July / August 2012 | Issue 251
LAW UPDATE LATEST LEGAL NEWS AND DEVELOPMENTS BY AL TAMIMI & COMPANY
Recent Key Developments in UAE Employment Law
Qatar: Changing the way we build
Regulation of digital content in the UAE
Mediation in the UAE Regional Footprint
Al Tamimi & Company Offices 6
Iraq 8 10 Jordan Kuwait 11 Qatar
UAE Kingdom of Saudi Arabia
DUBAI - DIFC BAGHDAD, IRAQ AMMAN, JORDAN 6th Floor, Building 4 East Al Harthiya PO Box 18055 Dubai International Financial Centre PO Box No: 10014, Code 12921 Amman, Jordan Sheikh Zayed Road Baghdad, Iraq Zip 11195 PO Box 9275, Dubai, UAE T: +962 6 577 7415 T: +962 6 577 7415 T: +971 4 3641 641 F: +962 6 577 7425 F: +962 6 577 7425 F: +971 4 3641 777 [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 [email protected] F: +966 1 4169 555 DUBAI INTERNET CITY [email protected] Building No.5, G 08 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 * Al Tamimi & Company International Ltd. provides services in Kuwait through a joint venture with Yaqoub Al [email protected] 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 In Focus 4 Employment Department
Dispute Resolution 6 Dubai: Commercial Agency Termination
8 Dubai: The Court’s approach - Side Agreements and their enforceability
10 Qatar Trademarks Dispute
11 Jordan International conventions vs. Domestic Laws
Litigation 12 Mediation in the UAE
Technology, Media & Telecommunications 17 Regulation of digital content in the UAE – Part two 20 BYOD in the UAE Intellectual Property 23 Software Piracy in the UAE
News and Events 26 Employment 29 Recent Key Developments in UAE Employment Law Construction & Engineering 33 Qatar: Changing the way we build
Corporate Commercial 36 Share Buy Backs in Private Joint Stock Companies
Corporate Benefit: An analysis under the UAE legal 38 regime
The New Difc Markets Law Regime – A Catalyst for 40 NASDAQ Dubai? 42 Qatar: Keeping your hands clean
Banking & Finance 44 KUWAIT Pledge of Shares: Statutory Provisions vs. Private Arrangements 47 Cross Border Marketing into the DIFC 50 Legislative Update INTRODUCING OUR NEW PARTNERS ACROSS THE MIDDLE EAST
Al Tamimi & Company is pleased to announce the appointment of 5 new partners.
These new appointments further demonstrates our commitment to developing the finest legal talent in the Middle East, with each new partner having specialist legal skills and an ability to provide practical and innovative solutions for our clients based on sound business experience.
AMMAR HAIKAL TARA MARLOW DAVID YATES Dispute Resolution Head of Hospitality Head of TMT UAE UAE UAE [email protected] [email protected] [email protected]
GLENN LOVELL HESHAM AL HOMOUD Banking & Finance Head of Corporate KSA Commercial, KSA [email protected] [email protected]
2 Law Update IN THIS ISSUE
Welcome to this month’s edition of Law Update.
It’s been an extremely busy time for the firm over the past few weeks. Many of us expected things to slow down over Ramadan however the opposite has been true. It’s been interesting as this has traditionally been a quiet period for many businesses in the region. The increase in workflow can be attributed to a number of factors I suspect but I personally believe it’s has much to do with the fact that business is definitely back on the up which is a positive sign for all doing business in the Middle East.
I’m going to take the opportunity this month to announce our recent promotions and appointments.
Promoted to Partnership were Ammar Haykal (Litigation, UAE) Tara Marlow Editor: (Hospitality, UAE), David Yates (Technology, Media & Telecommunications, UAE), Angela Maglieri Hesham Al Hamoud (Corporate Commercial, KSA) and Graham Lovell (Corporate Commercial, KSA). These promotions bring the l Tamimi partnership number to 40 and Graphic Design: support our commitment to developing the finest legal talent in the region ultimately benefiting our clients. Waad Barghouthi I’m also pleased to announce the appointment of Adam Balchin as Head of Construction and Engineering. Adam will be based in Dubai however will be working For further information with our clients across the Middle East. Joining Adam is Justin Eade, Senior Associate on Law Update please in our Construction and Engineering practice who will be based in our Abu Dhabi contact: office. Adam and Justin bring over 40 years of combined experience to the firm and [email protected] are well-positioned to deal with the ongoing growth in the construction sector across Middle East.
You can read more about these appointments in this month’s newsletter along with the latest legal developments from across the region.
As we enter the Eid Al Fitr holiday, which I know many of us are looking forward to, I wish you and your families a happy and joyful break. It’s a time when many of us travel to be with family and friends around the world. Safe travels and I look forward to seeing you in September.
Husam Hourani Managing Partner
Law Update 3 THE EMPLOYMENT TEAM at Al Tamimi & Company Our employment practice consists of 10 lawyers and a paralegal making it the largest employment practice in the Middle East. We have built a reputation for providing the relevant, practical, commercially viable and cost effective legal advice as we guide our clients through the complex and changing employment environment in the region. Ensuring that our lawyers remain at the forefront of any changes in regional law and in clear and regular communication to our clients is key to our approach.
4 Law Update In Focus
The employment team (jointly with the TMT practice) recently won the Commercial Team of the Year award for 2012 at the Corporate Counsel Middle East Awards, hosted by Legal Week, for the work undertaken in advising Coca-Cola on an acquisition of stakes in Saudi Arabian company Aujan Industries. The team was also named as the In-House Counsel UAE Employment Team of the Year 2011.
The combined extensive experience of the team enables us to advise clients on all aspects of employment work, including transactional work, day to day employee relations advice and employment litigation.
Expertise Our expertise spans all aspects of employment law in the public and private sectors including:
POLICIES, PROCEDURES AND CONTRACTUAL DOCUMENTATION including service agreements, employment contracts, secondment arrangements and employee handbooks, for all categories of staff, including directors and senior executives
CORPORATE SUPPORT on employment aspects of acquisitions and disposals (both share and business transactions), including due diligence and related reports
BUSINESS REORGANISATIONS including redundancy programmes, changing terms and conditions, and transfer of employment
EMPLOYEE RELATIONS ISSUES including disciplinary, dismissal and grievance procedures, settlement negotiations and severance agreements
LITIGATION before the relevant labour authorities, labour and other civil courts, and in the DIFC courts, from termination and bonus claims, to protecting trade secrets, confidential information and business interests
For more information please contact:
SAMIR KANTARIA Partner Head of Employment [email protected] 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]
DUBAI: COMMERCIAL AGENCY
EL-AMEIR NOOR Zane Anani Partner [email protected] Dispute Resolution TERMINATION [email protected]
This commercial agency judgment the business was suspended or to Agent commenced legal proceedings addresses the issue of termination pay compensation amounting to AED against the Principal. and whether legislation can operate 150 million for losses that the Agent retrospectively. This unique decision would sustain as a consequence of the The Principal filed a counter claim arguing establishes a precedent in the UAE on termination of the agency agreement. that the agreement between the two such dispute as the case concerned the parties was a fixed term agreement which applicability of the former law 13 of 2006. The Agent argued that it had been the would expire on the 31 December of each Details of the judgment are set out below. commercial agent for the Principal year and to be renewed annually and pursuant to an agreement dated impliedly provided neither party notifies SUMMARY 24/1/1969 which was confirmed by an the other of its intention not to renew, 4 agreement dated 10/2/1983 whereby the months before the expiry date. In a case concerning a commercial Agent became the exclusive commercial agency, the Agent filed a claim before the agent for the principal in the Emirate of The Principal notified the Agent of Abu Dhabi Federal courts requesting an Abu Dhabi. Its agency agreement had its intention not to renew before the order to compel the Principal to continue also been registered with the Ministry 31 December 2008 and accordingly with the commercial agency which had of Economy. The Agent argued that its considered the agreement expired. been terminated by the Principal. The agency had been renewed annually until it Thereafter, the Principal requested Agent also claimed compensation of was terminated pursuant to a letter issued the Ministry of Economy to cancel the AED 1 million per month from the date by the Principal in 2008. As a result, the registration of the agency. However, the
6 Law Update Dispute Resolution
Ministry refused to do so without giving and cannot be construed as termination 8 provides that a commercial agency of any reason which led to the Principal filing (which meant that the Agent did not need a fixed term shall be considered expired the counter claim against both the Agent to go through the Commercial Agency upon expiry of the term unless the and the Ministry. The Principal requested Committee). parties agree to renew the term before the court to recognize that the agreement its expiry. The court then held that Law expired on the 31st December 2008 and COURT OF APPEAL 13 of 2006 applied with immediate effect an order to be sent to the Ministry to and confirmed that the contract expired cancel the registration. Law 13 of 2006 was repealed in 2010, as there had been no new agreement whereby the provisions in Law 18 of 1981 to renew the term. As a result, the court DETERMINING THE APPLICABLE were reinstated. However, the case which properly applied the law. LAW IN THIS COMMERCIAL AGENCY commenced in 2008 was still ongoing in DISPUTE 2010. In the Principal’s counterclaim, it The Court also held that the Principal was argued that if the courts looked at the had not abused its right to terminate the One of the main issues highlighted in this applicable law at the time the agreement agreement as it was not established that significant commercial agency case was was signed then the Agency law would the Principal exercised its right with the how to determine the applicable law in not even apply. Instead, the courts would intent to cause harm to the Agent or to this commercial agency dispute in view have to consider Sharia principles which achieve an illegal purpose. Furthermore, of the fact that the agency agreement/ were applicable in 1969. Applying Sharia it had notified the agent 10 months before letter of appointment was signed before law, there is no prohibition to refuse to the expiry date that it did not want to renew the Commercial Agency Law came into renew a contract. the agreement upon its expiry. existence and in light of the amendment of the Commercial Agency law by Law No The Principal’s second argument CONCLUSION 13 of 2006. The letter of appointment was highlighted that the courts should look at signed in 1969 and the UAE Agency Law the applicable law at the time the cause In this case, the Supreme Court was enacted in 1981 but was drastically of action arose. Accordingly, the decision addressed two important issues, one was amended by Law No 13 of 2006 which not to renew was taken in 2008 when the the principle of freedom of contract and for the first time allowed for termination of 2006 Law was still in force. the second was whether the application a fixed term agency without the need to of Law 13 of 2006 would contravene the establish the grounds for termination. In The Court of Appeal rejected the Agent’s general principle against retroactivity 1983, the parties amended the contract, main claim and accepted the Principal’s of laws. The Court held that Law 13 of the effect of the wording stated that the counter claim and confirmed that the 2006 applied to the cause of action agency agreement would be renewable contract was a fixed term agreement and with regards to the subject matter of the on a yearly basis, automatically renewable the applicable law was Law No 13 of 2006. law suit (the termination letter was sent unless notice of termination was given 4 in 2008). It should be noted that the months before the end of the year. FEDERAL SUPREME COURT principle held by the court in this matter applies only to cases in which the cause In February 2008, the Principal sent The Agent appealed before the Federal of action started during the validity of Law a letter to the Agent giving him notice Supreme Court, however, the Federal 13 of 2006 which was repealed in 2010. that they do not wish to continue with Supreme Court confirmed that it is well Any new matters brought after the 2006 the relationship. The notice was sent 10 established that laws can not be applied Law was repealed can not benefit from months before the end of the year. An retroactively unless such laws relate to the principles highlighted by this Supreme amendment to the 1981 Law in 2006 (Law procedural or public policy issues. Court decision as under the current law, 13 of 2006) provides that: “A commercial a principal can not terminate or refuse to agency of a limited term shall expire on The Federal Supreme Court also held renew an agreement even if the agreement the date of its expiry unless its parties that although the law under Article 8 of is a fixed term agreement. However, new agree to extend the same within a year the Commercial Agency Law of 1981 as disputes that occurred after the 2006 Law before such expiry.” amended by Law 13 of 2006 contains was repealed must be filed before the provisions to ensure the parties are Commercial Agencies Committee and The Agent argued that the applicable protected and safeguards against thereafter to the court. The Principal must law was Federal Law 18 of 1981 (on the termination without grounds, there is provide the Committee/court sufficient basis that the agency agreement was nothing under Article 8 that restricts the reasons to justify termination and cannot signed in 1969) and that the contract was parties freedom of contract and prevents rely on the expiry of the fixed term not fixed, (as a result, the Principal can’t them from terminating the contract agreement. terminate the agency agreement without expressly or impliedly. Under the general the permission of the Agent and the principles of UAE contract law, the parties grounds for termination must satisfy the may agree to terminate their contract Commercial Agency Committee) whereas expressly or impliedly and this shall be the the Principal argued that they had a fixed role of the trial court to determine. term agreement and Federal law 13 of The court also rejected the Agent’s 2006 applied. If the court decided that the argument that Law 13 of 2006 does not applicable law was 13 of 2006, exercising apply on the basis that this law regulates the right not to renew was a valid right procedural issues. It is clear that Article
Law Update 7 JudgmentDispute Resolution
DUBAI: THE COURT’S APPROACH-SIDE
AGREEMENTS AND EL-AMEIR NOOR Zane Anani Partner [email protected] Dispute Resolution THEIR ENFORCEABILITY [email protected]
A recent judgment issued by the Federal of First Instance and the court issued to incur. The Court of First Instance Supreme Court demonstrates a unique judgment in favour of the UAE partner refused to accept the UAE shareholder’s position on the issue of side agreements on the basis of the official documents request on the basis of articles 37, 47 and and the removal of a partner in a company. (the Memorandum of Association) which 63 of the Commercial Companies Code. The judgment sheds light on the validity confirmed that he was the owner of 51% These articles mandate that a numerical and enforceability of side agreements in of the shares of the company. The court majority is required and in these the context of a 49/51 UAE limited liability however rejected the request of the UAE circumstances, only one shareholder out company. The judgment also addressed partner to expel the Omani partner. of three requested the dismissal. This was a very important issue on whether the followed by the Court of Appeal however majority shareholder can request the FEDERAL COURT OF APPEAL this was reversed by the Federal Supreme court to remove any of his partners/ Court (as discussed below). shareholders and the grounds for such Both the UAE and Omani partners request. The case is discussed in detail appealed further against the judgment FEDERAL SUPREME COURT below. and the Court of Appeal rejected both appeals and upheld the lower judgment. The Federal Supreme Court decided that BACKGROUND what is legally required is the majority FEDERAL SUPREME COURT of shares rather than a majority of the A dispute arose in relation to a limited partners and accordingly a shareholder liability company in Abu Dhabi between Both parties appealed further to the owning a majority of the shares could a UAE shareholder (owning 51 % of the Federal Supreme Court. The Federal request the court to dismiss a partner shares), an Omani shareholder (owning Supreme Court ruling highlighted two based on sufficient reasons to justify the 24 % of the shares) and a US company important issues: request. As the UAE shareholder owned (owning 25 %). An action was filed 51% of the shares he could request the by the UAE shareholder requesting • Side agreements dismissal of the Omani entity on the basis confirmation of its entitlement to 51 % of of the following articles: the profits according to the shareholder’s The general principle in UAE Evidence agreement. The UAE shareholder also law is that a written contract can only be ARTICLE 677 OF THE CIVIL CODE requested the court to issue judgment for contradicted by written evidence, except PROVIDES: the withdrawal of the Omani shareholder where the opponent waives his right to on the basis that the Omani shareholder documentary evidence or where there is (1) It shall be permissible for a majority of had not been cooperative and caused an agreement to defraud the law. When the partners to apply for a judicial order loss to the company as a result of his lack the fraud exception to the general principle dismissing any partner if they adduce of cooperation. The Omani shareholder applies, the party against whom the fraud serious reasons justifying the dismissal. argued that the partners in the company was made can use all means of evidence signed a side agreement and entered including testimony of witnesses to prove (2) It shall likewise be permissible for any into an arrangement whereby the UAE that the official agreement is not genuine partner to apply for a judicial order that he partner would own 37.5 % of the shares, vis-à-vis the side agreement. cease to be a partner in the company if the Omani partner would also have 37.5 % the company is of defined duration, and and 25% was owned by the US Company. • Withdrawal of the Omani shareholder he provides reasonable grounds for such application. COURT OF FIRST INSTANCE The UAE shareholder requested the court to dismiss the Omani shareholder as a (3) In both of the foregoing events the The matter progressed before the Court result of the losses he caused the company provisions of Article 675 (2) shall apply to
Law Update 8 8 Law Update Dispute Resolution
the share of the dismissed or withdrawing The Federal Supreme Court, however, partner, and such share shall be assessed rejected the appeal filed by the UAE in accordance with its value on the date shareholder on the basis that there was the claim was brought. no evidence to support its request to remove the Omani shareholder. Article 675 (2) provides that ‘it shall likewise be permissible for an agreement The Supreme Court therefore overruled to be made to continue the company as the Court of Appeal judgment for the between the remainder of the partners second time and returned the case back if one of them dies or is placed under a for retrial to look into the documents legal restriction or becomes bankrupt and arguments raised by the Omani The Federal Supreme or withdraws, and in those events such shareholder in support of the side partner or his heirs shall be entitled only agreement. Court decided to his share in the assets of the company…’ In light of the above, the Federal Supreme As a result of this judgment the request that what is legally Court overruled the Court of Appeal of the UAE partner to expel the Omani judgment and remanded the case again partner became final and the only issue required is the to the Court of Appeal to look into the that remained to be addressed by the appeal and consider the directions of the Court of Appeal was the issue of the majority of shares Supreme Court. side agreement as argued by the Omani partner. rather than a majority THE COURT OF APPEAL THE COURT OF APPEAL JUDGMENT – of the partners Upon re-trial, the Court of Appeal gave the UPON RETRIAL Omani shareholder the opportunity to call and accordingly a witnesses to prove his side agreement. As a result, the Court of Appeal heard the However, the case was dismissed for lack case again (for the third time) in order to shareholder owning of evidence confirming ownership of the decide whether or not there are sufficient UAE partner for 51% of the shares. The documents to establish the existence of the a majority of the court also dismissed the appeal filed by side agreement/arrangement as argued the UAE partner to remove the Omani by the Omani partner. Upon reviewing all shares could request partner on the basis of lack of evidence to the documents submitted by the Omani support such request. partner, the court concluded that there the court to dismiss is sufficient evidence to establish the Both parties appealed again to the existence of the side agreement between a partner based on Supreme Court. The Omani shareholder the parties (and that the shares have been argued that it has submitted sufficient distributed on the basis of 37.5% to the sufficient reasons to evidence to establish the side agreement UAE and Omani partners and 25% to the but argued that the Court of Appeal US Company). neglected this issue. The UAE shareholder justify the request. filed its appeal insisting on its request to COMMENT remove the Omani shareholder. In this case, it was clear that the FEDERAL SUPREME COURT shareholders of the company could continue the company’s business on the The Federal Supreme Court confirmed basis of the side agreement. In the event that the Court of Appeal neglected to that one of the parties wanted to dissolve look at evidence confirming the Omani’s the company, a separate court judgment shareholding. The Court of Appeal would be needed to dissolve the company did not address the side agreement on the basis that the company lacked the which contains a clause (Article 20 required legal corporate structure as the of the contract) Article 20 of the side UAE partner’s shares had been declared agreement states that “Each of the parties to be less than 51%, however the partners acknowledges that they hold shares may need to decide whether or not their equally in the company.” The profits and interest are better served by living with losses of the firm were distributed equally the side agreement and continue with the under Clause 20. This is in addition to company or dissolve it. various other documents which prove that the profits and losses were distributed equally between the two companies and not based on the official 51/49% shareholding of the UAE Company.
