit various violations, such as merchandizing counterfeit 2. obtain information on the history of a domain name (if and/or infringing and/or otherwise unlawful products and it has been modified, assigned, etc); materials. Such domain name owners may have been under the impression that ID Protect gives some “protection” to 3. expedite the litigation process as it is a fast procedure, them to freely act without having to expose their identities and and resulting in practical difficulties on the part of intellectual property rights owners to establish their identities and to take 4. illuminate the shadow of uncertainty that individuals legal action in the UAE. or entities can establish through ID Protect to escape legal liability in respect of their unlawful activities. In a recent court case which involved a person who was associated with a domain name operating under the gTLD Al Tamimi & Company’s IP practice is capable to assist (.com), the defendant denied any association or ownership on various online and domain names issues, such as of a particular domain name before the Dubai Court of First due diligence, fighting online infringements and most Instance. Al Tamimi & Company represented the plaintiff significantly, anti-cybersquatting cases. Our lawyers in this proceeding and sought from the Court to serve a handle UDRP complaints before WIPO and hadve subpoena on the domain name registration provider (one successfully disputed cases on behalf of IP owners. of the largest hosting and domain registration providers) Outstanding results are typically achieved and a transfer located in the USA. The Dubai Court of First Instance of domain names to legitimate owners was successfully approved the request and an official letter was served by accomplished in the vast majority of cases.
Law Update 25 Corporate Commercial
BONDS ISSUE UNDER THE UAE LOCAL LAWS
Companies have many different ways to raise financing; either by way of equity financing or by way of debt financing. Classic examples of equity financing are for corporations to increase their share capital by inviting existing shareholders or new strategic investors (i.e. private placement) to subscribe in newly issued shares, or through lunching a public offering to the general public to subscribe in its AHMED IBRAHIM shares. The public offer process is internationally know as “IPO” or Head of Equity Capital Market [email protected] Initial Public Offering.
26 Law Update Corporate Commercial
Alternatively, corporations may, instead of Another type of bonds is where a company overall performance of the company allow equity financing, decide to raise financing issue bonds against a loan and grant the it to issue CBs. On one hand, to ensure through debt financing. The commonly lender an option to convert the value of that the issuer of the CBs will be in a used debt financing means are: the bonds a lend holds into shares in the financial position to repay the face value issuing company. The conversion terms of the CBs in addition to the applicable (i) borrowing from one or a syndicate and rate are to be set beforehand between interest rate, and on the other hand, if the of banks against a set of securities and the issuing company and the lender. As CBs holder decides to convert the CBs charges on the corporations’ assets, this article will explain, in the UAE this into shares in the issuer, the CBs holder commercial establishment, and shares; or type of bond(namely convertible bonds) will become a shareholder in a vibrant and confers particular practical benefits and lucrative entity. For this reason the CCL (ii) issuing bonds to general or specific advantages to companies and investors provides that a public joint stock company beneficiaries, known as “Bond Holders”. who have particular interests to hold a shall not be permitted to issue CBs significant stake in the issuing company. before the publication of the company’s WHAT ARE “BONDS”? balance sheet and loss/profit accounts WHY DO COMPANIES ISSUE for at least one financial year following its As explained above, bonds are one of CONVERTIBLE BONDS? incorporation. the most commonly used instruments by corporations to raise financing. Bonds can The decision to issue new equity, Furthermore, the CCL indicates that the be a cost-effective but less flexible form of convertible and fixed-income securities value of the CBs must not exceed the finance than equity shares. It is more cost- to raise capital funds is governed by a existing capital as disclosed the latest effective because lenders are entitled to number of factors. One is the availability of certified balance sheet of the public only a fixed rate of interest, but less flexible internally generated funds relative to total joint stock company, unless the CBs are because they are usually entitled to that financing needs. Such availability, in turn, guaranteed by a UAE Sovereign entity or interest, whether a company is doing is a function of a company’s profitability by a UAE-licensed bank. well or badly, whereas the declaration of and dividend policy. dividends on ordinary shares is usually As the issue of CBs may diliute the a matter for the discretion of the Board Another key factor is the current market existing shareholders of a public joint whose recommendation must be ratified price of the company’s stock, which stock company, the CCL requires the by shareholders. In this way, distribution of determines the cost of equity financing. shareholders of the issuing company to dividends is dependent upon and linked to Further, the cost of alternative external approve the isssue of CBs in a general the operational and financial performance sources of funds (i.e., interest rates, assembly with special attendance and of the company. Also, the financing cost availability of securities) is of critical voting quorums. a company must incur depends to a importance. considerable extent on whether it can Although, CBs grant its holder a right offer a lender security and the quality of As we will see later on in this Article, against the issuer of the CBs, the the security offered. sometimes UAE joint stock companies resolutions of the general assemblies of issue convertible bonds to facilitate the shareholders of the issuer shall apply The legal relationship between a company bringing on board new strategic investors, to CBs holders. However, the general and its bond holders is a contractual but to do it is necessary to circumvent assemblies may not alter the rights of relationship of a debtor and creditor. On preemption rights of existing shareholders the holders of such CBs except with the the other hand, the legal relationship to subscribe to newly issued shares. approval of the CB holders in a special between a company and its shareholder(s) meeting. is a contractual relationship governed by WHAT ARE THE RULES GOVERNING the company’s articles and memorandum BONDS ISSUE UNDER THE LOCAL As a matter of contract, CBs may not be of association. In contrast, with a UAE LAWS? converted into shares unless this was shareholder, the bond holder is in law not provided for in the loan agreement(s) and a member of the company having rights The Commercial Companies Law No. the conversion must be implemented in in it but a creditor with rights against the 8 of 1984 (“CCL”) sets out basic terms accordance with the terms and conditions company. In other words, shareholders and conditions applying to the issuance stated in the loan agreement(s). CB holders have rights in the company but bond of convertible bonds. Under the CCL, a will still have the right under the CCL to holders have rights against the company. public joint stock company may, following choose between either the conversion of the approval of its EGM, enter into the CBs into shares, or repayment, unless Issuance of bonds is something that we loan agreement(s) in consideration for the CBs were issued on terms such that can only expect from a large company negotiable loan debentures of equal value, conversion is mandatory. of perceived creditworthiness. A bond in i.e. convertible bonds (“CBs”). this context is a bearer security of certain The CCL sets out specific conditions nominal value issued for money by a As the case in all common and civil which a company must fulfill to issue CBs. company which promises payment of the law jurisdictions, the UAE legislation nominal value at a certain date in the future designed to protect the best interest of the 1. The publication of at least one (1) and, usually, regular interest payments in prospective holder(s) before the company year financial statements before the meantime. Some bonds are issued for in question issues the CBs and general the issue of the CBs; much less than their nominal value and no public subscribe to it. The law seeks to interest is paid on them. ensure that the financial position and 2. The issuance of the CBs does not
Law Update 27 Corporate Commercial
