Build It and They Will Come
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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 Qatar UAE Kingdom of Saudi Arabia 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.