LawLaw Update Update 9 9 JudgmentDispute Resolution Dispute Resolution
QATAR TRADEMARKS
AHMED EL AMOURY DISPUTE Qatar [email protected]
Al Tamimi’s Qatar Litigation team RULING OF THE COURT OF FIRST trademark being the symbol, would successfully won a lawsuit brought on INSTANCE cause confusion to the consumer as behalf a Swiss watchmaker recently, to the source of the trademark. following a dispute which arose from the The Claimant contested the decision of trademark registration process where the Registrar before the Court of First In reaching its decision to uphold that the Swiss watchmaker was prevented Instance based on the provisions of of the Registrar, the Court also took into from registering their trademark by a Article 6(5) of the Paris Convention (of account the fact that the Defendant had rival high end watchmaker for trademark which Qatar is a signatory state) and registered their trademark in Qatar before infringement. Article 8 of Qatar’s Trademark Law No 9 the Claimant did. 2002. BACKGROUND TO THE CASE JUDGMENT OF THE COURT OF The Claimant stated that the trademark is APPEAL The Claimant (a Swiss watchmaker) was differed from that of the Defendant’s for the owner of a trademark which had the following reasons: The Claimant appealed against the been registered in the office of origin, Judgement before the Court of Appeal Switzerland, with the World Intellectual • Pursuant to Article 8 (1) of the based on the aforementioned reasons Property Organisation (WIPO) and Trademark Law No 9 of 2002 certain and argued that the Court of Cassation internationally registered as well. The symbols, including the contested one, had issued a principle which had stated Claimant lodged an application to register are generic symbols which cannot be that in assessing the degree of similarity their trademark in Qatar, which consisted registered as a trademark; between two trademarks, the trademark of a semi-figurative trademark featuring should be examined in its entirety and not the company name and a symbol, with • The two trademarks were different solely on a particular feature or aspect. the Ministry of Business and Trade’s both in size and shape; and, Industrial Property Rights Office. The The Court of Appeal overruled the application was accepted and as part of • The two trademarks differ in the findings of the Court of First Instance and the examination period was published overall appearance and are distinct ruled in favour of the Claimant. In deciding for opposition purposes in the monthly from one another. the case, the Court of Appeal applied the Official Gazette. balancing test , where it viewed the overall The Court of First Instance rejected the aspects of the trademark and concluded An objection to the registered trademark claim on the following grounds: that the trademarks were dissimilar and was filed with the Trademark’s Registrar can be distinguished by the consumer; by the Defendant on the grounds that • The trademarks were similar in and that the symbol in question was the Claimant’s trademark shared an appearance; generic and the Defendant could not be identical symbol to theirs, namely. The afforded exclusivity of its use. The Court Registrar issued a decision upholding the • The symbol in question was identical of Appeal ruled that the Claimant be objection made by the Defendant and the to that of the Claimant; and, allowed to proceed with the registration of registration process was halted. the trademark in Qatar. • The main distinguishing feature of the
10 Law Update Dispute Resolution
JORDAN INTERNATIONAL CONVENTIONS VS. SAMER AL ZURIEKAT Jordan [email protected] DOMESTIC LAWS
In maritime disputes, focus is often constitutes an arbitration agreement in No. 12 of 1972, which stipulates that placed on the issue of the applicability of writing, provided that the reference (to “notwithstanding any other law, any arbitration clauses which refer disputes such clause) is clear with regards to that clause or agreement that ousts the to international institutions, particularly clause as a part of the contract” Jordanian court’s jurisdiction with regards when domestic laws clearly state that the to disputes arising in relation to shipping same shall not be valid. In Jordan, Article • As a result, the Court of First Instance and maritime transportation documents 215 of the Jordanian Maritime Trade Law ruled in favor of the Defendant and shall be nullified”, the Court of Cassation No. 12 of 1972 (the “Maritime Trade Law”) ordered the dismissal of the case. In decided that this provision conflicts with stipulates that “notwithstanding any other addition, it ordered that the Claimant pay the United Nations Convention on the law, any clause or agreement that ousts the fees and interests incurred by the Carriage of Goods by Sea (the Hamburg the Jordanian court’s jurisdiction with Defendant. Rules) (the “UN Convention”) of 1978. regards to disputes arising in relation to In accordance with Article 22 of this UN shipping and maritime transportation • The Defendant challenged the Court of Convention, it is permissible for parties of documents shall be nullified”. In the case First Instance’s decision and then to the a contract to refer any dispute, relating to outlined below, the Court of Cassation Court of Cassation. the shipment of products, to international settled the matter by referring to arbitration through the use of an arbitration international conventions that address the THE JUDGMENT clause or an agreement. As such, and same issue. as international conventions supersede In the Court of Cassation’s decision, the domestic laws, the Court of Cassation FACTS OF THE CASE Court first highlighted the issue of the decided in favor of the Defendant and Claimant subrogating the Insured. This is ordered the rescinding of the contested • In the bill of lading of a shipment, there as if the Claimants were not a party to the decision. was an arbitration clause that referred any Bill of Lading, and because the insurance dispute to an international arbitral court policy in question did not contain an CONCLUSION excluding the courts’ jurisdiction in any arbitration clause. Consequently, the other country. Claimants could not make a claim In view of the foregoing, if a dispute arises except if they act in lieu of the Insured. in connection with a maritime or shipping • The Claimants (an insurance company In the Court of Cassation’s decision, document which contains an arbitration acting in subrogation of the insured) it was stipulated that the Claimant clause referring the said dispute to an claimed an amount of 21068.775 subrogated the Insured in the contract international institution and in view of Jordanian Dinars (JOD), in addition to with the Defendants in accordance with the fact that Jordan is a party to the UN the legal fees, expenses, interest, and Article 926 of the Jordanian Civil Code. Convention supersedes Article 215 of the lawyer’s fees for the loss of a part of the Both of the conditions specified by the Jordanian Maritime Trade Law, the parties shipment. aforementioned Article were fulfilled in in question are therefore allowed to refer this case by virtue of the following: to international authorities excluding • The Defendant requested that the case any authority in any other country. It is be dismissed on account of the arbitration 1. Because the Claimant had paid important to note, however, that this UN clause in the Bill of Lading. They argued the amount of the insurance to the Convention is with respect to arbitration this case pursuant to Article 10(b) of the Insured. clauses only; as such, the judgment Jordanian Arbitration Law No. 31 of 2001 2. For the fact of the existence of a tort. issued by the Court of Cassation does which stipulates that: not affect the fact that Article 215 of the Additionally, and with respect to the Maritime Trade Law nullifies any provision “The reference in a contract to the Claimants argument that the arbitration in an agreement ousting the Jordanian provisions of a standard contract or to clause in the insurance policy did not courts’ jurisdiction when dealing with a an international convention or any other apply in accordance with Article 215 dispute. document containing an arbitration clause of the Jordanian Maritime Trade Law
Law Update 11 JudgmentLitigation
Mediation in the UAE
Mediation is the catalyst which puts the thought of settlement into the minds of parties in dispute. It is a process which allows the parties to focus on the commercial aspects of their dispute rather than the legal issues and it can be used in all disputed matters, subject to a few exceptions. In recent years the use of ABIGAIL POWELL Dispute Resolution mediation has increased exponentially. It is a concept [email protected] which is widely considered and used in common law jurisdictions and more recently within the civil law jurisdiction of the UAE. Litigation
Whilst the benefits of Alternative Dispute as a pre-trial process in all jurisdictions, out, which they are free to do at any time. Resolution (“ADR”) are recognised whether for fear of costs consequences or All parties must therefore agree to enter and explored within this jurisdiction, otherwise. The true benefit of mediation into the process with the right mindset, the advantages of the mediation can will only be recognised if the attitudes of although in some jurisdictions this may sometimes be overlooked; possibly due those in the position to use the process, only be after judicial recommendation with to lack of understanding of the process or indeed advise on it, are focused on the associated risks of cost sanctions against which can lead to negative attitudes. positive aspects of mediation rather then the party which refused to mediate. The mediation process is certainly being the draconian idea that settlement is a explored and implemented favourably compromise beneficial only to one party. In a jurisdiction where the parties do not in the UAE, however it can take time for have to consider cost consequences, the attitudes to change in order accept a In order to make an informed decision idea of mediation as a pre-trial option settlement concept which may previously whether or not to mediate a dispute, it is may not even enter into the equation. not have been considered. important to understand what the process For the process to become widely involves. Mediation is a voluntary and accepted therefore, it is important that the The introduction of the Civil Procedure confidential dispute resolution process, advantages of mediation are promoted so Rules (CPR) in England and Wales meant which is non binding to the point of that any misconceived negativity can be that mediation became an integral part of agreement. During mediation a neutral disregarded. the pre-trial process, a process which any third party mediator helps the parties to party to litigation cannot afford to ignore attempt to reach a settlement, negotiated Confidential dispute resolution process for fear of costs consequences. Parties by the parties. who refuse to enter into mediation as Mediation is both “without prejudice” a pre-trial process without a valid and A voluntary process (under the law of England and Wales) reasonable reason will be penalised by and confidential. This means that the costs penalties imposed by the judge. Mediation is a voluntary process. It discussion and/or any documents is therefore not possible without full submitted during the process cannot There are many advocates who would participation and commitment from all be used against the party who made argue that mediation should be considered parties, and it will cease if one party walks or produced them in subsequent proceedings. A mediator is bound by a duty of confidentiality to each party both during and after the mediation. This means that the position of either party is not compromised in any way if the mediation fails and litigation or some other dispute resolution route is pursued. Should mediation break down a party is free to formalise an offer made during mediation within any subsequent court procedural process or even attempt mediation again at a later stage.
The terms of any settlement agreed in mediation are confidential. However, the parties are free to agree to an alternative arrangement. For example a party may insist on a public apology or vindication and this can form part of the mediated settlement, if agreeable to the other party.
Non binding to the point of agreement
The mediation process does not bind the parties to reaching settlement. This can only come about when the parties have given authority to settle. The mediator JudgmentLitigation
will not make any binding determination decisions and answerable for the terms of or order and if the parties do not wish any settlement that may be agreed. to agree a settlement at the end of the mediation then the matter will simply move Parties can run their mediation in whatever onto the next stage of legal proceedings. manner they chose. There is, however, a developed classic mediation model which If and when a settlement has been recommends that the parties open the agreed by the parties, the terms of the mediation with a joint session, whereby settlement will be written into a binding the mediator explains the process and and enforceable contract. answers any questions. During the The mediator’s opening joint session each party makes The neutral third party mediator an opening statement and thereafter role is to facilitate the mediator separates the parties into The mediator must be a truly neutral private rooms and spends time with each person having no association with either of party in turn (known as private sessions). the discussions the parties or any interest in the outcome. During the private sessions the mediator It is essential that all parties trust and will discuss the dispute, explore and between the parties, entrust authority to the mediator. Should challenge the required aims and assess any party withdraw that authority, the the attitude of each party towards allow them to mediation will come to an end. Likewise, settlement. The private sessions are an should trust in the mediator be broken for imperative part of the mediation process any reason, it is unlikely that a settlement as they give the parties opportunity to talk explore options will be reached. about the dispute from their point of view, vent feelings, say what they want, and which they may The mediator’s role is to facilitate the generally ‘clear the air’. discussions between the parties, allow not have previously them to explore options which they may Mediation aims to resolve a dispute by not have previously considered and focus maximizing all parties’ interests and considered and the parties on their aims and requirements achieving a “win-win” outcome so that for settlement. The mediator is not there to the parties do not feel compromised or judge, give opinions or impose a decision. hard done by. The parties must agree the focus the parties The mediator creates the conditions for terms of the settlement themselves and dialogue between the parties using a hence the results achieved are such that on their aims and non-adversarial, non-partisan approach. may never be considered or imposed by The final outcome of mediation is agreed a court or tribunal. A judge or a tribunal requirements for by the parties, not the mediator. will simply review available evidence and apply the applicable legislation to a Mediation is more likely to succeed when dispute, whereas during mediation the settlement. the mediator is properly trained and parties must agree their own terms of the qualified. There are various respected settlement and this allows for ingenuity organisations which provide ADR and extra-legal solutions. professionals and services globally. These include the Centre for Effective THE STRENGTH OF THE MEDIATION Dispute Resolution (“CEDR”), the Royal PROCESS Institute of Chartered Surveyors (“RICS”) and the ADR Group to name a few. The Mediation addresses the underlying three mentioned organisations provide causes of conflict or tension. Mediators mediation training accredited by the are skilled in investigating the potential Civil Mediation Council (“CMC”) which for joint gains in resolving disputes. This accredits mediators and mediation bodies is one of the most important tools in in England and Wales. CMC accreditation unlocking the potential for settlement. By is recognised throughout the EU, the gaining a birds-eye view of the conflict, Commonwealth and in most nations of and exploring the respective needs and the world. priorities of the parties, the mediator is usually able to encourage the parties to A settlement, negotiated by the parties consider mutual gains.
