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	(91836,4990,'content_description','There has been a recent clarification on the laws concerning the use and occupation of residential premises in the Emirate of Abu Dhabi and the use of premises which have been licensed for demolition.  '),
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	(91838,4990,'pageSummary','There has been a recent clarification on the laws concerning the use and occupation of residential premises in the Emirate of Abu Dhabi and the use of premises which have been licensed for demolition.'),
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	(91846,4990,'_yoast_wpseo_metadesc','There has been a recent clarification on the laws concerning the use and occupation of residential premises in the Emirate of Abu Dhabi and the use of premises which have been licensed for demolition.'),
	(91847,4991,'content','September 2014\r\n\r\n<hr />\r\n\r\n<strong>The Scam</strong>\r\n\r\nThe Respondent, Nicole Huisman, registered the disputed domain name ‘www.altamimichambers.com’. No website was created for the domain name. Instead the scam involved emails being sent to people by a person who identified himself as Mr. T. K. Badran of the Commercial Bank of Dubai. He would inform the victim that they were the beneficiaries of a deceased estate, and that in order to inherit they needed to provide their bank details and liaise with an attorney called Mr. H. Hourani, the managing partner of Al Tamimi &amp; Company. The contact details provided were the correct details of Al Tamimi &amp; Co.; the only incorrect detail was the email address, given as “[…]@altamimichambers.com” and the phone number.\r\n\r\n<strong>The Complaint</strong>\r\n\r\nAl Tamimi &amp; Co. owns the registered trademark ‘Al Tamimi &amp; Company’, and uses the domain name ‘www.tamimi.com’, which is a source of information and contact details for clients and potential clients.\r\n\r\nOn learning of the scam the firm filed a complaint before the World Intellectual Property Organization (WIPO) against Nicole Huisman to stop her using the Al Tamimi trademark. The firm argued that:\r\n<ol>\r\n 	<li>The disputed domain name was confusingly similar to its own trademark.</li>\r\n 	<li>The Respondent had no rights or legitimate interests in using the disputed domain name, and was in fact using it bad faith.</li>\r\n 	<li>The Respondent has no connection with Al Tamimi &amp; Co. and was not authorized by the law firm to use its name.</li>\r\n 	<li>The Respondent is not known by the name Al Tamimi, nor was the name being used for a non-commercial purpose (which may have provided a defence to the complaint).</li>\r\n 	<li>There was no plausible reason why the Respondent would have chosen to use ‘Al Tamimi’ as part of the disputed domain name except to misappropriate the goodwill and reputation of Al Tamimi &amp; Co. The Respondent must have known of the ‘Al Tamimi’ trademark and the credibility it has in the market place. The Respondent had manifestly registered the domain name solely for the purpose of attracting users who rely upon the goodwill and reputation subsisting in the Complainant’s name.</li>\r\n</ol>\r\n<strong>WIPO’s Findings</strong>\r\n\r\nThe WIPO Panel agreed with Al Tamimi &amp; Co. that the disputed domain name had incorporated its ‘Al Tamimi’  trademark in its entirety and, crucially, that the addition of thedescriptive term ‘chambers’ had added nothing to distance the domain name from the Complainant.\r\n\r\nThe WIPO panel also found that the Respondent’s use of the disputed domain name could not be characterised as ‘use in connection with the bona fide offering of services’. Instead it found that the disputed domain name had been registered and used in bad faith.\r\n\r\nThe Panel also accepted Al Tamimi &amp; Co.’s argument that the Respondent must have had knowledge of its trademark and its reputation at the date at which the Respondent registered the disputed domain name. In particular the Panel accepted that Husam Hourani is a well known legal personality in the region who had been named Managing Partner of the Year in 2013 by IFLR, and that this was doubtless why his name and law firm he worked for had been targeted.\r\n\r\nAccordingly, the WIPO Panel was satisfied that the Complainant had succeeded in proving its case and ordered that the disputed domain name be transferred to Al Tamimi &amp; Co. (thereby preventing the Respondent from further using the firm’s name in its scams).\r\n\r\n<strong>Comment</strong>\r\n\r\nA company’s business reputation is its fortune. It is important to be vigilant in monitoring any unauthorised usage of your intellectual property in cyberspace and to act swiftly and decisively in rooting out any problems. Using the WIPO Arbitration and Mediation Centre as a means to do so has proven highly effective and quick in resolving domain name disputes.\r\n\r\nIn this case, the fact that Al Tamimi &amp; Co. has a portfolio of trademarks that it vigilantly enforces supported its argument that any attempt to free ride on its substantial goodwill and reputation was damaging to its brand integrity and likely to cause brand dilution.\r\n\r\nFortifying one’s cyber presence has never been more important as an increasing number of users log onto the internet to conduct research and to seek verification of facts and figures as a basis for making commercial decisions.\r\n\r\nThis significant case represents yet another decisive victory for the ATCO Domain Name Dispute Resolution practice, part of our award winning IP practice which continues to counsel clients in ensuring that their valuable goodwill and reputation is well protected in cyberspace.'),
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	(91851,4991,'content_description','Al Tamimi & Co. recently won a domain name dispute before WIPO against a scam artist that registered the domain name ‘www.altamimichambers.com’ and used it to mislead people into believing they were dealing with Al Tamimi & Co. law firm.'),
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	(91853,4991,'pageSummary','Al Tamimi &amp; Co. recently won a domain name dispute before WIPO against a scam artist that registered the domain name ‘www.altamimichambers.com’ and used it to mislead people into believing they were dealing with Al Tamimi &amp; Co. law firm.'),
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	(91865,4991,'_yoast_wpseo_metadesc','Al Tamimi & Co. recently won a domain name dispute before WIPO against a scam artist that registered the domain name ‘www.altamimichambers.com’ and used it to mislead people into believing they were dealing with Al Tamimi & Co. law firm.'),
	(91866,4992,'content','September 2014\r\n\r\n<hr />\r\n\r\nThe UAE authorities are conscious that the development of systems that adopt international best practice standards for the examination and granting of patents is one of the main propellants of innovation and investment in the UAE. In accordance with the UAE’s 2021 vision, the Ministry of Economy has been working hard to develop and encourage innovation, research and development, to advance its target of having the Knowledge Economy contribute to 5% of the UAE’s GDP.\r\n\r\nIn light of furthering its strategic commitments above, the UAE’s Ministry of Economy has recently announced the inauguration of stage two of its collaboration with KIPO, the Korean Intellectual Property Office. This unprecedented project aims to propel the UAE’s 2021 vision through the development of the UAE Patent Office’s capabilities for the examination and granting of patent applications.  A number of patent examiners from KIPO have moved to the UAE to assist the UAE Patent Office with the examination of patent applications. This is an advancement over the first stage collaboration between the parties where KIPO was assisting remotely with the examination of UAE patent applications.\r\n\r\nThe South Korean system, lead by KIPO, has long been a reflection of the best practices adopted by leading jurisdictions worldwide for the protection and development of IP rights.\r\n\r\nThrough this collaborative project, the UAE’s government has seized the opportunity to build a leading patents system that is inspired by the experiences of one of the world’s most developed IP authorities. This second stage of collaboration will lay the foundations for patent examinations and grants based on a framework of international best practice. The UAE has highlighted is seriousness in advancing this project to the next stage whereby specialists from both jurisdictions will begin to develop plans to create an information system with specialized programs for the exchange of information to enhance the protection of patents and inventions. This will include an action plan with strict timescales and recommendations that reflect the best practices adopted by KIPO and as customized to meet the UAE’s needs.\r\n\r\nThe UAE is already recognized for its innovation. According to the 2014 Global Innovation Index the UAE ranked the first in the region and thirty sixth globally, up two ranks from last year. The index is part of a report published by Cornel University, the European Insead and the World Intellectual Property Organization and is used by business executives, investors and policymakers to gauge innovation capabilities and measurable results in a respective jurisdiction. The World Economic Forum has acknowledged that the UAE’s Economy is progressing towards a knowledge and innovation-based economy whereby innovation is seen to be the future’s capital.'),
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	(91870,4992,'content_description','The UAE has been at the forefront of regional jurisdictions seeking to strengthen their intellectual property framework and enhance their legal protections so as to become the region’s leading hub for innovations. '),
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	(91872,4992,'pageSummary','The UAE has been at the forefront of regional jurisdictions seeking to strengthen their intellectual property framework and enhance their legal protections so as to become the region’s leading hub for innovations.'),
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	(91876,4992,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Sharaf Al Hijazin'),
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	(91894,4992,'_yoast_wpseo_metadesc','The UAE has been at the forefront of regional jurisdictions seeking to strengthen their intellectual property framework and enhance their legal protections so as to become the region’s leading hub for innovations.'),
	(91895,4993,'content','September 2014\r\n\r\n<hr />\r\n\r\nThe Regulations repeal several policies (set out below) with the aim of streamlining each of these policies into one to provide an umbrella framework which will govern the conditions, level and scope of service to be provided by all licensees of the TRA (“Licensees”) to their respective subscribers. In this article, we provide a general overview of the Regulations and highlight some of their key aspects.\r\n\r\nThe Consumer Protection Regulations repeal the following TRA policies:\r\n<ul>\r\n 	<li>Privacy of Consumer Information Policy</li>\r\n 	<li>Price Transparency Policy</li>\r\n 	<li>Consumer Complaints and disputes procedure</li>\r\n 	<li>Marketing and Communication Practices Policy</li>\r\n 	<li>Directory Information Policy</li>\r\n</ul>\r\nNote that the Unsolicited Electronic Communications Policy (“Spam Policy”) dated 30 December 2009, remains in full force. The operation of the Regulations does not impact on the Spam Policy.\r\n\r\nKey aspects of the Regulations include:\r\n\r\n<strong>1. Provision of information to consumers</strong>\r\n\r\nAt the outset, the Regulations require all Licensees to take all reasonable steps to ensure that consumers make informed decisions. To this end, the Regulations mandate the provision of accurate and complete information, including:\r\n<ul>\r\n 	<li>a written contract to all new subscribers specifying the complete terms and conditions, including any limitations and restrictions;</li>\r\n 	<li>details regarding the price and terms and conditions of the standard services offered to consumers; and</li>\r\n 	<li>any information relating to the circumstances under which the prices may vary during the term of the contract.</li>\r\n</ul>\r\n<strong>2. Confidentiality of subscriber information</strong>\r\n\r\nRecognising the importance of maintaining the privacy of subscriber information, the Regulations require all Licensees to use reliable security measures in order to safeguard and prevent the unauthorised disclosure or use of subscriber information. Generally, the Regulations require Licensees to:\r\n<ul>\r\n 	<li>refrain from using subscriber information for any purpose other than for which such information has been obtained (marketing purposes or in furtherance of anti-competitive practices, for example);</li>\r\n 	<li>obtain the consent of the data subject before sharing any such data subject’s information with Licensee’s affiliates or third parties;</li>\r\n 	<li>limit access to subscriber information to Licensee’s authorised personnel that are trained in the Licensee’s security and privacy protection practices; and</li>\r\n 	<li>refrain from obtaining non-essential information (i.e. any personal information relating to other individuals that are not essential and directly related to the requirements of the service ordered).</li>\r\n</ul>\r\nThe TRA is entitled to visit the premises of the Licensee (or its affiliate(s)) where subscriber information is stored to review the security measures taken by the Licensee to maintain the security of subscriber information.\r\n\r\n<strong>3. Marketing communications and practices</strong>\r\n\r\nIn addition to the Spam Policy generally prohibiting unauthorised electronic marketing communications, the Regulations set out further requirements regarding marketing communications and practices. In summary, the Regulations provide that marketing communications should not:\r\n<ul>\r\n 	<li>exploit the credulity, lack of knowledge or inexperience of consumers;</li>\r\n 	<li>be unduly intrusive or coercive and should not or be likely to harass consumers;</li>\r\n 	<li>mislead or deceive consumers; and</li>\r\n 	<li>in the context of comparative claims, be unclear or likely to create confusion.</li>\r\n</ul>\r\nNote that the Regulations also contain separate sections addressing marketing communications aimed at specific audiences or in respect of specific topics (children and prize promotions, for example).\r\n\r\n<strong>4. Complaints and dispute handling</strong>\r\n\r\nA large number of the provisions contained in the Regulations deal with consumer complaints and disputes handling. Generally, the Regulations provide that Licensees must:\r\n<ul>\r\n 	<li>make available information to consumers explaining the Licensee complaint policy and procedure;</li>\r\n 	<li>ensure that people with physical disabilities or special needs are capable of accessing the complaints handling process;</li>\r\n 	<li>provide consumers with at least one method of registering complaints free of charge; and</li>\r\n 	<li>keep the complainant updated regarding the progress and expected conclusion date of the complaint. At the date of conclusion, the complainant must be informed about the outcome of the case and the available remedies, if applicable.</li>\r\n</ul>\r\nAl Tamimi &amp; Company’s Technology, Media &amp; Telecommunications team regularly advises on consumer protection issues. For further information about these matters, please contact Anita Siassios, a.siassios@tamimi.com.'),
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	(91899,4993,'content_description','On 30 January 2014, the UAE Telecommunications Regulatory Authority (“TRA”) introduced ‘new’ Consumer Protection Regulations (“Regulations”). '),
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	(91901,4993,'pageSummary','On 30 January 2014, the UAE Telecommunications Regulatory Authority (“TRA”) introduced ‘new’ Consumer Protection Regulations (“Regulations”).'),
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	(91917,4993,'_yoast_wpseo_metadesc','On 30 January 2014, the UAE Telecommunications Regulatory Authority (“TRA”) introduced ‘new’ Consumer Protection Regulations (“Regulations”).'),
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	(91932,4996,'content','October 2014\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">In a very clear cut final judgment, the Court of First Instance established, first, that our client had no bad intention whatsoever while giving Dubai Police his witness statement and, secondly, that the police officer who wrote down our client’s statement was accused in a different case of forging the same statement and asking for a bribe.</p>\r\n<p class=\"MsoNormal\">One of the main legal principles established by the court in this case, is the significant factor of bad faith in providing the police, or any administrative authority, with a false accusation that might lead to penalising an innocent person.</p>\r\n<p class=\"MsoNormal\"><strong>TYPES OF FALSE ACCUSATIONS:</strong></p>\r\n<p class=\"MsoNormal\">When there is insufficient supporting evidence to determine whether an accusation is true or false, such an accusation can be described as \"unsubstantiated\" or \"unfounded\".</p>\r\n<p class=\"MsoNormal\">However, accusations that are determined to be false can be divided into three categories:</p>\r\n<p class=\"MsoListParagraph\">a)       An allegation that is completely false in that the events that were alleged did not occur;</p>\r\n<p class=\"MsoListParagraph\">b)       An allegation that describes events that did occur, but were perpetrated by an individual who is not accused, and in which the accused person is innocent.</p>\r\n<p class=\"MsoListParagraph\">c)       An allegation that is partially true and partially false, in that it mixes descriptions of events that actually happened with other events that did not occur.</p>\r\n<p class=\"MsoNormal\"><strong>BACKGROUND</strong><strong> </strong></p>\r\n<p class=\"MsoNormal\">This case arose out of a separate criminal complaint that was made by the first accused in this case (our client was the second accused). The first accused had initially submitted a criminal complaint against the complainant in this case, alleging that the latter had made threats to kill and injure. Our client was called as a witness. However, the complainant in this case took the view that those allegations were unfounded and, in a counter-attack, he submitted a criminal complaint against both men, alleging that they had made a false accusation against him, in accordance with Article 276 of the UAE Federal Penal Code (Law No. 3 of 1987 as amended).</p>\r\n<p class=\"MsoNormal\">During the time of giving his testimony to the Police, our client claims that he was harassed during the process by the police officer, who afterwards asked for a bribe in return for not pressing charges against him for making false accusations in his witness statement.</p>\r\n<p class=\"MsoNormal\">Although our client did not testify to anything that would fall under the definition of false accusations, our client’s case is that the police officer, in order to request a bribe, had to manipulate and falsify the statement, having to his advantage our client’s lack of knowledge of the Arabic language, and the absence of a translator during his testimony.</p>\r\n<p class=\"MsoNormal\">Consequently, our client reported the request for a bribe to the Criminal Investigation Department of Dubai Police, who liaised with our client to arrest the police officer who, accordingly, was caught in the act.</p>\r\n<p class=\"MsoNormal\">The police officer is subject to criminal accusations of bribery, for which he is being tried before the court of law.</p>\r\n<p class=\"MsoNormal\"><strong>GROUNDS FOR ACQUITTAL</strong></p>\r\n<p class=\"MsoNormal\">Al Tamimi and Company’s approach in defending our client (the second accused in this case) was based on very definite and focused strategic challenges, which may be summarized as follow:</p>\r\n\r\n<ul>\r\n 	<li>As a civil claimant, we joined the ongoing bribery case filed against the police officer, in order to have a copy of the case file and submit it to the court that was reviewing the false accusations case. This was for the sole purpose of making the relevant judge aware of the alleged bribery with a view to him doubting the police report, in which our client’s allegedly false statement was written.</li>\r\n 	<li>As per article 102 of the Civil Procedural Law, <em>“The court shall order a stay of the proceedings if in its opinion it should defer judgment on the subject matter pending determination of another question on which the judgment is dependent; as soon as the cause of the stay has ceased, either of the parties may recommence the action</em><em>.”</em> We argued the necessity of staying the case, pending a final judgment in the criminal case against the police officer for bribery.</li>\r\n 	<li>The bribery case comprised of a preliminary issue, which is the accusation of forgery of our client’s witness statement by the police officer. This issue should be settled first, before any judgment could be issued in the false accusation case. (However, see below – as the Court was suspicious of the police report, it was not necessary to adjourn the case).</li>\r\n 	<li>Al Tamimi and Company’s defences did not stop at this stage, however; we explained to the court the lack of the physical element of the crime and the criminal intention, as well as the forgery of the main evidence in the case, which was our client’s witness statement.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">On 2 July 2014, the Court of First Instance issued its judgment, ruling for the acquittal of our client, while penalizing the first accused for committing a false accusation crime, sentencing him to confinement for a period of 3 months and a fine. This judgment was not appealed by the Public Prosecution against our client, which made the acquittal in favour of our client a final judgment.<strong> </strong></p>\r\n<p class=\"MsoNormal\"><strong>PRACTICE NOTE</strong><strong> </strong></p>\r\n<p class=\"MsoNormal\">As a general misconception, many people believe that an accusation against a person should only be refuted with the aim of proving the accused’s innocence. However, this is not the case according to the UAE Penal code, which clearly allows an innocent person to file a separate criminal complaint, against whoever has submitted a false accusation against him.</p>\r\n<p class=\"MsoNormal\">Since the sole evidence in the case against our client was the subject of a forgery accusation in another case, the Court of First Instance was suspicious of the police report, which included our client’s alleged confession to committing the offence.</p>\r\n<p class=\"MsoNormal\">Consequently, the Court reiterated a very well known and common principle, which is that penal judgments should be based on certainty rather than on suspicion and speculation. Therefore, given the doubt as to the veracity of the police report, it was disregarded by the Court and, in the absence of any other evidence, our client was acquitted of the charge of making a false accusation. This doubt surrounding the police report was sufficient to secure an acquittal without the need for a final determination in the bribery case against the police officer,</p>'),
	(178227,4996,'core_values',''),
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	(91936,4996,'content_description','In early 2014, Al Tamimi & Co successfully represented a client who was accused by Dubai Public Prosecution of being an accomplice in a false accusation case.'),
	(91937,4996,'_content_description','field_59b641c07f473'),
	(91938,4996,'pageSummary','In early 2014, Al Tamimi &amp; Co successfully represented a client who was accused by Dubai Public Prosecution of being an accomplice in a false accusation case.'),
	(91939,4996,'_pageSummary','field_59e59b307dec8'),
	(91940,4996,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-8/october-4/false-accusation-is-not-a-petty-crime-under-uae-penal-code.html'),
	(91941,4996,'_currentURL','field_59d35123ab1e7'),
	(91942,4996,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Mohamed Abdelrehiem'),
	(91943,4996,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(91944,4996,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','M.Abdelrehiem@tamimi.com'),
	(91945,4996,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','field_59e59afcd15de'),
	(91946,4996,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation',''),
	(91947,4996,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
	(91948,4996,'lawUpdateArticleNoWriters_1_lawUpdateAuthorName','Omar Khattab'),
	(91949,4996,'_lawUpdateArticleNoWriters_1_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(91950,4996,'lawUpdateArticleNoWriters_1_lawUpdateAuthorEmail','o.khattab@tamimi.com'),
	(91951,4996,'_lawUpdateArticleNoWriters_1_lawUpdateAuthorEmail','field_59e59afcd15de'),
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	(91960,4996,'_yoast_wpseo_metadesc','In early 2014, Al Tamimi & Co successfully represented a client who was accused by Dubai Public Prosecution of being an accomplice in a false accusation case.'),
	(91961,4997,'content','October 2014\r\n\r\n<hr />\r\n<p class=\"MsoFootnoteText\">The 1958 New York Convention on the Recognition and Enforcement of Arbitral Awards has helped standardize the enforcement criteria in a large number of states.  The UAE acceded the New York Convention in 2006 without reservation.</p>\r\n<p class=\"MsoFootnoteText\">It took four years before the first judgment applying the New York Convention was rendered.</p>\r\n<p class=\"MsoFootnoteText\">In 2010 Fujairah Federal Court of First Instance ruled <a href=\"file:///C:/Users/faye/Desktop/October%20article/Judgment%202_%20Enforcment%20of%20foreign%20arbitral%20awards_Al%20Hadrami%20(RKL%20edit)%20(3).DOCX#_ftn1\">[1]</a> to enforce a London award issued under the London Maritime Arbitrators Association (LMAA) rules. The judgment expressly recognised that conventions and treaties entered into by the UAE have the force of local legislation.<a href=\"file:///C:/Users/faye/Desktop/October%20article/Judgment%202_%20Enforcment%20of%20foreign%20arbitral%20awards_Al%20Hadrami%20(RKL%20edit)%20(3).DOCX#_ftn2\">[2]</a> However, the case was not contested by the party against whom enforcement was sought and, although encouraging, was therefore treated with some caution.</p>\r\n<p class=\"MsoFootnoteText\">In 2011, the Dubai Court of First Instance<a href=\"file:///C:/Users/faye/Desktop/October%20article/Judgment%202_%20Enforcment%20of%20foreign%20arbitral%20awards_Al%20Hadrami%20(RKL%20edit)%20(3).DOCX#_ftn3\">[3]</a> was faced with an application to enforce two London arbitral awards issued under the DIFC-LCIA Arbitral Rules involving two Dubai based companies. The defendant objected to the enforcement of the awards and sought nullification based on a number of procedural grounds. The court recognised that the awards were “undoubtedly foreign awards, both issued outside the UAE in London in accordance with the New York Convention” and held:</p>\r\n<p class=\"MsoNormal\">“The Court’s supervisory role when looking to recognize and enforce a foreign arbitral award is strictly to ensure that it does not conflict with the Federal Decree under which the UAE acceded to the New York Convention on the recognition and enforcement of foreign arbitral awards and satisfies the applicable procedural and substantive requirements of Articles 4 &amp; 5 of the Decree in terms of being duly authenticated.”</p>\r\n<p class=\"MsoNormal\">A further positive step came in 2012 when the Dubai Court of Cassation upheld the lower courts’ decision enforcing a foreign arbitral award in Airmech v Maxtell (Commercial Appeal No. 132 of 2012 ). The Court held, among other things, that:</p>\r\n<p class=\"MsoNormal\">“In ruling that the UAE Courts have no jurisdiction to set aside foreign arbitral awards, the Court of Appeal reached the right conclusion as a matter of law and cannot be faulted for finding that jurisdiction belongs to the arbitrator that issued the award. As settled in the Court, the Court of Cassation can make up for incomplete reasoning and rectify error without having to reverse the decision. The effect of Federal Decree No. 43 of 2006 (under which the UAE acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards) is that all UAE Courts shall recognize and enforce such awards in the territory where the award is relied upon.”</p>\r\nDespite the encouraging approach above, the UAE Courts had a setback in 2013 when the Dubai Cassation Court upheld the appeal court’s decision in rejecting an enforcement application in Civil Case No. 165 of 2013. The award creditor had applied for enforcement of a French award against a foreign government with assets in the UAE. The Dubai Cassation Court, after reciting the full text of Articles 3 and 4 of the New York Convention as well as Article 15 of the UAE’s Judicial Cooperation Agreement with France, stated that: “The procedure for obtaining enforcement of a judicial decision shall be governed by the law of the State of which the request is made”. On that basis the court applied the UAE Civil Code and found that the court had no jurisdiction to enforce the award because the defendant was not resident in the UAE, even though that is not a requirement for the enforcement of awards under the New York Convention.\r\n<p class=\"MsoNormal\">Not long after, the Dubai Court of Appeal issued a decision (Commercial Appeal No. 1 of 2013, issued on 9 July 2013) which proved that the above Cassation Court’s decision was an exception, and that the UAE is committed to its international obligations. The Appeal Court held.</p>\r\n<p class=\"MsoNormal\">Although errant judgments do arise periodically, the above shows that the UAE courts’ general approach towards arbitration has recently been positive, it is hoped that it will remain so.</p>\r\n<p class=\"MsoNormal\">Footnotes:</p>\r\n\r\n<div>\r\n<div>\r\n<p class=\"MsoFootnoteText\">[1] Abdul Hameed Ahdab, Resource of International Arbitration, First Addition, Nofal Library, Beirut, Lebanon, 1990, p. 206. (Arabic).</p>\r\n<p class=\"MsoFootnoteText\">[2] Ibid.</p>\r\n[3] Case No.35 of 2010.\r\n<p class=\"MsoFootnoteText\">[4] Ibid.</p>\r\n[5] <em>Maxtel International FZE v Airmec Dubai LLC</em>, Court of First Instance Commercial Action No.268, January 12, 2011.\r\n\r\n</div>\r\n</div>'),
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	(91965,4997,'content_description','International commercial arbitration as a mechanism for resolving commercial disputes continues to gain popularity worldwide.  The popularity of this form of dispute resolution however varies and the reason for this is the difference in application from one country to another.  '),
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	(91967,4997,'pageSummary','International commercial arbitration as a mechanism for resolving commercial disputes continues to gain popularity worldwide. The popularity of this form of dispute resolution however varies and the reason for this is the difference in application from one country to another.'),
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	(91971,4997,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Khaled Ali Al Hadhrami'),
	(91972,4997,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(91973,4997,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','k.alhadhrami@tamimi.com'),
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	(91975,4997,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation',''),
	(91976,4997,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
	(91977,4997,'lawUpdateArticleNoWriters_1_lawUpdateAuthorName','Marwa El Mahdy'),
	(91978,4997,'_lawUpdateArticleNoWriters_1_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(91979,4997,'lawUpdateArticleNoWriters_1_lawUpdateAuthorEmail','m.elmahdy@tamimi.com'),
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	(91981,4997,'lawUpdateArticleNoWriters_1_lawUpdateAuthorLocation',''),
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	(91989,4997,'_yoast_wpseo_metadesc','International commercial arbitration as a mechanism for resolving commercial disputes continues to gain popularity worldwide. The popularity of this form of dispute resolution however varies and the reason for this is the difference in application from one country to another.'),