contradict with the Memorandum Article 204 of the CCL states that: approved the issuance of CBs might be and Articles of Association of the void because it impliedly deprives the PJSC; “Shareholders shall have priority existing shareholder from one of their [preemption right] to subscribe to the new rights granted to them by the law, being 3. The CBs are equal in value and shares. Any condition to the contrary in their right to have priority to subscribe in tradable; the company articles or in the resolution new capital increase shares that will be adopted to increase the capital shall be allotted to the CBs holder(s). 4. The CBs are either registered or void.” payable to bearer; and The likelihood of having a successful As clearly indicated in the above Article, claim made on the above argument is 5. The CBs grant their holders equal existing shareholders of public joint stock relatively remote unless someone can rights. companies have a preemption right to establish undisputable evidence that the subscribe in shares that will be issued underlying rational of the resolution of In a more specific piece of regulation, the as a result of a capital increase. This the extraordinary general assembly is to Securities and Commodities Authority is a mandatory rule, so the company’s deprive the existing shareholders from (“SCA”) has issued the Resolution No. 94R memorandum of association may not their preemption rights. In practice, this is of 2005 (“Resolution”) in respect of “debt deprive the shareholders of this right. less likely to happen. securities”, i.e. bonds. In this regard, the Therefore, if a public company wishes to Resolution provides that every issuer of invite a strategic investor to invest in the HOW TO DETERMINE CB PRICING CBs offered through public subscription company by way of a capital increase, AND WHAT IS ITS TERM? must apply to SCA to list such CBs with such invitation will always be subject to one of the Stock Exchanges licensed with the preemption rights conferred to the The law is silent as to the pricing of CBs or by the SCA, i.e. Dubai Financial Market existing shareholders by the CCL making its term or the maturity period. Although, or Abu Dhabi Stock Exchange. The commercial negotiation of placement parties are at liberty to determine the Resolution defines “Public Subscription” terms problematic. conversion rate and the term of the CBs, as follows: such determination is always subject to The only way out is for the existing SCA’s approval. Typically, the conversion “any subscription where Debt Securities shareholders to waive their rights to of CBs takes from eight to twelve months. are offered in the State to the subscribe to the capital fresh shares, However, there are exceptional cases publicpursuant to a public invitation which is cumbersome and impractical. where conversation took place in six but does not include debt securities Alternatively, the company in question months or less. or certificates of deposit or any other may circumvent the preemption rights of debt instruments which are not offered the existing shareholders by issuing CBs CAN LIMITED LIABILITY COMPANIES for public subscription and which are to the strategic investor, offering him the ISSUE CBS? issued by banks and specialised financial right, or the option, to convert such CBs and investment institutions on behalf into equity in the issuing company. The Article 221 of the CCl prevents any limited of their customers and where such strategic investor in can convert the CBs liability companies from carrying on or debt instruments are subject to special into equity, and in which case the existing offering for public subscription any shares regulations to be issued by the Central shareholders will have no option to tab in or negotiable stocks or securities, i.e. CBs. Bank” and exercise their preemption rights. CONCLUSION If, however, a company issues CBs that are By law, CBs should be issued against an not offered through a Public Subscription underlying loan from the CBs holder to the Used wisely, a policy of selling it may apply to SCA to list all such CBs CBs issuer. The value of the underlying differentiated securities (including with one of the stock exchanges. In such loan will be the consideration for the newly convertible bonds) to take advantage of event the provisions of the Resolution will issued capital increase shares which will market conditions can lower a company’s apply to the issuer of the CBs and the CBs be subscribed for by the strategic investor. overall cost of capital below what it would sought to be listed. be if it issued only one class of debt and In practice, the structure is commonly common stock. However, there are pros In principle, the provisions of the Resolution used in the UAE. However, there is a and cons to the use of convertible bonds shall not apply to those CBs or certificates residual legal problem under Article 174 of for financing; investors should consider of deposit or any other debt instruments the CCL, which states that: what the issue means from a corporate which are not offered to the public through standpoint before buying in. a Public Subscription that are issued “Any resolution adopted by the ordinary by banks and specialised financial and or extraordinary general assemblies that investment institutions on behalf of their might affect the rights of shareholders customers, such debt instruments are derived from the provisions of this law or subject to special regulations to be issued from the company’s articles or increasing by the Central Bank. their liabilities shall be void.”,
CAN THE ISSUE OF CBS CIRCUMVENT The argument based on this provision THE PREEMPTION RIGHTS OF would be that an extraordinary general EXISTING SHAREHOLDERS? assembly of the issuing company which
28 Law Update Corporate Commercial
KUWAIT NEW COMPANIES LAW RAMY EL DEMERDASH Kuwait [email protected]
A new positive step has been recently taken by the Parliament of person company and the professional companies. Professional Kuwait to reflect the changes which have occurred over the past companies may take the form of a closed shareholding company, years concerning commerce and industry in the GCC region and limited partnership or a company with limited liability. in various economies throughout the globe. A new companies law has been passed in Kuwait which provides a more realistic Further, the Companies Law also has changed some provisions and practical perspective than the previous companies law. with respect to holding companies, as under the Companies Law The issuance of such new companies law can be regarded as holding companies may take the form of a closed shareholding progress as it reforms the outdated practices and offers investors company, a limited liability company or a sole person company. a more attractive investment environment, which will positively affect the economy in Kuwait. Law No. 25 of 2012 Promulgating With respect to the incorporation procedures of companies, it is the Companies Law was published in the official gazette – (Al acknowledged that the process for starting a business in Kuwait Kuwait Al Youm) on 29 November 2012 (the “Companies Law”). is lengthy and complicated thereby hindering commerce and the establishment of new companies. To address this issue, the A high level review of the Companies Law demonstrates that Companies Law has adopted what is known as the one window such new law provides more details and clarity than the previous system for finalizing the procedures of incorporating companies. one. Further, it provides guidance in relation to certain matters, Procedures of incorporating companies shall be completed as the previous law was silent on various areas (i.e. shareholders’ through a special department for this purpose at the Ministry of agreement) and such non codification often resulted in investors Commerce and Industry, which comprises representatives of the facing uncertainty and thereby triggering their hesitance to invest concerned government bodies to ensure prompt finalization of in Kuwait. the incorporation procedures. The aim of the Companies Law is to facilitate the entire process, while encouraging more investors The Companies Law provides more types of companies that can to establish companies in Kuwait. be established in Kuwait, such as the incorporation of non-profit companies. Non profit companies are now permissible under In light of the above, the Companies Law is a welcomed reform the Companies Law in order to undertake a social role, along that should have a positive impact on investments in Kuwait and side the commercial companies, which is going to benefit the the Kuwaiti economy overall. social function of Kuwait. Moreover, new forms of companies have been introduced in the Companies Law, such as a sole
Law Update 29 Special Projects
30 Law Update Special Projects
THE CORRELATION OF MONEY LAUNDERING AND FRAUD FROM A
PRACTICAL KHALID AL HAMRANI OMAR KHATTAB Head of Special Projects Special Projects PERSPECTIVE [email protected] [email protected]
INTRODUCTION through out this article.
Aside from crimes of violence, the main THE DISTINCT NATURE OF MONEY objective behind almost all crimes is LAUNDERING to generate profits for the individual or group that carries out such crimes. The Practically, INTERPOL considers any act tremendous amounts of illicit profits or attempted act to conceal or disguise generated encourage the criminals the identity of illegally obtained proceeds involved to discover innovative methods in order to appear to have originated from of controlling their ill-gotten funds without legitimate sources to be a crime of Money jeopardizing their underlying activity or Laundering . identity. They do this by disguising the sources of the funds, changing their form, Therefore, money laundering is a or moving them to a place where they are derivative crime that mandates a less likely to attract attention. predicate offense as the source of the illicit proceeds subject to laundering. A The United Nations Office on Drugs and predicate offense is a crime that has been Crime (UNODC) reported that criminal concluded before the commencement proceeds amounted to an estimate of money laundering. Both crimes shall of 3.6% of the global GDP in 2009, have distinct legal elements but not any with around 2.7% (or USD 1.6 trillion) predicate crime qualifies as a prerequisite laundered throughout that year . Although for money laundering. Legislation limits it is impossible to calculate with certainty predicate crimes subject of money the amount of money that is globally laundering to certain offenses. Examples laundered every year due to the illegal of such predicate offenses are bribery, nature of the whole process, other studies embezzlement, breach of trust and fraud. have estimated that the overall value of In other words, money laundering as a criminal proceeds being laundered each crime only occurs after the perpetration year amounts to USD 3 trillion. of certain prior crimes such as those previously mentioned. International agreements and UAE national laws strongly associate money However, the aforementioned should laundering with fraud. The connection not be interpreted to entail that criminals between both crimes will be explored accused of money laundering must be
Law Update 31 Special Projects
the same as those who committed the predicate offense. It is The prosecution claimed that the accused parties conspired to legally acceptable to be solely accused of committing money deceitfully forge documents on behalf of an airline company after laundering, if the criminal being accused of such crime did not hacking its private bank account. They also forged signatures take part in seizing the illicit proceeds being laundering. of the representatives of the said airline company and sent instructions, by misrepresenting such company, to its bank THE EMIRATI APPROACH IN COMBATING MONEY to transfer the aforementioned monies to their private bank LAUNDERING accounts.