The process of mediation is completely Mediation enables the parties to consider flexible and will allow the parties to remain and identify what value there is in avoiding in control of both cost and outcome while legal proceedings, where the arguments being guided by the neutral mediator. The will focus on the merits of the case, and parties remain responsible for their own look to extra-legal solutions which a
14 Law Update Litigation
court or tribunal could not provide. This running for a long time the parties are free If a party believes that his case inevitably focuses the minds of the parties to consider the possibility of recourse to has merit, when in fact it does not, on the reality of the dispute and any mediation in the interests of achieving a the legal adviser must be able to potentially negative outcome, rather then speedy resolution to an ongoing matter. deal with this and manage his the legal arguments. This is another advantage of the flexible client’s expectations effectively. In process. reality, there will always be difficult When considering mediation one must parties who believe that they have bear in mind the objectives of the process and consider the following:
• You may have a strong case, actual or perceived, but you need to consider the value of your wasted time, your irrecoverable costs (especially in the UAE Courts, even if you win your case), the time of any witnesses, employees or co-workers in preparing for litigation and attending any court/ tribunal hearings; the impact of such time loss on your business or employment; the impact of any publicity; the proportionality of cost and time against your chances of recovering any damages if the matter were to proceed to court or arbitration.
• You may have a weak case which should not be tested on the merits.
• There may be an ongoing commercial, social or economic relationship between the parties which may be ruined by years of legal disputing.
WHEN IS MEDIATION NOT SUITABLE? a “right to justice”, even though Mediation has a very they technically have no case to high success rate. It is a Mediation is unlikely to work unless answer. all parties genuinely wish to reach quick and relatively cheap agreement, or if one party has little 3. You need a remedy which process when compared incentive to enter into the process. It is not mediation cannot achieve, namely suitable when: an injunction or other mandatory or to litigation or arbitration. prohibitory order of the court 1. A legal decision is needed The average mediation will last one or two because an area of law is unclear These are remedies which will days and therefore the process enables or untested need a court order and hence parties to swiftly finalise a dispute and could not be agreed by way of move on. In the minority of cases that do This is less likely to be a mediation. not settle, the mediation process helps consideration in the UAE civil to narrow the number of disputed issues law jurisdiction which does RECENT DEVELOPMENTS IN THE UAE between the parties, often saving costs in not recognise the doctrine of preparing for litigation. Involvement in the stare decisis, although Court The Centre for Amicable Settlement of mediation process is a wise investment, of Cassation judgments are Disputes likely to save both time and money and considered as guidance and are providing the opportunity for rebuilding binding on the lower courts. His Highness Sheikh Mohammed bin trust where relationships have broken Rashid Al Maktoum, Vice-President and down. 2. There is no bona fide dispute, i.e. Prime Minister of the UAE and Ruler of one side’s position is devoid of Dubai, created the Centre for Amicable Mediation can be attempted at any stage merit Settlement of Disputes in Dubai under of a dispute. If a dispute has already been UAE Law Number 16 of 2009. The
Law Update 15 JudgmentLitigation
publication of this law demonstrates that The DIFC Court will not compel parties to train and prepare members of the the Government wishes to encourage and to engage in justice by reconciliation proposed RICS UAE President’s Panel increase the use of mediation in Dubai. as a prerequisite to litigation (although of Mediators in time for its official launch Part 38.24 of the RDC gives the court at the joint-hosted RICS and Dubai Land The Centre deals with amicable discretion, when assessing costs, to Department Conference in Dubai on 1 settlement of civil and commercial matters consider efforts made in trying to resolve October 2012. The launch of the RICS excluding certain categories of case and the dispute). The court will however, if Mediation Panel demonstrates growth in those involving Government bodies. The appropriate, invite the parties to consider the demand for mediation in the region. settlement of a dispute before the Centre justice by reconciliation at the Case is reviewed by a number of mediators Management Conference, and may SUMMARY under direct supervision of the concerned adjourn the case for a specified period of judge and based on relevant laws and time to encourage and enable the parties The UAE has made some impressive regulations. to use justice by reconciliation. recent progress in implementing various forms of mediation. As the process DUBAI INTERNATIONAL FINANCIAL In addition, the DIFC-LCIA Arbitration becomes more readily available and CENTRE (DIFC) AND MEDIATION Centre, established in February 2008, accepted in the jurisdiction, it is hoped that it will be more widely used. Recognised mediation service providers are promoting mediation within the jurisdiction with very positive effects. As continued professional training is provided in the UAE it is likely that the process will gain further momentum and the popularity of the process will increase.
Mediation is a positive, forward-thinking way of resolving disputes using a neutral third party. Parties should be encouraged to use mediation as a pre-trial process, where possible, as the process is an excellent way to assist those in dispute to find a resolution, before costs start to escalate and the commercial relationship is destroyed forever.
The DIFC Courts have their own rules offers mediation as well as arbitration regarding ADR, found in Part 27 of the services to users of the Centre under the Rules of the DIFC Court (“RDC”). While rules contained in the LCIA mediation emphasising its primary role as a forum procedure. for deciding civil and commercial cases, the DIFC Court encourages parties to RICS UAE MEDIATION PANEL consider the use of justice by reconciliation (such as, but not confined to, mediation The RICS has been actively promoting and conciliation) as an alternative means its mediation services in the UAE with of resolving disputes or, particular issues great success. It has recently conducted within a dispute. a further training course in Dubai in order
16 Law Update Technology, Media & Telecommunications
Regulation of digital content in the UAE – ANITA SIASSIOS SANA SALEEM TMT TMT [email protected] [email protected] Part two
In the United Arab Emirates, digital media content, like traditional media content, is regulated. Given the pervasive nature of social media, and the substantial increase in the use of social networking sites, we outline the legal landscape and some of the key issues that affect users of social media in the UAE, whether in a personal or corporate capacity.
The increased popularity of social networking sites (social media) in the UAE brings with it the potential to create great economic value. The Arab Media Outlook 2011-2015 (a report presenting an overview of the regional media industry) showed that social media has grown significantly across the Arab world, with over 90 per cent of all internet users in the UAE using social networking sites like Facebook. Additionally, the frequency of use has significantly increased in the past couple of years with over 65 per cent of these users visiting social networks more than once a day.
Users of social media are not limited to the “i-generation” of individual bloggers, Facebook users and Twitter users. Instead, its popularity and potential audience-reach has influenced corporate entities to adopt social media as part of their day-to-day marketing campaigns. While the corporate use of social media can help boost business growth, it can also bring with it increased risks, including targeted attacks on personal information, software attacks, and risks to reputation. These concerns are not limited to corporate entities, and can also affect non-corporate entities and individual users of social media.
LAWS REGULATING SOCIAL MEDIA IN THE UAE
As laid out in the “Regulation of digital content in the UAE – Part One”, published in the last issue of Law Update, there are various laws and regulations that apply to traditional media. These laws also apply to digital media, and may be applicable in social media contexts. We summarize these key laws again below:
1. Federal Law No 15 for 1980 concerning Publications and Publishing (Publications Law) – The Publications Law governs both traditional media and digital media content. It covers all forms of published content and sets out matters that may not be published, which include matters related to religion and politics, national security, individual rights, and public morals.
2. Federal Law No 2 of 2006 on the Prevention of Information Technology Crimes (Cyber-Crime Law) - The Federal Government has also enacted the Cyber-Crime Law which prohibits any intentional act that abolishes, destroys, or reveals secrets, or that results in the republication of personal information. Social media and networking sites fall directly within the purview of the Cyber-Crime Law, which aims to deter abuses of technology.
Law Update 17 Technology, Media & Telecommunications
The Telecommunications Regulatory Authority (TRA),tasked with regulating digital content, prohibits activities encompassed in the Publications Law and the Cyber-Crime Law. The TRA monitors online content available to users in the UAE and prohibits content for hacking and malicious codes, internet content providing unlicensed VoIP services and other illegal internet content. Licensed service providers (e.g. Du and Etisalat) can also block online content if required and subsequent to complaints of abuse or defamation, official authorities can take legal action against those running the sites after verifying the validity and seriousness of the complaint.
Once finalized and enacted, the “Media Law” that was made available for public comment in 2009 will also apply to social media and social networking sites. It has still not been finalized or enacted as at the date of writing of this article.
USE OF SOCIAL MEDIA SITES: THINGS TO CONSIDER
Social media sites were originally used as spaces for individuals to share their lives, although, more recently, corporate entities have begun to use this medium to promote their businesses and communicate with customers. Either way, users of social media (whether corporate or individual) may encounter any one or more of the issues below at any given time:
SECURITY- It is important to be aware that the use of social media has the potential to affect the integrity of the users’ IT security. The use of social networking sites can expose the system to viruses and malware, so appropriate IT security policies should be implemented. In the context of a corporate setting, employees should be made aware of the risks of social media so that they do not disclose information that could leave the company’s IT systems vulnerable to attack. Furthermore, agreements with software vendors should be reviewed in order to make sure they are suitable for the task.
18 Law Update Technology, Media & Telecommunications
PRIVACY- The use of social media by individuals and companies also raises privacy concerns. For example, companies often use Facebook and Twitter to stay connected with clients and customers. There have been instances where the individuals responsible for these networking sites accidently post confidential or inappropriate content. It is important for companies who use this medium to monitor the content put online on their behalf, and to issue guidelines so as to ensure that such incidents do not occur. Where such services are provided by a third party service provider, a clear service agreement incorporating penalties may provide some comfort – although where the damage is reputational or involves the leakage of customer data, this comfort may be far outweighed by the damage.
The rapid THEFT– Seemingly innocent use of social media can also expose individuals and companies to theft, corporate espionage and fraud. Several security companies in the UAE carry out “penetration tests” that are designed to test a company’s defenses against cybercrime. (One example, of which increase in the we are aware, uses fake Facebook profiles to test the ability of employees to resist scams on social networking sites.) Fake social network profiles can (amongst other risks) expose users to use of social theft of information, and this can have devastating consequences for companies that rely heavily on confidentiality for their competitive edge. Users should take care to use all social media sites media within conscientiously and companies should educate their employees of the potential hazards. the UAE makes TERMS AND CONDITIONS- Users should also be aware that Facebook, Twitter, and such it an area other networking sites have their own terms and conditions that must be followed, particularly as they relate to advertising on their platforms. In addition to complying with the terms of use of of growing these sites users must ensure compliance with all applicable laws, regulations and guidelines of the country where the advertisements are being promoted. Companies and individual users concern and should review the Terms and Conditions of Use and follow those requirements to avoid having their accounts deleted from these platforms, incurring wasted costs related to advertising, and interest. Its potential legal liability. development DEFAMATION- Care must also be taken to ensure that no defamatory content is posted onto brings these sites because this could lead to civil or criminal liability. Such content could include posting secret information about others without their consent (even if such information is true), or posting new legal photographs without the consent of the subject of the photograph. challenges Posting defamatory comments about co-workers can have employment repercussions. There is scope for employers to dismiss employees for misconduct as a result of indiscreet social network making it a “hot postings about the employer, colleagues, or their own activities. In recent months, a number of Facebook and Twitter accounts in the UAE have been closed down topic”. by authorities subsequent to complaints of abuse and defamation.
The rapid increase in the use of social media within the UAE makes it an area of growing concern and interest. Its development brings new legal challenges making it a “hot topic”. Users of social media should educate themselves in order to ensure that they are in compliance with all the relevant laws and regulations so that they may benefit by optimally harnessing the strength of this medium.
Al Tamimi & Company’s Technology, Media & Telecommunications team regularly handles issues arising from the use of social media in a business context.
For further information please contact David Yates at [email protected], Anita Siassios at [email protected] or Sana Saleem at [email protected]
Law Update 19 Technology, Media & Telecommunications Intellectual Property
BYOD in the UAE SANA SALEEM TMT [email protected]
Mobile devices, like smartphones and be addressed before companies consider Operating Systems tablet computers, ensure that users have making the switch. the most up-to-date information and Smart phones come in many shapes, communication capabilities available BYOD: THINGS TO KEEP IN MIND forms and operating systems. Companies at all times. The benefit of these widely should decide how much they can invest available and advanced mobile devices While an increase in employee satisfaction in making the proper modifications to is that they can be used for a variety of and productivity is a valid consideration, connect each employee’s personal device activities such as reading digitized books, there are several challenges to to the corporate network. Moreover, given keeping reminders, and keeping up-to- implementing a BYOD policy: the variety of IT issues users are likely date with the news. They can also allow to encounter, corporate users must also access to work networks and emails, and Security decide who is responsible for the device’s can be used by companies to encourage technical support before considering a employees to use more of their time away It is very dangerous for a device that is BYOD policy. If BYOD means that the IT from the office to work. loaded with company data and emails to team will have to be familiar with a range fall into the wrong hands. Most mobile of devices, there will be a cost impact. In the consumerization of IT, bring your devices come with basic security features own device (“BYOD”) refers to the use of like passwords and locks. However, many Malware/Viruses personal devices, such as smartphones, users do not enable these, and when laptops and PDAs, for work purposes, they do they use very weak passwords. A The often indiscriminate use of personal including connectivity on the corporate device’s inbuilt security features may not smartphones, laptops and PDAs to network. In the United Arab Emirates be entirely reliable. Companies planning access applications, documents and alone, consumers spend three times on allowing BYOD must first educate their social networking sites can leave personal more than enterprises on IT - smartphone employees on best practices for securing devices open to a variety of viruses and penetration in the UAE is 47%; higher than their devices. The use of complex malware. Corporate users are also more the US which stands at 40%. Employee passwords and should be a consideration prone to targeted attacks using unique productivity can be increased by making when giving corporate users access to malware designed by hackers to gather advantage of the popularity of mobile business applications. sensitive information. Companies should devices. Although cost savings can be put in place an acceptable usage policy realized by companies exploring this in order to ensure that employees are not avenue there are IT issues that should unwittingly disclosing sensitive corporate
20 Law Update Technology, Media & Telecommunications
information and documents when using personal information about the security of sensitive material devices on the company’s network. on personal devices and provide guidance on the kinds of policies that would aid in data protection. Before implementing a BYOD policy: To ensure data security, companies should set • Develop an accurate picture of the nature up a secure remote access procedure that details of the data and classify it in order to the technical steps users must take to connect determine its sensitivity level. their devices securely to any company-connected network. Furthermore, a “digital certificate” (i.e. a • Determine where the corporate data is means to verify that a user sending a message is stored (i.e. which systems and devices it who he or she claims to be) should be installed is stored in, and what back-up procedures on every device so that e-mail and calendaring and disaster recovery policies are in place). functions can be authenticated between the device and the company server. • Review how and where employees, contractors and visitors to the company The HR department is instrumental to the can access, copy, and transmit data. development of a new BYOD policy and must make sure that it integrates all existing policies without • Institute a workable usage policy and code contradicting the same. It determines the penalties of conduct for how users should use their for not adhering to the policy and ensures that devices. the policy and penalties are in line with company standards. Competent legal assistance should be • Install security on all computers and mobile sought to draft such policies and procedures to devices owned by the company, and work ensure that they are suited to the task. with employees to ensure that they have installed up-to-date security software on Adapting to the changing technology landscape their devices. and industry demand is a routine exercise for all businesses but it is important to undertake such SETTING UP AND ENFORCING A BYOD POLICY changes in an informed manner so as to avoid security risks and needless cost. Companies that allow or are considering allowing employees to use their own mobile devices at Al Tamimi & Company’s Technology, Media & work should implement a BYOD security policy Telecommunications team, led by David Yates, that clearly outlines the company’s position and regularly handles issues arising from the impact of governance policy to help IT better manage technological developments in a business context. these devices and ensure network security is not compromised by employees using their own Our Employment and Incentives team, led by devices at work. Samir Kantaria, regularly advises on HR policies, and legal compliance in the context of employment Two departments that should be consulted relations. For further information about BYOD regarding the development of a BYOD policy are and its impact in an employment context, please the IT and HR departments. An IT department contact David Yates ([email protected]) or has the technical expertise to provide information Samir Kantaria ([email protected]) on the abilities and limitations of devices and give insight on its capacity to support and handle The writer wishes to thank Ahsan Hasnani for his logistic challenges presented by the use of a range contribution to this article. of devices. Further, an IT department can provide
Law Update 21 Intellectual Property
MANSOUR NEW EMIRATI CARTOON CHARACTER
A first of its kind cartoon character “Mansour” was launched in Abu Dhabi last month. The launch occurred during the Summer in Abu Dhabi festival at Abu Dhabi National Exhibition Centre, and was supported by Mubadala Development Company.
Al Tamimi & Company advised on the Intellectual Property assets created by Mansour cartoon. Omar Obeidat, Head of the Intellectual Property Department, met with Mansour character during the launch Mansour, a young Emarati boy, is a character designed to address important learning stages of UAE Children and also educate them about the development and growth of their country in order to inspire young boys and girls build their country’s future.
Mansour is considered to be the first locally produced cartoon that combines the first local production applying world class high quality animation techniques and an Arabic theme that builds ties with the national identify. The cartoon is projected to be aired post Ramadan and Eid in September of this year and will run episodes year round.