	(91990,4998,'content','<em>Note: Important changes have been introduced to the UAE Labour Law. Scroll down to the bottom of the article to read more.</em>\r\n\r\n<hr />\r\n\r\n\r\n\r\n<hr />\r\n\r\nUnder the UAE Labour Law No. 8 of 1980 (as amended) (the “UAE Labour Law”), applicable to all employers in the UAE (save for those based in the Dubai International Financial Centre (“DIFC”)), there are two types of employment contract employers can issue to employees; limited term or unlimited term contracts.\r\n<p class=\"MsoNormal\">There are various distinctions between the two types of contract including the treatment of statutory end of service gratuity entitlement and termination consequences.</p>\r\n<p class=\"MsoNormal\"><strong>Limited term contracts</strong></p>\r\n<p class=\"MsoNormal\"><strong>1. What is a limited term contract?</strong></p>\r\n<p class=\"MsoNormal\">A limited term contract is a fixed term contract and is normally linked to the duration of the UAE residency visa (i.e. two or three years, depending on the location of the employer). It will automatically terminate at the end of term unless terminated earlier by either party, or renewed by both parties.</p>\r\n<p class=\"MsoNormal\"><strong>2. When is it appropriate to use a limited term contract?</strong></p>\r\n<p class=\"MsoNormal\">Limited term contracts are useful where an employer needs to engage employees for specific projects and the lengths of those projects are known in advance.</p>\r\n<p class=\"MsoNormal\"><strong>3. How may a limited term contract be terminated?</strong></p>\r\n<p class=\"MsoNormal\">Limited term contracts generally have no notice provision and simply expire at the end of the term or on the date specified in the contract (unless terminated earlier by either party – see answers to questions 5 and 6 below).</p>\r\nSummary dismissal by the employer is allowed on the basis of one of the 11 exhaustive grounds under Articles 88 and 120 of the UAE Labour Law. An employee may validly resign prior to the expiry of the contract under the provisions of Article 121 of the law.\r\n<p class=\"MsoNormal\"><strong>4. How may a limited term contract be renewed?</strong></p>\r\n<p class=\"MsoNormal\">A limited term contract may be renewed with the consent of both parties, or alternatively, at the end of the contract, the parties could agree to convert the agreement to an unlimited term contract.</p>\r\n<p class=\"MsoNormal\"><strong>5. What if an employer wants to terminate the contract early?</strong></p>\r\n<p class=\"MsoNormal\">Under the UAE Labour Law an employee is entitled to “early termination compensation” of a minimum three  months’ remuneration, including salary and allowances, (or the remainder of the term of the contract if the period remaining is less than three months ), if an employer seeks to terminate the contract prior to the end of the limited term.</p>\r\n<p class=\"MsoNormal\"><strong>6. What if an employee wants to terminate the contract early?</strong></p>\r\n<p class=\"MsoNormal\">Unless the employment contract provides otherwise, if the employee wishes to terminate the limited term contract before the expiry of the term, he will be liable under the UAE Labour Law to pay the employer “early termination compensation” of half of three months’ remuneration, including salary and allowances, or half of the remuneration for the residual period if the contract has fewer than three months to run.</p>\r\n<p class=\"MsoNormal\"><strong>7. What happens if the limited term contract contains a notice period?</strong></p>\r\n<p class=\"MsoNormal\">Where notice is provided for in a limited term contract, this will have to be provided to the other party in addition to any early termination compensation due.</p>\r\n<p class=\"MsoNormal\"><strong>8. How is end of service gratuity calculated under a limited term contract, where the employer terminates the contract?</strong></p>\r\n<p class=\"MsoNormal\">An employee who has completed one year or more of continuous service is entitled to end of service gratuity calculated as follows:</p>\r\n\r\n<ul>\r\n 	<li class=\"MsoNormal\">21 calendar days’ basic pay for each year of the first five years of service.</li>\r\n 	<li class=\"MsoNormal\">30 calendar days’ basic pay for each additional year.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">Provided that the entire total remuneration does not exceed two years’ pay.</p>\r\n<p class=\"MsoNormal\">An employee is not entitled to end of service gratuity where he has been terminated summarily for gross misconduct pursuant to the provisions of the UAE Labour Law.</p>\r\n<p class=\"MsoNormal\"><strong>9. How is end of service gratuity calculated under a limited term contract, where the employee resigns?</strong></p>\r\n<p class=\"MsoNormal\">An employee is not entitled to an end of service gratuity if he resigns with fewer than 5 years of service. If he has over 5 years of service, he is entitled to the same end of service gratuity as if he resigned on an unlimited contract (see answer to question 16 below).</p>\r\n<p class=\"MsoNormal\"><strong>10. Checklist for a limited term contract.</strong></p>\r\n<p class=\"MsoNormal\">Under the UAE Labour Law, a limited term employment contract must, as a minimum specify:</p>\r\n\r\n<ul>\r\n 	<li class=\"MsoNormal\">the date of its conclusion;</li>\r\n 	<li class=\"MsoNormal\">the date on which work begins;</li>\r\n 	<li class=\"MsoNormal\">the nature of the work;</li>\r\n 	<li class=\"MsoNormal\">the workplace;</li>\r\n 	<li class=\"MsoNormal\">the amount of the remuneration; and</li>\r\n 	<li class=\"MsoNormal\">the duration.</li>\r\n</ul>\r\n<p class=\"MsoNormal\"><strong>Unlimited term contracts</strong></p>\r\n<p class=\"MsoNormal\"><strong>11. What is an unlimited term contract?</strong></p>\r\n<p class=\"MsoNormal\">An unlimited term contract is open-ended and may be terminated for various reasons under the UAE Labour Law (see answer to questions 13 and 14 below).</p>\r\n<p class=\"MsoNormal\"><strong>12. When is it appropriate to use an unlimited term contract?</strong></p>\r\n<p class=\"MsoNormal\">Unlimited term contracts are generally viewed to be more flexible and user friendly than limited term contracts. For this reason, an unlimited term contract is more commonly used in the UAE than a limited term contract. It can be used for employees who are intended to be permanent and are not undertaking project work (where the length of the project is known in advance).</p>\r\n<p class=\"MsoNormal\"><strong>13. How may an unlimited term contract be terminated by an employer?</strong></p>\r\n<p class=\"MsoNormal\">Under the UAE Labour Law, there are two main ways for an employer to legitimately terminate an unlimited term contract:</p>\r\n\r\n<ol>\r\n 	<li class=\"MsoNormal\">For a ‘valid’ (i.e. performance related) reason on notice (the UAE Labour Law provides for a minimum notice period of 30 calendar days. However, the parties are entitled to agree on longer notice periods in the contract); or</li>\r\n 	<li class=\"MsoNormal\">Summarily (without notice and end of service gratuity) for one of the 11 exhaustive gross misconduct reasons set out in Articles 88 and 120 of the UAE Labour Law.</li>\r\n</ol>\r\n<p class=\"MsoNormal\"><strong>14. How may an unlimited term contract be terminated by an employee?</strong></p>\r\n<p class=\"MsoNormal\">An employee may resign by providing the employer with the contractual notice period (which must be a minimum of 30 calendar days, or longer, as per the contract of employment).</p>\r\nAlternatively, the employee may resign without notice as set our under Article 121 of the law.\r\n<p class=\"MsoNormal\"><strong>15. How is end of service gratuity calculated under an unlimited term contract, where the employer terminates the contract?</strong></p>\r\n<p class=\"MsoNormal\">An employee who has completed one year or more of continuous service is entitled to end of service gratuity to be calculated as follows:</p>\r\n\r\n<ul>\r\n 	<li class=\"MsoNormal\">21 calendar days’ basic pay for each year of the first five years of service.</li>\r\n 	<li class=\"MsoNormal\">30 calendar days’ basic pay for each additional year.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">Provided that the entire total remuneration does not exceed two years pay.</p>\r\nNote that an employee is not entitled to end of service gratuity where he has been terminated summarily for gross misconduct pursuant to the provisions of the UAE Labour Law.\r\n<p class=\"MsoNormal\"><strong>16. How is end of service gratuity calculated under an unlimited term contract, where the employee resigns?</strong></p>\r\n<p class=\"MsoNormal\">Where an employee resigns from an unlimited term contract, he will be entitled to an end of service gratuity on the following sliding scale:</p>\r\n\r\n<ul>\r\n 	<li class=\"MsoNormal\">Period of service of between one to three years: 2/3 reduction;</li>\r\n 	<li class=\"MsoNormal\">Period of service of between three to five years: 1/3 reduction If the period of service if over five years there is no reduction.</li>\r\n</ul>\r\n<p class=\"MsoNormal\"><strong>17. Checklist of items to include in an unlimited term contract.</strong></p>\r\n<p class=\"MsoNormal\">Under the UAE Labour Law, an unlimited term employment contract must, as a minimum specify:</p>\r\n\r\n<ul>\r\n 	<li class=\"MsoNormal\">the date of its conclusion;</li>\r\n 	<li class=\"MsoNormal\">the date on which work begins;</li>\r\n 	<li class=\"MsoNormal\">the nature of the work;</li>\r\n 	<li class=\"MsoNormal\">the workplace;</li>\r\n 	<li class=\"MsoNormal\">the amount of the remuneration.</li>\r\n</ul>\r\n\r\n<hr />\r\n\r\nUpdate: The Minister of Labour introduced some important changes to the UAE labour regulations by means of three decrees issued on 27 September 2015. <a href=\"http://localhost:8888/tamimi/law-update-articles/uae-labour-market-reform-a-new-platform-for-2016/\">Click here to read more.</a>'),
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	(99727,5419,'_content','field_59b649b5c8b2b'),
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	(99730,5419,'content_description','Crowdfunding has grown in both scope and popularity in recent years around the world and the UAE is no exception in this regard.  However, unlike many other jurisdictions, there is no specific regime providing for or enabling crowdfunding in the UAE and platform operators must try and work within existing securities and financial regulations which are not necessarily conducive to modern crowdfunding models.'),
	(99731,5419,'_content_description','field_59b641c07f473'),
	(99732,5419,'pageSummary','Crowdfunding has grown in both scope and popularity in recent years around the world and the UAE is no exception in this regard. However, unlike many other jurisdictions, there is no specific regime providing for or enabling crowdfunding in the UAE and platform operators must try and work within existing securities and financial regulations which are not necessarily conducive to modern crowdfunding models.'),
	(99733,5419,'_pageSummary','field_59e59b307dec8'),
	(99734,5419,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-14/jun-jul/crowdfunding-platforms-in-the-uae.html'),
	(99735,5419,'_currentURL','field_59d35123ab1e7'),
	(214181,5419,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(214180,5419,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Edward Brown'),
	(99738,5419,'lawUpdateArticleWriters',''),
	(99739,5419,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(99740,5419,'_yoast_wpseo_metadesc','Unlike many other jurisdictions, there is no specific regime providing for or enabling crowdfunding in the UAE and platform operators must try and work within existing securities and financial regulations which are not necessarily conducive to modern crowdfunding models.'),
	(99741,5420,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\">Technology, media and telecommunications now affect almost every aspect of our lives.  For property owners this has created interesting relationships and issues to consider.  In this article we set out current issues that are affecting a wide range of property owners and technology, media and telecommunication companies alike.  In particular we look at:</p>\r\n\r\n<ul>\r\n 	<li>Technology: Airbnb and Dubai 2020 – what you need to know;</li>\r\n 	<li>Media: Billboards and Advertising in Community Developments and Jointly Owned Property; and</li>\r\n 	<li>Telecommunications: Cell Tower Agreement Essentials.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\">These areas of law will continue to develop over coming years as the way society uses technology develops and grows.  Although the law reputedly struggles to keep up to date with society’s development, parties often find creative contractual solutions to deal with any lack of regulation for the use of new technologies.  We will continue to watch these developments with interest.</p>\r\n<p class=\"p4\"><strong>Technology: Airbnb and Dubai 2020 – what you need to know</strong></p>\r\n<p class=\"p1\">Disruptive technologies have created major changes worldwide in recent times. Government and legal responses have been varied.  The Government of Dubai has taken a progressive approach with its recent Dubai Holiday Home Rental Regulations No. 3 of 2015 issued on 31 December 2015) (the ‘Regulation’), which specifically states that the Department of Tourism and Commerce Marketing ‘encourages use of reputable online service providers and welcomes specific proposals towards the betterment and enhancement of Holiday Home Rental activity in Dubai.’ The forward to the Regulations include within its objectives a target of welcoming 20 million annual visitors to Dubai by 2020 by increasing the supply and broadening the range of available accommodation. With those objectives in mind we consider how the law applies to Airbnb and other disruptive accommodation providers in this period of lead up to the Dubai 2020 Expo.</p>\r\n<p class=\"p1\">First we will start with what the Regulation is not.  The Regulation does not apply to renting out a single room in your own home. Table 2, number 18 of the Regulation sets out, among other matters, unit conditions and states that ‘Holiday Homes must be rented as an entire unit, not on a shared basis, and can be hired on a daily, weekly, monthly, or yearly basis.’  This cuts out much of the Airbnb lower end of the market that uses a spare room in their own home for additional income.  We do not explore in this article the legalities of that use of Airbnb in Dubai.</p>\r\n<p class=\"p1\">What the Regulation covers is the rental for holiday purposes of entire furnished and equipped residential homes which meet the relevant standard anywhere in Dubai, including free zones, development zones and real estate communities.</p>\r\n<p class=\"p1\">The Regulation may also limit contractual provisions and/or strata community rules that prevent the use of residential property for short term accommodation.  The Regulation states at 2.1.3 B that community rules that prohibit seeking to licence and rent-out units as ‘‘Holiday Homes’’ lack legal recognition. This permissive approach may open up areas to visitors that have previously been limited to permanent occupants only as well as providing new options for absentee owners.  Owners however should act with caution, they may be subject to contractual or other obligations and we recommend that advice is sought before action is taken.</p>\r\n<p class=\"p1\">Strata communities may currently be unaware of the permission for short term accommodation granted by the Regulation, and many have rules against short term accommodation uses in the unit sale agreements, strata community rules or jointly owned property declarations.</p>\r\n<p class=\"p1\">We expect some challenge to occur on this point particularly as the Dubai Land Department direction for jointly owned property declaration allows restrictions on how units may be used.  Restrictions on short term letting would be a common restriction in the ‘‘Community Rules’’ of residential strata communities.</p>\r\n<p class=\"p1\">The Regulation does go on to temper its prohibition of short term accommodation restrictions by providing:</p>\r\n\r\n<ul>\r\n 	<li>minimum terms and conditions upon which a property is offered, booked and occupied as a Holiday Home; in (table 3); and</li>\r\n 	<li>minimum house rules (table 4).</li>\r\n</ul>\r\n<p class=\"p1\">These restrictions include noise and residential amenity rules, particularly between the hours of 10pm to 8am as well as rules against functions and parties.</p>\r\n<p class=\"p1\">Until April of this year, when further regulation was brought in, home owners would not have been compliant with the laws of Dubai if they listed property directly onto Airbnb as a Holiday Home.  The rules have now changed in line with the stated aims of the Regulation and private home owners and tenants may apply for a holiday home license without the need to appoint a registered agent (refer to our article in the May 2016 edition of Law Update).</p>\r\n<p class=\"p1\">Subject to classification of the Holiday Home as standard or deluxe, there are significant requirements relating to the property quality standards, furniture, fittings and equipment requirements, health and safety standards, insurance and operational aspects such as provisions of minimum information.  Holiday Homes may be subject to regular inspection by the department and sanctions are likely to apply to private listers in the same way as to registered agents.</p>\r\n<p class=\"p1\">The progressive approach taken by the Dubai government with respect to Airbnb and similar accommodation sites aims to provide a balance between the use of technologies and quality of experience for visitors to Dubai.  Collaboration was recently announced between the department and Airbnb, we look forward to seeing the results of this approach.</p>\r\n<p class=\"p4\"><strong>Media: Billboards and Advertising in Community Developments and Jointly Owned Property</strong></p>\r\n<p class=\"p1\">One hears so much about social media as the new way of advertising it is easy to forget that many traditional forms of advertising continue to provide important strategies for business. Advertising billboards and signs on buildings continue to be prevalent in most societies. One issue that affects Dubai more than many other locations is the private ownership of road infrastructure and other commonly ‘public’ areas through community developments and jointly owned property.</p>\r\n<p class=\"p1\">In many countries all roads are public and the right to place billboards on the edge of roads is negotiated directly with the local authority. Even where billboards are placed on private land at the edge of public areas in many countries, the advertising company is often dealing with a single party.</p>\r\n<p class=\"p1\">In locations where advertising is to be placed on community property (for the sake of this article we will refer to this as ‘strata titled land’), some property developers have become quite sophisticated in their pre-planning of this area.</p>\r\n<p class=\"p1\">When considering a new development for strata titled land and the individual opportunities that relate to any location, property developers sometimes consider the additional income streams that may be available by using space for advertising. Traditionally the most common form of this was through naming rights on the top of a building. In more recent times we have seen an entire side of a 40 floor building used as a billboard. It has also been common to use placard style billboards on non-productive areas of land that face roads and other public spaces.</p>\r\n<p class=\"p1\">When strata titled land developers look at these options they have to consider where the income stream from that advertising should rightfully be channelled.  There are three main options, the income stream opportunity may be:</p>\r\n\r\n<ul>\r\n 	<li>retained as a unit or plot by the developer as future ‘passive income’;</li>\r\n 	<li>sold as a unit or plot and therefore contribute to the saleable inventory of the developer; or</li>\r\n 	<li>held as common property of the strata community to contribute income towards ongoing costs, therefore reducing costs and levies to unit or plot owners.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\">As to whether any of the above options are achievable in any given situation may require work with their surveyors and lawyers and the Real Estate Regulatory Authority (‘RERA’) during the planning phase of the development.</p>\r\n<p class=\"p1\">In theory it may be possible to define part of the exterior wall of a building as a unit or component, this way it can be held in separate ownership.  That owner can then use that unit or component to sell advertising. In practice however the Dubai Land Department and RERA are reluctant to allow such subdivisions and regardless of definition of the wall or structure the Master Developer usually retains rights to use it for advertising. Another alternative may be to use ‘Exclusive Use Rights’. Exclusive Use Rights are rights that are linked to the ownership of a particular unit. It is therefore necessary to retain ownership of a unit in order to benefit from the associated Exclusive Use Rights.</p>\r\n<p class=\"p1\">Whatever mechanism is chosen, a developer must be careful to:</p>\r\n\r\n<ul>\r\n 	<li>define the boundaries of that unit to limit an owner’s responsibility for the cost of exterior structural repairs and maintenance to that part of the building;</li>\r\n 	<li>allow sufficient scope for the unit owner to access and alter the unit or place advertising as necessary and if necessary, for power and other utilities; and</li>\r\n 	<li>place sufficient restriction on the title or in the rules or bylaws to protect the owner from claims by other unit or component owners or any owners association.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p2\">Assuming such arrangements are approved, it is also advisable that the arrangements are clearly disclosed to investors in a ‘Disclosure Statement’ as required under Directions to Law on Jointly Owned Property in the Emirate of Dubai (No.27 of 2007). Such disclosure ensures that all investors are aware of the arrangement and therefore cannot assert, for example, that the relevant area should be common property and therefore the associated income is for the benefit of the owners association.</p>\r\n<p class=\"p1\">Defining the advertising space as a separate unit or designating the same as an Exclusive Use Area allows developers to own the unit and receive advertising income and sell the unit to a third party and collect profit.</p>\r\n<p class=\"p1\">If the strata community is retaining the proposed advertising space as common property, the rules or by-laws should be sufficiently clear in order the owners have good process to:</p>\r\n\r\n<ul>\r\n 	<li>make clear decisions on acceptable advertising; and</li>\r\n 	<li>negotiate the contractual terms with advertisers.</li>\r\n</ul>\r\n<p class=\"p1\">In Dubai all signage must have the approval of the Dubai Municipality. In addition, the approval of the relevant Master Developer and the RTA could be required. As noted above, the ability to create such signage areas in strata communities may also require the Dubai Land Department’s approval.</p>\r\n<p class=\"p5\"><strong>Telecommunications: Cell Tower Agreement Essentials</strong></p>\r\n<p class=\"p1\">Over the last approximately 20 years the use and popularity of mobile phones has grown exponentially.  This has required corresponding support from telco’s, who have in turn often required the support of private land owners to enable sufficient expansion of their infrastructure, particularly with the placement of cell towers.</p>\r\n<p class=\"p1\">In many cities one will find cell towers on the roofs of tall buildings, in rural areas on the apex of hills and on roadsides disguised as trees.  Unless the land is public, or the law provides otherwise, it will be the case that the land owner has negotiated a commercial arrangement with a telco for use of their land for a cell tower.  For land owners this can be a small but useful income source from an otherwise unproductive part of their property.</p>\r\n<p class=\"p1\">Land owners approached by telco’s in relation to use of land for a cell tower or other telecommunications infrastructure can expect agreements with a number of common factors, subject to their local laws and provider.</p>\r\n<p class=\"p1\">Where the equipment or technology appears to have a fixed life of a relatively short period, say less than 15 years, the form of arrangement with a landowner is most often through a licence to occupy or lease for a period of time.  Where the equipment is more in the nature of fixed long term infrastructure it is often dealt with by way of easement over the land.  In many jurisdictions, the government also enacts laws to cover arrangements for essential infrastructure over private land.  In this section we focus on the essentials of cell tower licenses to occupy private land or buildings (‘Cell Tower Agreements’).</p>\r\n<p class=\"p1\">Cell Tower Agreements should clearly define the area that is being used and how it is to be accessed.  The telco will be responsible for the installation of their equipment, connection to the necessary infrastructure and all repair, maintenance and risk of their equipment as well as for any damage their access over the land or the equipment may cause whilst it is present.</p>\r\n<p class=\"p1\">The land owner will promise not to interfere with the telco’s equipment nor do anything to interfere with the way it functions.  Interference includes both physical interference with the equipment or relevant part of the land and in relation to transmissions that may interfere with any frequency or electromagnetic field that the cell tower uses.</p>\r\n<p class=\"p1\">Where the cell tower is on the roof of a commercial or retail building, land owners must consider their tenants, the nature of the businesses and whether there are any restrictions in their lease documents on transmission of any audio or visual material or electromagnetic radiation of any frequency outside of the premises, which may cause a breach to the Cell Tower Agreement.</p>\r\n<p class=\"p1\">It is common in commercial and retail leases to include restrictions limiting broadcasting of electronic, digital and electromagnetic radiation that may interfere with other tenants or the landlord.  For some tenants, the nature of their business will require such broadcasting.  Land owners will need to assess their particular building and its current (and future) tenants in relation to any restrictions in a Cell Tower Agreement.</p>\r\n<p class=\"p1\">The land owner and the telco will need to agree appropriate limitations on liability and arrangements for insurance in relation to damage to the equipment.  The nature of the equipment will often equate to any damage being financially significant.</p>\r\n<p class=\"p1\">The telco should pay for the installation of a separate electricity meter and be responsible for its own costs of operation. The telco will also pay a licence fee or rent to the land owner.  The licence fee or rent is sometimes a fixed cost, particularly when the term of the licence is quite short.  With longer terms the licence fee is increased, often annually, by a fixed amount or linked to the rate of inflation by reference to changes in the consumer price index.</p>\r\n<p class=\"p1\">The telco will be responsible for the cost of reinstating the land owner’s property for any damage caused during the installation of the equipment, during any repairs, maintenance or upgrades and at the end of the licence period when the equipment is removed.</p>\r\n<p class=\"p1\">If a land owner is approached by a telco for use of their land to expand the telco’s infrastructure the land owner must ensure that the Cell Tower Agreement between them properly defines the rights of both parties so that the effect to their property is cost neutral and the licence fee provides a financial return.</p>\r\n<p class=\"p4\"><strong>Conclusion</strong></p>\r\n<p class=\"p1\">Although Dubai has a modern and flexible real estate law framework, the implementation (or lack thereof) of aspects of this sometimes means that the commercialising of otherwise unproductive areas of a development requires careful consideration at the planning stages in order to capitalise on the benefits that rapid changes in technology may bring.</p>\r\n<p class=\"p1\">Technology continues to change and with it, comes the opportunity, through thoughtful use of existing legal principles, to create positive commercial outcomes for developers, land owners and technology providers alike.</p>'),
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	(99711,5418,'content_description','The software and information technology services industry abounds with examples of companies that enter into commercial contracts for services related to software development, installation and updates as well as other technical solutions.'),
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	(99713,5418,'pageSummary','The software and information technology services industry abounds with examples of companies that enter into commercial contracts for services related to software development, installation and updates as well as other technical solutions.'),
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	(99717,5418,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Rami Abdellatif'),
	(99718,5418,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(99719,5418,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','r.abdellatif@tamimi.com'),
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	(99721,5418,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','Dubai, UAE'),
	(99722,5418,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
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	(99724,5418,'_lawUpdateArticleNoWriters','field_59e59aaed15dc'),
	(99725,5418,'_yoast_wpseo_metadesc','The software and information technology services industry abounds with examples of companies that enter into commercial contracts for services related to software development, installation and updates as well as other technical solutions.'),