Money laundering in the United Arab Emirates is primarily The First Instance Criminal Court sentenced each of the accused criminalized by Federal Law No. 4 of 2002 and supported by the natural persons to one year imprisonment, fined each an amount Federal Penal Law No. 3 of 1987 and Federal Penal Procedures of AED 30,000 and ordered the confiscation of the proceeds. Law No. 35 of 1992. The aforementioned Federal Law No. 4 of The same court fined each of the two accused companies an 2002 regarding criminalization of money laundering sets out the amount of AED 300,000. However, the judgment was appealed rules governing such crime in line with the international treaties by the convicts. The Appeals Court upheld the challenged ratified by the UAE, in order to penalize dealing in the proceeds judgment but amended it to relieve the convicts from the ordered of certain crimes, including but not limited to, drug trafficking, confiscation of their illicit proceeds. illegal arms dealings, bribery, embezzlement, breach of trust and fraud. The matter was brought forward to the Cassation Court on grounds that the lower courts erred in their reasoning, The aforementioned law mandates that any suspicious misconstrued presented evidence and misapplied the law. It transaction must be reported to the Anti-Money Laundering and was argued that the lower courts mistakenly characterized the Suspicious Cases Unit (AMLSCU) of the Central Bank of the attributed crime as money laundering on grounds that money UAE. The said unit investigates such reports, gathers intelligence laundering is a derivative crime that requires a prior separate and decides whether further prosecution should follow. After crime as the source of the illicit proceeds being laundering. In evaluating the gravity of reported suspicious transactions, the addition, the said prior committed crime has to be one of those said unit decides whether to freeze the suspected properties crimes exclusively set out by Article 2 of Federal Law No. 4 of and refer the matter to public prosecution, or disregard further 2002 regarding criminalization of money laundering. investigation. It is worthy to note that the UAE Attorney General has exclusive authority to initiate criminal actions in relation to The Cassation Court concluded that lower courts have full money laundering accusations. discretion to evaluate the facts of the case and the evidence submitted by the parties. It restated that the appeal judgment A PRACTICAL APPROACH had duly illustrated the facts of the case to establish all the legal elements of the charged crimes and properly correlated the In a recent cassation case, the public prosecution charged undertaken criminal actions with logical prosecution evidence eleven accused parties (two of which are companies) with money pursuant to the documents and testimonies. laundering, on the basis that they intentionally transferred into the UAE, GBP 4,209,625 and USD 380,461.95, illegally obtained When interpreting Article 2 of the Federal Law No. 4 of 2002, from a fraud in order to conceal and disguise the illicit origins of the Cassation Court stated that the material aspect of money such proceeds. laundering as a crime is composed of any criminal behavior undertaken by the perpetrator with the effect of concealing
32 Law Update Special Projects
or disguising the origins of the proceeds of one of the crimes Unfortunately, money launderers exploit the complex existing exclusively set out by the abovementioned article including, global financial systems and the differences between the among others, fraud and breach of trust. The court maintained respective national anti-money laundering laws and systems. that a predicate crime has to be concluded from which the Also, they exploit jurisdictions with weak or ineffective controls illicit proceeds are obtained and that the criminality relates to in order to move their funds more easily without detection. In the possession of such proceeds, regardless of the purpose of that sense, money laundering has several negative impacts such such possession as long as the perpetrator had prior knowledge as undermining the integrity and stability of financial institutions at the time of receiving such proceeds of it’s “dirty nature” and and systems, discouraging foreign investments, distorting with no consideration to whether the perpetrator is a natural or international capital flows and ultimately destroying societies by judicial person. allowing criminals to attempt committing the same crimes again and again. The Cassation Court demonstrated that money laundering is an intentional crime entailing a criminal intent. Such criminal In addition, the previous problems are further aggravated by the intent is prior knowledge that the proceeds possessed by the fact that the UAE is one of leading business hubs world wide with perpetrator stem from a crime punishable by law. its well known free market. Therefore, the UAE courts interpret money laundering broadly to combat all perpetrations as long as In addition, the convicts argued before the Cassation Court the prior committed crime constitutes one of those prohibit by the that their actions ought to be interpreted as forgery and not money laundering law. fraud as misconstrued by the lower courts and, therefore, their undertaken actions do not fall within the scope of Article 2 of Finally, the UAE is making concerted efforts to tackle this problem the Federal Law No. 4 of 2002. Accordingly, the whole case by implementing stern measures and modern safeguards along has to be dismissed against them. The court established that with signing and implementing mutual judicial cooperation the law intended to penalize dealing in the proceeds of certain agreements and extradition treaties. crimes as fraud. Moreover, fraud implies actions undertaken by the perpetrator to seize for himself or for others, the possession of any movable property by using fraudulent practice, assuming a false name or quality whenever it is intended to deceive the victim and bring him to surrender a legal right.
Accordingly, the Cassation Court reached a conclusion that the Appeals Court properly applied the law when it concluded from the presented evidence that all the legal elements of fraud were present and that despite the forgery of documents, such forgery was a step towards a bigger fraudulent scheme to deceive the victim into surrendering the proceeds that were afterwards attempted to be laundered.
In line with the above, the Cassation Court restated that the Appeals Court properly applied the law on the facts and sustained its view to relieve the convicts from confiscation of the crime proceeds but instead such proceeds should be restituted to the victim of the crime. The reasoning behind this is that, despite the fact that Federal Law No. 4 of 2002 explicitly states that criminal proceeds shall be confiscated, the proper application of the general rules of law according to Article 82 of the Federal Penal Law No. 3 of 1987 limit confiscation to cases where there is no prejudice to the rights of any bona fide third party (i.e. other parties having good faith or the victim of the crime).
In summary, the Cassation Court rejected all the arguments and claims of the convicts, reaching an ultimate decision that the challenged judgments are in conformity with the law and consequently upheld the judgment of the Appeals Court.
CONCLUSION
Concealing or disguising the proceeds of fraud is considered as money laundering. Fraud entails any false representation of a matter of fact that deceives and is intended to deceive a victim so that the latter will act upon it to his legal injury and detriment. The foregoing illustrates the gravity of both crimes and that the deceptive nature of both crimes needed harsh punishments by laws in order to deter criminals.
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AL TAMIMI & COMPANY SHEDS LIGHT ON THE KUWAIT NEW COMPANIES LAW
In late November 2012, the Kuwait Government published the New Companies ALEX SALEH Law No. 25 of 2012. The New Companies Law superseded the pre-existing law, Partner the Commercial Companies Law of 1960. Given this highly anticipated change Head of Kuwait Office in the law, the Al Tamimi & Company Kuwait office held a seminar in Dubai on [email protected] 23 January 2013 that provided an overview and initial thoughts of the new law. The seminar was attended by a number of high level executives throughout the region. During the seminar, Partner and Head of the Kuwait office, Alex Saleh, spoke about the structure and flexibility of the new law, as well as its compatibility with the Capital Markets Authority. Partner Philip Kotsis addressed the corporate governance and Shariah compliance aspects of the new law. The Kuwait office PHILIP KOTSIS held a second seminar in Kuwait related to the New Companies Law on 11 Partner February 2013. [email protected]
NEW LAW ON ANTI-COMMERCIAL FRAUD TO BE PASSED IN UAE
Federal Law No. 4 of 1979 on Suppression of Fraud and Deception in Commercial Transactions is to be repealed and replaced with a new Anti-Commercial Fraud Law of 2013. The draft law has been approved by the Cabinet and with it now being in the final stages of the legislative process, it is expected to come into force within a few months. OMAR OBEIDAT The draft law compliments the existing enforcement mechanisms in respect of Partner intellectual property rights under the Trademarks Law, Copyright Law and Industrial Head of Intellectual Property Property (Patents, Design and know-how) Law. Unlike the current law concerning [email protected] the Suppression of Fraud and Deception in Commercial Transactions, the draft law carries hefty penalties where it penalizes acts of fraud, counterfeiting, cheating in transactions and false advertisement, with fines reaching up to 1 Million Dirhams and imprisonment of up to two years.
Law Update 35 ANTI-COUNTERFEITING ACTION – KARAMA, DUBAI
On 17 January 2013 a raid was executed by the Commercial Compliance Section of the Department of Economic Development (the “DED”) in Dubai in the Karama market area on behalf of a client of Al Tamimi & Company. Working with Al Tamimi & Company’s Intellectual Property Enforcement team the client, a well known French fashion brand, WALDO STEYN conducted investigations in Dubai and identified targets dealing in counterfeit high end Intellectual Property fashion items. [email protected]
Al Tamimi & Company provided a product briefing to DED inspectors in order to assist it in the identification of counterfeit products and the DED inspectors were able to inspect six retailers seizing more than 550 pairs of counterfeit shoes. In addition to seizing counterfeit goods, the DED also issued fines of AED15,000 (USD4,100) to the offending retailers. AHMAD ZAZA Intellectual Property The Al Tamimi & Company Intellectual Property Enforcement team is continuing to [email protected] work with the DED and law enforcement agencies in Dubai to enforce the valuable intellectual property rights of this client and to support it in a systematic drive against the infringement of its intellectual property rights. The support provided by the Al Tamimi & Company team includes advising on the extension of the protection of intellectual property rights in order to enhance the client’s ability to protect its well known brand.
The Al Tamimi & Company Intellectual Property and Anti-counterfeiting team that BASSAM AL AZZEH worked on this action consisted of Waldo Steyn, Ahmed Zaza and Bassam AlAzzeh. Intellectual Property [email protected]
WALDO STEYN SPEAKS AT SME ADVISOR SUCCESS SERIES
On 19 December 2013 a SME Advisor Success Series event was held at the Radisson Blu, Sharjah focusing on the topic - “Sustaining Trade Growth”. The event was attended by members of the business community and presentations included the topics of “Structuring trade finance”, presented by Dhiraj Kunwar, Regional Head, SME Business, ADCB (Dubai & Sharjah), and “The relationship between your business and insurance”, presented by Clint Draper, Head of Small Business, Zurich Insurance Middle East. WALDO STEYN Intellectual Property Waldo Steyn, Senior Associate in the Intellectual Property Department, was invited to [email protected] present on the protection of intellectual property rights in the UAE. Waldo’s presentation included a broad overview of different intellectual property rights such as trade marks, copyright, patens, designs and know-how, and the protection of these rights in the UAE.
During the questions and answers session it, became clear that of particular interest to the audience was considerations related to the ownership of intellectual property where consultants are used to assist in the creation of for example technical drawings and where disclosures are required in the search for appropriate business partners and financing. The importance of an appropriate contractual framework where disclosure of potentially new intellectual property is required was discussed, along with the need to ensure that intellectual property specialists are consulted at an early stage in the development of new intellectual property in order to advise on ownership, disclosure and protection of rights.