OMAR OBEIDAT Partner Head of Intellectual Property [email protected]
22 Law Update Intellectual Property
Software Piracy in the UAE WALDO STEYN TMT [email protected] 2011 BSA GLOBAL SOFTWARE PIRACY STUDY During May 2012, the Business Software Alliance (BSA), described as “the voice of the global commercial software industry”, published the 2011 BSA Global Software Piracy Study. The study, conducted in partnership with IDC and Ipsos Public Affairs is based on a survey of 14,700 computer users in 33 countries, including computer users in the UAE.
REGION 2011 PIRACY RATE 2011 COMMERCIAL VALUE OF UNLICENSED SOFTWARE IN US$ MILLION
Middle East & Africa 58% 4,159
North America 19% 10,958
Western Europe 32% 13,749
Central & Eastern Europe 62% 6,133
Asia Pacific 60% 20,998
Latin America 61% 7,459
Law Update 23 Intellectual Property
The Federal Government in the UAE clearly appreciates the impact that software piracy (and counterfeiting in general) has on the economy as illustrated by the 2011 circular issued by the Ministry of Economy entitled “Anti-Piracy Circular 2011”. The circular, directed at distributors, resellers and media related retailers reiterated the Ministry of Economy’s commitment to combat piracy of copyrights and the intention of the Ministry to take action against entities offering for sale and selling unlicensed software. In particular the Ministry requested the relevant parties to:
• Refrain from dealing with counterfeit and / or unlicensed software, coded cards, loose certificates of authenticity and electronic products without prior permission from the copyright holder.
• Refrain from illegally copying and downloading of software.
• Maintain contacts, licenses and purchase invoices of all software In the study various data sources were an impact study entitled The Economic and computers offered for sale or used to determine the total number of Benefits of Reducing Software Piracy. sold. licensed and unlicensed software units The analysis conducted by IDC showed installed in a country and by expressing that every one US dollar spent in • Ensure that all software installed the unlicensed software units as a respect of licensed software, generates on computers brought for repair, percentage of the total software units approximately US$1.25 in additional maintenance or other service by installed in a country, the “piracy rate” revenue for software services companies. customers is genuine and licensed applicable in the relevant country was It is well known that software piracy and that the owner of the computer determined. According to the study, directly results in lost opportunities for has a license for all software the global piracy rate for PC software is software vendors, distributors and service prior to receiving the computer approximately 42% which is valued at providers, but the extent and value of hardware for repair, maintenance US$63.4 billion. The study also breaks those lost opportunities are perhaps not or other service; otherwise the results down to a regional level, which are that clearly understood. reseller or maintenance centers set out below: will be liable for any copyright In the 2010 study, IDC determined that violation, unless they provide the The UAE has the third lowest piracy in the 42 countries surveyed a total of customer with a lawfully licenced rate in the Middle East Africa region at US$45 billion of unlicensed software was solution or refuse to perform any 37%, which compares favourably with in use. In the report it is stated that the service in this regard. the piracy rates in other GCC countries lost opportunities resulting from the use (Bahrain 54%, Kuwait 59%, Oman 61%, of this unlicensed software “caused total THE RISK OF USING PIRATED Qatar 50% and Saudi Arabia 51%). losses of revenue, employment and taxes SOFTWARE IN BUSINESS Despite the comparatively low piracy from related sectors in excess of US$110 rate of the UAE, the value of unlicensed billion. The study also considered the The Anti-Piracy Circular 2011 refers to software installed in the UAE is the fifth impact of a possible reduction of piracy on Federal Law No. 7 of 2002 in respect highest in the region, valued at US$208 the economy and it was found that in the of author copyrights and parallel rights, million (South Africa US$564m, Turkey UAE, a reduction of 10% in the piracy rate which deals with the protection of US$526m, Saudi Arabia US$449m and could lead to 841 new job opportunities. copyright in the UAE and in particular Nigeria US$251m). Further, a reduction of 10% in the piracy software. Articles 37, 38 and 39 of this rate over a period of four years could law provide for punishment by way THE ECONOMIC BENEFITS OF contribute as much as US$425m to the of detention and fines with article 38 REDUCING SOFTWARE PIRACY UAE’s GDP and US$566m if the 10% specifically criminalizing the downloading reduction could be achieved over a period and saving of unlicensed software. During 2010 the BSA and IDC conducted of two years.
24 Law Update Intellectual Property
Article 39 extends the protection offered towards software and IP. Public may be “accidental pirates”. Although to software by also criminalizing the use education is critical, therefore, to increase the study did not relate to software of unlicensed software and provides awareness of the importance of managing specifically, the results may suggest that that where a person uses unlicensed software assets and respecting creative in other societies - such as here in the software in the name of, or for the account works through compliance with software UAE - and in respect of other works in of a corporate person, commercial or licensing.” which copyright subsist - such as software professional establishment, the court may - there exist a similar level of “confusion”. determine that that entity be closed for a Australia’s Intellectual Property period of not more than three months. Awareness Foundation (IPAF) conducted According to the 2011 BSA Global a study in 2011 related to attitudes Software Piracy Study “experience has The provisions of article 39 are of and behaviors in relation to the illegal shown that pubic-private awareness particular importance especially downloading of online movies and campaigns about piracy and the value of considering that the 2011 BSA Global television content which revealed that IP can be extremely effective”. In order Software Piracy Study revealed that there was a high level of confusion among to bring about the “fundamental shift in “business decision makers around the members of the general public with public attitudes” referred to by the BSA, world admit to pirating software more respect to which activities constituted a wide range of audiences should be frequently than do other computer users”. acts of copyright piracy. According to the educated about copyright and in particular Typically this form of piracy consists of IPAF, as many as one in three Australians the impact of copyright piracy on the purchasing for example one license to use economy. Such audiences should include software, but then installing the software schoolchildren, university students, on numerous machines. The implication information technology professionals and of article 39 for employees of a business professionals in the creative industries, where unlicensed software is used is that but also more generally business decision they may be liable as a result of the use makers, business owners and employees. of that software. The other side of this coin is however, that a business may be it is clearly in the CONCLUSION ordered to be closed for a period of up to three months in the event that a person interest of employees In this article I set out to highlight the uses unlicensed software in the name of impact that software piracy has on the or for the account of the business. and business owners local economy, the risks to individuals and to businesses resulting from the use of Based on the above, it is clearly in the to ensure that the pirated software and the need to educate interest of employees and business the public with respect to the legal rules owners to ensure that the software used software used within governing copyright. There are two clear within businesses are used lawfully. In this steps that business decision makers, regard adequate organizational policies businesses are used business owners and educators can take with respect to the installation, recordal to address some of the risks highlighted of licenses and use of software must be lawfully. In this and these are: put in place, monitored and enforced both to protect employees, but also to protect regard adequate • ensuring that organizational business against employees obtaining policies with respect to the and using unlicensed software “for the organizational policies installation, recordal of licenses account of the business”. and use of software are put in place and monitored; and REDUCING COPYRIGHT PIRACY with respect to the THROUGH EDUCATION • ensuring adequate education installation, recordal of students, business decision The BSA suggests a basic blueprint to makers, business owners and reduce software piracy which includes of licenses and use of employees. modernizing intellectual property laws, stepping up enforcement activity and software must be put ensuring that governments as significant users of software lead by ensuring that in place, monitored only fully licensed software is used. An important consideration raised by the and enforced both to BSA is an increase in public education and awareness, articulated in the 2011 protect employees BSA Global Software Piracy Study as follows:
“Reducing software piracy requires a fundamental shift in public attitudes
Law Update 25 NEWS AND EVENTS
AL TAMIMI & COMPANY WINS 15 CATEGORY AWARDS ACROSS ALL OFFICES 2012 Our offices in Iraq, Jordan, Kuwait, Qatar, Saudi Arabia and the UAE have been announced winners in 12 categories in the Corporate International 2012 Global Awards; our Qatar office have won two category awards in the Acquisitions International Magazine M&A Awards 2012 and one category in the Lawyer Monthly Legal Awards 2012.
The awards reiterate our long standing commitment to excellence, excelling in all practice areas including, Arbitration, Banking & Finance, Construction, Corporate, Debt Restructuring, Dispute Resolution, Islamic Finance, Litigation and Mergers & Acquisitions.
A full list of the awards can be found on our website www.tamimi.com/en/article/our-firm/our-accolades.html
26 Law Update AL TAMIMI & COMPANY RANKS NO.1 IN SEIZING COUNTERFEITS
During a ceremony held on the occasion of the World IP Day, Omar Obeidat Partner and Head of IP, received on behalf of Al Tamimi & Company an award from the Director General of Dubai Customs Mr. Ahmad Butti. The award comes in recognition of Al Tamimi & Company as the top ranking firm with the highest number of seizures against counterfeit goods seized at all Dubai ports. This is annual award where all law firms and IP attorneys with anti counterfeiting practice compete together and Al Tamimi & Company has bagged this award for the third consecutive year in a row.
Dubai’s strategic location makes its busy sea ports and airports target of many counterfeiters. As a gateway to Middle East, Africa and Europe, Dubai’s ports serve as a re export hub for goods originating from China and the East. As such, Al Tamimi & Company has set up for its clients proper monitoring controls to curb the flow of counterfeit goods through Dubai ports.
RAMADAN KAREEM FROM THE ABU DHABI OFFICE
On 30 July 2012, Al Tamimi & Company’s Abu Dhabi office hosted its annual Iftar gathering at the recently opened Jumeirah Etihad Towers. The event proved to be a huge success and a great opportunity for us to catch up with our clients during the Special and Holy month of Ramadan. A thoroughly enjoyable evening was had RITA JABALLAH by all and we would like to take this opportunity to thank all of those who came out Partner Dispute Resolution to enjoy the evening with us. [email protected]
Law Update 27 AL TAMIMI & COMPANY ANNOUNCES THE APPOINTMENTS OF ADAM BALCHIN AND JUSTIN EDE IN THE CONSTRUCTION & ENGINEERING DEPARTMENT
July saw the appointment of Adam Balchin as the new Head of Construction & Engineering at Al Tamimi & Company. Based in the Dubai office, Adam is a welcome addition to the team where he brings specific experience in a wide variety of transactions in a number of jurisdictions. Qualified as a solicitor in Melbourne, Australia in 1997, Adam is highly experienced in advising on project structures, documenting and negotiating large projects, dispute counselling and dispute resolution. Prior to joining Al Tamimi & Company, Adam was a senior associate at SNR Denton within the construction and ADAM BALCHIN projects team, working on a number of major transactions and disputes. Head of Construction & Adam has also worked in the projects group at Blake Dawson in Melbourne, Engineering Australia. [email protected]
Joining Adam on the Construction & Engineering team is Justin Ede, as Senior Associate. With over 25 years of experience and an outstanding reputation advising on construction issues, both contentious and non-contentious, Justin will be a welcome addition to the team. His work includes acting for employers, contractors, subcontractors and professional consultants on a broad range of commercial, infrastructure and plant projects across the world. Justin’s expertise will help to further bolster our thriving Abu Dhabi practice. JUSTIN EDE Construction & Engineering [email protected]
28 Law Update Employment
Recent Key Developments in UAE Employment Law
SAMIR KANTARIA Partner Head of Employment [email protected]
An overview of the key employment law changes that have taken place in the UAE over the past few years
Employment relationships in the United workforce are predominantly made up of Arab Emirates (UAE) are generally expatriates (for example, figures released regulated by the UAE Federal Law No. last year indicated that 93 percent of the 8 of 1980, Regulating Labour Relations, private sector workforce was made up as amended (Labour Law) together with of expatriates). The UAE must therefore regulations promulgated under that law. balance the need for access to jobs and The Labour Law applies to all employees training for its local population and the working in the UAE, whether national retention of expatriates, particularly in or non-national, with the exception of light of the recent changes provoked by certain categories of people. One of the the economic climate. exempted categories are employees working in the Dubai International KEY DEVELOPMENTS Financial Centre (DIFC) are subject to the DIFC Employment Law No. 4 of 2005 It is possible to characterise recent key (Employment Law). The legislative regime developments in the laws as addressing in the DIFC (save for certain laws such as certain areas which, as identified above, criminal and immigration) is independent result from the UAE’s unique position and from the UAE. The DIFC has its own laws broadly fall into three main categories, (1) and regulations which govern commerce management of the movement of workers; within the DIFC supported by its own (2) protection of UAE nationals; and (3) independent English language common developing practices to ensure that the law court system. UAE is in line with international standards for workers. Each of these is dealt with The UAE faces relatively unique in turn. challenges, in that its population and
Law Update 29 Employment
1. Management of the movement of workers of the temporary work permit is to allow LABOUR BANS expatriates to obtain employment from another employer, pending the outcome Prior to January 2011, the Ministry of of any ongoing litigation with their former Labour (Ministry) imposed an automatic employer (with whom they retain their 6-month ban on all expatriates leaving their all employees must visa). The part-time work permit is open for employer. This applied to all employees use by both expatriate and UAE nationals, falling within their jurisdiction (i.e. outside although it is likely that one of the aims of the free zones or the DIFC) and could have approval the permit is to encourage UAE national only be lifted for those individuals with females into the workforce. As with all more than one year’s service by way of to work, by way permits, these are only issued upon the a “no objection certificate” provided by approval of the Ministry and therefore the former employer and/or payment of of a work permit they are tightly controlled. The use of a fee (depending upon length of service). the part-time permit remains in doubt, However, during the economic downturn in light of the fact that the Labour Law of 2009/2010, the automatic ban affected or ID card from does not make any provision for part-time employees who had been made redundant work and therefore minimum provisions by their employer, and this in turn resulted the relevant applicable to full time employment (such in the loss of some skilled workers with as annual leave and sickness absence local UAE knowledge. authority. Prior entitlement) will continue to apply to part time employees. From January 2011, the practice has been amended and in accordance with to January 2011, RETIREMENT a Ministerial resolution, the automatic ban will not be imposed in certain employees falling As noted above, all employees must have circumstances, having regard to issues approval to work, by way of a work permit such as length of service, level of under the Ministry or ID card from the relevant authority. expertise, and reason for dismissal, Prior to January 2011, employees falling including whether the termination is under the Ministry jurisdiction were due to a business reorganisation. In jurisdiction were required to obtain express approval to addition, in practice, the Ministry has continue working once they reached the further relaxed the enforcement of the required to obtain age of 60 years. The age limit after which employment ban provisions, so that at such express approval must be obtained present, employees are free to move express approval to has been increased to 65 years. between employers (subject to any post- termination restrictions or other issues continue working 2. Protection of UAE nationals raised before the Ministry). However, the Ministerial resolution remains in place The UAE operates a policy of and may be more rigorously enforced in once they reached “Emiratisation”, which seeks to encourage the future. private sector employers falling under the the age of 60 years. jurisdiction of the Ministry to maintain INTERNAL WORK PERMITS minimum levels of UAE nationals in their The age limit after workforce. Whilst prior to January 2011, In order to work in the UAE, an expatriate the Emiratisation policy was relatively must obtain a residency visa and work indiscriminate, focusing purely on the permit. If the employee works within a which such express number of UAE nationals in the workforce, free zone, their residency visa and ID card a Ministry resolution which came into (work permit) is obtained via the relevant approval must be force in January 2011 now addresses free zone (for example, DIFC). the requirement for UAE nationals to fall The use of work permits is a further obtained has been within the white collar labour force and method by which the authorities are able to in particular, UAE nationals should make manage the movement of workers. From up 3 percent of the top three professional January 2011, the Ministry introduced five increased to 65 categories in an employer’s workforce. new work permits, which are applicable in The professional categories have to cases where an individual already has a years. date been based upon educational residence visa (or, in the case of a UAE qualifications, although there is a move national, is entitled to reside in the UAE). towards reclassifying these, based upon These permits are for a work transfer, professional experience. temporary work, part-time work, cases where individuals are sponsored by family Firms which maintain the required level members and juveniles. One of the aims of UAE nationals at the professional Employment
categories, and also comply with does not first notify the Ministry of the protection to employees, particularly blue- certain other Ministry requirements, are proposed dismissal (and at least 30 days collar workers who may lack the ability to categorised as “First Class” companies, before the termination date). The Ministry challenge unfair practices. Recent key out of three possible categories. The will investigate whether the employment is developments are: Second Class categorisation also focuses being terminated for a legally valid reason. on employee diversity, and seeks to limit If the Ministry decides the termination is • In 2009, the Wage Protection the percentage of the workforce made not for a legally valid reason, the employer System (WPS) was introduced up of one of three nationalities (Indian, is given 15 days to resolve the situation. and came into effect in 2010. This Pakistani, and Bangladeshi). A Third Class In accordance with the resolution, the applies to all employees falling categorisation includes those companies termination will not be valid where (a) within the Ministry jurisdiction. who receive a certain number of fines or the employment is being terminated for Employers are required to pay “penalty points” issued by the Ministry for a reason other than one of ten specified employees’ salary in UAE dirhams breach of Ministerial resolutions, as well reasons for cause listed in the Labour through the WPS. This is intended
as companies undertaking more serious Law (in practice, the ten reasons listed in to ensure that employees are paid activities, such as human trafficking. The the law are very narrowly interpreted); (b) the correct salary amounts, and category into which a company falls will a non-national is undertaking the same that the salaries are paid on time. determine the amount of fees and bank role (in other words, the non-national guarantees that the company will be should be dismissed first); or (c) where the • Manpower supply companies are required to pay to the Ministry, as part of UAE national has not received all end of strictly regulated by the Ministry the normal administrative requirements service benefits due to them. and a Ministerial resolution in when obtaining Ministerial consent for the 2010 revised the criteria for the employment of staff. 3. Development in line with international issuance of licenses for such best practices entities. The key requirement UAE nationals have also enjoyed is that the owner (whether an protection from dismissal, since 2009, Although it remains the case that collective individual or an entity) must be a when a Ministerial resolution was provides bargaining and strike action remain illegal UAE national. The resolution was that the termination of UAE nationals in the in the UAE, there have been a number issued in response to complaints private sector is unlawful if the employer of recent developments intended to give that certain employees recruited Employment
by manpower supply companies employment claims. In 2011, the 2012 following widely reported talks offshore were badly treated SCT extended its jurisdiction to all between the World Bank and the UAE. or mislead over employment employment claims which equal Currently expatriate employees are only opportunities. It was also brought or are less than AED200,000 entitled to statutory end of service gratuity in to stamp out illegal practices (approx.. US$ 55,000). In addition, (in the form of a lump sum payment) at by certain entities in the UAE that it is possible for the SCT to hear the end of service which is calculated by provide manpower without being all employment claims (regardless reference to their period of service with appropriately licensed. of size of the amount of the claim), employers in the UAE/DIFC. This is seen upon consent by both parties. as one of the key requirements to make • Although the Employment Law employment in the UAE more attractive contains anti-discrimination LOOKING FORWARD to expatriates and encourage individuals protection, the Labour Law only with specialised expertise to remain in the contains positive discrimination In light of recent socio-economic and UAE long term. provisions. However, the political developments in the region, it Along with the possible changes in the UAE legislation, the DIFC is also likely to implement amendments to the Employment Law. A consultation paper on proposed amendments to the Employment Law was launched in December 2011 with the consultation period ending on 14 January 2012. The proposed amendments are being viewed as an attempt to address some of the inconsistencies in and provide clarity on certain aspects of the law.