	(99726,5419,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\"><strong>1. Introduction</strong></p>\r\n<p class=\"p1\">Crowdfunding has been around for many years, arguably for centuries with one of its earliest uses in the production of books.  In the modern era, however, it is ostensibly linked with information technology and online platforms starting in the late 90s and early 2000s in connection with arts and music communities.</p>\r\n<p class=\"p1\">Crowdfunding covers many types of activities including equity funding and debt funding, but also extends to the likes of litigation and donation based funding.  Today, however, crowdfunding is most closely associated with the online offering of private company equity or debt investments and as such is subject to securities and financial regulation.</p>\r\n<p class=\"p3\"><strong>2. The rise of crowdfunding </strong></p>\r\n<p class=\"p2\">There has been a rise in the number of crowdfunding platforms based in or focused on the UAE and wider GCC in recent years.  Aflamnah was launched in Dubai in 2012 focusing on locally produced film projects, Eureeca followed in 2013 with an equity crowdfunding platform, in 2014 the first real estate platform focused on the UAE was launched by Humming Crowd Realty and there are now a plethora of other platforms based in the UAE including Durise, Beehive, Yomken and Zoomaal to name a few.</p>\r\n<p class=\"p1\">As yet, however, there is no regulatory regime specifically catering for or permitting such activities in the UAE outside of the existing regulation and requirements of either the UAE Central Bank (“Central Bank”) or the UAE Securities and Commodities Authority (“SCA”) or, in respect of the Dubai International Financial Centre (“DIFC”), the Dubai Financial Services Authority (“DFSA”).  However, it should be noted that the DFSA has recently indicated it intends to specifically provide for crowdfunding and will be looking to have a regime in place towards the end of this year catering for debt-based funding.</p>\r\n<p class=\"p3\"><strong>3. Regulatory issues</strong></p>\r\n<p class=\"p1\">In short, any financial service or activity in the UAE or the DIFC is regulated either by the Central Bank, the SCA or, in respect of the DIFC, the DFSA.  Therefore, depending on a particular crowdfunding platform’s model (ie, merely introducing two independently contracting parties or actively establishing a fund or offering securities), it may or may not be deemed as being subject to securities and financial regulation in the UAE.</p>\r\n<p class=\"p1\">A typical equity based platform may offer an investment in the ownership of an enterprise or start-up, thus constituting an offer of securities to the public.  A typical lending or debt based platform may offer a pooled investment into a fund which will then lend to or purchase debt securities from an enterprise or start-up, thus potentially constituting fund formation, lending and securities offering activities all in the one platform.</p>\r\n<p class=\"p2\">The above examples would likely be subject to regulation and will come under the remit of either the Central Bank in respect of banking and debt financing activities or the SCA in respect of securities, fund formation and operation or other financial services related activities, or the DFSA in respect of activities in the DIFC.</p>\r\n<p class=\"p1\">Central Bank, SCA or DFSA rules and regulations prohibit any person conducting lending, securities offering, fund formation or management activities in the UAE or DIFC without an appropriate license or licenses, and thus such crowdfunding platforms should be licensed as appropriate depending on the nature of the platform.</p>\r\n<p class=\"p1\">However, under existing legislation and regulations, gaining of such licenses is time consuming and costly in the context of crowdfunding activities which are often focused on raising a limited pool of funds and where the full breadth of traditional financial services regulation may not be seen as appropriate or necessary.  Indeed, given the particulars of contemporary crowdfunding platforms, many jurisdictions have implemented specific crowdfunding regimes to assist in their establishment and operation and alleviate the somewhat onerous regulation focused at traditional securities offers and company financing.  Such regimes typically try to effect a balance in allowing crowdfunding platforms to operate and small enterprises to access funding with limited regulatory burden but at the same time protecting investors by limiting the size of individual and overall subscriptions.  Jurisdictions which have promulgated such regimes in recent years include the United States, the United Kingdom, Belgium, Canada, China, Italy, New Zealand and Portugal to name only a few.</p>\r\n<p class=\"p1\">However, to date, there is no such regime currently in place or contemplated for the UAE and, as things stand, any crowdfunding platform in the UAE will face licensing and authorisation issues concerning marketing and distribution, fund set-up and operation, lending and securities offerings where deemed to be conducting these activities in the UAE.  However, as noted above, the DFSA has recently indicated it intends to specifically accommodate debt-based crowdfunding within its rules towards the end of this year.</p>\r\n<p class=\"p3\"><strong>4. UAE free zone based platforms</strong></p>\r\n<p class=\"p1\">A number of existing crowdfunding platforms are domiciled in one or other of the many free zones within the UAE.  However, notwithstanding any particular free zone approval or licenses, financial services and activities are not permitted within free zones and should be conducted and appropriately licensed within the UAE outside of the free zones by the Central Bank or SCA (with the exception of certain activities within the DMCC and the separately regulated DIFC).  Therefore, depending a the platform’s particular model, if an operator is deemed to conducting lending, securities offering or fund formation and operation activities they run a regulatory risk where doing so in the UAE without appropriate Central Bank or SCA licenses and approval.</p>\r\n<p class=\"p3\"><strong>5. Foreign based platforms</strong></p>\r\n<p class=\"p1\">As an alternative to locally domiciled platforms, and in an effort to alleviate the UAE regulatory burden and/or risk, many of the UAE and GCC focused platforms are in fact domiciled in off-shore jurisdictions where there is a specific enabling regime or, despite there being no specific crowdfunding regime, the local requirements are not as onerous as in the UAE, such as a non-regulated fund structure in the likes of the Cayman Islands.  However, with such structures there still remain issues, and care must be taken regarding marketing and distribution in the UAE without appropriate Central Bank or SCA licensing to ensure  that local entities are not deemed to be conducting regulated activities by proxy without appropriate licensing.</p>\r\n<p class=\"p3\"><strong>6. Conclusion</strong></p>\r\n<p class=\"p1\">There are locally domiciled crowdfunding platforms operating in, or foreign domiciled platforms focused on, the UAE which are either confident that their models do not bring them within reach of the Central Bank’s or SCA’s regulatory remit or, alternatively, have made a risk assessment in this regard and are operating within the appropriate regulatory framework.  However, while crowdfunding platforms may be seen by regulators as towards the lower end of the spectrum in terms of systemic risk, there still exist regulatory risks for the platform operators and they should be cognizant of the regulatory restrictions within which they are operating and aware of the issues noted above.</p>'),
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	(99694,5417,'content_description','In a landmark legal development, a judgment of the DIFC Courts has been recognised and enforced for the first time in a Western jurisdiction.'),
	(99695,5417,'_content_description','field_59b641c07f473'),
	(99696,5417,'pageSummary','In a landmark legal development, a judgment of the DIFC Courts has been recognised and enforced for the first time in a Western jurisdiction.'),
	(99697,5417,'_pageSummary','field_59e59b307dec8'),
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	(214189,5417,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(214188,5417,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Tarek Shrayh'),
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	(99705,5417,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(99706,5417,'_yoast_wpseo_metadesc','In a landmark legal development, a judgment of the DIFC Courts has been recognised and enforced for the first time in a Western jurisdiction.'),
	(99707,5418,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\">Disputes frequently arise during the course of performance of such contracts over matters of a largely technical nature. Although such disputes can be hard to pinpoint due to the very nature of the work and contracts involved, they generally tend to be centred on the following issues:</p>\r\n\r\n<ul>\r\n 	<li>Delays in performance of contract work;</li>\r\n 	<li>Unsatisfactory work in terms of quality and work that does not conform to specifications;</li>\r\n 	<li>The contract scope of work and whether work is included in the contract;</li>\r\n 	<li>Non-payment and the amount payable at the completion of work;</li>\r\n 	<li>Post-installation operational and technical issues; and</li>\r\n 	<li>The ownership of work completed.</li>\r\n</ul>\r\n<p class=\"p1\">Such disputes are resolved in much the same manner as any normal court proceeding where the claimant files an action before the relevant court. Without delving too deep into the different kinds of courts and their functions, general rules in commercial disputes, which could apply in software cases, include jurisdiction being vested in the court in whose area the defendant has his domicile; or vested in the court in whose area the agreement was made or was performed in whole or in part; or vested in the court in whose area the contract should have been performed.</p>\r\n<p class=\"p1\">A common feature of these types of disputes is that the courts usually find themselves required to appoint a technical expert. This expert will review the case file based on the court’s mandate and advise on technical matters, depending on the nature of the dispute and the claims and defences asserted.</p>\r\n<p class=\"p2\">Article 69 of the Law of Proof in Civil and Commercial Transactions states:</p>\r\n<p class=\"p1\">“The Court may, when necessary, rule to appoint one or more experts from amongst the employees of the State or those listed in the register of experts, in order to seek their opinion to give insight on the issues on which judgment is to be made in the case. The Court shall determine the deposit which must be lodged with the Treasury Department of the Court on account of the expenses of the expert and his fees, the party who shall be required to lodge this deposit, and the time by which it must be lodged; also the amount which may be drawn by the expert towards his expenses.”</p>\r\n<p class=\"p1\">Expert evidence forms part of the overall evidence in the case on which the court may or may not rely. Article 90 of the Law of Proof states that:</p>\r\n<p class=\"p1\"><em>“The opinion of the expert shall not bind the Court. If the Court rules in contradiction to the opinion of the expert, it shall show in its ruling the reasons which led it not to accept this opinion in full or in part.”</em></p>\r\n<p class=\"p1\">It is therefore very important that all the parties involved look at the expert’s credentials to make sure he has the necessary expertise and specialisation in the relevant area. Any incorrect or unsound opinions would reflect adversely on the expert’s conclusions and, ultimately, on the court’s ruling.</p>\r\n<p class=\"p1\">It is worth noting that Article 77 of the Law of Proof deals with the recusal (removal) of experts as follows:</p>\r\n<p class=\"p1\">“The adversaries shall be permitted to reject the expert if some reason pertaining to him makes it probable that he will be unable to perform his function without prejudice. In particular the expert may be rejected if he is a relative or in-law of one of the adversaries up to the fourth degree, the agent of one of them in his private business, his executor or guardian, if he works for one of the adversaries, or if he or his spouse has some current dispute with one of the adversaries in the case or with his spouse, provided this dispute has not arisen after the appointment of the expert with the aim of rejecting him.”</p>\r\n<p class=\"p1\">While the causes of removal under the above article relate principally to neutrality, there is nothing to preclude the parties from objecting to the court-appointed expert and seeking his removal on genuine and convincing grounds that his expertise has absolutely no bearing on the subject matter of the dispute and, therefore, he is unable to undertake the court’s mandate.</p>\r\n<p class=\"p1\">Ultimately, the court shall decide quickly on the application for rejection and the ruling issued on the request shall not be subject to appeal. If it refuses the request for rejection, the person making the request shall be subject to a fine of not less than two hundred dirhams and not more than five hundred dirhams.</p>\r\n<p class=\"p1\">In light of case law and practice, the following practical challenges for parties and court-appointed experts emerge:</p>\r\n\r\n<ul>\r\n 	<li>Lack of clarity and definition that can lead to conflicts about the scope of work and what has been performed within and/or outside the scope of the contract and should be paid for. If a contract’s terms are too unclear or indefinite, the court-appointed expert cannot advise on the technical aspects of the case. It would all depend on the expert’s expertise in the field in which expert evidence is required and his assessment of whether the variation work is part of the original contract and does not need to be expressly mentioned.</li>\r\n 	<li>The time schedule for each phase and a lack of agreed methodology and consensus on receipt and acceptance procedures.</li>\r\n 	<li>No itemised budget forecast for each phase.</li>\r\n 	<li>No agreement on the procedures to be followed in the event of a breach of contract by either party and no clear basis for measuring the value of work completed and no clear agreement on the consequences and obligations that would arise if the contract is terminated.</li>\r\n 	<li>Making changes to the scope of the project without setting them down in writing in the form of contracts and addenda where either or both parties could end up losing their rights.</li>\r\n 	<li>One of the biggest practical challenges for an expert is a situation in which he finds himself unable to inspect the work because the employer, by reason of his contractual dispute with the contractor, has terminated the contract and hired a different contractor to either complete outstanding work or cancel everything and start over. The parties will surely have difficulty proving the work actually completed and the expert, for his part, will not be able to ascertain such work through inspection. It is therefore advisable in such cases that the contract include a clear process and method for offsetting this deficiency and the parties keep track of the progress and approval of each phase. In a worst case scenario where either party terminates the contract or goes to court, that party should at least be able to take necessary steps to prove the work completed to date. This can be done through a summary action to determine the status of the work in which a specialised expert is enlisted to perform an inspection and note the completed work in a report which will then be presented as evidence in court.</li>\r\n</ul>\r\n<p class=\"p2\">Given the particularly important role that expert evidence plays in matters before the courts in the adjudication of purely technical matters, it is always advisable to draft clear and precise contracts whose essential terms are sufficiently certain to be enforceable. Contracts should clearly set out the work methods and time periods and receipt, inspection and acceptance procedures and variations should be set down in writing in the form of contracts or addenda that are sufficiently clear to avoid any issues down the line when a dispute reaches the courts.</p>'),
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	(99690,5417,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\">The Supreme Court of New South Wales, Australia, issued an order recognising and enforcing the DIFC Courts judgment issued by Justice Sir Richard Field in Legatum Limited v Arif Salim (CFI 027/2014).</p>\r\n<p class=\"p3\">The reciprocal enforceability of court judgments is noteworthy where it involves countries with close commercial ties, such as the UAE and Australia. The UAE is Australia’s largest trading partner in the Middle East and the 15th largest overall. Australia’s commercial profile in the UAE is significant, with over 360 Australian companies having a physical presence in the UAE.</p>\r\n<p class=\"p3\">These close commercial ties between the two countries were a principal reason for the signing of a Memorandum of Guidance between the DIFC Courts and the Federal Court of Australia. This document, which is not legally binding, was intended to generate further confidence in the commercial relationship between the two countries by facilitating the mutual enforcement of money judgments. The Memorandum entered into by the two courts was signed by their respective Chief Justices during a ceremony in Melbourne, Australia in March 2014.</p>\r\n<p class=\"p3\">Following on from this, in March 2016, the Supreme Court of New South Wales ordered the recognition and enforcement of the Legatum judgment against the Defendant, an Australian citizen.</p>\r\n<p class=\"p3\">The Claimant, represented by Al Tamimi &amp; Company, originally brought a claim in the DIFC Courts against its former employee, the Defendant, for deliberately and wrongfully interfering with its IT system.</p>\r\n<p class=\"p3\">The DIFC Courts gave judgment in favour of the Claimant and concluded that the Defendant was the perpetrator of the IT incident. The Defendant was ordered to pay the Claimant significant monetary damages.</p>\r\n<p class=\"p3\">Subsequently, the Claimant sought to have the DIFC Court judgment against the Defendant recognised and enforced in the courts of the Defendant’s country of residence. The Supreme Court of New South Wales, discussing the principles governing the enforcement of judgments at common law, listed the following four conditions that must be satisfied in order for a foreign judgment to be enforced by an Australian court:</p>\r\n\r\n<ul>\r\n 	<li>The foreign court must have exercised a jurisdiction that Australian courts recognise.</li>\r\n 	<li>The foreign judgment must be final and conclusive.</li>\r\n 	<li>There must be an identity of the parties.</li>\r\n 	<li>If the judgment is in personam, the judgment must be for a fixed sum.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\">Accordingly, the Supreme Court found that the four relevant conditions had been satisfied as follows:</p>\r\n\r\n<ul>\r\n 	<li>The jurisdiction that the DIFC Courts had exercised was a jurisdiction recognised by the Supreme Court and the Defendant had submitted to that jurisdiction by his appearance as a party in the proceedings in which he defended the claim. Furthermore, the Defendant did not challenge the DIFC Courts’ jurisdiction at any point in the proceedings.</li>\r\n 	<li>The DIFC Courts’ judgment and orders are final and are not conditional and have not been stayed or set aside.</li>\r\n 	<li>The parties to these and the Dubai proceedings were identical.</li>\r\n 	<li>The judgment was for a fixed sum.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\">On this basis, the Supreme Court ordered the recognition and enforcement of the DIFC Courts’ judgment. The judgment of the Supreme Court represents an encouraging precedent for the recognition and enforcement of DIFC Courts’ judgments in other common law jurisdictions.</p>'),
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	(99679,5416,'content_description','The online distribution network YouTube was started on Valentine’s Day in 2005. In a short space of time, love for this platform has grown beyond the expectations of even the industry experts.  People now talk about ‘the number of hits’ that a video might get and the world universally understands that meaning.  The audience for YouTube is at record levels and continues to grow at a pace that it is undeniable. In addition, the Middle East has some of the world’s most voracious consumers of YouTube content as well as some of its most avid creators.'),
	(99680,5416,'_content_description','field_59b641c07f473'),
	(99681,5416,'pageSummary','The online distribution network YouTube was started on Valentine’s Day in 2005. In a short space of time, love for this platform has grown beyond the expectations of even the industry experts. People now talk about ‘the number of hits’ that a video might get and the world universally understands that meaning. The audience for YouTube is at record levels and continues to grow at a pace that it is undeniable. In addition, the Middle East has some of the world’s most voracious consumers of YouTube content as well as some of its most avid creators.'),
	(99682,5416,'_pageSummary','field_59e59b307dec8'),
	(99683,5416,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-14/jun-jul/youtube-online-distribution-network.html'),
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	(99685,5416,'lawUpdateArticleWriters_0_lawUpdateArticleWriter','845'),
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	(99689,5416,'_yoast_wpseo_metadesc','The audience for YouTube is at record levels and continues to grow at a pace that it is undeniable. And the Middle East has some of the world’s most voracious consumers of YouTube content as well as some of its most avid creators.'),
	(99653,5415,'_content','field_59b649b5c8b2b'),
	(99654,5415,'lawUpdateArticleMonth','5401'),
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	(99656,5415,'content_description','The Financial Services Regulatory Authority (“FSRA”) of the Abu Dhabi Global Market (“ADGM”) has circulated Consultation Paper No.2 of 2016 (the “Paper”) regarding policies to be introduced in a proposed regulatory framework to support participants deploying innovative technology within the financial services sector.  The Paper is focused on ’FinTech’, which are innovative tech services that are concerned with the financial services industry.  '),
	(99657,5415,'_content_description','field_59b641c07f473'),
	(99658,5415,'pageSummary','The Financial Services Regulatory Authority (“FSRA”) of the Abu Dhabi Global Market (“ADGM”) has circulated Consultation Paper No.2 of 2016 (the “Paper”) regarding policies to be introduced in a proposed regulatory framework to support participants deploying innovative technology within the financial services sector. The Paper is focused on ’FinTech’, which are innovative tech services that are concerned with the financial services industry.'),
	(99659,5415,'_pageSummary','field_59e59b307dec8'),
	(99660,5415,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-14/jun-jul/proposal-to-support-fintechs-within-the-adgm.html'),
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	(99666,5415,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Eleonore Kressner'),
	(99667,5415,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(99668,5415,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','e.kressner@tamimi.com'),
	(99669,5415,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','field_59e59afcd15de'),
	(99670,5415,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','Abu Dhabi, UAE'),
	(99671,5415,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
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	(99673,5415,'_lawUpdateArticleNoWriters','field_59e59aaed15dc'),
	(99674,5415,'_yoast_wpseo_metadesc','The “FSRA” of the “ADGM” has circulated Consultation Paper No.2 of 2016 regarding policies to be introduced in a proposed regulatory framework to support participants deploying innovative technology within the financial services sector. The Paper is focused on ’FinTech’'),
	(99675,5416,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\">With all of these potential viewers available and ready to consume every conceivable type of content, it is no surprise that large studios, record companies, celebrities and sporting entities are all clamouring to be a part of the offering.  What is surprising is that companies as diverse as consumer goods suppliers, retailers, healthcare providers and hotels are also hoping to spark interest in their brand by careful use of a YouTube campaign. And beyond seeking the potential customers that YouTube can deliver to your content and your brand, many companies are also seeking to monetise the YouTube content, seeking a share of massive revenue that YouTube generates by showing videos that it does not pay for.</p>\r\n<p class=\"p3\"><strong>So if YouTube is making all this money, what is the best way to make money from YouTube? </strong></p>\r\n<p class=\"p1\">The past few years has seen the rise of the Multi Channel Network (known as an MCN). This is, in simplest terms, a company that aggregates or curates content under its own umbrella brand and then promotes that brand to consumers.  Many MCNs have a loyal following but more importantly they have strong relationships with YouTube – they are YouTube preferred customers.  The result of this ‘preferred status’ is that they receive better advertising rates, generate sponsorship opportunities and work to achieve larger audience share. The combination of these three elements means that, as a content supplier, you may be able to use an MCN to generate noticeable revenue from placing your content on YouTube for the world to see.</p>\r\n<p class=\"p1\">An MCN must sign a long contract with YouTube in order to become a preferred supplier. These terms are reasonably standard but can be heavily negotiated depending on the status and desirability of a particular MCN to YouTube and its operations. Sitting underneath that main contract, the MCN carefully selects its desired content supplier and each one then must negotiate and sign a content supplier agreement with the MCN. From early beginnings as short form agreements, these MCN content supplier agreements are becoming more complex as revenue generated from the use of the content has become more significant.</p>\r\n<p class=\"p1\">As with all distribution contracts in the media industry, significant revenue potential should always be protected with a well defined and properly drafted contract.  So what are the key terms that a content supplier should look for in an MCN content supplier agreements and, more importantly, what are commercial ranges that you should be seeking to put into place.</p>\r\n<p class=\"p3\"><strong>The Term</strong></p>\r\n<p class=\"p1\">Any MCN will likely want to replicate the terms it has itself with YouTube in relation to the duration of your contract. If you are a first time content supplier this will be more likely to be a shorter term but to ensure that you can retain positive commercial term in the future negotiations, it is always recommended to have an ability to extend the term easily. Note that some MCNs will present you with a content supplier agreement that will only allow the MCN itself to terminate. However, if you feel that your content or your brand does have some commercial strength, we recommend that you negotiate to include termination by your company, at the very least if there is any failure by the MCN to pay your revenue to you in a timely manner or otherwise makes an error in calculating your revenue.</p>\r\n<p class=\"p3\"><strong>Censorship</strong></p>\r\n<p class=\"p1\">This can be a difficult area since MCNs do legitimately have a reason to request the ability to edit content for various reasons, usually to comply with censorship matters. If censorship is required, it is important to specify who will decide if censorship edits are required, who will undertake them and who will pay for them. Whilst it is tempting for smaller operations to allow the MCN to undertake and pay for the edits, as the MCN will likely have larger resource to do so, it is important to remember that the MCN censorship team may not have the same respect for your content that you do. However, if you are going to demand the right to undertake those edits then you should expect that it will have to be done at your own cost.</p>\r\n<p class=\"p1\">Most MCNs will, regardless of whether the right to edit is included, include the right to take down your content. They themselves have little control over this, as they must comply with YouTube terms of engagement which has strict take down provisions. It is, as an aside, always wise to make yourself familiar with these take down provisions before you provide your content to the MCN.</p>\r\n<p class=\"p1\">Aside from the MCNs right to take down your content, it may also be desirable for you to have the capacity to require the MCN to take down content upon your reasonable request. This might be not always apply but might become extremely relevant where a particular piece of content links to, by way of example, a 6 month brand activation or content directly relevant to a sporting event.  There may be times, where, for commercial or legal reasons, you want the content to be removed from public view.  If you are not afforded this right under the content supplier agreement, then you need to have a negotiation with the MCN to give effect to your wishes.  The clause should provide you with an on-demand mechanism to remove particular content.</p>\r\n<p class=\"p3\"><strong>Minimum Video Upload</strong></p>\r\n<p class=\"p2\">An MCN generates more revenue if it has increased and popular content. They therefore seek to be the next carrier of next “big thing” on the internet.  For this reason, they may require you to upload a minimum number of videos on a periodic basis. Obviously, you can only agree to this if you are practically able to deliver that amount of content. But ideally, you would avoid the minimum commitment all together, even if you feel that you are able to comply with its terms at the early stage of your negotiation. Things can change very quickly in the commercial world and you may find that your budget alters, and so this minimum commitments means that you are going to have to supply substandard content – which will be linked to you and to your brand.</p>\r\n<p class=\"p2\"><strong>Promotion and Marketing</strong></p>\r\n<p class=\"p2\">In any agreement where a third party is taking your content and seeking to exploit it, it is always desirable to have clear indications contractually as to the level of marketing and promotion that the third party will provide. In  this case in particular, your revenue is linked to the number of clicks that are generated by your content, so if your content is difficult to find, poorly indexed, or just not promoted very much in other channels carried by that MCN, then your clicks will reflect that. Standard terms in the MCN content supplier agreement should note that your content will be promoted on other channels that are included in the MCN but in exchange for this, you should note that you will be expected to carry a similar amount of promotion for other channels in the MCN suite.</p>\r\n<p class=\"p1\">In negotiating this difficult area, be sure to include anything that was promised to you during your negotiations. If promised promotional activities are not contained within the content suppler agreement then it is very likely that you will never see them.</p>\r\n<p class=\"p1\">It is also possible that, if your content is considered to be desirable to sponsors that are already working with the MCN, the MCN may include a clause that allows them to require, or request that, you include third party content within your videos in exchange for additional revenues. Again, consider this carefully and, if this is appealing to you, ensure that you have contractual terms that specify your level of control over who you will work with and how much time within the content you may give them. Ambiguous language may mean that your content ends up with third party logos throughout – not a creatively desirable option.</p>\r\n<p class=\"p3\"><strong>The Revenue Share</strong></p>\r\n<p class=\"p1\">There is no doubt that YouTube generates a massive amount of revenue on annual basis – it was reported as securing US 9 billion in revenue for 2015. Obviously they would be unable to do this without content creators and the operation of multiple MCNs is a key part of that operation.</p>\r\n<p class=\"p1\">It is important to note that revenue generation really does not become relevant until you have a half a million clicks on a piece of content, so it is wise to be initially conservative when it comes to estimating potential revenue generation from YouTube and any MCN.</p>\r\n<p class=\"p1\">The MCN content supplier agreement will generally provide you with about 70% of the net revenue that the MCN generates from advertising but this figure is not fixed by any means and may be lower.  More importantly, in analysing the terms, you must check the manner in which the MCN deals with expenses. What expenses are claimable by the MCN against the revenue generated for your content? Is it clear in the contract? Can they claim back overheads such as marketing flights for their executives or electricity for their offices? Are these expenses capped at any particular level? Can you request approval before they are incurred?</p>\r\n<p class=\"p1\">You may not be able to negotiate all of these points but you should at least know the answers.  More importantly it should be clear in the content supplier agreement so that there are no arguments later about what they can and cannot claim in your revenue before they distribute the balance to you.</p>\r\n<p class=\"p4\"><strong>Conclusion</strong></p>\r\n<p class=\"p5\">There is no doubt that an effective relationship with MCN can increase your clicks, increase your audience and positively affect income. It is potentially a wonderful opportunity however, do not blindly sign the first draft of the content supplier agreement, fuelled by the enthusiasm for potential growth. Ask questions. Talk to other suppliers to ensure that this MCN pays reliably and properly manages and promotes content.</p>\r\n<p class=\"p5\">Despite the delight you will feel if an MCN chooses to carry your content, at that stage you have only managed the first half of the battle.</p>\r\n<p class=\"p6\"><em>Al Tamimi &amp; Company’s Technology, Media &amp; Telecommunications team regularly advises on content matters both on-line and in traditional media, acting for producers, creative agencies and broadcasters. For further information, please contact Fiona Robertson (f.robertson@tamimi.com)</em></p>'),
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	(99639,5414,'content_description','Telecommunications advertising has great potential to misled consumers about the nature and characteristics of service plans, including the pricing.'),
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	(99641,5414,'pageSummary','Telecommunications advertising has great potential to misled consumers about the nature and characteristics of service plans, including the pricing.'),
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	(99643,5414,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-14/jun-jul/a-free-uncapped-update-on-tra-regulation-of-misleading-telecommunications-advertising-in-the-uae.html'),
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	(99650,5414,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(99651,5414,'_yoast_wpseo_metadesc','Telecommunications advertising has great potential to misled consumers about the nature and characteristics of service plans, including the pricing.'),