36 Law Update ANTI-COUNTERFEITING ACTION – CHARACTER INFRINGEMENTS
On 3 February 2013 a significant market sweep was executed by the inspectors of the Commercial Compliance Section at Dubai Department of Economic Development (the “DED”) in the Dragon Mart complex in Dubai. This action was taken on behalf of several well known media clients including Carton Network. The Intellectual property rights involved included some of the most well known animated television / movie / cartoon characters namely Tom & Jerry, BATMAN and BEN 10. MUNIR SUBOH With more than eight inspectors and senior officials of the DED and support by members Intellectual Property of the Al Tamimi & Company Intellectual Property Enforcement team the DED officials [email protected] were able to simultaneously inspect and seize infringing goods bearing unauthorised reproductions of the well know characters from more than 36 different retailers in the shopping complex. An estimated 9000 infringing items including games, T-shirts, toys, watches, bags and CDs were confiscated. The DED imposed fines that ranged from AED 5,000 to AED15,000, i.e. USD 1,365 to USD 4,100 against the infringers.
The Al Tamimi & Company Intellectual Property Enforcement team has been instrumental in supporting media clients in a systematic drive against the infringement of their valuable rights. The grounds of the administrative complaints included both the infringement of trademarks and copyrights. The actions taken by the DED officials are very important as it sends a clear message to both infringers and rights holders that the DED is very serious about the enforcement of intellectual property rights in Dubai. AHMAD ZAZA Intellectual Property The actions taken by the DED represent a significant commercial tool for intellectual property [email protected] owners as it notably assisted to spread the word amongst retailers of anti-counterfeiting activities that Al Tamimi & Company is undertaking on behalf of the intellectual property rights holders. As a result of actions of this nature, a substantial decrease in trade in unauthorized goods bearing the BEN 10, BATMAN and Tom & Jerry trade marks and copyrights has been noted in the market. Al Tamimi & Company’s Intellectual Property team is continuing to work with our clients to continue the enforcement of their valuable intellectual property rights.
The Al Tamimi & Company Intellectual Property Enforcement and Anti-counterfeiting team that worked on the action consisted of Munir Suboh and Ahmed Zaza.
AMENDMENTS TO DIFC LAW - UPDATE
In December 2012, the DIFC made important amendments to the DIFC Law No. 4 of 2005. Members of the firm’s employment department were SAMIR KANTARIA involved in the consultation phase and also assisted the DIFC in the drafting Partner of the proposed amendments to the law. In January, our employment Head of Employment [email protected] lawyers presented and chaired two separate roundtable discussions with various in-house counsel and HR heads to consider the amendments and their impact. The first roundtable discussion was hosted by JP Morgan GORDON BARR Chase Bank, and the second discussion was hosted by the firm at the Employment Capital Club. [email protected]
Law Update 37 AL TAMIMI & COMPANY SPONSORS TWO GULF FINANCIAL CONFERENCES IN QATAR
On 21 and 22 January Gulf Financial Conferences held two events in Qatar on ‘Finance & Investment’ and ‘M&A, Corporate Finance & Advisory’ Al Tamimi & Company were proud to sponsor both conferences’.
Mohamed Khodeir, Partner and Head of the Qatar office, presented at the Finance & MOHAMED KHODEIR Investment Conference on 21 January on ‘Successfully executing Equity Capital Market Partner transaction in Qatar – a legal and regulatory overview’. Rafiq Jaffer, Senior Associate, Head of Qatar office participated in the panel discussion on ‘What challenges are Qatar’s private sector and [email protected] non-government companies facing to raise capital?’.
At the M&A, Corporate Finance & Advisory Conference on 22 January, Rafiq Jaffer again participated in a panel discussion on the subject of ‘Have finance options for acquisitive companies changed at all in today’s new global financial landscape?’ Gary Watts, Partner and Head of Corporate & Commercial, also participated in a panel discussion on ‘Why mid-market deals will continue to drive intra-regional and inter-regional M&A activity’. RAFIQ JAFFER Head of Banking, Qatar [email protected] If you would like a copy of Mohamed’s presentation or you have any questions in relation to any of the topics above, please contact Mohamed Khodeir at [email protected]
AL TAMIMI & COMPANY IN PARTNERSHIP WITH QATAR DEVELOPMENT BANK (“QDB”) HOSTED A WORKSHOP TO PROVIDE ESSENTIAL LEGAL KNOW-HOW AND GUIDANCE TO NEW BUSINESS OWNERS MOHAMED KHODEIR Partner On 28 January 2013, Al Tamimi in partnership with QDB, ran a workshop aimed at Head of Qatar office Qatari entrepreneurs of SMEs. The workshop which was conducted entirely in Arabic [email protected] was presented by Mohamed Khodeir, Head of the Qatar office, supported by Ahmed Jaafir, Senior Associate and Dina Al-Wahabi, Trainee Lawyer. The topics discussed were designed to provide essential legal know-how and act as a legal guide to potential business owners at the inception stage of their business. These ranged from running through the legal aspects of financing a business, outlining the different business structures available under Qatari Law, explaining the licensing procedures required and the regulatory issues relating to personnel and recruitment. The format was interactive with the session AHMED JAAFIR Qatar concluding with a set of case studies given to the attendees to discuss and was Chaired [email protected] by the Al Tamimi panel.
AL TAMIMI & COMPANY SPONSORS MORNING COFFEE FOR THE INTERNATIONAL ACADEMY OF DISPUTE RESOLUTION
The inaugural Dubai Invitational Mediation Tournament was held at the end of January 2013. Run by the International Academy of Dispute Resolution, the competition attracted law students from around the world to compete in the tournament. The intent of the event is to focus on the growing importance of the mediation process and its importance to the practice of law while giving students the opportunity to gain perspective and real life experience as mediators. Senior Associate Mohammed Dessouky along with Sarah Hasnani and Omar Khattab from Al Tamimi, participated in the event by being a part of the judging panel. The firm also hosted the networking coffee session held on the beach at the Westin Mina Seyahi Hotel.
38 Law Update Banking & Finance
ARE SWIFT MESSAGES LEGALLY SARAH EL SERAFY Qatar BINDING? [email protected]
SWIFT messages are a method of communication, payment, If a SWIFT message is issued clearly and in line with the QCB settlement, clearing, trading in deposit certificates etc. that Regulations in relation to each type of dealing, it shall have a are admissible by the Qatar Central Bank “QCB”. The QCB binding effect on the sending bank. Regulations set the SWIFT system for the interbank dealings e.g. in relation to the messages of the daily inter-bank payments, The TELEX system is also considered an alternative by QCB for the message no.”MT203” or “MT202” should be used to transfer banks that are not yet set up with the SWIFT system. any amount from the clearing account of the bank to one or more of the banks operating in Qatar. No other messages will be The E-Commerce Law provisions apply to transactions between accepted for this purpose. In addition, the field “58A” should be parties who agree to conduct transactions using electronic used to indicate the beneficiary bank. If the beneficiary bank is communications. The law defines electronic communication not a Swift system user, the field “58D” should be used according as any transmission, emission or reception of signs, signals, to the bank’s identification symbol. writing, images, sounds, pictures, data or information of any kind by wire, radio, optical, other electromagnetic means of According to the QCB Regulations, the bank issuing the SWIFT communications or any other similar means of communication. message will be liable for sending the messages correctly. All This definition is broad enough to cover SWIFT messages being banks should liaise with the Banking, Payment and Settlement a way of transmitting data. Systems Department of the QCB to be advised of the updated technical details for sending SWIFT messages. The law excludes governmental entities from the above rule by stating that governmental entities shall give explicit consent in relation to electronic transactions of which they are a party. This also indicates that the electronic communication implies the consent of the parties and accordingly should be binding on them, except for governmental entities who must give their explicit consent.
Article 4 of the E-Commerce Law further elaborates on the contract formation for conducting transactions, that an offer or acceptance of an offer may be expressed, in whole or in part, by means of electronic communications.
A contract or transaction shall not be denied validity or enforceability solely on the grounds that one or more electronic communications were used in its formation.
In light of the above, SWIFT messages are a valid and legally binding method of communication between the banks, provided that the QCB Regulations and the E-Commerce Law provisions are observed in relation to each type of dealing.
Law Update 39 Banking & Finance
QATAR: ASSIGNMENT OF RIGHTS AND OBLIGATIONS UNDER THE QATARI CIVIL CODE
Lenders providing financing for the construction or purchase of assets such as a power plant, ship or building often stipulate that the receivables arising from the asset should be assigned to the lenders. Once such receivables are assigned to the lenders, these receivables are ‘ring fenced’ thereby securing the cash flows from the asset for servicing the payments under the loan provided in connection with the asset.
Generally, an assignment is a process of transferring rights and/ or obligations held by one party—the assignor to another party— the assignee. Assignment agreements relating to assignment of rights (or receivables) are typically bilateral agreements between the assignor and the assignee with a notification sent to the debtor. The assignment agreement, relating to an assignment SARAH EL SERAFY of obligations in general is a tri-party agreement, between the Qatar debtor, the creditor and the assignee. [email protected]
There are two types of assignments; an assignment of rights and an assignment of debt also known as an assignment of obligations. Under the assignment of rights, the assignee is a third party who assumes the rights to collect the receivables accruing to the creditor, while under the assignment of debt; the assignee replaces the debtor and the debtor’s obligations to repay its debt to a creditor.