We expect that the Arab Spring will continue to have a positive effect in the UAE with more foreign investment earmarked for the region being channelled into the UAE, but at the same time it is likely that the focus will continue to be on the issue of jobs for UAE nationals.
First published in Asian-Mena Counsel Magazine, Vol 10, Issue 3.
Twofour54 Abu Dhabi Media is likely that the UAE will remain one of Free Zone introduced anti- the prime destinations for expatriates but discrimination provisions in its at the same time the UAE government employment regulations in 2011, will be keen to continue to ensure that which state that the free zone aims its nationals are protected adequately. to create an environment where After a relatively busy year in 2011 on the employment and advancement is legislative front, it is envisaged that the based on merit and an employee authorities will consolidate the changes is not treated less favourably implemented. by reason of gender, marital status, race, religion or disability. There has been some discussion of The regulations also impose an implementing new schemes to encourage obligation on companies operating Emiratisation, for example, by partnering in the free zone to be guided by with the private sector to train and employ the principle of non-discrimination UAE nationals for a minimum period when employing employees. in return for subsidies provided by the government. • The DIFC Court offers employees an informal forum (the Small Pensions for expatriate employees are Claims Tribunal) in which to bring expected to be high on the agenda for
32 Law Update Construction & EmploymentEngineeringProperty
Qatar: Changing the way we build
SHARIFAH HAMZAH Qatar [email protected]
Climate change is a global issue.
Addressing climate change should be both a global agenda as well as a national one. Every country should make a serious commitment to mitigate the impact of climate change as well as to develop and implement effective climate policies to ensure a more sustainable national development.
Planning for climate change today is less expensive than rebuilding an entire network after a catastrophe. In fact, failing to plan for the effects of climate change now will prove to be an expensive mistake in the near future. There is an urgent need to develop a critical response strategy to reduce carbon emissions and address other environmental impacts.
Residential and commercial buildings account for more than a third of total energy use and its associated greenhouse gas emissions in the world. A report by the United Nations Environment Programme and Sustainable Buildings & Construction Initiative (“UNEP-SBCI”) shows
Law Update 33 Construction & Engineering
that the “huge potential of the building and a role model and the green capital, construction sector for combating climate amongst the Middle Eastern countries, change remains virtually untapped”. The in sustainable development and in UNEP-SBCI report further states that addressing climate change – showing greenhouse emissions from buildings a firm commitment to combating the worldwide are set to increase sharply alarming decline of our environmental over the next 2 decades and a major conditions. QNV2030 outlines Qatar’s contributor is the construction industry. strategies for balancing economic growth The building and construction sector with social and environmental progress. has the largest potential for cutting greenhouse emissions responsible for As a further attestation to its commitment, global warming. Qatar has formed the National Committee for Climate Change (“NPCC”) under the The way we design, build, manage and Ministry of Environment and it has also Qatar has formed operate buildings has a major impact on strongly supported the establishment the environment and this planet. of the Qatar Green Building Council the National (“QGBC”). Whilst the rest of the world is ACCOUNTABILITY AND preoccupied with either economic woes Committee for RESPONSIBILITY or civil unrest, Qatar remains relatively unscathed and is pressing on with its Whilst collectively we may proclaim in ambitious development plans. In line Climate Change public that we are conservationists, just with its determination to safeguard the because it is in vogue to say so nowadays, environment, Qatar is seriously looking (“NPCC”) under yet in our daily lives we continue to make at implementing various strategies to choices which do not reflect this. curb environmental deterioration and the Ministry of reverse its impact. Those responsible Left to their own devices, environmental for the establishment of the QGBC protection and preservation are understand that implementing its mission Environment and it not foremost in the agenda of most to encourage green development requires construction companies and property special impetus through Government has also strongly developers. Maximisation of profits is action. usually the key criteria and “going green” supported the is perceived as an expensive indulgence. It is inevitable that the implementation Similarly for the buyers and investors of of the policies and strategies developed the end product – they are more concerned by these bodies will require either a establishment of with the cost of the product and fiscal revamp of existing related legislation returns on their investment. Investing or the enactment of new legislation to the Qatar Green in the future should not just be about supplement the existing legislation. financial gain. There must be a balance in The Government of Qatar has a Building Council life and our focus should shift to investing critical role to play in setting regulatory in environmental management and standards and creating incentives for sustainability for our children and future reducing greenhouse gas emissions. (“QGBC”). generation. Specific laws should be enacted on sustainable development, focusing on GOVERNMENT IMPETUS energy efficiency and greenhouse gas mitigation. In addition, the Government Recognising the compelling need to should strengthen and empower the take positive action, environmentally relevant Government agencies and local conscious governments around the authorities charged with enforcement world have devised various strategies to of these regulatory standards. Poor encourage the private sector to build and enforcement of these new policies, invest in sustainable development. These programs and legislation developed and incentives come in the form of stimulus enacted will curtail all the efforts made packages and enactments of distinct to mitigate, adapt to and counter climate legislation and regulations to curtail change. environmental pollution and damage. A carrot and stick approach could be In light of these circumstances, Qatar adopted to encourage developers and must be lauded for the emphasis placed construction companies to design, in sustainable development in the Qatar develop and build green buildings and National Vision 2030 (“QNV2030”). It infrastructure. Existing environmental highlights Qatar’s determination to be laws should be scrutinised and if need
Law Update 34 Construction & EmploymentEngineering
be, revamped, to impose more stringent provisions to curb A balance must be achieved between development and environmental abuses. As mentioned above, enforcement of preservation of the natural beauty and heritage of this earth. the laws must also be addressed as it is pointless enacting such Wanton and reckless development at the price of destroying the laws if implementation is lax. environment should no longer be tolerated. Apathy is a luxury we can no longer afford. We can choose to be the caretakers of Certain jurisdictions have already enacted laws to impose levies this earth or its destroyers. and penalties on companies which use toxic materials. In fact, incentives are given to encourage the use of non toxic materials Sustainable development is the way of the future. Opting for this and “green building materials”. A green building stimulus choice of development “meets the needs of the present without package to spur responsible development could include the compromising the ability of future generations to meet their own following incentives: needs” [United Nations 1987 Report of the World Commission on Environment and Development]. • Tax exemptions and reductions • Capital subsidies, grants, subsidised loans, rebates The time for change is • Priority in building permit processing and expedited plan now. review • Increased Floor-to-Area ratios, which allow a developer First published in to construct more building area than allowed by Construction Week applicable zoning Magazine, August • Incentives for procurement and use of recycled materials 2012. and building materials which are environmentally friendly • Publicity and awards given to companies which undertake and promote green projects.
Financial institutions should also be encouraged to participate in green building and infrastructure projects and development. Incentives could be given to financial institutions to provide financing for projects which focus on sustainable development at a more attractive rate than the financing rates given for projects which do not emphasise on sustainable development.
In fact, obtaining the relevant certification for compliance with the green building criteria should be made a material obligation under these financing agreements. Failure to obtain such certification could then trigger a default provision in the financing agreement.
CHANGING THE WAY WE THINK
Being environmentally conscious is not and should no longer be perceived as an expensive indulgence. Making the right choices is a responsibility incumbent on all of us to undertake for the future of this planet. Corporate Commercial
Share Buy Backs in Private Joint Stock
CARLA SALIBA Corporate Commercial Companies [email protected]
What is a Share Buyback - The shares should be bought back with the intention of re- selling them. A share buyback occurs when a corporation buys shares in its own capital. Once the shares are bought by the company, they Share Buy Backs in Private Joint Stock Companies are referred to as “treasury shares”. Initially, Article 168 of the Companies Law was interpreted to Permissibility of Shares Buy Back apply only to public joint stock companies. However, the UAE Ministry of the Economy’s interpretation has since evolved The general rule is that any buyback of shares by the shares and it allows private joint stock companies to buy back their issuing entity is prohibited by Federal law no. 8 of 1984 on own shares in the terms set out in Article 168 if approved by commercial companies (“Companies Law”) except in controlled the extraordinary general assembly of the private joint stock circumstances. The reason is that the buy-back has the same company, a requirement not reflected in Article 168 of the effect as reducing the capital of the company, diminishing the Companies Law. This requirement to obtain general assembly resources available for working capital and satisfaction of the approval is not imposed in the case of public joint stock company. company liabilities. However, recently because private joint stock companies have Article 168 of the Companies Law states: “No company shall have recently pressed to access the flexibility offered by share buy- the right to pledge its shares or purchase such shares unless the back, the Ministry of Economy has modified its position and purchasing is for the purpose of decreasing the capital or for has been applying the provisions of Article 168 CCL to private depreciation of shares. Such shares thereupon shall not have joint stock companies without imposing the general assembly voting right in the deliberations of the general assembly nor shall approval requirement. they have the right to any dividends.” Why Do Private Joint Stock Companies Buy Back Shares? However the second paragraph of Article 168 of the Companies Law does provide that the company may purchase some shares Private Joint Stock Companies buy back their shares to subject to the following significant restrictions: reconcile incompatible needs or perceptions between different shareholders. If some shareholders need cash and want their - The shares bought back should not exceed (10%) of the investment liquidated, the company can facilitate this outcome company’s share capital; and upon terms which are fair to the continuing shareholders. If
36 Law Update Corporate Commercial
some shareholders have less confidence than others in the company’s prospects, the company can likely facilitate their exit and possibly head off conflicts amongst the shareholders.
In How Can Private joint Stock Companies Buy Back their Own Shares
Article 168 of the Companies Law set out parameters to be followed for shares buy-back. These conditions have been adjusted to fit the form of private joint stock companies:
1. The company shall obtain the approval of the Ministry of Economy prior to the purchase;
2. The company’s board of directors shall carry out the purchasing process during a period not exceeding one year from the date of the Ministry of Economy’s approval;
3. The company shall have a cash surplus to meet the purchasing process without using the capital or legal reserve in the purchasing process;
4. The purchasing process shall be advertised to the public in two local daily newspapers of wide circulation with one of them at least being in Arabic, and a period not less than two weeks must elapse between the date of announcing the company’s intention to purchase and the actual purchasing;
5. The company shall not conduct any selling process whilst carrying out the announced purchasing processes and 9. The company, if it is a bank, shall obtain the approval of the the selling of the purchased shares shall be conducted central bank before the purchasing and it shall undertake within a period not exceeding two years from the date to finance the purchasing process from financing sources of last purchase. However, if the sale is not completed in accordance with the rules set by the central bank in during the specified period, the purchasing process this respect; shall be considered to have been made for reducing the capital and consequently the purchased shares shall be 10. No member of the company’s board of directors or any of cancelled; its executive managers shall be a party to the purchasing and selling processes which are carried out by the 6. The company shall not issue any new shares before company; completing the selling process of the purchased shares; 11. Disclosure of the purchasing and selling processes of 7. The process of the company’s purchasing of its shares the company shares shall be made in the quarterly report shall not be carried out within a period of (15) days before which is issued by the company. and (3) days after the advertising of the financial details of the company or any substantial information which is It is worthwhile noting that shares purchased with the intention of likely to affect the share price (whether by an increase or being sold shall lose their right to attain dividends and the right to a decrease); vote at the general assemblies until they are resold.
8. The company shall not re-apply for approval to purchase its shares with the intention of selling them except after expiry of not less than one year from the date of the latest selling of its purchased shares;
Law Update 37 Corporate Commercial
Corporate Benefit: An analysis under the UAE legal RICHARD CATLING AHMED HAMAD Corporate Commercial Corporate Commercial regime [email protected] [email protected]
THE PRINCIPLE A company in the UAE is further shareholders or directors. constrained however by its ‘objects’, In a world where large corporate groups which the UAE Companies Law provides The first paragraph of Article 197 of the are the norm, corporate benefit issues a company must observe and comply with. UAE Companies Law states that: “The constantly rear their head in common law The UAE Companies Law states in Article company may not grant cash loans of legal systems. In this article, we examine 13 that: “The objectives of the company whatever kind to the chairman of its to what extent similar and parallel must be legitimate. Specialization and board of directors or to a member of the doctrines apply to UAE companies uniformity of purposes must be maintained board, neither may it guarantee any loan operating under a civil code legal system. in its main objectives”. agreement concluded with third parties in their favour”. A director or manager of a company in Therefore the directors of a company the UAE is obliged, when dealing on the are tasked with conducting the business A further example is provided by Article company’s behalf, to act in its best interests of the company with regard to these two 103 of the UAE Companies Law which at all times. In practical terms, this means key principles; compliance with both sets out limitations on the powers of that the director must, in exercising the the company’s purpose and its objects. directors for certain business activities powers of his office, attempt to realise the In doing so the company can be said to which directors cannot undertake, greatest benefit possible to the company. be acting in furtherance of its ‘corporate including entering into loan agreements In reality, the best interests of a company benefit’. for periods in excess of three years, the set up for commercial purposes are sale or mortgage of the company’s real served by profitable dealings. Sometimes the directors of a company estate assets and the cancellation of make decisions on a day to day basis debts owed to the company. Such actions In the UAE, this quest for profitability which have significant and long lasting can only be legitimised by the express is enshrined in law. Under the UAE effects on the company’s prospects. inclusion in the Articles of Association Companies Law, a company itself is For such decision makers it is key that of the authority to perform such actions, expressed to be a contract under which they are mindful of the corporate benefit or, less explicitly when the action can be two or more shareholders agree to (if any) flowing from their decisions. justified as being in complaince with the participate in an economic concern for However, rather than considering company’s objects. the purpose of generating profits. Under themselves constrained by the rules put UAE Companies Law a company has a in place by the UAE Companies Law and By inserting such express provisions, distinct juristic personality from the legal the company’s Articles of Association, the shareholders in a company can give personalities of its shareholders, and so the directors should view these rules explicit authorisation to the directors this independent juristic personality’s sole as providing a ‘safe habour’ where they to take such corporate actions. In the purpose must be to conduct its business cannot be attacked with allegations of absence of these provisions Article 103 in order to make profit from its dealings, wrongdoing. provides that such significant decisions for and on behalf of its shareholders. It is require a resolution of shareholders to be the duty of its directors to see that this is A clear practical example of this principle passed before the directors are able to achieved. is the provision of a guarantee by a undertake the corporate actions listed in company of the liabilities of one of its Article 103.