	(99652,5415,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\">FinTech companies pride themselves on having two main functions, which over the past decade have pushed them to the forefront of venture capitalists’ ‘must have’ investments.  These two functions are: (1) better use of data and (2) effortless customer experience.  In 2015, Goldman Sachs estimated that FinTech companies could make up to US$ 4.7 trillion in annual revenue and around US$ 470 billion in profit.  Satander InnoVentures estimated that US$ 23.5 billion of venture capital investment in 2013 – 2014 was in FinTech companies. Such figures are, naturally, making this growing industry extremely attractive to venture capitalists, governments, banks, and entrepreneurs.</p>\r\n<p class=\"p2\">Existing FinTech companies include: ‘Lending Club’, ‘OnDeck Capital’, ‘Kabbage’, ‘Kickstarter’ and “Indiegogo”.  These FinTechs all operate slightly differently from one another but, in essence, they all have one thing in common: they connect directly to the consumer and they are quick and easy to use in comparison to traditional financial options.</p>\r\n<p class=\"p1\">Abu Dhabi is proposing to offer a zone for FinTechs within the ADGM and has proposed a prospective policy to entice FinTechs to come to the region.  The Paper, which was circulated on 10 May 2016, proposes to create a ‘Regulatory Laboratory’ (“RegLab”) that will ‘provide a safe environment, within controlled boundaries, for businesses to test, develop and provide innovative FinTech products’.</p>\r\n<p class=\"p1\">It is proposed that the RegLab will operate and provide a framework that will adjust the current ADGM requirements so that FinTechs are offered a sustainable environment in which they are able to operate.  The Paper has offered some broad examples of what may be included in the conditions imposed under the RegLab, including:</p>\r\n\r\n<ul>\r\n 	<li>requiring appropriate disclosures to, and consent of, FinTech clients willing to participate. In order for clients to make an informed decision, it is important for there to be clear disclosures on the risks involved with FinTech, the regulatory safeguards clients are foregoing by utilising a FinTech under the RegLab, and the possible outcomes at the end of the FinTech test;</li>\r\n</ul>\r\n<ul>\r\n 	<li>limiting the impact or reach to consumers.  For example, the RegLab may prohibit the FinTech from handling clients’ money, restrict the clientele base, cap the size of investments, restrict the marketing channels, etc; and/or</li>\r\n 	<li>appointing established financial institutions as sponsors to undertake responsibility for compliance assurance or resolution of any client issue if a FinTech test does not perform as expected. For example, the trial deployment of a robo-advisor may be excluded from Anti Money Laundering/Know Your Client due diligence if the consumer opens an investment account with a sponsor bank, which takes on the corresponding regulatory obligations.</li>\r\n</ul>\r\n<p class=\"p1\">These examples show the direction in which the RegLab proposes to be a satisfactory entry into the market but, there needs to be a more robust system in place to show the core framework in which the RegLab will operate. FinTechs largely operate in a similar manner therefore, providing a bespoke analysis of each particular FinTech on a case by case basis may not be the most efficient way in which to assess the FinTechs viability for the zone.</p>\r\n<p class=\"p4\"><strong>Two year exemption period</strong></p>\r\n<p class=\"p2\">FinTechs would be given a two year period in which the FSRA will ‘actively engage the FinTech participant so as to stay abreast of, and support, the FinTech innovation’.  During these two years, FinTechs will be given added benefits, such as not having to lease an office within the ADGM in order to benefit from the ADGM freezone.</p>\r\n<p class=\"p1\">During the two year period, the FSRA will actively engage the FinTech so as to assist and support FinTech innovation, not only with the grant of authorisation under the RegLab but also to ensure that they continue to be ‘fit and proper’ to operate within the ADGM.</p>\r\n<p class=\"p4\"><strong>Dedicated online FinTech portal</strong></p>\r\n<p class=\"p1\">The Paper proposes that there should be a dedicated online FinTech portal. This will be greatly beneficial to FinTechs as, traditionally, FinTechs have not been given the support needed due to the competition that they pose to traditional financial services. The Paper proposes that the FinTechs will have ‘direct engagement with FSRA’ in order to help assist in the development of their business plan scope and ultimately assist the FinTechs with achieving final authorisation by the RegLab, giving the FinTechs the support needed to establish a base in the region.</p>\r\n<p class=\"p4\"><strong>Authorisation criteria</strong></p>\r\n<p class=\"p1\">The FSRA has proposed that the authorisation criteria for FinTechs under the RegLab will be based on the following three pronged approach and will be assessed after the two year period:</p>\r\n1. the FinTech project should promote novel innovation, in terms of the business application and deployment model of the technology;\r\n<p class=\"p3\">2. the FinTech project should have the potential to:</p>\r\n\r\n<ul>\r\n 	<li>\r\n<div class=\"p3\">promote significant growth, efficiency, or competition in the financial sector;</div></li>\r\n 	<li>\r\n<div class=\"p5\">promote better risk management solutions and regulatory outcomes for the financial industry; or</div></li>\r\n 	<li>\r\n<div class=\"p5\">improve the choices and welfare of consumers; and</div></li>\r\n</ul>\r\n<p class=\"p3\">3. the FinTech project should be in a sufficiently advanced stage of development to mount a live test. If the FinTech participant is at an early stage of product development, it will not be permitted to conduct regulated activities, hence, it will not need to be authorised under the FSMR.</p>\r\n<p class=\"p1\">Further, the FinTechs would be required to:</p>\r\n\r\n<ul>\r\n 	<li>explain and demonstrate how it satisfies the authorisation criteria;</li>\r\n 	<li>demonstrate the test parameters, milestones and outcomes;</li>\r\n 	<li>detail the safeguards that have been put in place and demonstrate how they are appropriate to the FinTech position being tested and the risks that are posed to the consumer; and</li>\r\n 	<li>set out a clear and fair exit strategy for consumers.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\">The FSRA may be able to extend, in exceptional circumstances and on a case by case basis, some FinTechs two year validity period but, it is not yet detailed under what circumstances this would be the case.</p>\r\n<p class=\"p1\">The interest in FinTechs is undeniable and the proposed RegLab supports the growth of FinTechs , however, it is equally important to create a framework that is adequately structured to support this growing industry and a the correct legal and financial framework to provide a stable environment in which FinTechs can achieve their full potential.</p>'),
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	(99624,5413,'content_description','Demurrage claims are an everyday battleground for vessel charterers and owners alike. Traditional arguments surrounding time calculations are routinely exchanged, for instance, suspension due to poor weather, shifting time, premature notice of the vessel’s readiness, etc. Parties may be surprised to learn of further potential defences and entitlements if their contracts are subject to UAE law. Many such entitlements available to parties remain underutilised in practice.'),
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	(99626,5413,'pageSummary','Demurrage claims are an everyday battleground for vessel charterers and owners alike. Traditional arguments surrounding time calculations are routinely exchanged, for instance, suspension due to poor weather, shifting time, premature notice of the vessel’s readiness, etc. Parties may be surprised to learn of further potential defences and entitlements if their contracts are subject to UAE law. Many such entitlements available to parties remain underutilised in practice.'),
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	(99634,5413,'_yoast_wpseo_metadesc','Al Tamimi & Company considers demurrage under UAE law. Attention will be given to the stipulated time periods in the UAE Commercial Maritime Code. Consideration will then be given to the possible adjustment of demurrage by a court pursuant to the Civil Code.'),
	(99635,5414,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\">The UAE’s Telecommunications Regulatory Authority (“TRA”) has recently reviewed and updated its Consumer Protection Regulations to strengthen and clarify provisions concerning telecommunications advertising.</p>\r\n<p class=\"p1\"><span class=\"s1\">The TRA first issued a set of regulations concerning consumer protection (“Consumer Protection Regulations”) in October 2014.  Under those regulations (which our team covered in our September 2014 issue http://localhost:8888/tamimi/en/magazine/law-update/section-8/september-4/new-telco-consumer-protection-regulations.html), the two licensed public telecommunications network operators in the UAE, Etisalat and du (“Licensees”), were made subject to a set of rules aimed squarely at providing their telecommunications consumers with clear and unambiguous information about matters such as the scope of services, contracts, and invoices, as well as providing a consumer complaint procedure.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">In December 2015, the TRA further updated the Consumer Protection Regulations (these changes were gazetted in April 2016).  The amended provisions for advertising came into force on 31 March 2016.</span></p>\r\n<p class=\"p3\"><strong><span class=\"s1\">Key Changes</span></strong></p>\r\n<p class=\"p1\"><span class=\"s1\">The first alteration of note is the change of terminology.  The previous term ‘Marketing Communications and Practices’ has been replaced with the term ‘Advertisement’.  Added are its derivative terms, ‘Advertising’ and ‘Advertises’.  The definition ‘Advertising Means and Materials’ is a replica (with some minor changes) of the old definition of ‘Marketing Communications and Practices’.  In essence, this change has the effect of clarifying the scope of activity that will be considered to be advertising and allowing some significant changes in the operation of the Consumer Regulations concerning advertising.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">To give further clarity to consumers, Article 16 (which relates to Advertising) has been expanded and altered.  Article 16.1 now states that, ‘Licensees shall take all reasonable measures to ensure compliance with this Article 16.  This includes taking all reasonable measures to ensure compliance with this Article 16 by Third Parties used to carry out any activity or activities which are subject to Article 16.’  Third Party is defined as ‘any [entity] who can reasonably be construed as being a distributor, dealer, agent, subcontractor or representative of an Advertiser’. An Advertiser is an entity that Advertises.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">It is now expressly provided that Article 16 applies to any direct or indirect advertising, or any other activity which has the same or similar effect and relates to, promotes, refers, or relies on any product or service or person regulated under the UAE telecommunications law.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">This broad reframing could include, for example, advertising on social media and even the seeding of positive comments online or trolling of competitor posts.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">Article 16 also now includes extended wording regarding comparative advertising including a new definition of the term ‘comparative advertising’ itself (i.e. advertising that makes a comparison with a competitor or a product or service of a competitor).  However, the overall effect of the article remains largely the same.  Whereas before, comparative advertising was to be ‘clear and fair’ and ‘objectively compare one or more material relevant verifiable and representative feature of those services’, there is now a requirement that the comparative advertising does not ‘unfairly criticize, discredit or denigrate’, refrains from ‘judgments and opinions’, must ‘rely solely on objective statements and facts that can be clearly substantiated, and must address offers or services that are ‘comparable’.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">An express requirement has been added to the Consumer Protection Regulations that any footnotes, qualifiers, or disclaimers (i.e. the ‘small print’) in advertisements must be clearly visible and legible, audibly apparent, and understandable.  Such small print cannot contradict, materially qualify, or otherwise alter the basis for the advertisement.</span></p>\r\n<p class=\"p2\">That requirement does not prevent the inclusion in an advertisement of reference to detailed terms and conditions being provided elsewhere.  However, such detailed terms and conditions cannot have the effect of contradicting or materially qualifying or otherwise altering the basics, or any claim made or implied in the relevant advertisement.</p>\r\n<p class=\"p1\"><span class=\"s1\">In the event that any statement made by a Licensee is misquoted in the media, then, to the extent that the misquote does or may result in an apparent breach of the Consumer Protection Regulations (for example, the misquote is misleading about the terms of a special offer), the relevant Licensee is now under a positive obligation to take reasonable steps  to procure a retraction, correction or other appropriate action concerning the misquoted statement in the same medium in which the misquotation was published.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">Wording has been added requiring that promotions using prizes must be ‘prepared with a sense of responsibility and comply with the spirit, not merely the letter of’ the Consumer Protection Regulations.  This is an imprecise obligation and it will be interesting to see how this will be applied by the TRA.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">More specifically, promotions with prizes should be communicated in a manner that is clear and readily understandable by the intended audience.  In addition, promotions using prizes cannot create confusion between ‘gifts’ and ‘prizes’.  Presumably for ‘gifts’, there is no element of chance or competition involved.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">Importantly, under the updated Consumer Protection Regulations, the TRA now has the power, where it considers it reasonable during the investigation of a complaint or an alleged breach of the advertising provisions, to issue ‘Temporary Instructions’.  Such Temporary Instructions may include the obligation to desist temporarily in repeating the relevant advertisement or to take, or refrain from taking, any relevant steps the TRA considers appropriate in the circumstances. </span></p>\r\n<p class=\"p2\">In deciding to issue Temporary Instructions, the TRA will have regard to the complexity of the case, the likely impact on consumers, the telecommunications market and the strength of the available evidence.  Consumer protection will be given paramount consideration in such cases.</p>\r\n<p class=\"p1\"><span class=\"s1\">Temporary Instructions will apply for such period as the TRA may specify.  Breach of the Temporary Instruction constitutes a breach of the Consumer Protection Regulation.</span></p>\r\n<p class=\"p2\">Under the TRA’s Consumer Dispute Procedure, in Annex 1 to the Consumer Protection Regulations, a consumer who is dissatisfied with the services of a Licensee should, in the first instance, raise the matter with the concerned Licensee in accordance with that Licensee’s consumer complaint procedures. If the consumer who has submitted the complaint to a Licensee is dissatisfied with the manner in which the Licensee handled the complaint, including the outcome of that process, the consumer can then submit a consumer dispute to the TRA.</p>\r\n<p class=\"p2\">While many jurisdictions have statutory prohibitions on false or misleading advertising generally, advertising standards are often only a voluntary self policing mechanism of the advertising industry.  These recent updates to the Consumer Protection Regulations give the TRA a far more complete arsenal of powers to crackdown on misleading telecommunications advertising in the UAE for the protection of consumers, if needed.</p>'),
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	(99619,5412,'_yoast_wpseo_metadesc','Investigators have recovered the aircraft’s “blackbox” flight recorders and analysis of the data is eagerly awaited given that the present available information is insufficient for the purposes of identifying the circumstances of the loss.'),
	(99620,5413,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\">Demurrage claims are an everyday battleground for vessel charterers and owners alike. Traditional arguments surrounding time calculations are routinely exchanged, for instance, suspension due to poor weather, shifting time, premature notice of the vessel’s readiness, etc. Parties may be surprised to learn of further potential defences and entitlements if their contracts are subject to UAE law. Many such entitlements available to parties remain underutilised in practice.</p>\r\n<p class=\"p1\">This article considers demurrage under UAE law. Attention will be given to the stipulated time periods in the UAE Commercial Maritime Code (Federal Law 26 of 1981) (the “Maritime Code”). Consideration will then be given to the possible adjustment of demurrage by a court pursuant to the Civil Code (Federal Law 5 of 1985) (the “Civil Code”).</p>\r\n<p class=\"p3\"><strong>What is Demurrage?</strong></p>\r\n<p class=\"p1\">A claim for demurrage arises in the context of a voyage charterparty when a charterer exceeds the permitted time period for loading and/or discharging its cargo (commonly known as ‘laytime’). An owner is then entitled to charge the charterer for its continuing breach of the permitted laytime. This charge is referred to as ‘demurrage’, and is calculated on an agreed, and predetermined, demurrage rate against the excess time actually spent on the loading/discharging operation.</p>\r\n<p class=\"p2\">It is settled law in most common law and western jurisdictions that demurrage is considered a claim for liquidated damages. Under UAE law, demurrage is considered, for a finite time period, part of the hire owed by the charterer to the owner and, thereafter, is considered a claim for liquidated damages.</p>\r\n<p class=\"p3\"><strong>Example of Demurrage Calculation –Without UAE Law</strong></p>\r\n<p class=\"p1\">For the purposes of this article, the following straightforward example will be used to demonstrate the applicable principles. A vessel is carrying a relatively small cargo of steel pipes. The parties enter into a standard form voyage charterparty, for instance, BIMCO’s ‘GENCON 94’, and agree that the permitted laytime for discharging will be 24 running hours. It is further agreed that the demurrage rate will be US$ 15,000 per day or part thereof. UAE Law does not apply.</p>\r\n<p class=\"p1\">The vessel in our example, in fact, takes 72 hours to discharge its cargo, with no applicable exceptions. On the face of it, the demurrage calculation will accordingly be:</p>\r\n<p class=\"p1\">72 hours (actual time) – 24 hours (permitted time) = 48 hours (on demurrage time)</p>\r\n<p class=\"p1\">48 hours × (US$ 15,000/24 hours) = US$ 30,000</p>\r\n<p class=\"p1\">The charterers consequently owe the owners US$ 30,000 in demurrage.</p>\r\n<p class=\"p4\"><strong>Applying UAE Law to Demurrage – The Two “Additional Periods”</strong></p>\r\n<p class=\"p1\">In the instance where UAE law does apply to the same charterparty, two additional periods will be considered.</p>\r\n<p class=\"p2\"><strong> (i) The First Additional Period</strong></p>\r\n<p class=\"p1\">Article 231(2) of the Maritime Code states;</p>\r\n<p class=\"p1\"><em>If loading or discharge does not take place within the original period specified in the contract, or by custom, there shall be given an additional period not exceeding the original period and the disponent owner shall be entitled to daily compensation in respect thereof to be defined by the contract or by custom without the need for any step in that behalf being take by the disponent owner. (Emphasis added).</em></p>\r\n<p class=\"p1\">Article 231(2) seemingly permits parties to stipulate a demurrage rate in their charterparty. If a demurrage rate is not agreed to in the relevant contract, guidance may be sought from ‘custom’. Such demurrage rate will then apply for a ‘period not exceeding the original period.’ It is suggested that the ‘original period’ is a reference to the agreed laytime period.</p>\r\n<p class=\"p1\">In the previously provided example, the laytime period was 24 hours. Following Article 231(2), the ‘additional period’ would accordingly be any time during the 24 hours after laytime had been utilised. For this period, the agreed demurrage rate may apply. Accordingly, should the charterers exceed the permitted laytime by 24 hours, owners shall be entitled to:</p>\r\n<p class=\"p1\">24 hours (additional period) × (US$ 15,000/24 hours) = US$15,000</p>\r\n<p class=\"p3\"><strong>(ii) The Second Additional Period</strong></p>\r\n<p class=\"p1\">Article 231(3) of the Maritime Code states:</p>\r\n<p class=\"p1\"><em>If loading or discharge does not take place within the said additional period there shall be given a second additional period not exceeding the first period and the disponent owner shall be entitled to compensation in respect thereof equal to the daily compensation laid down in respect of the first additional period plus one half without prejudice to such other compensation to which he may be entitled.</em></p>\r\n<p class=\"p1\">Under this article, a ‘second additional period not exceeding the first period’ may apply. For this second additional period, demurrage will be applicable as per the agreed rate, plus one half. Using the afore mentioned example, should the charter exceed laytime by 48 hours, the owners will be entitled to:</p>\r\n<p class=\"p1\">24 hours × (US$ 15,000/24 hours) = US$ 15,000   [First Additional Period]</p>\r\n<p class=\"p1\">                             +</p>\r\n<p class=\"p1\">[24 hours × (US$ 15,000/24 hours)] × 1.5 = US$ 22,500   [Second Additional Period]</p>\r\n<p class=\"p1\">= US$ 37,000</p>\r\n<p class=\"p1\">Accordingly, should UAE law apply in our example, the owners would be entitled to US$ 37,000 for a demurrage period of 48 hours. This is compared to US$ 30,000 (as previously calculated) should UAE law not apply and the contract is upheld directly.</p>\r\n<p class=\"p1\"><strong>Demurrage as an Addition to Hire under the Maritime Code</strong></p>\r\n<p class=\"p1\">Article 232(4) of the Maritime Code states;</p>\r\n<p class=\"p2\"><em>The daily compensation due in respect of the additional periods shall be deemed to be appurtenances of the freight and the provisions relating to freight shall apply thereto.</em></p>\r\n<p class=\"p1\">The above article, read in isolation, may appear to be a somewhat curious provision. It does, however, stand to have a profound impact on a demurrage claim. The effect of the article is that any demurrage incurred during the two ‘additional periods,’ as described above, are considered part of the ‘freight’ (hire). This amount is, therefore, simply added to any hire owed by the charterer to the owner. This raises the question – what happens if demurrage exceeds the two additional periods?</p>\r\n<p class=\"p3\"><strong>Demurrage as a Provision for Liquidated Damages under UAE Law</strong></p>\r\n<p class=\"p2\">Our opinion is that any demurrage, beyond the two additional periods, should be considered a claim for liquidated damages. The reason for such proposition is twofold:</p>\r\n<p class=\"p1\">Firstly, Article 8(2)(a) of the Maritime Code stipulates that:</p>\r\n<p class=\"p1\"><em>The following shall apply in matters for which there is no special provision in this Law:</em></p>\r\n<p class=\"p1\"><em>(a) Maritime customs which do not conflict with the provisions of the Islamic Shari’ah.</em></p>\r\n<p class=\"p2\">As previously mentioned, it is widely accepted under common law and western jurisdictions, which are commonly employed in maritime contracts, that demurrage, in the context of a voyage charterparty, is a provision for liquidated damages. This may be considered a ‘maritime custom’ as mentioned in Article 8(2)(a).</p>\r\n<p class=\"p1\">Secondly, Article 390(1) of the Civil Code specifically permits liquidated damages under UAE law and provides a brief description of its nature, which corresponds with the fundamental elements of a demurrage provision. It states:</p>\r\n<p class=\"p1\"><em>The two contracting parties may fix, in advance, the amount of damages either in the contract or in a subsequent agreement subject to the law provisions.</em></p>\r\n<p class=\"p3\"><strong>What are ‘Liquidated Damages’?</strong></p>\r\n<p class=\"p1\">A liquidated damages provision stipulates that a predetermined amount of compensation shall be owed by a party who is in breach of a particular obligation to the other party. The reasoning behind the concept is that contracting parties are not required to deliberate about the quantum of the damages incurred after the breach occurs; the compensation owed for damages is agreed beforehand. In common law jurisdictions, should the specific breach occur, the innocent party is generally not required to prove its loss, only that such breach occurred. This stands to save time and provides commercial certainty because the harm is quantified from the outset.</p>\r\n<p class=\"p2\"><strong>Liquidated Damages under UAE Law</strong></p>\r\n<p class=\"p1\">Once demurrage exceeds the described statutory ‘additional periods’ and is considered part of a liquidated damages provision, there are a variety of legal issues that arise under UAE law. Arguably the most significant issue is that a judge may amend a liquidated damages provision to equal the harm actually suffered. To this extent, Article 390(2) of the Civil Code states:</p>\r\n<p class=\"p1\"><em>The judge may, in all cases, at the request of one of the parties, amend such an agreement, in order to make the amount assessed equal to the prejudice. Any agreement to the contrary is void.</em></p>\r\n<p class=\"p1\">Article 390(2), therefore, provides judges with a corrective mechanism to adjust a previously agreed liquidated damages amount to ‘make the amount assessed equal the prejudice’. This amendment may be made by either increasing or decreasing the previously agreed amount. A demurrage rate may, accordingly, be adjusted, after the two additional periods, to equal the prejudice (harm) suffered by the owner. This adjustment may be applied for by the vessel owner (to increase the demurrage owed) or by the charterer (to decrease the demurrage owed).</p>\r\n<p class=\"p1\">The rationale behind Article 390(2) appears to be to ensure the concept of liquidated damages (being of western origins) is compliant with fundamental Shari’ah principles. Article 7\r\nof the Constitution of the UAE confirms that Shari’ah is the principle source of legislation in the UAE. When considering damages under Shari’ah, the fundamental elements required are:</p>\r\n\r\n<ol>\r\n 	<li>damages must be quantified;</li>\r\n 	<li>damages must be substantiated;</li>\r\n 	<li>damages must be only awarded to the extent suffered.</li>\r\n</ol>\r\n&nbsp;\r\n<p class=\"p2\">Quantifying damages before they are incurred will likely result in a difference between the actual damages suffered and the predetermined amount. For instance, considering the provided example of a demurrage rate of US$ 15,000, it is unlikely that the ‘loss’ suffered by the delay in loading/offloading the cargo is exactly US$ 15,000. It is more likely that it is either more or less than the agreed amount.</p>\r\n<p class=\"p1\">A difference between the agreed liquidated damages amount and the harm actually suffered stands to infringe the Shari’ah principle of gharar. This principle prohibits the profiting, or incurring loss, due to circumstances that are unknown at the time the agreement is concluded. A classic example of this is gambling. Article 390(2) aims to address the potential infringement by permitting judicial intervention to adjust the liquidated damages amount to accord with the loss actually suffered.</p>\r\n<p class=\"p3\"><strong>Liquidated Damages before the UAE Courts</strong></p>\r\n<p class=\"p1\">The UAE Courts have taken different approaches to the application of Article 390(2). The Dubai Court of Cassation (Appeal No. 222 of 2005) suggests that a judge is empowered to adjust the compensation owed under a liquidated damages provision to equal the loss actually suffered. Accordingly, any difference between the agreed liquidated damages amount and the actual loss suffered may be adjusted to reflect the former.</p>\r\n<p class=\"p1\">The Abu Dhabi Court of Cassation (Appeal No. 941 of 2009) found that an adjustment under Article 390(2) should only be made when the amount claimed is excessive. The court held that;</p>\r\n<p class=\"p2\"><em>The judge has to abide by the agreement of the parties and give effect to it unless the party against which the clause is invoked proves that the agreed compensation is excessive.</em></p>\r\n<p class=\"p1\">It is suggested that the Dubai Court of Cassation’s finding in this regard is more in line with a strict interpretation of Article 390(2) and the principle of gharar.</p>\r\n<p class=\"p2\"><strong>In Summary – What to do if your Demurrage Provision is subject to UAE Law</strong></p>\r\n<p class=\"p1\">Demurrage under UAE law remains in relatively untrodden territory. Parties negotiating demurrage provisions should be aware that, under UAE law, the agreed compensation may be changed. The key factor in this regard is the amount of time the vessel is on demurrage.</p>\r\n<p class=\"p1\">During the ‘first period’ (which is equal to the agreed laytime) the demurrage rate will be what is recorded in the charterparty. Once this period is complete, during the subsequent ‘second period’ (which is also as long as the agreed laytime) the demurrage rate is automatically increased one and a half times. During these two periods, the demurrage rate is considered part of the hire, afterwhich is may be considered a liquidated damages provision.</p>\r\n<p class=\"p1\">Practically, it is important that parties:</p>\r\n\r\n<ul>\r\n 	<li>are aware that demurrage is automatically adjusted after the first additional period is exceeded;</li>\r\n 	<li>are prepared if the other party requests a court to adjust the demurrage rate under Article 390(2) of the Civil Code;</li>\r\n 	<li>continually identify what may constitute a ‘loss’ during any demurrage period, for example, by identifying all operating expenditure incurred during the demurrage period;</li>\r\n 	<li>carefully document and record the losses as these documents may be required in court.</li>\r\n</ul>\r\n&nbsp;'),