Although assignments are permitted under the Qatari Civil Code, Law No. 22 of 2004 (the “Civil Code”), some contracts may include
40 Law Update Banking & Finance
a clause stipulating that “assignments are being assigned by the assignee to the pledged to the assignee. not permitted” or that “any assignment is assignor. subject to the consent of all the parties ASSIGNMENT AND NOVATION to the agreement”. Where such a An assignment of debt requires the prior restriction is included in the contract and approval of the creditor, and not merely The Civil Code recognizes two ways of a contracting party attempts to assign acknowledgment of the creditor. If the transfer of rights or obligations, one is by the contract such an assignment will not creditor received a notification of the assignment, which has been explained only be ineffective, but also, the assigning assignment of debt and does not respond above and the other is by novation. party will be in breach of the relevant within the deadline stipulated under contract. However, where a contractual the notification, the assignment will be Articles 381 to 386 of the Civil Code deal restriction relating to assignment is deemed rejected by the creditor. However, with the novation. Novation is defined present and all the contracting parties the assignment shall be effective between under the law as “a change of the debt accept the assignment, the assignment the original debtor and the assignee, even when the two parties agree to substitute a will be deemed effective and enforceable. if the creditor rejected the assignment, new obligation for the original obligation. hence, the assignee shall be obliged to The new obligation differs from the The Civil Code sets out the process by pay the debt, when due, to the creditor. original obligation in respect of its object which an assignment can be executed. or as regards its source by a change of The law differentiates between the The creditor does not guarantee the the debtor, when a creditor and a third assignment of rights and the assignment solvency of the debtor at the time of the party agree that such third party shall take of debts. Article 324 to Article 336 of the assignment of rights while the debtor must the place of the original debtor and that Civil Code relates to assignment of rights, guarantee the solvency of the assignee at the original debtor shall be released of the while Article 337 to Article 353 regulates the time of the assignment of debt, unless debt without his consent being necessary, the assignment of debts. otherwise agreed. or when the debtor has procured the consent of the creditor to substitute the PROCESS The Civil Code does not recognize the debtor by a third party who consents to be concept of “assignment as a security”, the new debtor; also by a change of the The procedures to effect an assignment the assignment under the Civil Code is creditor, when the creditor, the debtor and of rights is different form that of the an absolute assignment. However, in a third party agree that his third party shall assignment of debts. Assignment of rights practice, assignment of rights is typically be the new creditor.” does not require the debtor’s approval, used as security, where the bank has no however, the debtor must be notified right to enforce the assigned rights except It is recommended to advise banks and the debtor’s acknowledgement is in case of the occurrence of a default by to obtain assignment as a security required. If the acknowledgment is signed the creditor. rather than novation, as the significant by the debtor, it should be date certified difference between assignment and from the Ministry of Justice in Qatar, as In general, there are some assets that novation under the Civil Code is that the opposed to the notary’s office in some may not be subject of an assignment. security associated with the debt is not legal systems. In the event the debtor Those types of assets are: automatically transferred under novation, refuses to sign the acknowledgment, an unlike the assignment, where security is official court notification can be served (a) Real Estate, as there are certain automatically transferred to the assignee. upon the debtor, which shall be deemed laws which provide for specific formal an “acknowledgment” under the law. procedures and registration requirements CONCLUSION The court notification in many civil law to assign title relating to real estate assets; jurisdictions is made through a court While assignment of receivables is a very bailiff. However, since court bailiffs do no (b) Movables, in respect of which a popular form of security among lenders exist in Qatar, the court undertakes the mortgage or pledge over movables is in the region, it is essential to ensure that notification process through an internal created by following specific formal the nuances relating to creation of such postal system. procedures with the relevant competent security are diligently followed. authorities, depending on each type of According to the Civil Code, an assignment asset; and Lenders should pay special attention to of rights can include the rights under the the transferability of collateral associated corresponding security provided by the (c) A business enterprise or “Fonds de with the rights or obligations being debtor to secure payments and other Commerce”, where a security interest assigned. Specifically, lenders should related rights. Having said that, it is shall only be valid and enforceable vis-à- consider the benefits of an assignment or advisable to clearly specify the security vis any third party provided the procedures rights over a novation. This is especially being assigned to the assignee. set out under Qatar Commercial Code significant as under an assignment of No. 27 for 2006 are followed. rights there may not be a need to re- Another significant factor is that the execute security documents. contracts being assigned must be It is also recommended that the assignee identified. In other words, it is not permitted takes possession of the assigned rights to Lenders should also be aware that when to assign the rights or receivables from facilitate enforcement if the assignment is assigning receivables, the receivables an asset generally. The assignment taken as a security. For example, where should be identifiable and quantifiable agreement must include a description of the assignment relates to receivables, at the time of executing the assignment the contracts and receivables that are the receivables can flow into an account agreement.
Law Update 41 Employment
SAMIR KANTARIA Partner Head of Employment [email protected]
LUKE TAPP Employment [email protected] AMENDMENTS TO EMPLOYMENT LAW IN THE DIFC
The DIFC Authority has recently introduced some key amendments to the rules regarding employment relationships for organisations operating within the DIFC. We are privileged to have been involved in the consultation phase (which was launched in December 2011) where the various amendments were discussed and also in the drafting of the amendments on behalf of the DIFC Authority, which are the most significant amendments that have been made to the DIFC Employment Law since it was first introduced.
By way of background, DIFC Employment Law No. 4 of 2005 (“DIFC Employment Law”) sets out all of the obligations and requirements on employers and employees operating within the DIFC. The amendments to the DIFC Employment Law were introduced pursuant to the implementation of the Employment Amendment Law, DIFC Law No. 3 of 2012 and were effective from 23 December 2012.
The amendments to the DIFC Employment Law tackled a variety of areas in respect of the relationship between employers and employees. As well as clarifying some of the rules and making them generally more user-friendly, the amendments have also sought to develop some important employee rights. In particular, the provisions regarding
42 Law Update Employment
discrimination were significantly amended 24 months remuneration. Where • End of service gratuity: The and the concepts of harassment, direct the employee sustains an injury, previous ambiguous wording discrimination and indirect discrimination the level of compensation will be has been clarified so that for the are now more consistent with the same a percentage of the 24 months purposes of the end of service concepts as defined in the UK Equality remuneration, which varies gratuity calculation, one day’s Act 2010. depending on the seriousness of basic wage shall be a calendar the injury suffered. day’s pay. The key amendments to the DIFC Employment Law are: • Health insurance: Employers are • Parts 11 to 14: These have been now only obliged to obtain heath repealed in their entirety. The • Provision of a written contract insurance cover for its employees provisions previously set out the of employment: The Law now (as opposed to insurance cover for process for raising complaints with, requires all employers to provide health and disability income, which and the decision making powers employees with a written was previously required). of, the Director of Employment contract of employment which is Standards. The removal of in accordance with the Law, as • Discrimination: Provisions these provisions is unlikely opposed to the requirement to relating to non-discrimination have any impact on the existing previously provide a statement have been significantly amended. DIFC complaints procedure for of employment particulars. This In particular, the following key employees and employers. is consistent with the obligation amendments have been made: on employers to provide a signed • Other amendments: contract of employment when - there is a clear distinction submitting new visa applications between the provisions prohibiting - Employers are permitted to and renewals to the DIFC indirect and direct discrimination; provide the written itemised pay Authority, an obligation which was statement and retention of payroll introduced earlier in 2012. - there is now protection for records in an electronic format. employees against harassment • Leave carry forward: Employees on the grounds of a protected - Employers are required to pay now have a right to carry forward characteristic; departing employees all wages up to 20 working days of accrued and any other outstanding amount and untaken annual leave from - the definition of a disability is set within 14 days of the termination of one holiday year to the next. The out in greater detail; employment. If an employer fails entitlement to the carried forward to comply with this requirement, annual leave will expire after a - the provisions specifically state a penalty will be payable to the period of 12 months following the that they protect employees only; employee which is equivalent to end of the holiday year in which it and his/her daily wage for each day the was accrued. employer is in arrears. - employers may now justify • Sick leave: This entitlement has indirect discrimination where their - Reduced Ramadan hours are now been amended to 60 working actions are a proportionate means now applied for fasting Muslim days (as opposed to 90 calendar of achieving a legitimate aim. employees only. days). • Termination for cause: Entitles the - Employees are entitled to national • Maternity leave: This entitlement employer or employee to terminate holidays which fall on working has now been amended to 65 the employment relationship for days only. working days (as opposed to three “cause” where the conduct of the calendar months). In addition, other party warrants termination - All Muslim employees are entitled the maternity leave period will and a reasonable employer or 30 days unpaid leave to go on a be extended by the number of employee would have terminated Haj pilgrimage after one year of national holidays which fall on the relationship. The word employment. working days during the maternity “cause” replaces the previous leave period. term “misbehaviour” although it is - There were additions and unlikely to have a significant impact amendments to the defined terms • Compensation for Accidents: on the legal justification required set out within Schedule 1 to the There is now a minimum level when summarily terminating DIFC Employment Law. of compensation that is payable employees. to employees or their named Please contact any member of the dependents where they die or • Pension for UAE and GCC employment team directly for further sustain an injury arising out of nationals: Obliges employers to information or assistance, or contact or during the course of their enrol an employee to their relevant the head of the team, Samir Kantaria employment. Where the employee state scheme and confirms that the ([email protected]). dies, the compensation payable pension is in lieu of end of service to his/her named dependent is gratuity.