38 Law Update Corporate Commercial
It is common for a parent company to in their decision making. It is advisable company’s shareholders or members. seek guarantees of its debts from its therefore that regular minutes of meetings Common law (from which DIFC laws subsidiaries. Directors of a subsidiary and written notes of resolutions are derive) imposes on all directors fiduciary company must ensure that they exercise taken whenever the directors enter into duties and a duty of care and skill. their powers in the best interests of the contracts on behalf of the company. These duties are now codified by the company of which they are a director, Not only will such paper work create an Companies Act 2006, the primary source regardless of whether these interests audit trail to demonstrate the company’s of UK company law, and similarly duties coincide with the interests of the parent corporate benefit had been considered, of directors of a DIFC company are also company. When guaranteeing upstream codified in the DIFC Companies Law. liabilities directors must consider the potential risks to the subsidiary company’s Article 53 of the DIFC Companies Law balance sheet and balance them against provides that “a director or other director any possible financial benefits to the The UAE Companies of the company, in exercising his powers subsidiary company as a single entity and discharging his duties shall a) act within a wider corporate group. Directors Law further provides honestly, in good faith and lawfully, with a must sometimes be mindful of a clash of view to the best interests of the company; their own duties when they are directors that directors are and b) exercise the care, diligence and skill of both parent company borrower and that a reasonably prudent person would subsidiary company guarantor. personally liable exercise in comparable circumstances”. Article 110 of the UAE Companies Law The fiduciary duties of directors towards provides that a company is bound by towards the company the company would also include an the actions of its board of directors obligation to use the powers granted to and liable in damages for any unlawful itself, its shareholders them for the purposes for which they actions or those undertaken with out were conferred. Under article 33 of the the proper authorisation of the Articles and economic third DIFC Companies Law (in relation to a of Association or objects. However, if a company limited by shares), “a company proper corporate benefit does not stand parties for all acts may be incorporated to conduct any behind the resolutions or acts of the lawful business”, a mirror of the obligation directors, the directors themselves may imposed by the UAE Companies Law. find themselves liable to the company for of fraud, abuse of any loss suffered as a result of failing to In entering into such lawful business on show a sufficient duty of care. power and mis- behalf of the company the directors must have consideration for the benefit to the Third parties therefore can be confident management, or for company and its members as a whole. in their dealings with directors that, by Whilst ‘benefit’ is not defined, in the case purporting to act on the company’s behalf, acts for which they of companies, it is likely to mean the the directors are binding the company sustained profitability of the company. If to any contractual arrangement entered such benefit cannot be clearly established into with such third parties. The UAE were not authorised then the directors will have breached their Companies Law further provides that duties, which would inhibit their ability to directors are personally liable towards to do. enter into a transaction on the company’s the company itself, its shareholders and behalf. economic third parties for all acts of fraud, abuse of power and mis-management, or the need to record the rationale for CONCLUSION for acts for which they were not authorised decision making itself serves as a timely to do. This Article is important in this reminder to the directors to consider their In conclusion, although not explicitly context as failure to act properly renders duty to the company at critical times. identified, the concept of corporate benefit directors personally liable (e.g. by failing is relevant under the UAE Companies to secure any corporate benefit) granting DIFC LAW – A COMMON LAW Law, and similar provisions under the third parties an additional recourse against PERSPECTIVE DIFC Companies Law mean that directors the directors if the event that they are of companies incorporated onshore or unable to seek redress from the company A similar level of accountability of offshore in the UAE are subject to the (such as a company in liquidation). directors for the conduct of the business same basic requirement to act only in the of a company is taken by common furtherance of the company’s interest. It PRACTICAL CONSIDERATIONS law jurisdictions, including the Dubai is important that directors always have International Financial Centre, based as it regard to their prime duty when dealing Given that the company’s directors are is on the law of England and Wales, itself on behalf of the company that they constrained in their actions as described a common law jurisdiction. The juristic represent, both to ensure they are fulfilling above, it is important that the directors personality of companies incorporated their duties and to ensure the long term can demonstrate that they had considered under the DIFC Companies Law no. 2 success of the company. the economic benefit to the company of 2009 is also separate from that of the
Law Update 39 Corporate Commercial
The New DIFC Markets Law Regime – A Catalyst
IZABELLA SZADKOWSKA Corporate Commercial for NASDAQ Dubai? [email protected]
Over the period of nearly two years • Recognition Module (REC); (although we would be pleased to provide the Dubai Financial Services Authority specific advice regarding any aspect of the (“DFSA”), being the regulatory authority of • Glossary Module (GLO); New Regime). The focus of this article is the Dubai International Financial Centre to consider the impact of the New Regime (”DIFC”), has undertaken an extensive • Authorised Market Institutions on the following questions in the context internal and external consultation process Module (AMI); of an offer of securities regulated under in relation to proposed changes to the the New Regime: (i) when is a prospectus DIFC Markets Law (issued in 2004), • Collective Investment Rules (CIR); required?; and (ii) if required, what Offered Securities Rules and associated information should a prospectus include? rules and regulations. The main aim of • Islamic Finance Rules (IFR); and such a process was to bring the DFSA’s It is important to note that an offer of units capital markets laws, rules and regulations • General Module (GEN). in a collective investment fund is subject into closer alignment with the European to separate considerations which are not Union’s Prospectus Directive (2003/71/ All of the changes referred to above (“New covered by this article (and references in EC) and Market Abuse Directive (2003/6/ Regime”) came into force on 5 July 2012. this article to “securities” do not include EC) and various capital market standards such units). adopted by the Organisation for Economic The New Regime represents a significant Co-operation and Development. change to the DIFC legal framework PROSPECTUS REQUIREMENTS relating to a number of areas including: The end result was the enactment of a Prospectus Trigger: new Markets Law DIFC Law No 1 of 2012 1. prospectus; (“New Markets Law”) and associated Prior to the New Regime, in the context Markets Rules (MKT) (“Markets Rules”) 2. authorised market institutions; of an offer of securities, the issue of which replace in their entirety the 2004 whether a prospectus was needed DIFC Markets Law and the Offered 3. obligations of reporting entities; and, if so, what it had to contain were Securities Rules. In addition, certain determined by first categorising the offer supporting amendments were also made 4. market disclosure; of securities as either being a public, to Regulatory Law DIFC Law No. 1 of exempt or unregulated offer. However, 2004 as well as to the following DFSA under the New Regime, unless subject to 5. accounting periods and financial Rulebook modules: exemptions (examples of which are given reporting; below), a prospectus will be required in • Fees Module (FER); either of the following two circumstances: 6. market abuse; and • Takeover Rules Module (TKO); • an offer of securities to the public 7. listed funds. in or from the DIFC; and • Representative Office Module Going into a detailed review of all of (REP); • having securities admitted to the changes brought about by the New trading on NASDAQ Dubai. Regime is beyond the scope of this article • Price Stabilisation Module (PRS);
40 Law Update Corporate Commercial
Offer of Securities to the Public: for that subsequent offer must again be The DFSA will only approve the prospectus assessed by reference to the definitions where it is reasonably satisfied that: Whereas the previous definition of “offer of “offer of securities” and “exempt offers” of securities” referred to “offers” and contained in the New Regime. • the prospectus meets all the applicable “invitations” directly or indirectly targeting requirements in the New Markets Law and investors, under the New Regime an “offer Prospectus Content – Summary: the Markets Rules; of securities to the public” takes place if there is “a communication to any person Where a prospectus is required, it will be • the board of directors of the issuer in any form by any means, presenting required to contain a prospectus summary complies with and has adequate systems information on the terms of the offer and section which must contain the following and controls in place to ensure on- the securities offered, so as to enable an key information relating to the offer: going compliance with the applicable investor to decide to buy or subscribe to requirements; and those securities (…)”. • the risks associated with and essential characteristics of the • the issuer has received all the This broad definition has been narrowed issuer, and guarantor, if any, of the necessary consents as required under down by certain exclusions. For example, securities, including their assets, the New Markets Law and the Markets communications made in connection with liabilities and financial position; Rules. the trading of securities that are listed and traded on a regulated exchange and • the risks associated with and Of course, the approval of a prospectus in the ordinary course of business of an essential characteristics of the by the DFSA does not mean that the authorised firm or recognised member relevant securities including rights DFSA accepts any responsibility for are not considered to constitute an offer attaching to those securities; the accuracy, comprehensiveness or of securities that requires a prospectus. merits of the information included in the • general terms of the offer, including prospectus. The responsibility for the Exemptions from Prospectus estimated expenses charged to contents of a prospectus will remain with Requirement: the investor; the issuer and/or advisors and experts responsible for verifying statements in the As was the case under the old legal • whether the securities are to be prospectus. framework relating to offers of securities, admitted to trading and if so, the the definition of an “offer of securities” details relating to such admission; The issuer may file a draft prospectus under the New Regime requiring the and with the DFSA for an informal review issuance of a prospectus is subject to to avoid approval delays upon the certain listed exemptions (offers coming • reasons for the offer and the actual submission. Should the DFSA within these exemptions being referred to proposed use of proceeds. not approve the prospectus, the issuer as “exempt offers”). Examples of exempt can appeal the decision to the DFSA’s offers where a prospectus is not required Prospectus Validity: Regulatory Appeals Committee. include: A prospectus issued under the New CONCLUSION • offers that are only made to Regime is valid for a period of 12 months institutional professional clients; from the date of its approval for the In a public statement, Ian Johnston, purposes of making an offer to the public Chief Executive Officer of the DFSA • offers involving a total or having securities admitted to trading, said: “These changes bring our markets consideration of USD 100,000 or provided that it contains all relevant regime into closer alignment with the EU less; and information. There are restrictions on requirements while retaining features the extent to which historical data can be necessary to accommodate regional • offers directed at fewer than 50 included in any prospectus (for example, needs and circumstances”. persons (and where no such financial information cannot be older than persons are natural persons) in 18 months from the date of the prospectus). From these changes, it is clear that any 12 month period. Further, if there is a significant change in, the DFSA is committed to making a material mistake or inaccuracy affecting continuous effort to ensure its legislative Secondary Sales: any material contained in a prospectus, or and regulatory standards follow best if a significant new matter arises during a international practices. However, it will be Under the old regime, if securities had prospectus’ validity, then a supplementary interesting to see whether these changes previously been offered by way of a prospectus is required to be produced. will result in increased capital markets prospectus, no subsequent (secondary) activity in the DIFC. offers of those securities were treated as Prospectus Approval: new offers requiring a further prospectus. For more details, please see: www. However, under the New Regime, any Whereas before there was no formal dfsa.ae/Legal Framework/Legislation/ subsequent offer of securities that had prospectus approval process, under the Amendments to Legislation and/ or previously been offered to the public will New Regime a prospectus undergoes a contact the author of this article. be considered as a new offer and the issue formal approval by the DFSA. of whether a prospectus is required or not
Law Update 41 Corporate Commercial
Qatar: Keeping
WONG YUEN PING Qatar your hands clean [email protected]
The government of Qatar and the United companies involved in projects to • Arbitrators, experts, bankruptcy Nations Development Programme construct the infrastructure and facilities administrators and liquidators (UNDP) signed an agreement in April for the 2022 World Cup, which could of this year setting out the financial involve a high level of interaction with • Chairmen and members of board of contributions to be made by Qatar to public authorities. directors, managers, and all other UNDP’s «Anti-Corruption and Integrity employees of private institutions in the Arab Countries» (ACIAC) project. THE OFFENCE AND THE PARTIES and associations, companies This step followed from the signing INVOLVED and co-operative associations, if of a Memorandum of Understanding one of the ministries, government between the parties in September 2011 Bribery and the attempted bribery of departments, public organisations on their intention to cooperate on the public officers are offences under the or corporations is a shareholder implementation of the ACIAC. The Rule Qatari Penal Code No. 11 of 2004 (Penal therein of Law and Anti-Corruption Centre was Code). subsequently launched in Qatar at the • Whoever carries out any work end of 2011. It is an offence for any person to offer a connected with a public service public officer money or a benefit of any under an appointment by a public This latest development once again kind or a promise of anything of the like in officer; and highlighted the issue of corruption order for him to perform or omit to perform in the region, although corruption is a duty assigned to his role. It is also an • Heads and members of legislative, not a major problem as such in Qatar offence for public officers to solicit or parliamentary and municipal which, incidentally, achieved a credible accept bribes, for themselves or others. councils. ranking in Transparency International›s 2011 Corruption Perception Index. A “public officer” is defined widely under It should be noted, although this point Nevertheless, many companies operating the Penal Code as those charged with is often overlooked, that employees in Qatar occasionally have questions on carrying out public authority, employees of companies in which a ministry how their dealings with various authorities of ministries, government departments, or government department, public might be perceived, as they do not wish public institutions and organisations, organisation or corporation is a to fall foul of local laws. This is especially including: shareholder (regardless of the size of given the increase in the number of its shareholding) are considered public
42 Law Update Corporate Commercial
officers in this context. existed would be a question of fact to be been offered on a regular basis proven. to a particular individual or group Aside from the Penal Code, the Human of individuals, such that there Resources Law also contains a similar It is likely that a court or any other third appears to be a pattern in the prohibition on civil servants accepting party reviewing the situation would company›s behavior? bribes, whether in the form of cash, consider the situation as a whole and donations or the like. the context in which the hospitality was • What is the purpose of the offered, before inferring an intention hospitality or entertainment What is a bribe? What benefits are to commit bribery. While there are no offered? Is it just for general permitted? specific legal provisions or guidelines on marketing or more targeted
The law does not specifically prohibit or the factors to be considered, it would be purposes? Is it customary in the define any particulars acts as amounting prudent for companies to consider the country (for example, events held to bribery. The offence, as defined above, following questions collectively before during Ramadan)? extends to offering a public officer money extending any offers of hospitality: or a benefit of any kind (or the promise CONCLUSION of such). As such, companies and their • The type and value of the employees who deal with or wish to hospitality: would the form It is vital to consider all relevant factors, improve ties with public officials often of hospitality be reasonable, including the questions suggested above have to consider if their offer/invitation significant or excessive, taking into when considering if an offer or provision or the provision of hospitality and minor account the status of the relevant of hospitality would be appropriate and benefits to public officers would be in public officer to avoid the perception of such offers as violation of the law. bribes or any intention to commit bribery. • Could the relevant public officers In their assessment, companies should According to the Penal Code, if the be responsible for or could also take into account the perspective of intention or purpose of any hospitality is influence decisions in favour of the the recipient and any neutral observer. to induce a public officer to perform or company, at that particular time or omit to perform his duty, then the offer or any other time? First published in Arabian Business Qatar provision of such hospitality would be an Magazine, July 2012 issue. offence. The existence of such intention • Has the hospitality or benefit
Law Update 43 Banking & Finance
KUWAIT Pledge of Shares: Statutory Provisions vs. JADE AL ARAOUI Kuwait Private Arrangements [email protected]
In Kuwait, it is not unusual for lenders the share ledger of the company issuing owner agrees to the pledge for the benefit to set in place certain contractual such shares indicating that such shares of the pledgee. The custodian would be arrangements with their borrowers are pledged to the pledge. In addition, for acting on trust on behalf of the pledgee in which create a pledge-like over shares listed shares, pledges must be also noted holding the security. owned by the borrowers in the capital of at the Clearance Chamber with the Kuwait certain high value companies. By virtue Stock Exchange (“KSE”); or The portfolio contract usually includes of such private arrangements, which self-remedies such as: remain typically un-authenticated or un- • Floating Pledge Over Securities notarized, the lenders will lock-up these Portfolio: • imposing restrictions on the beneficial shares for the entire term of the facilities owner to liquidate the assets of the granted to the borrowers and dispose of A floating pledge of a portfolio (account) portfolio or receive cash available the same in the event of default or breach with a custodian or the lenders can be in the portfolio even though limited of contract. However, such arrangements, made by a contract. Title to every asset power is granted to the beneficial in conjunction with the actions of the in the portfolio must be transferred to the owner to trade the shares in limited lenders pursuant to the same, are not custodian. In case of shares, the pledgor cases; necessarily valid and enforceable. would transfer (i.e., by direct transfer and not a trade) the shares through the • grant the pledgor the right to request KSE to the custodian which would be the the custodian to liquidate the portfolio There are two methods under which a registered owner of the shares but, being and remit cash to it at any time; and pledge over shares can be made, as a custodian, the shares in the portfolio follows: would be “off balance sheet” assets. • notarization of the contract with the As such, the custodian would hold the “writ of execution” by the Notary • Direct Pledge Over Shares: shares in its name but for the benefit of an Public in favor of the pledgor which undisclosed client which is the beneficiary grants the pledgor the right to enforce Under Article 225 of the Kuwait Law of owner of the portfolio. its rights in the contract without the Commerce, a pledge of shares is made need to obtain a Court judgment. by a contract and is perfected by a A pledge over the portfolio is established notation on the share certificate and in by a contract whereby the beneficial A pledge over the portfolio (which assets
44 Law Update Banking & Finance
is composed of shares) as opposed to against the pledgor’s indebtedness to • If after a sale there are surplus a direct pledge over shares is usually pledgee. However, we are aware of some funds, these must be returned to the a preferred structure for lenders and cases where pledgors request damages pledgee. The sale shall be effected borrowers because it enable both parties higher than the value of the shares sold at the time and place designated to replace/trade the underlying shares which include for example the difference by the President of the Al-Kulliya in the portfolio with simple procedures between the sale price by the pledgee or Court by public auction except where without a need to release the pledge and the custodian and the market price of the the President designates another then noting a new pledge over the new shares when the pledgor files the legal method. For the sale of shares, the shares each time there is a trade of the action if such price appreciates. President of the Al-Kulliya Court will shares deposited in the portfolio. order their sale in the KSE through an Foreclosure procedures over any pledged authorized broker. However, any private agreement executed assets would require: between the lenders (or a Security In conclusion, we recommend that a Court Agent representing the lenders), the • a notice to be served on the debtor order is obtained prior to any enforcement borrower and the custodian (the “Private requesting payment of the due procedures. Agreement”) granting the lenders (or the amount of the debt that is secured Security Agent acting on their behalf) by the pledge over the shares or the We also recommend that the portfolio the right or prerogative to “liquidate” portfolio. pledge contract is notarized by the the shares contained in the custody Kuwaiti Notary Public. Notarization of the account (outside the scope of a pledge • when three days have elapsed contract is not required for the validity of set forth through one of the mechanism after service, the submission by the the pledge but to have the Notary Public’s described above) in the event of default pledgee of an ex parte petition to the stamp of the “writ of execution” in favor or breach of agreement under the loan President of the Al-Kulliya Court (first of the pledgee on the contract. This writ agreements or the Private Agreement degree court) requesting the issue of execution would enable the pledgee is deemed null and void pursuant to the of an order to sell all or part of the to deposit the original portfolio pledge provisions under Article 237 of the Kuwait collateral (shares or portfolio). contract with the Execution Department Law of Commerce. Said provisions are at the Ministry of Justice for enforcement mandatory and may not be set aside by • The Court order to sell the pledged of its rights under the contract directly an agreement between the parties. assets may not be executed until five without a prior judgment. This would be days have elapsed following the date required for enforcement of any other Further, in practice, we note that many of its service on the pledgor, which rights other than the foreclosure over the pledgees (under a duly structured pledge, notice must name the place, date shares. regardless of notarization) generally and hour of the intended sale. If the prefer, in case of default of the pledgors, security interest covers more than to sell the shares that are deposited in one asset, the pledgee is entitled portfolios directly without referring the to designate the asset to be sold same to the court in accordance with the except where otherwise agreed in the procedures set out in the Commercial pledge contract. However, in no case and Civil Pleadings Law. In this regard, can the sale cover more than what is the pledgees rely on the fact that in adequate to pay off the debt. any action by the pledgor nullifying the sale procedures for violation of the enforcement rules outlined above, the pledgor would be entitled to damages in an amount equal to the value of the shares sold which would be then set-off
Banking & Finance
Cross Border Marketing into HUFRIZ WADIA Banking & Finance the DIFC [email protected]
As the instability in the financial markets of the world continues, a larger number of financial services providers are looking to the Middle East region to tap into the capital reserves of the region. While not all banks and financial institutions would seek to expand into the region at this point in time, there is growing interest in marketing existing products on a cross border basis within this region.