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	(99601,5412,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\">In our November 2015 edition we had the sad task of reporting on the loss of the Metrojet Airbus A329 aircraft in the Sinai desert on route from Sharm El Sheikh in Egypt to St. Petersburg in Russia and the regulatory and investigatory investigations to follow. </span></p>\r\n<p class=\"p2\">Tragically, on 19 May 2016 an EgyptAir Airbus A320 lost radar contact about 3.5 hours after taking off from Charles De Gaulle airport in Paris and just 10 minutes after entering Egyptian airspace. The 2003 built aircraft carrying 66 crew members and passengers was at an altitude of 37,000 feet when it “disappeared” from the radar.</p>\r\n<p class=\"p1\"><span class=\"s1\">As with the Metrojet disaster, speculation has raged about the cause of the tragedy. At the time of publication, investigators have recovered the aircraft’s “blackbox” flight recorders and analysis of the data is eagerly awaited given that the present available information is insufficient for the purposes of identifying the circumstances of the loss.</span></p>\r\n<p class=\"p2\">France’s aviation safety agency has said that the aircraft transmitted a series of automated messages indicating smoke in the cabin and a fault in the flight control unit, before losing contact. The Egyptian authorities have confirmed that investigators have received satellite reports indicating receipt of an electronic distress call from the plane’s emergency locator transmitter (“ELT”) shortly before the aircraft disappeared from radar.</p>\r\n<p class=\"p2\">As with Metrojet, and all aviation loss instances, there has been widespread media speculation as to the cause of the disaster ranging from a catastrophic mechanical failure to the possibility of a bomb planted by terrorists.</p>\r\n<p class=\"p2\">Unfortunately some media reports in the Middle East have attempted to provide explanations of compensation payable as a result of the loss of the aircraft and demonstrated a misunderstanding of the concepts involved in international aviation law. One article suggests that there is a special air navigation law that pays out set amounts to passengers’ families depending on the nationality of the victim and then lists a series of amounts payable based on their nationality.</p>\r\n<p class=\"p1\"><span class=\"s1\">As with all speculation in the aftermath of such terrible incidents, emotions run high and it is important to explain both the exact reasons for the airline incident (which will not be available until the incident is properly investigated) and also to accurately explain the legal concepts and international framework associated with aviation disasters and any consequential liability claims. Especially so as to avoid falsely raising expectations of bereaved families.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">Aviation law is governed by international treaty and aviation liability claims are dealt with within a system which ostensibly provides an exclusive remedy for any passenger claim against an airline. The Convention for the Unification of Certain Rules for International Carriage by Air or “Warsaw Convention”, was ratified in 1929 and since that date it has been amended, updated and replaced through  various instruments such as the Hague Protocol 1955 (the “Amended Warsaw Convention”), the Guadalajara Convention 1961, the Guatemala City Protocol 1971, and the Montreal Protocol No. 4 1975.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">The Montreal Convention 1999 (the “Convention”) was drafted in an effort to modernise and consolidate the Warsaw Convention, and to replace the Warsaw system with a new uniform instrument. The intention behind the Convention is to achieve a level of global uniformity, to reflect a more prominent position of the passenger based on consumer rights, to reflect the balance of interests of consumers and air carriers, and to provide for reasonable compensation in the event of a claim against an airline.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">The Convention applies to international carriage of passengers and cargo where the place of departure and place of destination are the territories of two member state parties, or the territory of a single state party if there is an agreed stopping place within the territory of a non-member state. To qualify as a member state party, a country must sign, ratify, adopt and bring the Convention into force by legislation in its own country.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">As of 2016, there are 119 parties to the Convention worldwide. It is worth noting that other countries, such as Russia, have not ratified the new Convention and are still subject to the provisions of the Amended Warsaw Convention. For this reason, the liability claims arising from the October 2015 Metrojet loss in Sinai in Egypt on a flight scheduled  from Sharm el Sheikh in Egypt  to St. Petersburg in Russia are being dealt with under the old Amended Warsaw Convention.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">The Convention came into force in Egypt on 25 April 2005 and in France on 28 June 2004. As both France and Egypt are member state parties to the Convention, and EgyptAir 804 was scheduled to fly between Paris and Cairo, the Convention applies to liability claims arising from the loss.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">The airline is liable under Article 17 of the Convention, which provides that ”the carrier is liable for damage sustained in the case of death or bodily injury on condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking”.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">The level of compensation arising from Article 17 is provided by Article 21 of the Convention. This states that an airline cannot exclude or limit its liability for any damages up to 113,100 Special Drawing Rights (“SDR”). SDR is a form of currency determined by the International Monetary Fund and it is calculated on a basket of four key international currencies, the Euro, Japanese Yen, Pound Sterling and U.S. Dollar. The exchange rate of one SDR to one US Dollar is USD 1.40 (as at 1 June  2016), making the current compensation level under Article 21 equivalent to  USD 158,550. Article 23 states that any SDR conversion exchange rate applied, especially in cases of judicial proceedings, will be determined at the date of the judgment.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">Whilst an airline cannot exclude or limit its liability for compensation up to 113,100 SDR, it does not guarantee an automatic right to families of a passenger to recover this amount of damages. The level of damages awarded is still subject to strict proof and document verification.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">Article 21 also allows families of a passenger or a passenger himself to claim a higher amount than the current threshold of 113,100 SDR, but this will still be subject to strict proof and the airline is allowed to raise two types of defences provided for in the Convention. These defences are that:</span></p>\r\n\r\n<ul>\r\n 	<li>such damage was not due to the negligence or other wrongful act or omission of the carrier or its servants or agents; or</li>\r\n 	<li><span class=\"s1\">such damage was solely due to the negligence or other wrongful act or </span>omission of a third party.</li>\r\n</ul>\r\n<p class=\"p2\">Article 28 allows airlines, especially in aircraft accidents, to make advance payments to any party entitled to claim compensation and many airlines will make a provision for an advance payment in circumstances of total loss of the aircraft. However, advance payment does not mean that the airline is admitting any liability on its part and the payment amount will be offset against any further amounts that an airline may have to pay as damages.</p>\r\n<p class=\"p1\"><span class=\"s1\">Article 29 states that “any action for damages however founded” against an airline made under the “Convention or in contract or in tort or otherwise” must be brought subject to conditions and limits of liability as set out under the Convention. In short, Article 29 expressly provides that the Convention is an exclusive regime and any action taken by the passenger or family members for compensation for death or bodily injury under Article 17 is an exclusive remedy. Article 29 further states that “in any such action, punitive, exemplary or any other non-compensatory damages shall not be recoverable”.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">In addition to the Convention providing an exclusive remedy, the Convention provides that a party intending to bring a law suit is able to do so in five jurisdictions only. These are:</span></p>\r\n\r\n<ul>\r\n 	<li>in a country in which the carrier is domiciled;</li>\r\n 	<li><span class=\"s1\">in a country in which the carrier has its principle place of business; </span></li>\r\n 	<li>in a country in which the carrier has a place of business through which the contract was made;</li>\r\n 	<li>at the place of destination; or</li>\r\n 	<li>in the territory of state party in which, at the time of the accident, the passenger has his principal and permanent residence, and to and from which the carrier operates services.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p4\"><span class=\"s1\"> </span></p>\r\n<p class=\"p2\">In terms of (i) and (ii) above, it is clear that EgyptAir is based and runs its commercial business from Egypt. Therefore, any claim made under (i) and (ii) above shall be brought in Egypt. In considering (iii) above, where the ticket was purchased and how it was purchased may be relevant factors. With respect to (iv) above, as Egypt was the destination, any party wishing to claim under this limb would have to file its action in Egypt. With respect to (v), regardless of the passengers’ nationalities, a claim can be brought within the territory of a state party where the passengers had their principal and permanent residence at the time of the accident. This would mean that an Egyptian passenger, who was residing in France could bring an action there after having proven that was his principal and permanent residence.</p>\r\n<p class=\"p1\"><span class=\"s1\">Another aspect of the Convention to be aware of is that there is an absolute two year limit in which claims must be commenced, otherwise the claim will be time barred under Article 35. This is calculated either from the date of arrival at the destination, the date on which the aircraft ought to have arrived, or the date on which the carriage stopped.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">Knowledge of the Convention’s rules on exclusivity of action and limited jurisdiction to commence actions are important, particularly in light of the confusing media reports in the Middle East suggesting that passengers will be entitled to fixed amounts based on their nationality. This is not the case. Claims will be dealt with in accordance with the Convention and in the local jurisdiction in which the law suit is filed or in the jurisdiction in which the case is settled.</span></p>\r\n<p class=\"p2\">It is fair to say that there are several factors influencing the amount of any final award, including the victim’s salary, age and life expectancy, and these may differ from country to country. Furthermore, in some jurisdictions, for example the USA, a higher award may be granted based on the above factors. However, to say that there is a fixed amount payable based on a passenger’s nationality is quite wrong.</p>\r\n<p class=\"p2\">It is hoped that the investigating authority quickly recovers the aircraft black boxes and identifies the cause of the tragedy. In the meantime, it is also hoped that liability issues are resolved quickly, and in accordance with international aviation law, and that bereaved families are compensated accordingly.</p>'),
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	(99592,5411,'pageSummary','The tax-free status of the countries within the Gulf Cooperation Council (GCC) is world renowned and a major draw for international corporations and foreign individuals alike, both of which are of great importance for the economy of the region. Personal income is mostly tax-free and corporation tax is generally non-existent with a few exceptions, for instance corporate taxation on revenues generated from the oil industry and in respect of branches of foreign banks (in the UAE).'),
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	(99590,5411,'content_description','The tax-free status of the countries within the Gulf Cooperation Council (GCC) is world renowned and a major draw for international corporations and foreign individuals alike, both of which are of great importance for the economy of the region.   Personal income is mostly tax-free and corporation tax is generally non-existent with a few exceptions, for instance corporate taxation on revenues generated from the oil industry and in respect of branches of foreign banks (in the UAE).'),
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	(99573,5410,'content_description','While employee share option schemes (“ESOPs”) and other long term incentive plans (“LTIPs”) come in a variety of shapes and sizes, they all share the same essential purpose of retaining, rewarding and incentivising employees. By linking part of an employee’s remuneration to the company’s financial performance under an ESOP, employees have a direct and tangible incentive to contribute to the company’s success, as higher company performance will increase the value of their individual rewards and incentives. ESOPs are also a useful tool for employers to help retain and reward valuable staff members, as the incentives offered under an ESOP are typically staggered over time such that the longer an employee remains employed by the company, the greater their ESOP rewards will become. '),
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	(99575,5410,'pageSummary','While employee share option schemes (“ESOPs”) and other long term incentive plans (“LTIPs”) come in a variety of shapes and sizes, they all share the same essential purpose of retaining, rewarding and incentivising employees. By linking part of an employee’s remuneration to the company’s financial performance under an ESOP, employees have a direct and tangible incentive to contribute to the company’s success, as higher company performance will increase the value of their individual rewards and incentives. ESOPs are also a useful tool for employers to help retain and reward valuable staff members, as the incentives offered under an ESOP are typically staggered over time such that the longer an employee remains employed by the company, the greater their ESOP rewards will become.'),
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	(99585,5410,'_yoast_wpseo_metadesc','ESOPs are a useful tool for employers to help retain and reward valuable staff members, as the incentives offered under an ESOP are typically staggered over time such that the longer an employee remains employed by the company, the greater their ESOP rewards will become.'),
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	(99586,5411,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\"><strong>Introduction</strong></p>\r\n<p class=\"p2\">The tax-free status of the countries within the Gulf Cooperation Council (GCC) is world renowned and a major draw for international corporations and foreign individuals alike, both of which are of great importance for the economy of the region.   Personal income is mostly tax-free and corporation tax is generally non-existent with a few exceptions, for instance corporate taxation on revenues generated from the oil industry and in respect of branches of foreign banks (in the UAE).</p>\r\n<p class=\"p2\">It is understandable how such a low level of taxation has been feasible bearing in mind the region’s proven oil reserves are some of the largest in the world.  However the market price, and demand, of this finite resource is intrinsically linked to global economic growth.  The rapid fall in the price of oil in 2009 was a result of the global recession at that time and, although OPEC may be able to control price to an extent, in practice it is difficult and prices have dropped by more than 60% since the middle of 2014.   To counter this volatility, economic diversification is paramount and the UAE leads the way with its tourism, financial services and manufacturing industry sectors.</p>\r\n<p class=\"p2\">However the changing landscape has meant that the practice of GCC governments’ funding budget deficits from (oil) cash reserves is no longer viable in the long term and valuable government services and infrastructure projects must be paid for.  Whilst forms of indirect taxation exist, for example municipality housing charges, tourist and motoring fees, direct taxation is being considered and the GCC Supreme Council has resolved that all GCC countries will implement a VAT on or between 1 January 2018 and 1 January 2019.</p>\r\n<p class=\"p1\"><strong>VAT</strong></p>\r\n<p class=\"p2\">The legal framework is expected to be in circulation in June 2016 but it has already been announced by the Minister of State for Financial Affairs that the UAE shall implement a consumption tax (VAT) as from 1 January 2018.  Other GCC Countries are expected to implement the following year.</p>\r\n<p class=\"p2\">Worldwide VAT levels range from 0% to around 25% and the UAE has confirmed that it shall impose a moderate 5%, on goods and services at point of sale, which is expected to generate around AED 12 billion in the first year.</p>\r\n<p class=\"p2\">A low consumption tax would appear to do little to deter from the “tax free” environment and is less of a disincentive to investment in the region than imposing direct corporation or income tax.  However VAT is generally considered as a regressive tax, impacting those on lower salaries in relative terms, albeit those on higher salaries are impacted on absolute terms.  This can be addressed by Government targeted welfare spending and exempting certain goods from VAT, which appears to be the approach in UAE, since it is expected that certain foods items, healthcare and education will be declared as exempted goods for VAT purposes. In a positive light, a consumption tax may in fact reduce consumption and therefore our carbon footprint in support of sustainable development.</p>\r\n<p class=\"p1\"><strong>How it works</strong></p>\r\n<p class=\"p2\">Quite simply, VAT is charged by adding the VAT rate to the charges for the supply of goods and services.  For example, if Company A sold its product or service to Company B, Company B would pay the cost of the product or service plus 5% (in the UAE).  Of course, there will be a whole raft of other matters for a trading company to consider including registration with the competent tax authorities, administration of payments, eligibility for input / output tax recovery and exempt supplies.  Moreover, actual location of the delivery of the services and/or products will have an impact on which jurisdiction the charges are imposed in and suppliers must consider cross border implications.  As expected, tax evasion or avoidance will result in series sanctions, both criminal and civil.</p>\r\n<p class=\"p1\"><strong>Basic considerations for commercial contracts</strong></p>\r\n<p class=\"p2\">VAT will be generally chargeable on goods and/or services at the point of sale and, in most cases, the responsibility to account to the relevant authority for the VAT element will be on the supplier.</p>\r\n<p class=\"p2\">As a supplier of goods and/or services in the UAE, whether pursuant to a services agreement, distribution agreement or otherwise, generally at present the contractual terms in relation to payment will not provide for the consequences of taxation on the supply since this has not been an issue needing to be addressed.  Therefore this means that standard form agreements are being issued regularly without any contractual VAT protections for the supplier and although, at present, no VAT is payable, many contracts will run across the implementation dates.</p>\r\n<p class=\"p2\">Contracts should clearly state whether the price is “inclusive” or “exclusive” of any applicable sales or value added tax and, in addition, a provision should allow for a valid tax invoice to be issued against payments if required by applicable law, as well as indemnification against loss or penalties.  Given that a supplier is generally responsible for the VAT, if the contract is silent on these aspects then the supplier may find that it is required to account to the relevant authority and it may be unable to recover the VAT from its customer, leaving the supplier short changed.</p>\r\n<p class=\"p1\"><strong>Conclusion</strong></p>\r\n<p class=\"p2\">The introduction of a sales tax means that companies are advised to undertake a review of their current commercial arrangements and general terms and conditions of sale to ensure that their contractual position is suitably protected.  In addition, internal procedures should be put in place to deal with collection and payment of the VAT.</p>\r\n<p class=\"p2\">An interesting point to note is in relation to the thousands of Free Zone consultancy businesses which are registered in the UAE and which, from time to time, in certain grey-areas of business may be deemed to have traded on-shore in the UAE and, therefore, to have undertaken activities that are not permitted by their license.  With the introduced of VAT, these business owners will need to be conscious of the additional sanctions which may be imposed against them for non-payment of VAT in relation to any services which may be deemed to have been delivered on-shore, although of course this is assuming that the legislation does not impose a VAT on Free Zone services.  Once the legal framework has been implemented, a deeper analysis of the law and regulation will be required to understand the reach of the taxation.</p>\r\n<p class=\"p2\"><em>Adam Powell (a.powell@tamimi.com) is a Senior Associate and Head of the Corporate Commercial Practice in Ras Al Khaimah.</em></p>');

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	(99568,5409,'_yoast_wpseo_metadesc','The United Arab Emirates (“UAE”) has remained steadfast in its efforts to curb financial crime including bribery and corruption. This includes implementing relevant safeguards by means of laws to deter and prevent such crimes, upholding those safeguards by means of close monitoring and international cooperation.'),
	(99569,5410,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\"><strong>What are ESOPs?</strong></p>\r\n<p class=\"p3\"><span class=\"s1\">While employee share option schemes (“ESOPs”) and other long term incentive plans (“LTIPs”) come in a variety of shapes and sizes, they all share the same essential purpose of retaining, rewarding and incentivising employees. By linking part of an employee’s remuneration to the company’s financial performance under an ESOP, employees have a direct and tangible incentive to contribute to the company’s success, as higher company performance will increase the value of their individual rewards and incentives. ESOPs are also a useful tool for employers to help retain and reward valuable staff members, as the incentives offered under an ESOP are typically staggered over time such that the longer an employee remains employed by the company, the greater their ESOP rewards will become. </span></p>\r\n<p class=\"p3\"><span class=\"s1\">While an ESOP (or other LTIP) can be a very valuable tool for companies to help retain high performing employees and incentivise them to drive the company’s financial success, UAE companies have experienced various difficulties in the past when seeking to implement ESOPs for their UAE based employees. </span></p>\r\n<p class=\"p1\"><strong>What recent changes have affected ESOPs in the UAE?</strong></p>\r\n<p class=\"p3\"><span class=\"s1\">Some of these difficulties have been overcome by the introduction of  UAE Federal Law No. 2 of 2015 concerning Commercial Companies (“CCL”) which came into force on 1 July 2015. For the first time, the CCL specifically provides that UAE companies may, by way of a special resolution approved by their general assembly, increase their share capital in order to implement an ESOP for UAE based employees. Participation in the ESOP is reserved for the company’s employees only and the CCL does not allow for directors of the company to participate in the scheme.</span></p>\r\n<p class=\"p3\"><span class=\"s1\">Importantly, pursuant to the CCL the existing shareholders of a public joint stock company do not have pre-emption rights in respect of shares issued pursuant to an ESOP. This represents a major shift in the legal framework regarding ESOPs in the UAE as, prior to the introduction of the CCL, existing shareholders had priority to subscribe to any new shares (and would need to consent to any new shares being issued to an employee pursuant to an ESOP). In the context of options being granted under an ESOP, existing shareholders having pre-emption rights would not only make the administration of the ESOP significantly more cumbersome, but would also mean that any of the existing shareholders could essentially block the company from meeting its obligations towards an employee under an ESOP. Accordingly, the specific provision in the CCL for UAE companies to implement ESOPs, together with the fact that existing shareholders would not have pre-emption rights in respect of shares granted under an ESOP, has overcome one of the major obstacles for public and private joint stock companies seeking to implement an ESOP for UAE based employees.</span></p>\r\n<p class=\"p3\"><span class=\"s1\">The CCL provides that the Emirates Securities and Commodities Authority (“ESCA”) will issue a Resolution on the “mechanism and conditions of implementation” of ESOPs.  Whilst the Resolution has not yet been issued, we have had sight of it in draft form and anticipate that it will have legislative effect imminently.  The Resolution sets out the regulations for issuing and offering public joint stock company shares including as part of an ESOP.  In terms of additional guidance of relevance, the draft Resolution provides that shares issued pursuant to an ESOP may not exceed 10% of the share capital increase and also that the company’s board or remuneration committee shall develop the ESOP to include: (i) its size, (ii) the price of the shares and conditions and procedures relating to the ESOP, (iii) the determination of the ESOP participants, (iv) the implications of participants leaving their employment whether by dismissal or resignation (akin to ‘good’ and ‘bad’ leaver provisions), and (v) its duration.  </span></p>\r\n<p class=\"p1\"><strong>What other options are available to our company?</strong></p>\r\n<p class=\"p3\"><span class=\"s1\">Of course, the issue of pre-emption rights is only relevant where legal title to the shares is actually being transferred, and there are alternative ways to structure an LTIP which do not involve the employees receiving actual shares in the company. Where legal title to the shares is not transferred, an LTIP is essentially a contractual arrangement between the company and the employee whereby the ‘incentive’ for the employee is a cash payment (often calculated by reference to the share price of the company) rather than actual shares. For limited liability companies it is generally simpler to implement and administer an LTIP which does not involve the transfer of legal title to the shares, as the cumbersome share transfer process and maximum limit of 50 shareholders pose additional obstacles for limited liability companies to consider.</span></p>\r\n<p class=\"p3\">The most appropriate design of an LTIP must be assessed on a case-by-case basis and will depend on a variety of factors, including the type and size of legal entity, whether legal title to the shares will be transferred to employees, and whether it would be appropriate for the company to establish a separate legal structure to hold a pool of shares (and any legal and accounting implications which may then arise for the company).</p>\r\n<p class=\"p2\"><strong>How can our company design and implement its own ESOP?</strong></p>\r\n<p class=\"p3\"><span class=\"s1\">It remains to be seen exactly how ESCA will develop the framework for UAE companies to structure and implement their ESOPs.  In the meantime, pending issuance of the Resolution, specific direction and input from ESCA is required before the implementation of an ESOP (for public and private joint stock companies) is possible. Indeed it is highly likely, given the existing form of the draft Resolution, that specific direction and input will continue to be required from ESCA post issuance of the Resolution.  However, it would appear from the draft Resolution that companies are likely to have a relatively wide degree of latitude in terms of the form of ESOP that they wish to adopt. </span></p>\r\n<p class=\"p2\">In the meantime, we are available to give guidance in terms of which structures may be most suitable for your business. This process will also involve the company auditors as they will need to assess how any proposed structures may impact the balance sheet. Part of the planning process will also involve the potential use of offshore vehicles and plan administrators to assist with the day to day administration of the plan.</p>'),
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	(99548,5409,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\"><strong>Introduction</strong></p>\r\n<p class=\"p2\">The United Arab Emirates (“UAE”) has remained steadfast in its efforts to curb financial crime including bribery and corruption. This includes implementing relevant safeguards by means of laws to deter and prevent such crimes, upholding those safeguards by means of close monitoring and international cooperation.</p>\r\n<p class=\"p3\">One recent initiative came to light in Dubai on 18 April 2016, when His Highness Sheikh Mohammed Bin Rashid Al Maktoum, in his capacity as the Ruler of Dubai, issued Law No. 4 of 2016 entitled the Dubai Economic Security Centre Law (“the Law”).</p>\r\n<p class=\"p3\">The Law aims, among other things, to protect the economic security of Dubai as a global financial and economic hub, by creating the Dubai Economic Security Centre (“the Centre”) as an establishment to assess and raise awareness of risks and to introduce new measures to protect the financial stability and investments in Dubai from crimes that may harm the economy.</p>\r\n<p class=\"p3\">In other words, the Law is intended to assist in the recognition and reduction of financial risks and the combat against financial crimes in Dubai, in order to provide investors with an attractive economic environment.</p>\r\n<p class=\"p1\"><strong>Wide competences and powers</strong></p>\r\n<p class=\"p2\">The Centre is a government body with jurisdiction over the following entities:</p>\r\n\r\n<ul>\r\n 	<li>Local government agencies.</li>\r\n 	<li>Agencies that are guaranteed a minimum profit by the Government of Dubai.</li>\r\n 	<li>Agencies that are subsidised by the Government of Dubai.</li>\r\n 	<li>Establishments licensed to practice an economic activity in Dubai.</li>\r\n 	<li>Charitable Associations.</li>\r\n 	<li>Any other agency falling under a resolution issued by the Chairman of the Executive Council of Dubai.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\">The Centre’s competences are contained in an extensive but non-exhaustive list and include:</p>\r\n\r\n<ul>\r\n 	<li>Combating corruption, fraud, bribery, embezzlement, destruction of public property, forgery, counterfeiting, money laundering, terrorism or illegal organisations financing, and other crimes that may be committed in entities that are under the jurisdiction of the Centre.</li>\r\n 	<li>Monitoring abuses and financial irregularities committed in Dubai.</li>\r\n 	<li>Supervising the trading of currencies, commodities, precious metals and securities (listed and unlisted).</li>\r\n 	<li>Developing rules and procedures to prevent interactions with individuals or organisations involved in terrorism or with any individual having any connection to such organisations.</li>\r\n 	<li>Proposing and auditing legislation to regulate financial and economic affairs in Dubai.</li>\r\n 	<li>Preparing and publishing periodical reports and statistics on the financial and economic position of Dubai.</li>\r\n 	<li>Following up on cases that the Centre is concerned with, including transnational crimes in coordination with the judicial authority.</li>\r\n 	<li>Holding and participating in conferences and seminars, cooperating with relevant regional and international organisations to exchange experience, knowledge and information about economic security.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\">The Centre has been granted wide powers to enable it to carry out its functions.  These include:</p>\r\n\r\n<ul>\r\n 	<li>Requesting the Public Prosecution to seize funds, property, documents, papers and any other things related to acts detected by the Centre’s staff.</li>\r\n 	<li>Coordinating with the relevant international institutions to gain access to information and data related to investigations being conducted by the Centre.</li>\r\n 	<li>Suspending trading in the stock market, freezing, suspending or reactivating any regulations or rules related to the financial market or any operation thereof.</li>\r\n 	<li>Requesting the details of bank accounts, balances and activity of any natural or legal person, in coordination with the relevant bodies, who shall fully cooperate with the Centre in this regard.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\"><strong>Protection of reporters and confidential information</strong></p>\r\n<p class=\"p3\">The Law provides protection for those who report acts that may affect the economic security of Dubai, which may include:</p>\r\n\r\n<ul>\r\n 	<li>Protection at the reporter’s home address.</li>\r\n 	<li>Keeping information relating to the identity and location of the reporter confidential.</li>\r\n 	<li>Protection at the reporter’s workplace and ensuring that no discrimination or mistreatment takes place.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\">Further, Article 20 specifically requires that the Centre, its employees and all persons having any connection to the Centre are to keep confidential all information and data provided by entities that fall under the jurisdiction of the Centre.  Disclosure of confidential information in violation of this requirement is punishable by imprisonment for a period of three months to one year and a fine of up to AED50,000.</p>\r\n<p class=\"p3\">When investigating potential violations of the Law, the employees of the Centre have the capacity of judicial officers.  They are therefore entitled to solicit the assistance of the police and other relevant bodies whenever necessary in order to conduct their investigations.</p>\r\n<p class=\"p3\">Persons who report, to the Centre, activity that may affect the economic security of Dubai will be deemed not to be in violation of non-disclosure laws and agreements and no legal or disciplinary action will be permitted against the reporter, unless the report is false.  Although no guidance has been issued in respect of the test for determining when a reporter should be prosecuted for a false report, the general requirement under the UAE criminal law that bad faith should be present for a crime to have been committed, would suggest that the report must be deliberately false, as opposed to negligent and based on an honest or reasonable belief.</p>\r\n<p class=\"p1\"><strong>Cooperation with the Centre</strong></p>\r\n<p class=\"p3\">The Law requires that all concerned persons cooperate with the Centre, respond to its requests and do nothing to hinder the Centre in the performance of its functions.  In the event that any person subject to the Law refuses to cooperate, the CEO of the Centre, or any other competent employee, may resort to the judicial authorities in order to obtain the required information.  According to Article 21 of the Law, a Resolution will be issued by the Chairman of the Executive Council of Dubai, setting out the administrative violations of the Law and the associated penalties.</p>\r\n<p class=\"p1\"><strong>Conclusion</strong></p>\r\n<p class=\"p3\">Not only is the establishment of the Centre good for Dubai as a further step towards the prevention and detection of financial crimes, and the resulting economic stability, but it should also serve to increase investors’ trust in Dubai’s financial markets and thereby increase foreign investment in the Emirate.</p>\r\n<p class=\"p3\">At a global level, this initiative is also a very positive one in line with the joint efforts between the UAE and the Gulf Cooperation Countries and the international community, all working together to enhance regional stability.</p>\r\n<p class=\"p3\">The success of the Centre depends to a degree on the level of cooperation between the relevant governmental entities and financial institutions, which are required to provide timely support to the Centre so that it can achieve its research, reporting and investigative objectives.  One of the major roles of the Centre is the proposal of legislative reforms.  We will be keeping an eye out to see what further developments come out of this initiative in parallel with existing ones and will be reporting accordingly.</p>'),