Law Update 43 Technology, Media & Telecommunications
SOCIAL MEDIA LEGAL ISSUES – PART I
Some of us are employers, many of us are employees, and all of us are customers. Some of us are fans, pundits, critics and activists. Depending on the role that we are fulfilling at the time, our use of Social Media can have different effects and repercussions. In this article, Part 1 of two-part series, we look at some general risks associated with the use of Social Media. Some of these are of broad relevance to all users of Social Media. Some are of NICK O’CONNELL particular relevance in a corporate environment, including use of TMT Social Media on behalf of a company and use and misuse of Social [email protected] Media by employees inside and outside company time.
In next month’s Law Update, Gordon Barr, with it a variety of issues. News stories publicity, a false accusation which a Senior Associate in our Employment about Social Media blunders abound. dishonours or discredits a man in team, will outline some of the employment- These range from reports about Social the estimate of the public, without related issues arising in respect of Social Media misconduct by employees, errors imputing any specific incident to Media. The increasing accessibility of in the way in which companies try to him; and consumer electronics and the internet engage with their customers via Social • charging, through any means of has meant that Social Media is becoming Media, mismanagement of employees’ publicity, another person with an as common place as emails. According to use of Social Media, and a range of other incident susceptible of making him the Arab Media Outlook report prepared problematic scenarios. subject to punishment or exposing by Deloitte in 2012, 86% of internet users him to public hatred or contempt. in the Middle East use Social Media to Broadly speaking, the key legal issues • access news, information advice, and arising out of use of Social Media relate The publication of such statements is 70% of users voice their opinions on to offensive content and privacy and considered to be an aggravating factor. Social Media sites. confidentiality. The Cyber Crimes Law 2012, which replaced the Cyber Crimes Law 2006, Businesses are increasingly using Social OFFENSIVE CONTENT contains a provision that basically mirrors Media as a business tool for internal this provision, confirming that defamatory communications, marketing and public The UAE Penal Code prohibits: statements published via Social Media relations. The rapid proliferation of Social are no less subject to sanction. Media in a corporate environment brings • making, through any means of The Publications and Publishing Law
44 Law Update Technology, Media & Telecommunications
1980 is also relevant. Coming into force to disgrace such individual, or • In February 2012 the Dubai Police well before the rise of Social Media, it is any secret that may cause harm chief pursued a defamation case no surprise that much of the language of to the reputation of someone, his against a 42-year-old Emirati, the law is focussed on printing presses property, or his commercial name. alleging the man had defamed and newspaper distribution. Despite him on Twitter with unfounded this, the language relating to materials, The Cyber Crimes Law also identifies a accusations of corruption and the publication of which is prohibited, is range of content, the on-line publication of injustice. broader – and likely to extend to publication which is prohibited. This includes content • In May 2012, a man who posted in the context of Social Media. Examples that blackmails or threatens a person, images insulting Islam on of prohibited publications include: content that offends religious sanctities Facebook was prosecuted after and encourages sins, content that insults members of the public complained • Any work instigating against Islam others or makes them the subject of about the posts. or the values of society, the system contempt, and content that criticizes • In June 2012, a gymnasium caused of ruling, or that harms the interest the State or that calls for donations or controversy with its Social Media of the state; news that harms the demonstrations without a licence. based advertising campaign, national economy or currency; and which included an image of an opinions that violate public order There are a number of examples in the obese woman making offensive or that circulate subversive ideas; UAE of instances that appear to fall within gestures at a fast food restaurant. and prohibitions set out in one or more of • News, pictures, comments about these laws. With regard to the latter example, an individual’s private life meant we are not aware of any prosecution
Law Update 45 Technology, Media & Telecommunications
arising. Despite this, a local newspaper with a customer, via a non-private is to appreciate that the industry is at reported that the so called ‘Middle Finger Social Media forum, about something as a very early stage of development, so Campaign’, which offered a week of free sensitive as bad debts, runs a high risk of there will be varying expectations and training to tackle the “obesity epidemic” in breaching the Penal Code prohibition on varying degrees of professionalism. In Dubai, caused outrage on Social Media the disclosure of secrets. this context, we recommend ensuring websites. Noting anecdotally that this that arrangements with service providers type of gesture often forms the basis for Besides the issue of privacy outlined are clearly set out in a suitable services a prosecution in the UAE in the context above, the use of Social Media in a agreement, specifying the scope of work, of altercations between drivers, there is corporate environment raises a number of the service level expectations, and – scope to conclude that the use of such a other confidentiality-related issues. From ideally – some mechanism for addressing photograph may breach the prohibition in an operational perspective, an employee’s non-compliance with service levels. the Publications and Publishing Law on use of Social Media – either for work or in advertisements that include expressions a personal capacity - could result in the Having said that, it is important to or pictures that are inconsistent with disclosure of information that would be appreciate the limitations of service level public conduct. best kept confidential to the company. credit type mechanisms when working with Social Media. If the end result of a The point with all these examples is USER GENERATED CONTENT Social Media ‘fail’ is that your reputation is essentially that the fact that the abusive damaged, then service level credits may or defamatory conduct has occurred on Many companies have adopted Social be of little consolation. Social Media does not make the conduct Media as a way of engaging with any less offensive or defamatory - or any customers, allowing people to post Al Tamimi & Company’s Technology, less vulnerable to prosecution under UAE comments directly onto corporate Media & Telecommunications team law. websites or Social Media sites. A simple regularly advises on Social Media example in a Social Media context would related issues. For any queries regarding PRIVACY AND CONFIDENTIALITY be comments made by customers on this article, or Social Media issues in the Facebook page of a company. While general, please contact Nick O’Connell – The Penal Code provides a punishment allowing such User Generated Content [email protected] of confinement and fine shall be inflicted may be an effective way of engaging with on any person who attacks the sanctity customers, it is not without risk. of individuals’ private or family life by publishing, through any means of In the UAE, there is some likelihood publicity, news, pictures or comments that User Generated Content that was pertaining to the secrets of people’s offensive or breached privacy could private or familial lives even if the same attract liability both for the individual is true. The Cyber Crimes Law contains posting it and for the company that failed a provision that mirrors this Penal Code to act promptly in taking it down. For this provision, confirming that infringing reason, we recommend that any company privacy by way of Social Media is no less that wishes to engage with customers via subject to sanction. Social Media in this manner moderate User Generated Content – or, at least, In the UAE, there have been a number act promptly the moment offending of cases involving the disclosure of User Generated Content comes to the secret information via Social Media. company’s attention. Our view in this Articles telling of jilted lovers circulating regard is supported by a new provision compromising photographs via Social in the Cyber Crimes Law, which - broadly Media seem to be a regular feature in speaking - provides for the site operator’s local newspapers. liability for offending content. Provisions of the Publications and Publishing Law In a commercial context, the example of a also support this view. bank using Facebook to approach a UAE- based customer regarding outstanding USE OF THIRD PARTY SOCIAL MEDIA loans is an example of what not to do. SERVICE PROVIDERS A local newspaper reported that the customer learned of the bank’s approach The use of third party service providers when his daughter emailed him to ask for the management of Social Media why the bank had posted details of his content is another area of risk. Many of the outstanding loans on his Facebook wall, points identified earlier will be applicable, threatening to lodge a case against him including making sure that offending for non-payment. While the newspaper’s content is not posted – or not permitted to discussion was focussed on the remain. threatening conduct of the bank’s debt collection agency, our view is that there A key consideration when it comes to is a high possibility that communicating engaging a Social Media consultant
46 Law Update Technology, Media & Telecommunications
ADVERTISING STANDARDS
ANITA SIASSIOS SANA SALEEM TMT TMT FOR THE UAE [email protected] [email protected]
On 16 January 2013, the National Media Council (“NMC”) issued a resolution Concerning the Standards of Advertisement Content in Mass Media - Federal NMC Resolution 35 of 2012 (“Advertising Standards”), governing advertisements in the UAE. The Advertising Standards apply to “all advertisements produced, broadcasted or distributed in the State [UAE] and those that are imported from abroad including free zones”. They incorporate the principles of Federal Law No. 15 of 1980 (“Publications and Publishing Law”) and set out standards for all advertisements that will be displayed in the UAE, either online or via traditional means of publication.
Prior to the issuance of the Advertising Standards, which contributes to the advancement of content in relation to advertisements in the UAE economic development in the UAE; and was governed and regulated by a combination of legislative and regulatory measures. Upon • ensure that all advertisement content is: publication in the Federal Gazette1, the new Advertising Standards will serve to consolidate the - impartial; various principles governing content in relation to - truthful; advertisements in the UAE, reinforcing a number of - respects the privacy of individuals; and fundamental edicts. - protects society from harmful influences.
1. OBJECTIVES. 2. STANDARDS IN RELATION TO ADVERTISEMENTS. With a view to ensuring the advertising industry’s conformity with the laws and regulations of the UAE, The Advertising Standards set out principles in the new Advertising Standards are intended to: relation to all digital and traditional advertisements broadcast or published through any media • instill respect for the local religious, cultural corporation and outlet in the UAE. Although, the and social values which prevail in the UAE; Advertising Standards do not define the meaning of these terms, they may be interpreted broadly • strengthen the freedom of expression of the to include advertisements issued by shops, for media; example.