Dubai in the United Arab Emirates is a The financial services regulator in the particularly attractive geography. Within DIFC, i.e. the DFSA, has introduced Dubai, the Dubai International Financial provisions in its rulebook on ‘Financial Centre (“DIFC”) is a financial free zone Promotions’ which enables limited having its own commercial and civil marketing on a cross border basis without laws distinct and separate from the laws the requirement of licensing by the DFSA. governing the rest of the UAE. In essence, there are two separate jurisdictions in The DIFC Regulatory Law, 2004 (the the UAE: (i) the DIFC, where financial “Law”) describes a “Financial Promotion” services are regulated by the Dubai as: Financial Services Authority (“DFSA”), and (ii) the UAE (excluding DIFC), where “Any communication, however made, the provision of any financial services is which invites or induces a Person to: regulated by the Central Bank. • enter into, or offer to enter into, This article seeks to provide guidance on an agreement in relation to the the marketing of products and services provision of a financial service; or into the DIFC on a cross border basis. The • exercise any rights conferred by ability to market financial products into the a financial product or acquire, DIFC does not automatically authorise dispose of, underwrite or convert a or enable an entity to market or promote financial product.” products or services in the rest of the UAE and any entity looking to do so would need A Financial Promotion may be made to comply with the separate laws of the in any manner or form including, but UAE in order to market financial products not limited to, an oral, electronic or in the UAE. written communication and includes an advertisement or any form of promotion
Law Update 47 Banking & Finance
or marketing. Communications may be company in the DIFC or an agreement through personal visits, telephone calls or or tie up with a third party licensed entity any other means of communicating with in the DIFC. If such a DFSA regulated persons within the DIFC. entity approves the Financial Promotion, the foreign entity will be able to make Under the Law, no person shall make a such a financial promotion in the DIFC. Financial Promotion in or from the DIFC However, there are rules that the DFSA unless the person is an Authorised Firm regulated entity must abide by prior to (i.e. duly licensed by the DFSA) or the approving such a financial promotion Financial Promotion (i.e. such activities and all promotional material would need or communications as described above) to name the DFSA regulated entity and qualify as Exempt Financial Promotions. state that it has approved the financial The details of Exempt Financial promotion. The DFSA regulated entity will Promotions are explained below. also be accountable to the DFSA for the content of the financial promotion and due EXEMPT FINANCIAL PROMOTIONS to this accountability, it is not often that this option is utilized in the DIFC. As per the DFSA Rules, a communication is an “Exempt Financial Promotion” if it is: (b) The Financial Promotion is directed at and capable of acceptance exclusively • approved by any Authorised Firm (i.e. by a Person who appears on reasonable an entity regulated and licensed by grounds to be a Professional Client the DFSA); or • directed at and capable of acceptance In the event the product being promoted or exclusively by a person who appears marketed is capable of being accepted by on reasonable grounds to be a a retail client, the Financial Promotion will Professional Client; or not be an Exempt Financial Promotion. • made to a person in the DIFC As long as the Financial Promotion is (the “Recipient”) as a result of an directed at Professional Clients only, unsolicited request by the Recipient and is capable of being accepted only to receive the Financial Promotion; or by Professional Clients, any person • made or issued by or on behalf of from outside the DIFC may make such a a government or non-commercial Financial Promotion in the DIFC. As long as the government entity; or • made in the DIFC by a Person in We find that this is the most widely used the course of providing legal or option for foreign financial institutions Financial Promotion accountancy services and which to market products into the DIFC on a may reasonably be regarded as cross border basis, thereby ensuring that is directed at incidental to and a necessary part of their financial promotions meet with the the provision of such services. Exempt Financial Promotions criteria. Professional Clients Therefore provided the marketing meets only, and is capable the requirements of an Exempt Financial (c) The Financial Promotion is made to Promotion, any person located outside a person in the DIFC (the “Recipient”) the DIFC may market products into the as a result of an unsolicited request by of being accepted DIFC without the requirement of obtaining the Recipient to receive the Financial a DFSA license for such marketing. Promotion only by Professional
Note that as long as one of five points In the event a person/ proposed client Clients, any person (i.e. from amongst (a) to (e) above) are in the DIFC (“Recipient”) requests satisfied, the promotion would qualify as a foreign entity to market or make a from outside the DIFC an Exempt Financial Promotion. Options Financial Promotion to such Recipient (a) to (c) above are the most widely used on an unsolicited basis, such a Financial may make such a to market into the DIFC. A few additional Promotion will be considered to be details on these three options are set out an Exempt Financial Promotion. It is below: important that the Recipient should have Financial Promotion requested the Financial Promotion and (a) Financial Promotion approved by any that such request be unsolicited. in the DIFC. Authorised Firm Any entity proposing to market and This option may be used where the promote products and services into the foreign entity proposing to market into DIFC on a cross border basis must ensure the DIFC has a licensed branch or group that any Financial Promotion it makes in
48 Law Update Banking & Finance
or from the DIFC: would be prudent for foreign entities to seek professional advice on the issue • is clear, fair and not misleading; prior to making any Financial Promotions • includes the person’s name, address into the DIFC or marketing any material in and regulatory status; and the DIFC. • if it is intended only for Professional Clients: Please be aware that the DFSA has stated in its rules that if a person makes • is not sent or directed to Financial Promotions into the DIFC on any person who appears on a regular basis (i.e. anything more than reasonable grounds not to be occasional) or for a prolonged period (i.e. a Professional Client; and anything more than 3 consecutive days) • contains a clear statement while physically located in the DIFC, for that only a person meeting example, by way of setting up a booth, the criteria for a Professional meetings or conference in the DIFC, the Client should act upon it, and DFSA may consider such activities as constituting Financial Services in the • does not attempt to limit or avoid DIFC which require licensing by the DFSA any duty or liability under the DFSA and would likely invite sanctions from the administered laws. DFSA if conducted without such a license.
The main point to note with respect to Please also be aware that the DFSA has marketing into the DIFC is entities that are specific additional rules in respect of not regulated by the DFSA are specifically listed securities and funds which would prohibited from providing any financial need to be considered prior to making any advice or recommendations. There is promotions in respect of such financial a fine line between making a Financial products. Promotion and providing advice and it Legislative Update
United Arab Emirates OFFICIAL GAZETTE Ministry of Justice 42nd Year Issue No. 536 10 Rajab 1433 AH 31th May 2012
FEDERAL DECREES
39 of 2012 Establishing a UAE embassy in Colombia
40 of 2012 Transferring the UAE Ambassador to Kuwait to the General Office of the Ministry of Foreign Affairs
41 of 2012 Appointing a UAE ambassador to Kuwait
42 of 2012 Renewing the secondment of a member of the diplomatic and consular corps
43 of 2012 Granting a special promotion to two members of the diplomatic and consular corps
44 of 2012 Terminating the tenure of an official at the Ministry of Presidential Affairs
45 of 2012 Ratifying the Agreement for Economic Cooperation between the UAE and Montenegro
46 of 2012 Concluding the first session of the fifth legislative term of the Federal National Council
47 of 2012 Promoting, appointing and retiring officers of the Ministry of the Interior
48 of 2012 Appointing a judge to the Federal Courts of Appeal
REGULATORY DECISIONS OF THE CABINET
7 of 2012 Regarding the bonus scheme for members of the Academic Board and the Faculty & Staff of the Institute of Training & Judicial Studies
8 of 2012 Regarding the Judicial Studies Journal of the Institute of Training & Judicial Studies
9 of 2012 Permitting GCC companies to open branches in the UAE
10 of 2012 Amending Cabinet Decision No. 27 of 2010 regarding the fees and fines payable in respect of the services provided by the Ministry of Labour
11 of 2012 Approving the Federal Government staff training and development program
12 of 2012 Approving the Federal Government staff performance management scheme
13 of 2012 Implementing regulations of Federal Decree-Law No. 11 of 2008 regarding human resources in the Federal Government
14 of 2012 Amending certain schedules to Federal Law No. 14 of 1995 on combating drugs and psychotropic substances, as amended
15 of 2012 Extending the five year period during which insurance companies in the UAE must amend their position
16 of 2012 Training Emiratis for a one year internship at health establishments affiliated with the Ministry of Health
17 of 2012 Concerning the gathering and exchange of information pursuant to international tax agreements
Legislative Update
MINISTERIAL DECISIONS
From the Ministry of Environment & Water:
136 of 2012 Minister of Environment & Water decision appointing a national committee on biological security
137 of 2012 Minister of Environment & Water decision concerning guidelines on the regulation of the activities of establishments engaged in manufacturing cement
141 of 2012 Minister of Environment & Water decision on the rationalization of power and water use in government buildings – green initiatives
144 of 2012 Minister of Environment & Water decision regulating the specifications of fishing traps
163 of 2012 Minister of Environment & Water decision on the guidelines to be followed when recalling food and animal feed
From the Ministry of Social Affairs:
699 of 2011 Minister of Social Affairs decision amending Ministerial Decision No. 576 of 2011 renewing the terms of office of the members of the Interim Board of Directors of the Jurists Association
700 of 2011 Minister of Social Affairs decision amending Ministerial Decision No. 577 of 2011 renewing the terms of office of the members of the Interim Board of Directors of the Teachers Association
200 of 2012 Minister of Social Affairs amending Ministerial Decision No. 294 of 2011 concerning the implementing rules of Cabinet Decision No. 7 of 2010 promulgating the by-laws of non- governmental organization facilities providing care and rehabilitation services to the disabled
From the Ministry of Economy:
99 of 2012 Minister of Economy decision revising the Articles of Association of Ras Al Khaimah Dredging Company PSC
128 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Al Maqsad Development Company PSC
171 of 2012 Minister of Economy decision appointing a committee to prepare a study on forging a partnership with cooperative societies From the Securities & Commodities Authority:
130 of 2012 Minister of Economy decision amending the Articles of Association of Arab Orient Insurance Company PSC 131 of 2012 Minister of Economy decision amending the Articles of Association of Al Wathba National Insurance Company PSC 151 of 2012 Minister of Economy decision amending the Articles of Association of Emirates Investment Bank PSC 152 of 2012 Minister of Economy decision amending the Articles of Association of Commercial Bank of Dubai PSC 164 of 2012 Minister of Economy decision amending the Articles of Association of Air Arabia PJSC
Legislative Update
ADMINISTRATIVE DECISIONS
From the Securities & Commodities Authority:
21 of 2012 Decision of the Board of Directors of the Securities & Commodities Authority concerning the penalties for late payment of fees for renewing listings of public joint stock companies
23T/2012 Decision of the Board of Directors of the Securities & Commodities Authority to cancel the licence of the Emirates Islamic Shares & Bonds Center and delete its registration as a broker 24T/2012 Decision of the Board of Directors of the Securities & Commodities Authority to cancel the licence of Lari Financial Brokerage and delete its registration as a broker
From the Department of Economic Development – Emirate of Abu Dhabi:
8C3/2012 Concerning Mesirow Investment Management Partners (Under Formation) PSC
United Arab Emirates Ministry of Justice 42nd Year Issue No. 537 17 Rajab 1433 AH 7th June 2012
FEDERAL LAW
1 of 2012 Concerning the care of children of unknown parentage
United Arab Emirates Ministry of Justice 42nd Year Issue No. 538 8 Shaban 1433 AH 28th June 2012
FEDERAL DECREES
49 of 2012 Ratifying the Agreement on the Encouragement and Protection of Investments between the UAE and the Republic of Guinea
50 of 2012 Ratifying the Agreement on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital between the UAE and the Republic of Guinea
51 of 2012 Ratifying the Agreement on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income between the UAE and the Republic of Kenya
52 of 2012 Ratifying the Agreement on the Encouragement and Reciprocal Protection of Investments between the UAE and the Republic of Portugal
53 of 2012 Ratifying the Agreement on the Formation of a Joint Committee for Bilateral Cooperation between the UAE and the Republic of South Africa
54 of 2012 Ratifying the Agreement on Defence Cooperation between the UAE and the Republic of South Africa 52 Law Update 55 of 2012 Ratifying the Agreement on the Formation of a Joint Committee for Bilateral Cooperation between the UAE and the Republic of Turkmenistan
56 of 2012 Ratifying the Agreement for Economic, Commercial, and Technical Cooperation between the UAE and the Eastern Republic of Uruguay
57 of 2012 Ratifying Arab agreements
58 of 2012 Ratifying Agreements for Economic Cooperation between the UAE and the Cabinet of the Republic of Albania
59 of 2012 Ratifying the Agreement for Economic, Commercial, and Technical Cooperation between the UAE and the Republic of Guinea
60 of 2012 Ratifying the Agreement between the UAE and the Cabinet of the Republic of Albania on Air Services Between and Beyond their Respective Territories
61 of 2012 Replacing the UAE Representative to the Advisory Body to the Supreme Council of the Gulf Cooperation Council States
62 of 2012 Federal Decree No. 62 of 2012 promoting a member of the diplomatic and consular corps
63 of 2012 Transferring the UAE Ambassador to the Sultanate of Oman to the Diwan of the Ministry of Foreign Affairs
64 of 2012 Appointing a UAE Ambassador to the Sultanate of Oman
65 of 2012 Transferring the UAE Ambassador to Canada to the Diwan of the Ministry of Foreign Affairs
66 of 2012 Appointing a UAE Ambassador to the Republic of Belarus
67 of 2012 Appointing a UAE Ambassador to Canada
68 of 2012 Appointing a UAE Ambassador to the Kingdom of the Netherlands
69 of 2012 Appointing a UAE Ambassador to the Federal Republic of Brazil United Arab Emirates Ministry of Justice 42nd Year Issue No. 538 8 Shaban 1433 AH 28th June 2012
FEDERAL DECREES
49 of 2012 Ratifying the Agreement on the Encouragement and Protection of Investments between the UAE and the Republic of Guinea
50 of 2012 Ratifying the Agreement on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital between the UAE and the Republic of Guinea
51 of 2012 Ratifying the Agreement on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income between the UAE and the Republic of Kenya
52 of 2012 Ratifying the Agreement on the Encouragement and Reciprocal Protection of Investments between the UAE and the Republic of Portugal Legislative Update
53 of 2012 Ratifying the Agreement on the Formation of a Joint Committee for Bilateral Cooperation between the UAE and the Republic of South Africa
54 of 2012 Ratifying the Agreement on Defence Cooperation between the UAE and the Republic of South Africa
55 of 2012 Ratifying the Agreement on the Formation of a Joint Committee for Bilateral Cooperation between the UAE and the Republic of Turkmenistan
56 of 2012 Ratifying the Agreement for Economic, Commercial, and Technical Cooperation between the UAE and the Eastern Republic of Uruguay
57 of 2012 Ratifying Arab agreements
58 of 2012 Ratifying Agreements for Economic Cooperation between the UAE and the Cabinet of the Republic of Albania
59 of 2012 Ratifying the Agreement for Economic, Commercial, and Technical Cooperation between the UAE and the Republic of Guinea
60 of 2012 Ratifying the Agreement between the UAE and the Cabinet of the Republic of Albania on Air Services Between and Beyond their Respective Territories
61 of 2012 Replacing the UAE Representative to the Advisory Body to the Supreme Council of the Gulf Cooperation Council States
62 of 2012 Federal Decree No. 62 of 2012 promoting a member of the diplomatic and consular corps
63 of 2012 Transferring the UAE Ambassador to the Sultanate of Oman to the Diwan of the Ministry of Foreign Affairs
64 of 2012 Appointing a UAE Ambassador to the Sultanate of Oman
65 of 2012 Transferring the UAE Ambassador to Canada to the Diwan of the Ministry of Foreign Affairs
66 of 2012 Appointing a UAE Ambassador to the Republic of Belarus
67 of 2012 Appointing a UAE Ambassador to Canada
68 of 2012 Appointing a UAE Ambassador to the Kingdom of the Netherlands
6970 of 20122012 AppointingAppointing a a UAE UAE Ambassador Consul General to the in FederalBarcelona Republic of Brazil
71 of 2012 Appointing a UAE Consul General in Munich
72 of 2012 Retiring a official at the Ministry of Energy
REGULATORY DECISIONS OF THE CABINET
18 of 2012 Regarding the application of the schedule of administrative penalties for violators of regulatory decisions concerning living aquatic resources and fisheries
19 of 2012 Concerning the Social Responsibility Fund
20 of 2012 Regarding the imposition of a levy on mobile phones imported into the UAE
21 of 2012 Concerning the fees for conformity assessment and the quality mark
22 of 2012 Concerning the fees for sale of UAE standard specifications
MINISTERIAL DECISIONS
From the Ministry of Environment & Water: Law Update 53 220 of 2012 Minister of Environment & Water decision reshuffling the Pesticide Registration Committee
246 of 2012 Minister of Environment & Water decision extending the reprieve from the ban on importing chilled and frozen meat from Somalia
From the Ministry of Social Affairs:
224 of 2012 Minister of Social Affairs decision appointing a new Board of Directors for the Sharjah Fishermen Cooperative Society
225 of 2012 Minister of Social Affairs decision on the registration of the Emirates Autism Association
285 of 2012 Minister of Social Affairs decision on the registration of Kirby Air Est.