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	(99526,5407,'_yoast_wpseo_metadesc','Al Tamimi & Company discusses this law, its impact on the dispute resolution landscape in the UAE in general and litigation in particular. The article will look into the future of dispute resolution.'),
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	(99527,5408,'content','June - July 2016\r\n\r\n<hr />\r\n<p class=\"p1\">In these challenging economic times, some businesses are struggling to cope with financial pressures and financiers are concerned with their customers’ ability to service their financing arrangements. An effective insolvency regime is, therefore, an important element of financial system stability. The statutory insolvency regime in the United Arab Emirates (“UAE”) has often been regarded as under-developed and remains largely untested. This article seeks to examine the application and the effectiveness of the insolvency regime in the UAE and consider the consequences of, and primary issues surrounding, insolvency from the perspective of commercial debtors and creditors.</p>\r\n<p class=\"p1\">The key provisions of insolvency laws in the UAE are comprised within Federal Law No. 18 of 1993 (“Commercial Code”), which governs bankruptcy proceedings, and Federal Law No. 2 of 2015 (“Companies Law”), which governs liquidation proceedings. Liquidation is the process by which a company’s existence is ended, which can be (but is not always) insolvency related. We will focus in this article on bankruptcy in the UAE.</p>\r\n<p class=\"p3\"><strong>Bankruptcy</strong></p>\r\n<p class=\"p1\">Under the Commercial Code, a trader may be declared bankrupt if it ceases or suspends payment of its commercial debts at their maturity dates due to financial instability or lack of available credit. Subject to certain exceptions, an individual or a company which undertakes a commercial activity is deemed as a ‘trader’ under the Commercial Code. These insolvency provisions are, however, applicable to companies incorporated in the free zone, unless such free zones are exempted from compliance thereto. The Dubai International Financial Centre, for example, has its own distinct legal and regulatory framework in this respect.</p>\r\n<p class=\"p1\">A petition for bankruptcy can be initiated by a trader, a public prosecutor, a court, or a creditor. From the lender’s perspective, a trader will have committed a criminal offence of bankruptcy by default if it has suspended payment for more than 30 days and failed to file a petition for bankruptcy within the 30 days period.  In practice, however, we have not seen this offence pursued by the relevant authorities. If the level of prosecution for such offences change, it is possible that the bankruptcy regime would more frequently be triggered by trader’s seeking to protect themselves.</p>\r\n<p class=\"p1\">Where a petition for a declaration of bankruptcy against a trader has been filed, the court will issue a judgment for a declaration of bankruptcy and is empowered to fix a provisional date for suspension of payment, order that the debtor’s place of business be sealed, and appoint a trustee in bankruptcy. The Commercial Code stipulates that the date of suspension of payment may not be brought back to a period of more than two years from the date for adjudication of bankruptcy. This has implications in respect of the antecedent transactions regime, as mentioned below.</p>\r\n<p class=\"p1\">Bankruptcy proceedings may be terminated only if: (i) all creditors are repaid; (ii) by way of judicial composition; or (iii) by the company waiving all its assets in favour of its creditors.</p>\r\n<p class=\"p1\">Upon the declaration of bankruptcy, a moratorium comes into effect such that no proceedings may be brought by a creditor against the debtor. However, this will not affect the rights of secured creditors to enforce their security. This is one of the factors to which we believe the lack of bankruptcy in the UAE may be attributed.</p>\r\n<p class=\"p3\"><strong>Voidable transactions</strong></p>\r\n<p class=\"p1\">A creditor is entitled to challenge any of the following pre-bankruptcy transactions entered into by the debtor for a period decided by the court, subject to a maximum of two years prior to the adjudication of bankruptcy:</p>\r\n\r\n<ul>\r\n 	<li>All donations excluding customary small gifts.</li>\r\n 	<li>Payment of a term debt before its maturity, regardless of the manner of such settlement.</li>\r\n 	<li>Payment of immediate debts other than in the manner agreed upon for payment.</li>\r\n 	<li>Provision of security for pre-existing debts.</li>\r\n 	<li>Transactions that are detrimental to creditors, where the payee is deemed aware that the trader has ceased to pay its debts.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\">The remedy for a successful challenge would be to restore the parties to their original positions.</p>\r\n<p class=\"p2\"><strong>Liability of Directors</strong></p>\r\n<p class=\"p1\">Under the UAE regime, in addition to the general duties owed by a director to the company, a director may be subject to both civil and criminal liability in the event that the company is declared bankrupt.</p>\r\n<p class=\"p1\">If the assets of the company are insufficient to satisfy at least 20% of its debts, the court may order the members of the board of directors, or all of the directors, jointly or severally, to pay the debts of the company, in whole or in part, but only where the court finds that (a) the directors are found liable for a breach under the Companies Law and (b) such breach caused the shortfall in payment.</p>\r\n<p class=\"p1\">Members of the company’s board of directors, its managers, or the liquidators are criminally liable if it is established that they have committed any of the prescribed offences under Article 879 and 882 of the Commercial Code, which relates to acts of directors concealing the company’s property and financial position. Further, the Penal Code also contains provisions that penalise managers involved in fraudulent activities relating to a bankruptcy.</p>\r\n<p class=\"p1\">Therefore, debtors should be mindful of the consequences of antecedent transactions and potential directors’ liability arising from preferential treatment of lenders in a bankruptcy situation.</p>\r\n<p class=\"p1\">Where the losses of a limited liability company exceeds 50% of its share capital, the directors are required to notify the shareholders; where losses exceed 75% of the company’s share capital, shareholders holding greater than 25% of the company can require its dissolution.</p>\r\n<p class=\"p1\">Notwithstanding the personal liability noted above, it is true that bankruptcy is seldom initiated in the UAE (unlike other jurisdictions where debtors or directors initiate insolvency proceedings to protect themselves and limit their liability).</p>\r\n<p class=\"p3\"><strong>Composition</strong></p>\r\n<p class=\"p1\">An adjudication of bankruptcy can be avoided by a debtor by entering into a composition with its creditors. Such compositions are available in the form of (i) a protective composition and (ii) a judicial composition.</p>\r\n<p class=\"p3\"><strong>Protective composition</strong></p>\r\n<p class=\"p1\">A protective composition allows a debtor (except for joint stock companies and companies already in a state of liquidation) to apply for a protective arrangement, to avoid bankruptcy, within 20 days following a suspension in payment of its debts. The debtor must be able to demonstrate that it has practiced its business continuously during the year that precedes the submission of the application and during this period has complied with all applicable provisions of law.</p>\r\n<p class=\"p1\">As part of the composition proceedings, the debtor must submit a proposal to repay its debts such that it shall repay not less than 50% of the debt within 3 years from the date on which the arrangement has been ratified.</p>\r\n<p class=\"p2\">If the court agrees to hear the application, it will appoint a judge and trustee for the arrangement.  Creditors will be invited to meet with the trustee and all execution procedures against the debtor will be suspended.</p>\r\n<p class=\"p2\">The arrangement, once finalised, will be binding on all unsecured creditors if the creditors comprising the majority of those who vote at the meeting (and two thirds of the debt represented by the creditors voting at the meeting) approve the proposal. If no agreement is reached at the meeting, the deliberations may be extended.  Following the vote, any interested person may comment on the arrangement and the judge will either cancel or ratify the arrangement within 3 days from the lapse of such period whereby any interested person is entitled to comment on the arrangement. The arrangement, if ratified, will bind all ordinary creditors whether or not they voted for it. If the debtor fails to carry out the terms of the arrangement, the debtor may proceed with an application for liquidation.</p>\r\n<p class=\"p2\">Due to the strict requirements for protective compositions, protective compositions are not used at all.</p>\r\n<p class=\"p3\"><strong>Judicial composition</strong></p>\r\n<p class=\"p1\">Following a declaration of bankruptcy, a judge may initiate a judicial composition whereby creditors, the debtor, and the trustee in bankruptcy are invited to a composition meeting. Similarly, a composition scheme can be proposed and approved by a majority of the creditors (those holding two thirds or more of the total debts). A judicial composition may grant the debtor extended periods for settlement of debts and may include a waiver of certain debts through the composition which the debtor is to pay as a natural debt.</p>\r\n<p class=\"p1\">Upon the court’s approval of a composition arrangement, the debtor retains the full right and authority to manage its own business. Accordingly, the duty of the trustee in bankruptcy shall expire and the debtor shall take over from him all his properties, books, and papers related to the bankruptcy.</p>\r\n<p class=\"p2\">In the event of a nullity (e.g. where the debtor has committed fraudulent bankruptcy after the approval of the composition) or termination of the composition (e.g. if the debtor fails to execute the conditions of the composition), an appeal for termination may be made to the court by creditors.  The court will appoint a judge and trustee in bankruptcy and will order the sealing of the debtor’s property. The trustee in bankruptcy will call upon the new creditors to submit documents of their debts in order to be realised in accordance with the procedures for realisation of debts.</p>\r\n<p class=\"p1\">Similarly to protective composition, judicial compositions have not been tested in the UAE.</p>\r\n<p class=\"p3\"><strong>Liquidation following bankruptcy</strong></p>\r\n<p class=\"p1\">Where an agreement is not concluded between the debtor and its creditors, or the debtor is further unable to settle its debts notwithstanding the bankruptcy proceedings, bankruptcy can lead to liquidation of the trader/company.</p>\r\n<p class=\"p1\">Upon the commencement of liquidation proceedings, liquidators are appointed, the powers of the board of directors cease, and the liquidator acquires the powers to preserve the company’s assets and raise and defend legal claims. Following realisation of assets, satisfaction of debts, and distribution of any remaining funds to the shareholders of the company, a company is dissolved upon the registration of the completed liquidation with the commercial register.</p>\r\n<p class=\"p2\"><strong>Practical analysis </strong></p>\r\n<p class=\"p1\">Historically, creditors’ rights in recovery of debts have been the focus of the insolvency regime in the UAE whilst debtor friendly restructuring options under the legislative framework are not a viable option due, in our view, to the stringent statutory requirements. Instead, informal consensual restructurings prevail.</p>\r\n<p class=\"p2\">It can be noted from our discussion above that the current bankruptcy and composition proceedings are processes driven by courts which may be perceived as uncertain, lengthy, and cumbersome. In the absence of less formal out of court procedures, debtors are discouraged from restructuring their liabilities and seeking protection before their financial situation worsens.  In our experience, consensual solutions more often come about due to creditor pressure than proactive debtors. From the perspective of creditors, there are no favourable incentives to enter into a composition arrangement given that such a court led process does not accord them with sufficient influence over the terms and timetable of the composition. Thus, parties have conventionally resorted to private commercial negotiations out of court or, for secured creditors, enforcement of their security through the tried and tested processes in place.</p>\r\n<p class=\"p1\">While the existing legislation provides the mechanics for protective composition, in reality this is of little use to debtors given the strict requirements for a statutory composition.</p>\r\n<p class=\"p2\"><strong>Law reform</strong></p>\r\n<p class=\"p1\">In view of the deficiencies of the existing insolvency regime, a proposed Federal Law on Financial Restructuring and Bankruptcy (“Proposed Bankruptcy Law”) has been in circulation for some time, which aims to modernise the insolvency regime to better suit the needs of the current business environment.</p>\r\n<p class=\"p2\">It is anticipated that the Proposed Bankruptcy Law would, amongst others: (i) introduce a more definite basis for the commencement of a bankruptcy proceeding in the form of both a cashflow (i.e. the debtor has stopped meeting or servicing debts) and balance sheet (i.e. the debtor’s assets do not cover liabilities) test of insolvency; (ii) streamline rescue procedures designed to reform the current preventative composition procedures, including financial reorganisation procedures available for debtors who are in financial difficulties but who are not yet insolvent, to enter into a ‘consent agreement’ with its creditors; and (iii) provide further guidance on the application and effects of the claw-back provisions and the positions of secured creditors versus unsecured creditors upon liquidation.</p>\r\n<p class=\"p2\">The Proposed Bankruptcy Law has been making its way through the formal legislative process since 2009.  It remains to be seen when it will come into force and in what shape. Therefore, for now, the current regime remains relevant.</p>'),
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	(99504,5407,'content_description','On 3 October 2013, the Emirate of Abu Dhabi issued Law No. 6 of 2013 concerning the Judicial Fees payable in the emirate (“AD Fees Law”).The law, which came into force on 3 November 2013, regulates the fees payable before the local courts, replacing Abu Dhabi Law No. 16 of 2008.'),
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	(99506,5407,'pageSummary','On 3 October 2013, the Emirate of Abu Dhabi issued Law No. 6 of 2013 concerning the Judicial Fees payable in the emirate (“AD Fees Law”).The law, which came into force on 3 November 2013, regulates the fees payable before the local courts, replacing Abu Dhabi Law No. 16 of 2008.'),
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	(99477,5406,'pageSummary','The United Arab Emirates Federal Supreme Court recently upheld important principles in relation to well-known trademark protection and elements; bad faith as a reason to lose ownership of a prior-filed application; and the need to consider ownership in the country of origin.'),
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	(99500,5407,'content','<p class=\"p1\">On 3 October 2013, the Emirate of Abu Dhabi issued Law No. 6 of 2013 concerning the Judicial Fees payable in the emirate (“AD Fees Law”).The law, which came into force on 3 November 2013, regulates the fees payable before the local courts, replacing Abu Dhabi Law No. 16 of 2008.</p>\r\n<p class=\"p1\">This article aims to discuss this law, its impact on the dispute resolution landscape in the UAE in general and litigation in particular. The article will look into the future of dispute resolution and whether the new law will create a fertile ground for the adoption of litigation funding in the UAE, and in particular, funding of the court fees incurred by litigants.</p>\r\n<p class=\"p3\"><strong>The AD Fees Law</strong></p>\r\n<p class=\"p1\">The law removed the cap on fees payable before the civil courts of first instance, which had been AED 20,000, but is now 3% of the value of the claim with no cap. The law exempts public entities and employees filing claims against their employers from payment of court fees for all stages of litigation.</p>\r\n<p class=\"p1\">The wisdom behind the issuance of the new law, as explained in the preamble of the AD Fees Law, is to ease the burden of filing cases and minimize the amount of malicious and frivolous cases. It is has been noted that there will be cases of high value where corporations will have to choose between paying the fees or keeping it for future investments and forgoing the claim.</p>\r\n<p class=\"p1\">Many legal commentators predicted that the decision to change the fees would be unpopular and the legislator would soon realize that it would need to be amended in response to popular demand to do so. However, two years on, the law seems to be here to stay.</p>\r\n<p class=\"p1\">By way of comparison, Dubai has not abolished the cap but has instead introduced new caps. Dubai Law No. 21 of 2015 on Judicial Fees Payable before Dubai Courts, was issued on 3 October 2015 and was published in the Official Gazette Issue No. 389 (August 2015) (“Dubai Fees Law”). It came into force on 1 September 2015. The Dubai Fees Law regulates all fees imposed by the Dubai Courts including those related to attachments, civil cases, contracts, real estate, execution, appeals, cassations and other types of cases.  The law has set new caps for court fees depending on the value of the claim.</p>\r\n<p class=\"p1\">The table below provides the fees structures for initiating claims before the different courts:</p>\r\n\r\n<table border=\"0\" align=\"left\">\r\n<tbody>\r\n<tr>\r\n<td><strong>Court </strong></td>\r\n<td><strong>Current Fees</strong></td>\r\n<td><strong>Previous Fees</strong></td>\r\n<td><strong>Recoverability</strong></td>\r\n</tr>\r\n<tr>\r\n<td><strong>Abu Dhabi Court</strong></td>\r\n<td align=\"left\" valign=\"middle\">3% of the claimed amount with no cap. For a claim of AED 5m, fees would be AED 150,000.</td>\r\n<td>4% of the claimed amount with a cap of AED 20,000</td>\r\n<td>Can be fully recovered</td>\r\n</tr>\r\n<tr>\r\n<td><strong>Dubai Court</strong></td>\r\n<td>AED 20,000 for claims up to AED 500,000, AED 30,000 for claims between AED 500,001 and AED 1m; and AED 40,000 for claim amounts in excess of AED 1m. For a claim of AED 5m, fees would be AED.</td>\r\n<td>40,000. 7.5% of the claim amount with a cap of AED 30,000</td>\r\n<td>Can be fully recovered</td>\r\n</tr>\r\n<tr>\r\n<td><strong>DIFC Court</strong></td>\r\n<td>5% of the value of the claim (monetary) and/or the property with a minimum of USD 1,500 (AED 5,510) and a maximum of USD 135,000 (AED 495,850). For a claim of AED 5m, fees would be USD 68,065 (AED 250,000).</td>\r\n<td>5% of the value of the claim (monetary) and/or the property with a minimum of USD 1,000 and a maximum of USD 20,000</td>\r\n<td>Can be fully recovered</td>\r\n</tr>\r\n</tbody>\r\n</table>\r\n<p class=\"p1\">Since the enactment of the AD Fees Law, we have noted that clients have become cautious and have often chosen to submit unquantified claims, especially in construction related claims where disputes are not certain (such as variation orders and delay payments claims). They tend to file for the appointment of an expert (which is AED 3,000) in order to ascertain the amount that they are entitled to according to the expert and then decide on the payment of the Court fees. Most clients with large claims amounts were not reluctant to pay the fees. However, clients with small claims were more conservative. Ultimately, if the court fees are not paid, either the claim will be dismissed by the court, or it may allow payment of the fees to be deferred to a later stage.</p>\r\n<p class=\"p1\">We will now consider the options available for those claimants who are unable to pay the costs of filing a claim.</p>\r\n<p class=\"p4\"><strong>Sources of Funding in the UAE</strong></p>\r\n<p class=\"p3\"><strong>Judicial Funding</strong></p>\r\n<p class=\"p1\">Currently, there is no particular law that provides for funding before different courts in the UAE. Parties are responsible for any fees payable to the Court, and also the professional fees paid to lawyers handling the claims. Despite this, the judiciary departments in the different emirates have issued several laws and regulations that provide for legal aid under which certain categories of individuals and companies are exempted from paying for some of the fees forming part of litigation or, in some cases, postponing the payment of the fees for them.</p>\r\n<p class=\"p1\">Under the AD Fees Law, most public entities are exempted from paying court fees to commence a claim against any individual or body. The law further exempts employees from the payment of fees for any claims that they may have against their employers. This exemption is further supported by the provisions of Article 5 of the UAE Labor Law.</p>\r\n<p class=\"p1\">The Dubai Fees Law also exempts certain categories of individuals and claims from payment of court fees, including (at Articles 8 and 9) any claims, appeals and requests filed by ministries, federal and local entities of the Government of Dubai or any other Emirate.</p>\r\n<p class=\"p1\">Though not specifically ways of funding litigation, these exemptions reduce the cost of litigation for the selected individuals.</p>\r\n<p class=\"p1\">Likewise, the Dubai International Financial Centre (“DIFC”) has set up a pro bono program to help those who cannot afford the cost of filling claims and paying their lawyers. The program has enlisted a number of local and international law firms who take on cases at no cost. If the claim succeeds, the defendant will have to pay the legal costs of the claimant, but the money will be paid to the DIFC Pro Bono centre, not the law firm.</p>\r\n<p class=\"p3\"><strong>Commercial Funding</strong></p>\r\n<p class=\"p1\">In the UAE there are companies that will agree to fund litigation. They are referred to as Debt Collection Companies (DCC), and are not to be confused with debt collection agencies (that help parties pursue debtors and often buy the debt at a discounted price and pursue the debtor themselves). DCCs have been around in the UAE for quite some time now. These companies usually tend to fund monetary claims, libel, compensation based claims whether based on personal injury or other forms of loss and damage. In recent years some of these companies have offered assistance with regards to property disputes claims but at a smaller scale.</p>\r\n<p class=\"p1\">DCCs typically fund claimants rather than respondents. The common denominator for these claims is that they are small scale claims and the reason for resorting to DCCs is either for administrative reasons, debt collection or for reasons related to uncertainty of the outcome (such as litigation in personal injury claims). This is commonly known as third party funding (TPF). The third party (individual or company) usually provides funds to the litigant to file their claim. Ideally, the funds provided are expected to cover the claimant’s legal fees, expert fees and miscellaneous expenses, and liability for adverse costs. In some cases, funding may be limited to the legal fees or fees for filing the claim, with the client having to incur all other expenses (expert fees, translation fees). In return the funder is supposed to receive a percentage of the amount awarded by the court in the event the claim succeeds.</p>\r\n<p class=\"p1\">There are different models for funding litigation but there are common traits in all these models. The models are all available for litigants with damage claims or defendants with substantial counter-claims. They usually pick and choose claims based on their probabilities of success. In recent years, these companies have started to hire in-house legal counsel to advise them and asses the probabilities of each claim and in some cases, legal professionals are behind such companies.</p>\r\n<p class=\"p1\">Some law firms used to provide funding – and some of them still are - by charging a percentage of the judgment amount (a contingency fee arrangement). But this practice should no longer exist as it has been prohibited by law. Today, funding agreements have to be in terms of an ordinary retainer detailing amounts payable at each stage and the services that are to be provided in order to be admissible before the Courts, should the funder decides to claim its fees.</p>\r\n<p class=\"p1\">Contingency fee arrangements, though illegal in the UAE, are often used in other jurisdictions and have helped in reducing the cost of access to justice. The laws in these jurisdictions support the use of these methods to fund litigation. For example, they have been used in the USA for many years, and in England contingency agreements for contentious matter became legal in 2013.</p>\r\n<p class=\"p1\">There are no available and reliable data to assess the effectiveness of DCC’s and their practice in general. However, we feel that there is a need for regulation in this area, especially with regards to how much such companies should charge and how to secure the payment of their funding, as well as regulations on their model of business.</p>\r\n<p class=\"p3\"><strong>Indirect Funding</strong></p>\r\n<p class=\"p1\">Another way of litigation funding is where either a right or a debt is transferred. The transfer of rights is typically found in claims that are covered by insurance where the insurance company pays out to the insured and, in doing so, becomes entitled to pursue recovery of the amount paid out from the wrongdoer. Article 1030 of the UAE Civil Code, which deals with subrogation, states that the insurer is allowed to take the place of the assured in respect of any amounts paid to the insured for the costs of bringing claims against the person who caused the loss out of which the liability of the insurer arose.</p>\r\n<p class=\"p1\">The transfer of a debt can be between any other entities or individuals based on the terms of their agreements (i.e. conventional debt collection agencies). Payment of other parties’ debt is also considered to be a form of funding.</p>\r\n<p class=\"p3\"><strong>Litigation Funding in Other jurisdictions</strong></p>\r\n<p class=\"p1\">In other jurisdictions, like the UK, USA, Australia and Hong Kong, litigation funding is well established, whether its damage-based fee agreements with lawyers or third-party funding. There are several forms of funding, including contingency fees, conditional fee arrangement, before-the-event insurance and after-the- event insurance.</p>\r\n<p class=\"p1\">Contingency Fee is similar to a ‘damaged-based agreement’, in which the total payment will be a percentage of the amount to be recovered.</p>\r\n<p class=\"p1\">Conditional Fee Arrangements are where the lawyer only charges if the case is successful, and with an uplift. If the case is lost, no fee is charged (‘no win no fee’).</p>\r\n<p class=\"p1\">After-the-Event insurance is an invention of the insurance industry. This type of insurance provides cover for legal costs incurred either in litigation or arbitration and is purchased after the occurrence of the legal dispute and offers cover for all areas of litigation apart from matrimonial and criminal cases. Before-the-Event insurance is where the cover is offered before any dispute has occurred.</p>\r\n<p class=\"p5\"><strong>Insurance Companies and Litigation</strong></p>\r\n<p class=\"p1\">Insurance business in the UAE is regulated by the general rules provided for in Federal Law No 5 of 1985 as amended by Federal Law No. 1 of 1987 (the Civil Code) and more specifically, by the provisions of the Federal Law no. 6 of 2007 (the “Insurance Law”).</p>\r\n<p class=\"p1\">Article 3 of the Insurance Law defines the term insurance as “A contract pursuant to which the insurer shall be obliged to pay the insured or the beneficiary in whose favor the insurance has been concluded a sum of money, regular proceeds or other monetary indemnity in case the insured accident or risk occurred, in return of installments or any other monetary sums paid by the insured thereto”.</p>\r\n<p class=\"p1\">Insurance contracts usually cover a wide range of sub categories, such as life insurance, marine insurance and professional liability insurance.</p>\r\n<p class=\"p1\">Liability insurance covers, in some instances, claims that the insured may have against another company. When such event occurs, for example damages caused by fire, the insurance company pays the insured sum to the insured and then, pursuant to the law of subrogation, becomes entitled to recover the insured amount paid out to the party.</p>\r\n<p class=\"p2\">Such a claim often requires the insurance company commencing legal proceedings in the competent court for the recovery of the damages. The cost associated with such a claim will typically be borne by the insurance company. However, with the removal of the court fees cap in Abu Dhabi, we anticipate a hike in the insurance premium to cater for the cost associated with such claims. Although not clearly labeled, this can be seen as a kind of indirect funding for claims.</p>\r\n<p class=\"p1\">In our opinion there is room for the introduction of insurance products that fund litigation costs, such as after-the-event insurance. Ideally the insurance would cover the client’s liability for expenses incurred by their advocate, although this could be extended to cover legal fees and the opponent’s legal costs where the insured loses in court. At the moment this type of insurance is not available in the UAE.</p>\r\n<p class=\"p2\">Article 6 of the Executive by-Law of the Insurance Law provides that additional categories and insurance products can be created/included by the Insurance Authority at any time. Therefore, the legal support needed is available. However, it is very early to decide whether the UAE insurance market is ready for such a product. Certainly DCC and similar companies will be better prepared to take this share of the market. Perhaps in the near future insurance companies will venture into this filed. Emirates Insurance Association (EIA) can also play a role in exploring the possibility of venturing in this flourishing business.</p>\r\n<p class=\"p3\"><strong>The Effect of the New Law</strong></p>\r\n<p class=\"p2\">All these forms of litigation funding are limited to certain types of litigation. However in our opinion, corporate litigation has the greatest potential to be transformed by litigation funding due to the high court fees. Small to medium enterprises with huge claims which have not budgeted for litigation will have to consider the amount to be spent on litigation and the amounts to be recovered on a successful outcome. Companies always try to balance their spending in a way that does not affect future investments, and litigation budgets will need to carefully managed to deal with the possibility of large court fees.</p>\r\n<p class=\"p1\">It is our opinion that the new law has created a good environment for the use of litigation funding, especially for the funding of court fees. With the cost being too high for individual claimants, litigants will be forced to look for alternative ways to fund their claims from the onset and will therefore be forced to turn to litigation funding. It is however important to note that the claims being funded by third parties or through any other form of litigation funding will be thoroughly examined before commencement. This is because with the high cost, the funders will need to be sure of success before commencement of any litigation. It is our opinion that any contingency agreements between clients and advocates will be fewer in number and those made will be in relation to claims whose chances of success can be ascertained upfront.</p>'),