• establish the advertisement sector as one Many of the standards set out in the Advertising
Law Update 47 Technology, Media & Telecommunications
Advertising content relating to medicines or pharmaceutical products must comply with the rules set out by Cabinet Resolution No. 7 of 2007 Regarding Health Advertisements Regulation.
3. REQUIREMENTS OF ADVERTISING CONTENT.
The most notable requirement under these new Advertising Standards is that advertisements are now required to be in standard Arabic or the local Emirati dialect. Prior to the issuance of these Advertising Standards, there was no such requirement.
We summarize additional requirements in respect of advertisements below:
• All advertisements broadcast or published in the UAE must be clear and must not contain incorrect information. Advertisements must not create confusion between products. Misleading claims of a comparative nature that have a tendency to mislead consumers are prohibited. Standards reiterate principles already established under various Additionally, statements relating to uniqueness that have existing legislations and regulations, while others introduce new a tendency to deceive consumers are also prohibited. rules governing advertisements and advertising content in the region. We summarize the main standards below: • The Advertising Standards prohibit the unlawful use of trademarks in advertisements. Advertisements must • Respect for religion and political institutions: not contain fraudulent or imitated trademarks. The use of labels or pictures that are unrightfully used is also Advertising content must be respectful of all divine religions and prohibited. not offend Islamic beliefs. It must not disrespect the regime in the UAE and/or the symbols and political institutions thereof. Further, • Broadcast or publication of specialized advertisements, no content broadcast or published by a media corporation or i.e. advertisements about medicines or pharmaceutical outlet may disrespect the local and international policies of the products, food products and promotions require special UAE or disrespect the cultural heritage of the UAE. permission of the relevant authority prior to issuance. Similarly, advertisements relating to properties, • Prohibited products/services: universities and kindergartens must be approved by the relevant authority. The Advertising Standards explicitly prohibit advertising alcoholic beverages, tobacco, smoking and all banned products 4. ENFORCEMENT. or services including banned narcotics. The National Media Council is authorized, under the Advertising • Prohibited content: Standards, to apply various penalties for non-compliant advertisements. Such penalties may not be in isolation of any The Advertising Standards prohibit the publication of words other penalties that may perhaps be imposed upon an entity and pictures that breach public morals. They further prohibit under Federal Law No. 15 of 1980 Regarding Printed Matters the spread and dissemination of information that may prejudice and Publications. Enforcement of such penalties can occur children, women or any other members of society. The against any or all of the “advertiser”, “producer” and “publication Advertising Standards also prohibit the provocation of violence, means” (the Advertising Standards do not define the meaning of hatred and sectarianism via advertising content. these terms) where each of these can be liable for advertising content that does not comply with standards as set forth in these • Privacy: Advertising Standards.
With a view to protecting the privacy of individuals, the Advertising Standards explicitly prohibit the broadcast and publication of Al Tamimi & Company’s Technology, Media & misleading news and rumors. Telecommunications team regularly handles issues related to advertising and promotions. For further information please • Consumer Protection: contact Sana Saleem at [email protected] or Anita Siassios at [email protected]. The Advertising Standards mandate compliance with the laws governing consumer protection and commercial activities particularly in relation to anti-competitive practices and illegal 1 - At the time of publication of this article, the Advertising Standards monopolies. had not been published in the Federal Gazette. We expect this will happen in due course. • Health regulations
48 Law Update
Legislative Update
United Arab Emirates Ministry of Justice 42nd Year Issue No. 543 15 Muharram 1434 AH 29th November 2012 FEDERAL DECREES
97 of 2012 Convening the Federal National Council
98 of 2012 Ratifying the Agreement on Cooperation in Combating Crime between the UAE and the People’s Republic of China
99 of 2012 Approving the UAE as a member of the Gas Exporting Countries Forum
100 of 2012 Terminating the tenure of an official at the Ministry of Presidential Affairs
101 of 2012 Approving the resignation of the Director General of the National Transport Authority
102 of 2012 Approving the resignation of the Director General of the Emirates Identity Authority
103 of 2012 Concerning the salary and allowances of the Deputy Governor of the UAE Central Bank
104 of 2012 Transferring the UAE Ambassador to the Federal Republic of Germany to the Diwan of the Ministry of Foreign Affairs
105 of 2012 Transferring and appointing a UAE Consul General
MINISTERIAL DECISIONS
• From the Ministry of Environment & Water:
532 of 2012 Minister of Environment & Water decision banning the import of frozen strawberries from Laiyang Jiateng Foodstuff in the People’s Republic of China
• From the Ministry of Health:
900 of 2012 Minister of Health decision appointing the High Committee on Medical Malpractice
932 of 2012 Minister of Health decision concerning the health and technical conditions applicable to private pharmacies
• From the Ministry of Economy:
250 of 2012 Minister of Economy decision revising the Articles of Association of Emirates Integrated Telecommunications Company PSC
296 of 2012 Minister of Economy decision revising the Articles of Association of Al Hilal Bank PSC
531 of 2012 Minister of Economy decision announcing the incorporation of Baraka First Holding Company PSC
540 of 2012 Minister of Economy decision announcing the incorporation of Baraka First Company PSC
Legislative Update
ADMINISTRATIVE DECISIONS
• From the Emirates Authority for Standardization & Metrology:
26 of 2012 Decision of the Chairman of the Board of Directors of the Emirates Authority for Standardization & Metrology approving a revision of the UAE regulations laying down requirements and conditions for the registration of biodegradable plastic products in accordance with UAE S 5009:2009
• From the Securities & Commodities Authority:
55T of 2012 Decision of the Chairman of the Board of Directors of the Securities & Commodities Authority to cancel the license of Asayel Shares & Bonds Company and delete its registration as a broker
56 of 2012 Decision of the Chairman of the Board of Directors of the Securities & Commodities Authority to amend the rules for listing and trading commodities and commodity contracts
57T of 2012 Decision of the Chairman of the Board of Directors of the Securities & Commodities Authority to cancel the license of Arab German Broker Finance Brokers and delete its registration as a broker
• From the UAE Central Bank:
39/5/2012 Decision of the Board of Directors of the UAE Central Bank approving the issue of gold and silver commemorative coins to mark the UAE‘s hosting of the World Energy Forum 2012 in Dubai
107/11/2011 Decision of the Board of Directors of the UAE Central Bank approving the issue of a commemorative Dirham coin to mark the 50th anniversary of exporting the first shipment of oil from the Umm Al Sheif Field, Abu Dhabi
• From the Department of Economic Development – Abu Dhabi:
92 of 2012 Decision of the Chairman of the Department of Economic Development approving the incorporation of private joint stock companies
Law Update 51 Legislative Update
United Arab Emirates Ministry of Justice 42nd Year Issue No. 544 18 Safar 1434 AH 31st December 2012 FEDERAL DECREES
106 of 2012 Promoting and retiring officers of the Ministry of the Interior
107 of 2012 On performing the duties of the UAE Ambassador to the Federal Republic of Germany
108 of 2012 Terminating the tenure of an officer of the Ministry of Presidential Affairs
109 of 2012 Appointing a non-resident ambassador to the Republic of Angola
110 of 2012 Transferring and appointing a member of the diplomatic and consular corps
111 of 2012 Transferring the UAE Ambassador to the Republic of Tanzania to the Office of the Ministry of Foreign Affairs
112 of 2012 Transferring the UAE Ambassador to the Republic of Yemen to the Office of the Ministry of Foreign Affairs
113 of 2012 Transferring the UAE Consul General in Karachi, Islamic Republic of Pakistan, to the Office of the Ministry of Foreign Affairs
REGULATORY DECISIONS OF THE CABINET
34 of 2012 Approving UAE mandatory standard specifications
35 of 2012 Concerning the Office of the Minister of State’s Contracts and Procurement Regulations
36 of 2012 Concerning the fee for pre-inquiring about passengers arriving at UAE airports
37 of 2012 Implementing regulations of Decree-Law No. 8 of 2011 regarding the rules for preparing the budget and final account
MINISTERIAL DECISIONS
• From the Ministry of Health:
1022 of 2012 Minister of Health decision concerning the study abroad program for Bachelor’s in Nursing Emirati students
• From the Ministry of Environment & Water:
581 of 2012 Minister of Environment & Water decision reshuffling the Ajman Fishing Regulatory Committee 598 of 2012 Minister of Environment & Water decision concerning the implementing regulations of Federal Law No. 17 of 2009 on the protection of new varieties of plants
599 of 2012 Minister of Environment & Water decision appointing a food laboratory team
• From the Ministry of Social Affairs:
605 of 2012 Minister of Social Affairs decision appointing a liquidator for the Khorfakkan Cooperative Society
Law Update 52 Legislative Update
654 of 2012 Minister of Social Affairs decision announcing the establishment of the Al Ahlia Jumeirah Corporation
707 of 2012 Minister of Social Affairs decision on reactivating the role of the UAE Fishermen Associations Cooperative Union and appointing an interim board of directors for the fishermen associations
• From the Ministry of Economy:
550 of 2012 Minister of Economy decision announcing the establishment of Nuwa Power Holding Company PSC
573 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Al Ruwais Power Company PSC
ADMINISTRATIVE DECISIONS
• From the General Authority for Pensions & Social Security:
4 of 2012 Decision of the Chairman of the Board of Directors of the General Authority for Pensions & Social Security regarding the terms and guidelines for the recognition of prior service as pensionable service
• From the Department of Economic Development – Ajman:
14 of 2012 Decision of the Director of the Department of Economic Development concerning the conversion of Arab Heavy Industries Company PJSC from a public joint stock company to a private joint stock company
ANNOUNCEMENTS
• From the Insurance Authority:
- Concerning the application filed by Bahrain Emirates Insurance, a branch of a foreign company registered on the Register of Insurance Companies, to delete the registration of its Abu Dhabi branch
Law Update 53 1010 Offices Offices
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Corporate Structuring
Dispute Resolution ABOUT AL TAMIMI & COMPANY
Employment As the largest law firm in the Middle East, Al Tamimi & Company knows more than just the law. We pride ourselves on understanding the business Equity Capital Markets environment in which we operate ultimately benefiting the clients we work with.