From the Ministry of Economy:
97 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Reem Investments PSC
121 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Tawteen Human Investment PSC
183 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Al Ruwais Power Company PSC
201 of 2012 Minister of Economy decision revising the Articles of Association of Foodco Holding PJSC
202 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Royal Capital PJSC
215 of 2012 Minister of Economy decision revising the Memorandum & Articles of Association of Union Insurance PJSC
223 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Al Safwa Islamic Financial Services PJSC
70 of 2012 Appointing a UAE Consul General in Barcelona
71 of 2012 Appointing a UAE Consul General in Munich
72 of 2012 Retiring a official at the Ministry of Energy
REGULATORY DECISIONS OF THE CABINET
18 of 2012 Regarding the application of the schedule of administrative penalties for violators of regulatory decisions concerning living aquatic resources and fisheries
19 of 2012 Concerning the Social Responsibility Fund
20 of 2012 Regarding the imposition of a levy on mobile phones imported into the UAE
Legislative21 of 2012 Update Concerning the fees for conformity assessment and the quality mark
22 of 2012 Concerning the fees for sale of UAE standard specifications
MINISTERIAL DECISIONS
From the Ministry of Environment & Water:
220 of 2012 Minister of Environment & Water decision reshuffling the Pesticide Registration Committee
246 of 2012 Minister of Environment & Water decision extending the reprieve from the ban on importing chilled and frozen meat from Somalia
From the Ministry of Social Affairs:
224 of 2012 Minister of Social Affairs decision appointing a new Board of Directors for the Sharjah Fishermen Cooperative Society
225 of 2012 Minister of Social Affairs decision on the registration of the Emirates Autism Association
285 of 2012 Minister of Social Affairs decision on the registration of Kirby Air Est.
From the Ministry of Economy:
97 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Reem Investments PSC
121 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Tawteen Human Investment PSC
183 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Al Ruwais Power Company PSC
201 of 2012 Minister of Economy decision revising the Articles of Association of Foodco Holding PJSC
202 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Royal Capital PJSC
215 of 2012 Minister of Economy decision revising the Memorandum & Articles of Association of Union Insurance PJSC
223 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Al Safwa Islamic Financial Services PJSC
54 Law Update Legislative Update
261 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of RAK Islamic Finance PSC
262 of 2012 Minister of Economy decision announcing a revision of the Articles of Association of Mubadala GE Capital PJSC
From the Securities & Commodities Authority:
153 of 2012 Ministry of Economy decision amending the Articles of Association of Noor Takaful Family PJSC
154 of 2012 Ministry of Economy decision amending the Articles of Association of Noor Takaful General PJSC
200 of 2012 Ministry of Economy decision amending the Articles of Association of Sunrise Real Estate PSC
222 of 2012 Ministry of Economy decision amending the Articles of Association of Siraj Finance PJSC
225 of 2012 Ministry of Economy decision amending the Articles of Association of Gulf Pharmaceutical Industries PSC
226 of 2012 Ministry of Economy decision amending the Articles of Association of Al Khazna Insurance PSC
235 of 2012 Ministry of Economy decision amending the Articles of Association of Abu Dhabi National Takaful Company PSC
278 of 2012 Ministry of Economy decision amending the Memorandum and Articles of Association of Commercial Bank International PLC
294 of 2012 Ministry of Economy decision announcing the incorporation of Mesirow Investment Management Partners PSC
From UAE University:
35 of 2012 President of UAE University decision concerning the organizational structure of the University
ADMINISTRATIVE DECISIONS
From the National Transport Authority:
12 of 2012 Decision of the Chairman of the Board of Directors concerning pleasure craft
From the Securities & Commodities Authority:
28T of 2012 Decision of the Chairman of the Board of Directors appointing an official at the Insurance Authority
From the Department of Economic Development – Emirate of Dubai:
94 of 2012 Decision of the competent authority approving the incorporation of Mohammed Omar bin Haider Holding Group PSC
Law 55 Update
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. 1010 Offices Offices 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 66 Countries Countries region. Kuwait Our unified approach illustrates our ability to work together Qatar 41 Partners with our clients, address their issues and identify reasonable UAE 40 Partners commercial Solutions by building close relationships with Kingdom them. We recognise the importance of being easily accessible, of Saudi Arabia Banking & Finance commercially aware and at the leading forefront of market 200200 Lawyers Lawyers developments. Construction & Engineering We employ a diverse group of talented individuals from varied backgrounds and with differing perspectives. They are each 400 Staff familiar with international and local business customs and are Commercial Advisory 400 Staff capable of addressing issues in a collaborative manner. By having the ability to look at matters from every angle, we can Corporate Governance apply our expertise confidently and decisively – providing integrated solutions to legal and commercial issues in the Middle East. Corporate Structuring Our innovative approach and superior level of expertise has been recognised by numerous Industry Awards, most recently: Dispute Resolution ABOUT AL TAMIMI & COMPANY Al Tamimi & Company Employment As the largest law firm in the Middle East, Al Tamimi & Company knows provides an ‘excellent Middle East Law Firm Corporate & Commercial more than just the law. We pride ourselves on understanding the business of the Year Teams of the Year service from very Equity Capital Markets environment in which we operate ultimately benefiting the clients we work with. knowledgeable,
Family Business Established in Dubai in 1989, we have offices in Dubai, Abu Dhabi, Sharjah, very responsive and 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 creative’ lawyers. Corporate Counsel Middle Corporate Counsel Middle Hospitality about where we are heading. advice. East Awards 2012 East Awards 2012 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 Legal 500, 2011 Full Service Law Firm Most Responsive Law qualified and experienced lawyers with lawyers who have deep local roots. of the Year-Iraq Firm of the Year-UAE 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. Our monthly Corporate International Asian – Mena Counsel Magazine Awards 2012 2012 magazine, Law Property Update, has been in publication for 20 years with over 250 Middle East & Africa Law Firm Special Projects The group’s ability to deliver local law editions published. Law Firm of the Year of the Year-UAE solutions within an international context To subscribe for Technology, Media & results in a high level of activity your free copy, Telecommunications please email us at: [email protected] Chambers, 2012 Transport British Legal Awards 2011 IFLR 2011 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. 10 Offices 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 6 Countries region. Kuwait Our unified approach illustrates our ability to work together Qatar with our clients, address their issues and identify reasonable UAE 40 Partners commercial Solutions by building close relationships with Kingdom them. We recognise the importance of being easily accessible, of Saudi Arabia Banking & Finance commercially aware and at the leading forefront of market 200 Lawyers developments. Construction & Engineering 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 Commercial Advisory 400 Staff capable of addressing issues in a collaborative manner. By having the ability to look at matters from every angle, we can Corporate Governance apply our expertise confidently and decisively – providing integrated solutions to legal and commercial issues in the Middle East. Corporate Structuring Our innovative approach and superior level of expertise has been recognised by numerous Industry Awards, most recently: Dispute Resolution ABOUT AL TAMIMI & COMPANY Al Tamimi & Company Employment As the largest law firm in the Middle East, Al Tamimi & Company knows provides an ‘excellent Middle East Law Firm Corporate & Commercial more than just the law. We pride ourselves on understanding the business of the Year Teams of the Year service from very Equity Capital Markets environment in which we operate ultimately benefiting the clients we work with. knowledgeable,
Family Business Established in Dubai in 1989, we have offices in Dubai, Abu Dhabi, Sharjah, very responsive and 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 creative’ lawyers. Corporate Counsel Middle Corporate Counsel Middle Hospitality about where we are heading. advice. East Awards 2012 East Awards 2012 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 Legal 500, 2011 Full Service Law Firm Most Responsive Law qualified and experienced lawyers with lawyers who have deep local roots. of the Year-Iraq Firm of the Year-UAE 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. Our monthly Corporate International Asian – Mena Counsel Magazine Awards 2012 2012 magazine, Law Property Update, has been in publication for 20 years with over 250 Middle East & Africa Law Firm Special Projects The group’s ability to deliver local law editions published. Law Firm of the Year of the Year-UAE solutions within an international context To subscribe for Technology, Media & results in a high level of activity your free copy, Telecommunications please email us at: [email protected] Chambers, 2012 Transport British Legal Awards 2011 IFLR 2011 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 TECHNOLOGY, MEDIA Khaled Saqqaf Samer Qudah & TELECOMMUNICATIONS [email protected] [email protected] David Yates +962 6 577 7415 +971 4 318 8412 [email protected] +971 4 364 1584 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 ALEX SALEH ABDULLAH AL TAMIMI Dispute Resolution Head of Kuwait office Head of Litigation UAE Kuwait KSA [email protected] [email protected] [email protected]
AMMAR HAIKAL Dispute Resolution BASSEM ZEIN EL DINE DAVID YATES UAE Head of DWTC office Head of TMT [email protected] UAE UAE [email protected] [email protected] EL-AMEIR NOOR Dispute Resolution GARY WATTS GLENN LOVELL UAE Head of Corporate Banking & Finance [email protected] Commercial, UAE LITIGATION - UAE KSA [email protected] [email protected] Hussain Eisa HANI AL NADDAF [email protected] Dispute Resolution HESHAM AL HOMOUD HUSSAIN EISA SHIRI +971 4 364 1710 Qatar Head of Corporate Head of Litigation [email protected] Commercial, KSA UAE LITIGATION - DIFC [email protected] [email protected] Rita Jaballah JAMES MACCALLUM [email protected] Corporate Commercial JASSIM M. ABDULLAH JODY GLENN WAUGH +971 4 364 1526 UAE Dispute Resolution Banking & Finance [email protected] UAE UAE PROPERTY [email protected] [email protected] Lisa Dale KHALED SAQQAF [email protected] Head of Jordan & Iraq offices KHALID AL HAMRANI LISA DALE +971 4 364 1641 Jordan/Iraq Head of Special Projects Head of Property [email protected] UAE UAE [email protected] TRANSPORT & INSURANCE [email protected] Yazan Al Saoudi LYNETTE BROWN MARIE-GRACE SEIF MARCUS WALLMAN [email protected] Banking & Finance Corporate Commercial Corporate Commercial +971 4 364 1530 UAE UAE UAE [email protected] [email protected] [email protected] SPECIAL PROJECTS MOHAMMED AK BIK Khalid Al Hamrani Head of Legislation & MOHAMMED MARZOUQI MOHAMMED AL MARRI [email protected] Drafting Dispute Resolution Partner +971 4 364 1587 UAE UAE Dispute Resolution, Qatar [email protected] [email protected] [email protected] TECHNOLOGY, MEDIA MOHAMED KHODEIR OMAR OBEIDAT OMAR OMAR & TELECOMMUNICATIONS Head of Qatar office Head of Intellectual Property Transport & Insurance David Yates Qatar UAE UAE [email protected] [email protected] [email protected] [email protected] +971 4 364 1584 PHILIP KOTSIS SAMER QUDAH Banking & Finance RITA JABALLAH Head of Corporate Kuwait Dispute Resolution Structuring [email protected] UAE UAE [email protected] [email protected] SAMIR KANTARIA Head of Employment SAMI FAKHOURY STEPHEN FORSTER UAE Banking & Finance Head of Abu Dhabi office [email protected] Qatar UAE [email protected] [email protected] TARA MARLOW Head of Hospitality YAZAN AL SAOUDI YAQOUB AL MUNAYAE UAE Head of Transport & Litigation [email protected] Insurance, UAE Kuwait [email protected] [email protected] ZAFER SHEIKH OGHLI Head of Sharjah office UAE [email protected] PARTNERS AT AL TAMIMI & COMPANY Abu Dhabi I Amman I Baghdad I Doha I Dubai I Kuwait City I Riyadh I Sharjah