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	(91287,4962,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nLike many countries in the Gulf Co-operation Council (“GCC”), Bahrain is tax free for most private companies (except for those in the oil and gas exploration, refining and production sectors). However, unlike many countries in the GCC, Bahrain allows 100% ownership of business assets in certain sectors.\r\n\r\nIn addition, Bahrain and the United States have signed a bilateral Free Trade Agreement which became effective in 2005 and allows for the relaxation of certain restrictions on trade and investment between the United States and Bahrain. Under the Free Trade Agreement, US nationals are given GCC recognition for investment purposes, allowing them to invest in business activities that might otherwise be restricted for foreign nationals.\r\n\r\nWith regard to property ownership, this is still restricted in relation to foreign investment but foreigners are allowed to buy land in certain designated areas.\r\n\r\nWhat this all means to Bahrain is that it has, over the years, been making a conscious effort to attract investment onto its shores. According to the Wall Street Journal’s 2013 Index of Economic Freedom, Bahrain has been ranked as the 12th most open economy worldwide. This paper provides a high level overview of what makes Bahrain an attractive destination for business investors.\r\n\r\n<strong>How to Establish Operations in Bahrain</strong>\r\n\r\nA commercial company established in accordance with the Commercial Companies Law (21 of 2001) (“CCL”) is the most common form of business vehicle used in the Kingdom.\r\n\r\nAs mentioned, it is possible for foreign investors to have 100% legal interest in particular Bahraini business vehicles but there are sector-related restrictions which can apply.\r\n\r\nIt is important to consider this a little more closely and the impact that this may have on foreign potential investors. Some sectors and activities are only allowed to be carried out by Bahrainis or entities fully owned by them and some are only open to Bahrainis and GCC nationals. Further, some business activities may require a minimum Bahraini investment, such as 51%.\r\n\r\nThe sectors in which a business vehicle cannot be 100% foreign owned ought to be considered further but these generally include construction, press, publishing and distribution, car and motorbike rental, fishing, foreign manpower supply, land transportation of goods and passengers, trading, small businesses, foreign manpower, commercial agencies, certain real estate services, gas bottling and distribution and gas cylinder distribution.\r\n\r\nDespite these restrictions, it is possible for the Minister of Industry and Commerce to grant exemptions in order to allow foreign investment into restricted sectors if the Minister considers that such investment will be for the benefit of the country and development of the economy as a whole. Notwithstanding the above, there are many industry sectors which allow for 100% foreign investment such as but not limited to, technology and manufacturing, although these have to be considered separately and may be subject to other restrictions.\r\n\r\nIt is worth considering the types of business vehicles that are commonly used in Bahrain. Certain business vehicles cannot be used in certain sectors, for example, businesses looking to engage in banking and insurance activities in Bahrain, can generally only do so through Public and Closed Joint Stock Companies and Foreign Branch Companies. These companies are also subject to approvals and regulations of the Central Bank of Bahrain.\r\n\r\n<strong>Public Joint Stock Company (Bahrain Shareholding Company (BSC))</strong>\r\n\r\nThis form of company consists of a minimum of seven shareholders and the shareholders are liable for the company’s debts and obligations only to the extent of the value of their shares. The minimum share capital required is BHD1 million and there must be a minimum of five directors. The shares can be offered to the public and any offering of shares to the public must be subject to approval from the Central Bank of Bahrain and in compliance with the CBB’s new Offering of Securities Module (Volume 6 of the CBB Rulebook) and subject to approval of the Ministry of Industry and Commerce.\r\n\r\nThe CCL states that all shareholders of a Public Joint Stock Company must be Bahraini nationals or nationals of the GCC. However, we understand that foreign investment is permitted in a Public Joint Stock Company with special approval from the Minister of Industry and Commerce, who will also determine the percentage of the investment.\r\n\r\n<strong>Bahrain Shareholding Company (BSC) (Closed)</strong>\r\n\r\nThis is commonly known as a Closed Joint Stock Company and consists of a minimum of two shareholders. Shares in these companies cannot be offered for sale to the public and as is the case with public shareholding companies, shareholders are liable for the company’s debts and obligations only to the extent of the value of their shares. The minimum share capital required is BHD250,000 and there must be a minimum of three directors. A Closed Joint Stock Company can be 100% foreign owned but this is dependent on the business activity of the company.\r\n\r\nBoth Joint Stock Companies and Closed Joint Stock Companies must adhere to the Corporate Governance Code issued by the Ministry of Industry and Commerce. There are further regulatory requirements on companies licensed or regulated by the Central Bank of Bahrain which may, amongst other things, increase the minimum share capital requirement and board composition.\r\n\r\n<strong>With Limited Liability Company </strong>\r\n\r\nA With Limited Liability Company (“WLL”) is comparable to a Limited Liability Company in the UAE and is the most common form of business vehicle. WLL’s must consist of a minimum of two and a maximum of 50 shareholders who are natural or legal persons. The shareholders are responsible for the company’s debts and obligations only to the extent of their respective share in the capital. The minimum share capital required is BHD20,000 and WLL’s are required to appoint at least one general manager who has the same obligations, duties and responsibilities as a director in a Joint Stock Company. The company cannot issue public shares and can be 100% foreign-owned, again depending on the business activity.\r\n\r\n<strong>Single Person Company </strong>\r\n\r\nA Single Person Company (SPC) is a company which is fully owned by a single natural or corporate person. The owner is liable for the company’s debts and obligations only to the extent of the value of his capital investment in the company. The minimum share capital required is BHD50,000. There must be at least one director and foreign and non-GCC nationals can set up an SPC provided that there are no restrictions on the business activity.\r\n\r\n<strong>General Partnership</strong>\r\n\r\nA general partnership is formed without limited liability between two or more natural or corporate persons. All partners assume joint responsibility to the extent of their entire personal assets for the partnership’s debts and liabilities. There is no requirement of a minimum share capital, there must be at least one manager and again, depending on the relevant business activity, they can be 100% foreign-owned.\r\n\r\n<strong>Foreign Company Branch</strong>\r\n\r\nForeign companies can establish branches in Bahrain in order to carry out business and branches can be established either by way of an operational office or a representative office. Branches of foreign companies with an operational office are able to engage in banking and insurance activities subject to approvals from the Central Bank of Bahrain. In addition, there is a requirement for a local partner. In relation to representative or regional offices, they are unable to carry out any business operations in Bahrain and are restricted to undertaking marketing and promotional activities in Bahrain.\r\n\r\nThe liability of the company must be in accordance with its parent company and it is a common requirement of the Ministry of Industry and Commerce and the Central Bank of Bahrain (if applicable) that the parent company provides a guarantee in relation to the branch and appoints a branch manager.\r\n\r\nOther types of companies exist under the CCL such as Commandite Companies but these are not as common as a means of a business vehicle.\r\n\r\nWhere a foreign investor wants to enter the Bahrain market by simply introducing its products into it without setting up an entity, it can appoint an agent, who must be a Bahraini individual or a Bahraini corporate entity. The parties’ relationship is governed by the Bahrain Commercial Agencies Law (promulgated by Legislative Decree No. 10 of 1992 as amended by Legislative Decree No. 8 of 1998 and Legislative Decree No. 49 of 2002), which allows the agent to register a sole agency for the product.\r\n\r\n<strong>Joint Ventures</strong>\r\n\r\nBahrain laws allow for contractual joint ventures to be established between parties, which are usually governed by a joint venture agreement. Such agreements typically set out the parties’ rights and obligations, provide for how a company is operated and deal with the division of profits and losses of the company.\r\n\r\nThe business vehicle for such a company will most likely take the form of one of the vehicles discussed above. Depending on the business activity of the company, a With Limited Liability Company is usually the most popular business vehicle for joint ventures. Typically, the parties’ relationship is governed by the constitutional documents of the company and a joint venture agreement. Agreements such as the joint venture agreement are enforceable only as far as they are not contrary to the laws of Bahrain.\r\n\r\n<strong>Financial Trusts</strong>\r\n\r\nBahrain has adopted the Bahrain Financial Trusts Law No. (23) of 2006. A financial trust is created by way of a trust instrument. Generally, any form of property or any financial right relating to an intangible asset can be included in a trust. The object and purpose of the trust must be defined and feasible and must not violate the law, public policy or public morality. The duration of a trust must not exceed 100 years.\r\n\r\nTrusts must be registered on the Register of Financial Trusts maintained by the Central Bank of Bahrain and such trusts must fulfill certain characteristics in order to be valid.\r\n\r\nFinancial Trusts must:\r\n\r\ni. adequately indentify the trust property;\r\n\r\nii. clearly set out the duties and powers of the trustees;\r\n\r\niii. clearly identify the settler and beneficiary;\r\n\r\niv. identify the trust property clearly; and\r\n\r\nv. define the object of the trust.\r\n\r\n<strong>Tax and Money</strong>\r\n\r\nIn very broad terms, the concept of residency tax does not exist in Bahrain. Further, employees are not required to pay income tax to Bahraini authorities and there is no wealth tax, tax on capital gains or inheritance tax. There are also no corporate taxes on companies carrying out business in Bahrain and no withholding tax. However, taxes are payable in relation to the profits earned by companies engaged in oil, gas or petroleum exploration, production and refining in Bahrain.\r\n\r\nEmployers must pay social security contributions in relation an employee’s monthly salary to the Social Insurance Organisation. This applies to both Bahraini and non-Bahraini employees, although the percentage payable differs.\r\n\r\nBahrain has no exchange control restrictions on repatriation of capital, profits or dividends, which allows them to be fully transferred. The Bahraini dinar is pegged to the United States dollar at a fixed rate of US$1 to BHD 0.377.\r\n\r\n<strong>Summary</strong>\r\n\r\nThe above is only a very brief snapshot of the investment environment in Bahrain and, typically, government departments are willing to assist potential entrants into the market. There are of course other considerations for investors to take into account when setting up in Bahrain, such as labour law requirements. Indeed, a new labour law came into force in 2012 (Bahrain Labour Law for the Private Sector No.36 of 2012) which attempts to bring the rights of employees and employers in line with international standards.\r\n\r\nAn amendment to the CCL has also been recommended by the Shura Council and Council of Representatives, but has yet to be promulgated. It is understood that these amendments are likely to further waive restrictions on foreign companies wanting to do business in Bahrain.\r\n\r\nRaj has over 7 years’ experience of working in Bahrain and on Bahrain related matters. He advises on a wide range of commercial matters, including mergers and acquisitions, joint ventures and project finance and has regional experience. Recent representations include acting for clients in the sports, telecommunications, power, financial services, mining and metallurgy, real estate development and software industries.\r\n\r\nRaj has particular skill in advising on infrastructure projects and large scale developments across a wide range of sectors, acting for a broad range of clients including owners, buyers, developers, project companies, financiers and international law firms.'),
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	(91291,4962,'content_description','Al Tamimi’s decision to open an office in Bahrain was partly driven by the business friendly approach that Bahrain has adopted in relation to foreign investment and the opportunities that this presents to its clients.'),
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	(91293,4962,'pageSummary','Al Tamimi’s decision to open an office in Bahrain was partly driven by the business friendly approach that Bahrain has adopted in relation to foreign investment and the opportunities that this presents to its clients.'),
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	(91300,4962,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(91301,4962,'_yoast_wpseo_metadesc','Al Tamimi’s decision to open an office in Bahrain was partly driven by the business friendly approach that Bahrain has adopted in relation to foreign investment and the opportunities that this presents to its clients.'),
	(91302,4963,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nRecent years have witnessed a considerable increase in local and GCC investments in Kuwaiti funds due to their long and short term relative investment stability. Driven by this growth, many offshore/foreign funds are looking to expand their investment sphere into Kuwait for the purposes of marketing their units to local investors. In doing so, foreign funds usually come across the following issue: does the offshore marketing of funds to investors in Kuwait require licensing by the concerned Kuwaiti authorities, specifically the Capital Market Authority (the “CMA”)?\r\n\r\nThe relevant law in Kuwait on this issue is Law No. 7 of 2010 (Promulgating the Establishment of Capital Markets Authority), and the Regulation of Securities Trading Activity (“CML”) and its implementing regulations. These legal provisions govern the marketing, offering and sale of securities and financial services in Kuwait. Article 63 of the CML restricts the offering and selling of foreign securities in Kuwait unless through a ‘licensed person’. A ‘licensed perso’n is defined pursuant to the CML’s Executive Regulations (the “Regulations”) as “a natural or corporate person who holds a license from the CMA to practice one of the securities activities stipulated under the CML. There are a wide range of activities that fall under the scope of the CMA’s licensing requirements, among which are the following:\r\n<ul>\r\n 	<li>brokerage, buying and selling securities for the account of another person in exchange for commission;</li>\r\n 	<li>a person buying or selling securities for their own account (subject to certain exceptions);</li>\r\n 	<li>offering investment advice on securities in exchange for commission;</li>\r\n 	<li>managing an investment portfolio;</li>\r\n 	<li>establishing and managing collective investment schemes;</li>\r\n 	<li>safeguarding assets formed for collective investment schemes;</li>\r\n 	<li>offering or selling securities for the interest of the issuer or their allied party, or obtaining securities from the issuer or their allied party for the purpose of remarketing them;</li>\r\n 	<li>credit rating agency; and</li>\r\n 	<li>any other activity which the Authority decrees should be defined as a securities activity.</li>\r\n</ul>\r\nIn addition, Article 158 of the Regulations prohibits any person, whether of natural or legal personality from drawing up or sending any invitation or announcement of securities to any person in the State of Kuwait unless they are a licensed person.\r\n\r\nGenerally, a ‘licensed person’ as defined above is a Kuwaiti shareholding company subject to several restrictions, most notably, minimum capital requirements, foreign ownership restrictions and corporate governance regulations.\r\n\r\nUnder the former Securities Law, the Ministry of Commerce and Industry was known to take a more lenient stance at times by deeming that offshore marketing did not constitute an offer or sale of securities in Kuwait and thereby did not require a license to conduct such activities.\r\n\r\nRecently however, the CMA appears to be taking a more stringent stance with regard to the licensing requirement. The CMA may consider that sending specific information and documents (such as a prospectus/Private Placement Memorandum or a presentation) in relation to a foreign fund, even in response to an enquiry from Kuwait, is a violation of Article 158 of the Regulations. Foreign funds seeking Kuwaiti investors should therefore take a conservative approach in order not to fall foul of the law. It is recommended that all marketing activities should be conducted outside of Kuwait, and that the following guidelines be followed:\r\n<ol>\r\n 	<li>No public/mass marketing campaigns in Kuwait.</li>\r\n 	<li>All communications with potential investors should be carried out outside Kuwait.</li>\r\n 	<li>Product specific materials should not be distributed when inside Kuwait and no marketing activities when inside Kuwait should be carried out even when on a brief visit.</li>\r\n 	<li>All relevant documentation relating to the foreign securities should be executed outside of Kuwait.</li>\r\n</ol>\r\nThe more the foreign fund can structure the contemplated transactions to occur outside of Kuwait, the more likely it will be able to avoid the application of the CML and the CMA bylaws in relation to the transactions.\r\n\r\nWhile the above conservative approach may not necessarily appear to be practical, it remains advisable for the purposes of mitigating any risks that may arise in the event the CMA strictly enforces its licensing requirement. If the marketing of a foreign fund is found to have breached the law, the transaction/investment will be rendered invalid for the purposes of Kuwaiti law, which may entitle the investor to retrieve the invested amounts.'),
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	(91306,4963,'content_description','The Kuwait Capital Market is seeing a substantial growth in investment funds. '),
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	(91308,4963,'pageSummary','The Kuwait Capital Market is seeing a substantial growth in investment funds.'),
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	(91320,4963,'_yoast_wpseo_metadesc','The Kuwait Capital Market is seeing a substantial growth in investment funds.'),
	(91321,4964,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nOne issue that has always been a major concern for the residents and the government of Kuwait relates to the rights and protection of consumers. Consumers have continually complained about counterfeit and poor-quality products and pricing and in order to ensure market stability, attention must be paid to consumer protection. This has led to the implantation of a dedicated consumer protection law.\r\n\r\n<strong>The Old Regime</strong>\r\n\r\nPreviously, there were minimal means available in Kuwait to allow members of the community to submit complaints regarding goods and services, whether in relation to pricing or quality. Consumers were only able to submit their complaints at certain consumer protection centers, which are located in each governorate, or call the “135” hotline. Once these complaints were lodged, the Ministry of Commerce and Industry (the “MOCI”) would take necessary measures to confirm the facts and address any issues in order to protect the consumer.\r\n\r\nDue to its nature, consumer protection requires both the participation of consumers and the government. However, the aforementioned methods for addressing consumer protection issues were one-sided and reactive, as the relevant governmental authorities would only act once they received a complaint, and complaints could only be issued if a community member was aware he/she could make such complaints. Given the need for a better approach to safeguarding its consumers, the Kuwait government made consumer protection a priority.\r\n\r\nIn March 2014, Kuwait hosted the fourth meeting of the Gulf Cooperation Council (“GCC”) member states’ consumer protection agencies.\r\n\r\nThe meeting focused on how to increase efforts to protect consumers in the GCC by enhancing awareness of consumer rights and securing the same.\r\n\r\n<strong>The New Regime</strong>\r\n\r\nOn 5 June 2014, Law No. 39 of 2014 Relating to Consumer Protection (the “Consumer Protection Law”) was published in the Official Gazette. The Consumer Protection Law has 37 articles aimed at safeguarding consumer rights and creating an instrument of control to ensure such rights are properly defended.\r\n\r\nThe second Chapter of the Consumer Protection Law requires the establishment of an independent national committee for consumer protection (the “Committee”) and governs the Committee’s operations. The Committee will comprise of representatives of the below listed governmental entities and be chaired by the Minister of Commerce and Industry.\r\n<ol>\r\n 	<li>the MOCI</li>\r\n 	<li>the Ministry of Health;</li>\r\n 	<li>the Ministry of Information;</li>\r\n 	<li>the Public Authority for Agricultural Affairs and Fish Resources;</li>\r\n 	<li>the Legal Advice and Legislation Department;</li>\r\n 	<li>the Qualitative Union of Consumer Protection Societies;</li>\r\n 	<li>the Public Authority for Environment Affairs;</li>\r\n 	<li>the Public Authority for Industry;</li>\r\n 	<li>the Union of Cooperative Societies;</li>\r\n 	<li>the Kuwait Municipality;</li>\r\n 	<li>the General Administration for Customs; and</li>\r\n 	<li>the Chamber of Commerce and Industry.</li>\r\n</ol>\r\nThe Committee’s role will involve the creation of a general policy for consumer protection; the  development of plans and programs for the protection, promotion and development of consumer rights; the investigation of complaints received from consumers or consumer protection societies; the reporting of violations to the concerned authorities and the filing of claims relating to the interests of consumers; the verification that goods and services meeting with specifications and quality standards; and cooperation with consumer protection bodies regionally and internationally.\r\n\r\nAn important provision of the Consumer Protection Law is set out in Article 7 which grants certain appointed Committee staff members with official authority to implement the Consumer Protection Law and take action against its violators. This authority includes the right to access, obtain and examine documents and records from any government or non-government authority. The executive regulations of the Consumer Protection Law (the “Regulations”), which are to be issued on 5 September 2014, will specify the procedures and limitations related to such information gathering.\r\n\r\n<strong>The Rights of Consumers</strong>\r\n\r\nChapter Three of the new law provides a framework for private consumer protection societies while Chapter Four enumerates the rights of consumers.\r\n\r\nArticle 9 lists the rights granted to consumers under the law as follows:\r\n<ol>\r\n 	<li>The right to safety – this means that consumers should be able to assume that the products they buy are reasonably safe.</li>\r\n 	<li>The right to quality – this means consumers should be assured of satisfactory quality of products which can be used for their intended purpose.</li>\r\n 	<li>The right to be informed – this means that consumers should be provided with sufficient information to make an informed choice and to be protected against false and misleading advertising and labelling practices;</li>\r\n 	<li>The right to redress – this means that consumers have the right to receive a fair settlement of just claims, including compensation for misrepresentation, shoddy goods or unsatisfactory services.</li>\r\n 	<li>The rights set out in Article 9 of the Consumer Protection Law are based on the rights granted by the United Nations Guidelines for Consumer Protection (UNGCP). These guidelines were adopted by the UN in 1985 and the UNGCP are intended to act as an international reference point of the consumer movement. Kuwait, through the introduction of the Consumer Protection Law, has become a part of this movement in the interests of progress and modernity.</li>\r\n</ol>\r\nArticle 10 allows a consumer to replace or return a defected product within 14 days of purchase (provided that it is not a rapidly perishable good) and further states that vendors and suppliers are jointly liable in such respect. Article 10 applies in instances where a consumer receives a defective or incomplete service in accordance with the nature of such service, contract conditions or prevailing commercial custom. In this case, the service provider shall refund the value of the service or the value of the product or re-provide the service to the consumer.\r\n\r\nPursuant to Article 11, every clause in a contract or document related to contracting with a consumer shall be invalid if it exempts the merchant or service provider of any of his obligations under the Consumer Protection Law. The obligations of the merchant or service provider are addressed in Chapter Five.\r\n\r\n<strong>Advertising</strong>\r\n\r\nChapter Six regulates the advertisement of goods and services. In general, merchants are required to include certain details of a product in Arabic, in a clear and legible manner, in accordance with the standard specifications approved in Kuwait, the GCC or any other law, particularly the product date; the expiration date; the ingredients; any inherent hazards; and the precautions to take in using the products and to avoid any risks. Service providers are required to clearly indicate the details of the service provided, its price, advantages and properties.\r\n\r\nArticle 13 states that in displaying products, a merchant is required to place the price on each product clearly and directly and a service provider is to indicate the value of the service to the consumer.\r\n\r\n<strong>Replacing Goods</strong>\r\n\r\nArticle 14 requires a merchant to replace a defective product or provide a refund for the same within the specified period as per the terms of the guarantee conditions declared by the merchant or the customary period (likely 14 days). This obligation does not apply to all goods, such as rapidly perishable goods, customized goods, books, newspapers, magazines, and computer software programs.\r\n\r\n<strong>Issuing Invoices</strong>\r\n\r\nPursuant to Article 16, a merchant is required to provide a consumer with an invoice written in Arabic confirming the product, the date of sale and purchase, the price, the quantity, type etc. and any other details to be determined by the Executive Regulations.\r\n\r\n<strong>Other obligations on Merchants and Service Providers</strong>\r\n\r\nChapter Six includes other merchant/service provider obligations such as the prohibition of the sale or rent of hazardous materials/products to anyone under the age of 18; or the obligation of a merchant/service provider to compensate the actual damages incurred by a consumer due to a defective good/service or one that is not in conformity with standard specifications.\r\n\r\n<strong>Penalties</strong>\r\n\r\nChapter Seven sets out the penalties applicable for violations of the Consumer Protection Law and Chapter Eight, in summary, discusses general conditions and states that every condition or agreement that prejudices or undermines consumer rights or relieves merchants/service providers of their obligations shall be null and void.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nWhile this new law is a welcome, the issue of awareness and enforcement will likely continue to be a concern for period of time. When the National Assembly was reviewing a draft of the consumer protection law, one of its members criticized the previous body entrusted with protecting consumer rights (i.e. the consumer protection department at the MOCI) as being practically ineffective. While the Consumer Protection Law aims to increase consumer protection, educate consumers, provide quality standards in consumer goods and services and apply local and international consumer protection regulations, only time can tell whether such objectives will be accomplished.\r\n\r\nMost recently, the media has stated that the GCC states have agreed to create a joint Gulf committee for consumer protection in the GCC region and that the contemplated GCC consumer protection commission will be launched in 2016.'),
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	(91339,4964,'_yoast_wpseo_metadesc','In the past five years Kuwait has been steadily pursuing the development and modernization of its laws and regulations to reflect the nation’s current and forward-looking attitude in relation to the economy but also the overall progress of its society.'),