Family Business Established in Dubai in 1989, we have offices in Dubai, Abu Dhabi, Sharjah, Kuwait, Qatar, Saudi Arabia, Jordan and Iraq with more than 200 lawyers and over 400 staff. We are proud of where we have come from and excited Hospitality about where we are heading.
As a full service law firm, we specialise in a range of practice areas - each Insurance being a genuine strength. We provide not only professional expertise but superior client service and quality strategic advice. We combine internationally qualified and experienced lawyers with lawyers who have deep local roots. Intellectual Property Along with this, the ability to practice local law in each of the jurisdictions we are present, rights of audience before local courts, and licensed litigators in Legislation & Policy each of our offices, really sets us apart. We have advised on some of the most complex legal issues and continue to M&A be at the forefront of business and legal challenges facing our clients.
Property
Special Projects The group’s ability to deliver local law solutions within an international context Technology, Media & results in a high level of activity. Telecommunications
Chambers, 2012 Transport OUR REGIONAL FOOTPRINT
With a focus on the Middle East, we have a strong understanding of the business environment that our clients operate in. This, combined with our full range capabilities, ensures that clients receive sound, strategic legal advice. Iraq With lawyers in 10 offices across 6 countries in the region who are dedicated to working together interactively, we can respond knowledgeably and efficiently on any legal aspect across the Jordan region. Kuwait
Our unified approach illustrates our ability to work together Qatar with our clients, address their issues and identify reasonable UAE commercial Solutions by building close relationships with Kingdom them. We recognise the importance of being easily accessible, of Saudi Arabia commercially aware and at the leading forefront of market developments.
We employ a diverse group of talented individuals from varied backgrounds and with differing perspectives. They are each familiar with international and local business customs and are capable of addressing issues in a collaborative manner. By having the ability to look at matters from every angle, we can apply our expertise confidently and decisively – providing integrated solutions to legal and commercial issues in the Middle East. Our innovative approach and superior level of expertise has been recognised by numerous Industry Awards, most recently: Al Tamimi & Company provides an ‘excellent Middle East Law Firm Corporate & Commercial of the Year Teams of the Year service from very knowledgeable,
very responsive and
creative’ lawyers. Corporate Counsel Middle Corporate Counsel Middle East Awards 2012 East Awards 2012
Legal 500, 2011 Full Service Law Firm Most Responsive Law of the Year-Iraq Firm of the Year-UAE
Our monthly Corporate International Asian – Mena Counsel Magazine Awards 2012 2012 magazine, Law Update, has been in publication for 20 years with over 250 Middle East & Africa Law Firm of the Year-UAE editions published. Law Firm of the Year To subscribe for your free copy, please email us at: [email protected]
British Legal Awards 2011 IFLR Middle East Awards, 2012 KEY CONTACTS
SENIOR PARTNER ARBITRATION LITIGATION - UAE Essam Al Tamimi Paul Turner Hussain Eisa [email protected] [email protected] [email protected] +971 4 364 1525 +971 4 364 1669 +971 4 364 1710
MANAGING PARTNER / DIFC BANKING & FINANCE LITIGATION - DIFC Husam Hourani Lynette Brown Rita Jaballah [email protected] [email protected] [email protected] +971 4 364 1531 +971 4 364 1622 +971 4 364 1526
DEPUTY MANAGING PARTNER CONSTRUCTION & ENGINEERING PROPERTY Hassan Arab Adam Balchin Lisa Dale [email protected] [email protected] [email protected] +971 4 364 1723 +971 4 364 1641 +971 4 364 1641
ABU DHABI COMMERCIAL ADVISORY TRANSPORT & INSURANCE Stephen Forster Marcus Wallman Yazan Al Saoudi [email protected] [email protected] [email protected] +971 2 403 8409 +971 4 364 1697 +971 4 364 1530
DUBAI WORLD TRADE CENTRE CORPORATE PROJECTS SPECIAL PROJECTS Bassem Zein El Dine Gary Watts Khalid Al Hamrani [email protected] [email protected] [email protected] +971 4 318 8406 +971 4 364 1590 +971 4 364 1587
JORDAN / IRAQ CORPORATE STRUCTURING Khaled Saqqaf Samer Qudah [email protected] [email protected] +962 6 577 7415 +971 4 318 8412
KINGDOM OF SAUDI ARABIA EMPLOYMENT Grahame Nelson Samir Kantaria [email protected] [email protected] +966 1 416 9666 +971 4 364 1652
KUWAIT HOSPITALITY Alex Saleh Tara Marlow [email protected] [email protected] +965 2 246 2253 +971 2 674 4537
SHARJAH INTELLECTUAL PROPERTY Zafer Sheikh Oghli Omar Obeidat [email protected] [email protected] +971 6 572 7255 +971 4 364 1506
QATAR LEGISLATION & DRAFTING Mohamed Khodeir Mohammed Ak Bik [email protected] [email protected] +974 4 457 2777 +971 2 403 8406 ESSAM AL TAMIMI HUSAM HOURANI HASSAN ARAB Senior Partner Managing Partner Deputy Managing Partner [email protected] Head of Banking & Finance Regional Head of Litigation [email protected] [email protected]
AHMED ALLOUZ AMMAR HAIKAL BASSEM ZEIN EL DINE Partner Dispute Resolution Partner Dispute Resolution [email protected] Head of DWTC Office [email protected] [email protected]
EL-AMEIR NOOR GARY WATTS HUSSAIN EISA SHIRI Partner Partner Partner Dispute Resolution Head of Corporate Commercial Head of Litigation [email protected] [email protected] [email protected]
JAMES MACCALLUM JASSIM M. ABDULLAH JODY GLENN WAUGH Partner Partner Partner Corporate Commercial Dispute Resolution Banking & Finance [email protected] [email protected] [email protected]
KHALID AL HAMRANI LISA DALE LYNETTE BROWN Partner Partner Partner Head of Special Projects Head of Property Banking & Finance [email protected] [email protected] [email protected]
MOHAMMED MARZOUQI MARIE-GRACE SEIF MOHAMMED AK BIK Partner Partner Partner Dispute Resolution Corporate Commercial Head of Legislation & [email protected] [email protected] Drafting [email protected] MARCUS WALLMAN OMAR OBEIDAT OMAR OMAR Partner PARTNERS AT AL TAMIMI & COMPANY AL TAMIMI AT PARTNERS Partner Partner Corporate Commercial Head of Intellectual Property Transport & Insurance [email protected] [email protected] [email protected]
SAMER QUDAH SAMIR KANTARIA RITA JABALLAH Partner Partner Partner Head of Corporate Head of Employment Dispute Resolution Structuring [email protected] [email protected] [email protected] YAZAN AL SAOUDI STEPHEN FORSTER TARA MARLOW Partner Partner Partner Head of Transport/Insurance Head of Abu Dhabi office Head of Hospitality [email protected] [email protected] [email protected]
ZAFER SHEIKH OGHLI Partner Head of Sharjah office [email protected]
ALEX SALEH ABDULLAH AL TAMIMI Partner Partner GLENN LOVELL Head of Kuwait office Head of Litigation, KSA Partner [email protected] [email protected] Banking & Finance, KSA [email protected]
HANI AL NADDAF HESHAM AL HOMOUD KHALED SAQQAF Partner Partner Partner Dispute Resolution Head of Corporate Head of Jordan & Iraq offices Qatar Commercial, KSA [email protected] [email protected] [email protected] MOHAMMED AL MARRI MOHAMED KHODEIR PHILIP KOTSIS Partner Partner Partner Dispute Resolution, Qatar Head of Qatar office Banking & Finance [email protected] [email protected] Kuwait [email protected]
YAQOUB AL MUNAYAE Partner Litigation, Kuwait [email protected] INTERNATIONAL OFFICES INTERNATIONAL Abu Dhabi I Amman I Baghdad I Doha I Dubai I Kuwait City I Riyadh I Sharjah