	(91340,4965,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nThey will be keenly studying their contracts and checking the force majeure provisions that they agreed in less disturbed times.\r\n\r\n<strong>Force Majeure provisions in FIDIC contracts</strong>\r\n\r\nNumerous projects in Iraq incorporate as the applicable conditions of contract, the General Conditions published by FIDIC in their Yellow and Silver Books (“the standard forms”).  Clause 19 of the General Conditions addresses force majeure. It is not unusual for Employers to amend this clause at the drafting stage. Contracts that we have recently reviewed have, by way of example, narrowed the definition of force majeure, excluded any right to payment of costs incurred due to a force majeure event or made very difficult the ability of a contractor to terminate the contract due to an extended force majeure event.\r\n\r\nWhilst the precise terms of each force majeure clause therefore requires careful scrutiny, important points of principle can be drawn from the force majeure clause in the standard form. This article does so on the basis of English law, which is frequently stated in the Appendix to Tender to be the governing law, particularly on larger projects in Iraq.\r\n\r\nClause 19.1 of the FIDIC Yellow and Silver Books defines force majeure as:\r\n\r\n“an exceptional event or circumstance:\r\n<ul>\r\n 	<li>which is beyond a Party’s control,</li>\r\n 	<li>which such Party could not have reasonably provided against before entering into the Contract,</li>\r\n 	<li>which, having arisen, such Party could not have reasonably provided against before entering  into the Contract,</li>\r\n 	<li>which, having arisen, such Party could not reasonably have avoided or overcome, and</li>\r\n 	<li>which is not substantially attributable to the other Party.”</li>\r\n</ul>\r\nClause 19.1 then provides a non-exhaustive list of the kind of events or circumstances that might amount to Force Majeure. These include:\r\n<ol>\r\n 	<li>war, hostilities (whether war be declared or not), invasion, act of foreign enemies,</li>\r\n 	<li>rebellion, terrorism, revolution, insurrection, military or usurped power, or civil war,</li>\r\n 	<li>riot, commotion, disorder, strike or lockout by persons other than the Contractor’s Personnel and other employees of the Contractor and Subcontractors”…</li>\r\n</ol>\r\nSub-clause 19.2 deals with notice.  It provides that:\r\n\r\n“<em>if a party is or will be prevented from performing any of its obligations under the Contract by Force Majeure, then it shall give notice to the other Party of the event or circumstances constituting the Force Majeure and shall specify the obligations, the performance of which is or will be prevented. The notice shall be given within 14 days after the party became aware or should have become aware of the relevant event or circumstance constituting Force Majeure.</em>\r\n\r\n<em>The party shall, having given notice, be excused performance of such obligations for so long as such Force Majeure prevents it from performing them.”</em>\r\n\r\n<em>Clause 19.4 addresses the consequences of force majeure. If a Contractor is prevented from performing its obligations under contract due to force majeure, it will be entitled (subject to complying with the claims procedure in clause 20.1) to an extension of time and payment of its costs.  The Engineer is charged with agreeing or determining those matters.</em>\r\n\r\nPursuant to Clause 19.6, if execution of substantially all the works is prevented for a continuous period of 84 days (or for multiple periods that total more than 140 days) by reason of force majeure, then either party can give a notice of termination, to take effect 7 days later, at which stage, the Engineer will again determine the value of work done, to include specified costs involved in withdrawing its plant, staff and labour from the site.\r\n\r\n<strong>Invoking force majeure clause</strong>\r\n\r\nThere seems little doubt that parties to numerous contracts in Iraq will be able to demonstrate the existence of a force majeure event within the definition of the force majeure in Clause 19.1, on the basis that the aggression shown by ISIS in seeking to establish an Islamic State within Iraq comprises one or more of “war”, “hostilities”, “terrorism” “invasion” and “act of foreign enemies”.\r\n\r\nThe next step, which is a key one in these circumstances, is to establish whether the Contractor has been “prevented” from performing any of his obligations pursuant to Clause 19.2.\r\n\r\nClause 19.2 refers to a party being “prevented”, not to it being “hindered” or “delayed” or “subjected to increased cost”. In Benjamin ‘s Sale of Goods (8th Ed 2011), the leading text on these mattesr, it was explained (at para 8-092) that ‘[a party which] seeks to invoke the protection of a clause which states that he is to be relieved or liability if he is “prevented” from carrying out his obligations under the contract or is “unable” to do so, he must show that performance has become physically or legally impossible, and not merely more difficult or unprofitable”. This was cited with approval in Dunavant Enterprises Inc v Olympia Spinning &amp; Weaving Mills [2011] EWHC 2028.\r\n\r\nIn the leading case of Tennants (Lancashire) Ltd v CS Wilson &amp; Co [1917] AC 495 (at p510), Lord Loreburn observed that “the argument that a man can be excused from performance of his contract when it becomes “commercially impossible” seems to me to be a dangerous contention which ought not to be admitted unless the parties plainly contracted to that effect.”\r\n\r\nAccordingly, English law focuses on physical or legal impossibility in performance as being the basic test for whether a party has been “prevented” and discourages a party from asserting prevention due just to increased financial cost.\r\n\r\nIssues may arise where a party is concerned that conditions at or outside the site are too dangerous to allow its staff or labour to continue to work on a project.  Do those conditions constitute legal or physical impossibility? Another situation which may arise is where a contractor is unable to undertake work on its critical path, due perhaps to lack of access into or out of the site, but is able to continue with some limited non-critical activities. Before making a decision to cease work, a party should gather as much information as possible relating to the underlying facts that it intends to rely on, including precise information about performance of critical and non-critical activities, reports by security advisors and/or information published by government organisations.\r\n\r\nPursuant to clause 19.1(a) – (e) above, the Contractor will also have to demonstrate that the force majeure event was one which the party could not reasonably have provided against and which, once it had occurred, could not be avoided or overcome. This is unlikely to be an issue for a force majeure triggered by the actions of ISIS.\r\n\r\n<strong>Giving Notice</strong>\r\n\r\nHaving identified that a force majeure event has taken place and that the conditions above can be satisfied, it is important that the notice provisions are closely followed.\r\n\r\nUnder the standard form, notice is to be given within 14 days of the date when the party became aware of the event or the date when it should have become aware of that event. The notice should be delivered in accordance with the requirements of Clause 1.3 of the Conditions and ideally should refer to it being a notice under Clause 19.2.\r\n\r\n<strong>Available Relief </strong>\r\n\r\nThe relief that will be sought by the party asserting force majeure under the standard form is an extension of time, coupled with payment of its costs reasonably incurred, including overheads but not profit.\r\n\r\nClause 19.6 sets out the conditions to be established before notice of termination of the contract can be given.  An important condition here is that it is the execution of “substantially all the Works” that has to be prevented for 84 days continuously, or multiple periods totaling more than 140 days. Termination is of course an extreme remedy in any commercial contract and it should be understood that the English Courts place the burden of proof very much upon the party asserting the force majeure to demonstrate prevention of substantially all the Works for the period in question.\r\n\r\nIn all cases, the small print of the force majeure clause should be reviewed carefully in accordance with the applicable law of the contract.  For assistance in interpreting a force majeure clause and/or in planning a strategy in relation to a possible force majeure event, do please contact us for further assistance.'),
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	(91359,4966,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nThe judgment of the Court of First Instance was issued in favour of the Plaintiff but it was then reversed by the Appeal Court in November 2013. Al Tamimi &amp; Company represented the Appellant in the successful appeal.\r\n\r\n<strong>Background</strong>\r\n\r\nThe Plaintiff was scheduled to depart from Doha to Venice on the Defendant’s aircraft. However, the Plaintiff arrived at the check-in counter late and with excess baggage. Once the Plaintiff had reduced his baggage, he was directed by the Defendant’s staff to proceed to the check-in counter and Boarding Gate 7, as was stated on his boarding card.\r\n\r\nDue to operational reasons, the boarding gate was amended at short notice to Boarding Gate 11. So the Plaintiff proceeded to complain that the boarding gate was changed and that the Defendant had attempted to charge him for his excess baggage. The Plaintiff began to shout, despite the fact that he was advised that if he persisted he would be denied boarding.  The Plaintiff did, however, persist and he also raised his grievance with a police officer. The Plaintiff was denied boarding on the aircraft by the Defendant’s staff and his baggage was offloaded.\r\n\r\n<strong>The Nature of the Claim</strong>\r\n\r\nThe Plaintiff brought an action against the Defendant seeking damages in the sum of AED 20,000 and AED 1,700 as a refund of the ticket price. The Plaintiff claimed that he bought a ticket from the Defendant to travel from Doha to Venice and was directed by the Defendant’s staff at the airport to proceed to Boarding Gate 7. Hence, the Plaintiff had been waiting at Boarding Gate 7, as he was directed and as was stated on the boarding card.\r\n\r\nThe Plaintiff claimed that, despite the change from Gate 7 to Gate 11, the Defendant’s staff did not direct him to Boarding Gate 11. When the Plaintiff asked the Defendant’s staff about the reasons for amending the gate number, he was denied boarding on the flight. Therefore, the Plaintiff said, he bought another boarding card in the sum of AED 1,700.\r\n\r\n<strong>The Court of First Instance</strong>\r\n\r\nThe Court of First Instance found that there was fault (negligence) on behalf of the Defendant. The Court reached its decision on the following grounds:\r\n<ol>\r\n 	<li>The boarding card was issued by the Defendant’s staff;</li>\r\n 	<li>Boarding Gate 7 was stated on the Plaintiff’s boarding card; and</li>\r\n 	<li>The Defendant’s staff did not direct the Plaintiff to the right boarding gate.</li>\r\n</ol>\r\nAccordingly, the Court of First Instance rendered its judgment in favour of the Plaintiff and ordered the Defendant to pay damages to the Plaintiff in the amount of AED 10,000, in addition to all expenses and fees.\r\n\r\n<strong>The Court of Appeal</strong>\r\n\r\nThe Defendant filed an appeal to challenge the Court of First Instance’s Judgment on the basis that there was a lack of evidence to support the findings of the Court of First Instance and that, in any event, an alteration of the boarding gate is not the responsibility of the Airline. The Court of Appeal accepted the Defendant’s appeal, cancelled the Court of First Instance’s judgment and dismissed the Plaintiff’s case.\r\n\r\nThe Court of Appeal ruled that the amendment to the boarding gate is not the responsibility of the company that owns the aircraft rather it is the responsibility of the company that provides services to the airport. Moreover, the Court pointed out that, in principle, the staff of aircraft companies do not arbitrarily deny passengers boarding aircraft. Furthermore, the Court found no evidence that the Plaintiff/Respondent was unjustly denied boarding.\r\n\r\n<strong>Comment</strong>\r\n\r\nAlthough this judgment is not issued by the Cassation Court, it should in our view be regarded as an approach that can be relied on and referred to in similar cases. It seems, in this case, that the Court of First Instance made a decision that the Appeal Court reversed with no difficulty, given the obvious position in law and the lack of evidence presented by the Plaintiff/Respondent.\r\n\r\nIt is worth mentioning that the Court of Appeal’s judgment should be final and not appealable, by virtue of Article 173 of the UAE Civil Procedures Law, as the total amount of claims before the Court of First Instance did not exceed AED 200,000.'),
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	(91363,4966,'content_description','This article gives an overview of a recent lawsuit that was brought by a passenger (“Plaintiff”) in the UAE courts, against an Airway Company (“Defendant”) where the Plaintiff was denied boarding an aircraft by the Defendant’s staff. '),
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	(91365,4966,'pageSummary','This article gives an overview of a recent lawsuit that was brought by a passenger (“Plaintiff”) in the UAE courts, against an Airway Company (“Defendant”) where the Plaintiff was denied boarding an aircraft by the Defendant’s staff.'),
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	(91373,4966,'_yoast_wpseo_metadesc','This article gives an overview of a recent lawsuit that was brought by a passenger (“Plaintiff”) in the UAE courts, against an Airway Company (“Defendant”) where the Plaintiff was denied boarding an aircraft by the Defendant’s staff.'),
	(91374,4967,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nIt allows parties involved in settlements, compromises, negotiations and mediations the right to make offers and concessions in the interest of resolving a dispute without harming (prejudicing) their formal positions. The opposing party will be forbidden from referring to the without prejudice communication in the court proceedings, except perhaps when the issue of costs is being decided.\r\n\r\nMany legal systems recognise the value in allowing such communications. It enables parties to enter into frank and open discussions, encouraging settlements that save both the parties and the courts time and money. In common-law countries the concept is well established and relied on by parties, whereas it has only gradually emerged in some civil law countries.\r\n\r\nThe United Arab Emirates is unique because although the UAE is governed by a civil law system, it has established the Dubai International Financial Centre (“DIFC”) which operates according to a common-law system with its own laws, regulations, independent judicial authority and courts.  In the DIFC Courts the concept of without prejudice communication is upheld and relied on by parties.\r\n\r\nWithout prejudice communication is not however recognised or referred to before the UAE local courts.  Therefore documents marked “Without Prejudice” and specifically used for the purpose of settlement throughout the negotiation process can be submitted to the court and later relied on if a settlement is not achieved. Consequently, the expatriate adaptation of using the term is closely linked to the idea of good practice, rather than the term being relied on in the local UAE courts.  Additionally, communications that are “off record” also have no legal implications and can be referred to in proceedings.\r\n\r\n<strong>Alternative Solutions</strong>\r\n\r\nAlthough the UAE courts do not recognise the concept of without prejudice communication, there are alternative solutions which can be utilised in order to ensure correspondence cannot later be relied on in legal proceedings.  The alternatives are summarised below.\r\n\r\n<strong>1.    Pre Settlement: </strong>\r\n<ol>\r\n 	<li>Include in the settlement agreement detailed and express provisions regarding confidentiality to avoid any kind of publication.</li>\r\n 	<li>Include in the settlement agreement an express provision stating that the parties cannot be called as witnesses in any litigation or arbitration in relation to the dispute and would not act in any such capacity without the prior written agreement of all the parties.</li>\r\n 	<li>Nominate the DIFC courts as the governing jurisdiction in the original agreement between the parties (i.e. dispute resolution clause) in the event the settlement fails.</li>\r\n 	<li>Qualify every document or communication with statements that any offer or communication does not constitute an admission of liability. Avoid simply marking correspondence as ‘without prejudice’ as when considered by a local court in its Arabic translation it is unlikely the translator will understand the phrase as a term of art and will likely give the phrase an insufficiently clear meaning.</li>\r\n 	<li>Propose and suggest conditional concessions, compromises and/or acknowledgments.</li>\r\n 	<li>Insist that all parties to the dispute sign an undertaking that any information disclosed in the communications will not be used as evidence before the courts.</li>\r\n 	<li>Restrain from documenting any settlement negotiation.</li>\r\n 	<li>Keep any concession or compromise in relation to liability or settlement oral.</li>\r\n</ol>\r\n<strong>2.     Post Settlement:</strong>\r\n\r\nSubmit all documentation, notes and comments to the Notary Public (who most likely is a lawyer) because they are also bound by the ethical duty of confidentiality as per the professional conduct handbook (article 42).\r\n\r\nThe Without Prejudice rule is not absolute and is subject to many exceptions, even in common-law jurisdictions where the courts may ignore the principle if it is in the interests of justice. For example, the parties settling a dispute might at a later stage disagree over the interpretation of a clause in the settlement agreement, or fail to honor the terms, which might necessitate a court reviewing the otherwise privileged material. Parties might also agree to waive the legal privilege for some reason, or it might be that an issue of public policy arises or the matter becomes subject to fraud or criminal allegations.  Moreover, any statement or admission contained within the document in question that is unrelated to the settlement subject or negotiations will not be covered by the privilege.\r\n\r\n<strong>‘Save as to costs’</strong>\r\n\r\nIn common law jurisdictions communications are often marked “without prejudice save as to costs”. This term means that the privilege applies until the court delivers judgment. After judgment the court will consider awarding costs to the successful party.  In certain jurisdictions the courts have a wide discretion to order one party to pay the legal costs of its adversary. The court is entitled to review the without prejudice offers made during the proceedings when determining the cost order it makes.  Additionally, if a party can show they made an offer more favourable than that awarded by the court, they can claim they should be awarded a portion of legal costs even if they were unsuccessful at trial. By marking the correspondence ‘without prejudice save as to costs’, that party is informing the other party that it reserves the right to rely on the communication when the issue of costs falls to be decided.\r\n\r\n<strong>Confidentiality </strong>\r\n\r\nUnlike the Without Prejudice concept, the confidentiality of documents and correspondences can be relied on in the UAE. Confidential communications cannot be disclosed without the party’s consent and the party receiving the communications may be under a fiduciary duty in relation to the information. The scope of confidentiality is however vague, especially if it is to be applied outside the concept of the attorney/client relationship. What has been established under the UAE’s advocacy laws and a number of cases in the UAE is the existence of a confidential obligation and liability between the client and the attorney. However, it is not clear under the UAE’s laws and in most Middle Eastern countries whether responsibility for confidentiality exists between attorney and attorney or between the parties in any correspondence or dealing.\r\n\r\nThere is no law in the UAE which upholds that it is a duty to respect confidentiality especially when a document is marked confidential or to hold a person responsible for using documents in court or arbitration or to even rely upon anything that is marked confidential.\r\n\r\nThere are however, two exceptions as follows:\r\n\r\n1. If the documents were obtained fraudulently or stolen\r\n\r\nIn such cases the other party may rely on the fact that the documents were stolen or fraudulently obtained and stop the person relying on the document’s confidentiality.  However, the offence is not that they have used confidential documents but that the documents were obtained illegally.\r\n\r\n2. In the event one of the parties was entrusted with confidential information because of his/her profession or position\r\n\r\nArticle 379 of the UAE Penal Code may apply in this case. The article states the following:\r\n\r\n<em>“[A person shall] be sentenced to detention for a minimum period of one year and/or to a minimum fine of twenty thousand Dirhams, whoever by virtue of his profession, craft, position or art is entrusted with a secret and divulge it in cases other than those allowed by law or if used for his own personal interest or for the interest of another person, unless authorized by the confiding person to disclose or use it.</em>\r\n\r\n<em>The penalty shall be imprisonment for a term not exceeding five years where the perpetrator is a public servant or a person in charge of a public service who was confided the secret because or on the occasion of discharging his duties or performing his service.”</em>\r\n\r\nThe Dubai Court of Cassation in Criminal Appeal No. 262/2009 dated 12 July 2009 ruled that there are four elements for disclosing confidential information that must be satisfied in order for the act to be considered a crime under Article 379:\r\n<ol>\r\n 	<li>The material element of the crime must be the disclosure of the confidential information;</li>\r\n 	<li>The disclosed information must be confidential;</li>\r\n 	<li>The confidential information must have been given to or accessed by the accused by virtue of his/her profession, craft, or position;</li>\r\n 	<li>There must be criminal intent (i.e. the accused disclosed the confidential information knowing that he/she was not authorized to disclose such information or is divulging it in cases other than those allowed by law).</li>\r\n</ol>\r\nIf a person wishes to rely on confidential document during a confidential process (such as mediation or arbitration) it would be advisable to make reference to Article 379 of the UAE’s Criminal Law when doing so. This will ensure that the recipient is aware that it would likely be a crime under the UAE Criminal Law for the recipient to disclose the document to others.\r\n\r\nIt also advisable for a party to seek legal advice when engaging in settlement negotiations to ensure that statements are not made which may later prejudice any court case.'),
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	(91378,4967,'content_description','The concept of “Without Prejudice” communication is an important legal privilege in many countries. '),
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	(91393,4968,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nRegardless of the rationale behind the developer’s plans, extensive homework should precede the hotel operator selection process.\r\n\r\nOne of the greatest and most widespread mistakes made by hotel developers is the appointment of the operator only by reference to the operator’s market profile and perceived reputation. However the operator’s success in any particular project and in any particular market should not be viewed as a guaranteed prerequisite of high performance in other upcoming hotel projects. This article is designed to outline the steps to be taken by a developer prior to and in the course of the hotel operator selection process, in order to achieve the optimum balance between the operator’s (and the chosen brand’s) reputation, and the economic feasibility of the hotel project.\r\n\r\nSTAGE 1:  FEASIBILITY STUDY\r\n\r\nA lot of developers underestimate the importance of a proper feasibility study relying too much on their own knowledge of the market and extensive experience in real estate development. Although a developer may indeed be successful in the development of commercial real estate, the hospitality industry has its own particular operational specifics, neglect of which may result in under-performance of the hotel and, consequently, the developer’s return on investment.\r\n\r\nA feasibility study performed by an independent professional hotel consultant should precede any operator selection process, even where the developer may already have existing relationships with hotel operators. This is because what may be working well for one hotel may not be suitable for another, taking into consideration the hotel location, positioning, construction costs, existing competitions and likely guest profile.\r\n\r\nThe feasibility study will include a market study of existing and future demand and supply on the market among existing and upcoming accommodation facilities. Based on this, the consultant may recommend a particular hotel segment which suffers undersupply, and then convert the results of its market research into estimated performance of the project, taking into account the existing competition of lodging facilities with interchangeable accommodation services. Thereafter, based on the projected performance, and taking into account projected development costs and operating expenses, the hotel consultant can estimate the owner’s return as the annual net operating profit. Based on such measures the hotel consultant may recommend an increase or decrease of the number of guest rooms, adjustment of the optimum room rate, a focus on additional services to be provided in the hotel (such as conference, spa/leisure, or F&amp;B facilities etc.), which may substantially contribute to the increased profitability of the project.\r\n\r\nAs soon as the hotel segment, room count, economics and concept of the project have been identified based on the feasibility study, the developer can move on to the next stage.\r\n\r\nSTAGE 2: PREPARATION OF REQUEST FOR PROPOSAL\r\n\r\nAt this stage it is crucial to determine the developer’s areas of leverage/advantage and major points of concern as the benchmark for further negotiations with candidates for the operator’s position. Particularly, the following issues may in whole or in part represent the developer’s key areas of concern:\r\n<ul>\r\n 	<li>Subordination of incentive management fee (or portion thereof) in favor of a lending bank or third party-investor contributing to the development finance, or owner’s priority return (usually arising due to the necessity to cover debt service).  In case income from the hotel operation before fixed charges is not enough to maintain debt service or to ensure the owner’s priority return, the incentive fee may be deferred or sometimes waived, if specifically negotiated with the candidate operator at the outset. Furthermore, it is important to clarify whether any deferred fee bears interest or not, and to clarify the mechanism for implementing the subordination/priority return.</li>\r\n 	<li>Variation of base for calculation of incentive fee (i.e. percentage of the gross operating profit, or percentage of GOP (gross operating profit) after property taxes, insurances, reserve for replacement of FF&amp;E and/or debt service). As the basis for calculation of incentive fee is decreased, the percentage of incentive fee will be increased in order to compensate the operator’s additional risk and smaller calculation base.</li>\r\n 	<li>Performance test to measure the operator’s performance and ensure an Owner’s right to terminate the management contract in the event of under-performance of the hotel. Unless a clear and robust performance test is in place, it will be almost impossible for the owner to terminate the contract with the operator. However the mere fact of existence of a performance test is not a guarantee of protection - it is important to ensure that the test itself is effective and based on realistic projections. Thus the performance test may be based on benchmarking of actual GOP against targeted GOP as an absolute financial measure, or alternatively, against budgeted GOP together with measuring the hotel actual RevPAR (revenue per available room) against the RevPAR of a competitive set of hotels, or benchmarking the hotel actual GOP against the targeted percentage of hotel gross revenue.</li>\r\n</ul>\r\nAlternatively, but less common, a developer may consider benchmarking of the hotel’s occupancy rate against targeted occupancy or comparison of the hotel’s performance with the performance of other similar hotels in the region managed by the operator. Even with such tests in place, a hotel developer should be aware that such tests may be subject to a certain amount of manipulation on the operator’s side. In order to find the best solution for the performance test base, and to eliminate possible deficiencies and reduce the risk of manipulation, the hotel developer should take advice and closely cooperate with its hotel consultant and legal advisor. Otherwise the performance test may remain only on paper and may not be enforceable in practice.\r\n<ul>\r\n 	<li>Key money, loan or equity contribution to be made by the operator, forming a joint venture with the developer. In certain trophy projects, or projects for development of a hotel portfolio, the developer may require the operator to contribute financially and this may be a stumbling block for certain chain operators, particularly those that are public companies having a policy of management only.</li>\r\n 	<li>In any case, the developer should beware an operator’s financial participation, as the investment injected by the operator may be eventually the most expensive funding the developer could get for the project (as compared to banks or other third party investors). It does not necessarily mean that the rate of interest, or other form of return on investment (i.e. dividends in a joint venture or the like), required by the operator in return for its financial investment will be more onerous than those available on the open market, but still the operator will have the ability to use the investment as leverage over the developer to encourage a trade away of other key commercial terms in the deal, which may otherwise not be agreeable to the developer.</li>\r\n 	<li>Termination of management agreement on sale. If the developer contemplates the hotel project as a short-term investment, with an intention of subsequent sale as soon as the hotel generates sustainable profit, the developer should strengthen its ability to sell the hotel by introducing into the management agreement  a right to terminate if the new purchaser, for any reason whatsoever, would like to acquire the hotel with vacant possession. At this point, the question of compensation (or liquidated damages) that would fall due to the operator in such circumstances, will be a major item for discussion between the parties. The compensation/liquidated damages may be calculated in a variety of ways, but typically will be identified as an amount representing the monthly average incentive fee due to the operator over the duration of the previous 2 or 3 years of operation, multiplied by 24-36, or alternatively, multiplied by an amount which represents the number of months that remain in the term of the agreement at the date of termination. Alternatively, the exact amount of compensation/liquidated damages may be set out in a form of a sliding scale and linked to the average occupancy rate or the hotel’s performance, over an agreed number of years preceding the termination. Further, the compensation/liquidated damages may be set in a descending scale, and the level of compensation/liquidated damages due would depend on which operating year of the management agreement the sale occurs.</li>\r\n 	<li>Restriction of competition by the operator. Although restriction of competition by the operator (i.e. its operation of another hotel under the same brand/position) within the vicinity of the hotel is rather common in practice, the major issue of concern to a developer often lies in the restriction of competition not only in respect of the same brand, but also in respect of so called “sister” brands of the operator. The sister brands may provide similar interchangeable accommodation services in the same or contiguous hotel segment, which in practice may create competition for the hotel. Operators are usually reluctant to include sister brands in the restriction of competition clause, so this issue will heavily depend on the developer’s bargaining strength.</li>\r\n</ul>\r\nSTAGE 3: DEFINING THE SET OF COMPETING OPERATOR CANDIDATES AND HOLDING THE BIDDING PROCESS\r\n\r\nEven where a developer knows for sure that a certain operator and certain brand is perfect for its hotel project, it may be fatal to focus on just one operator, letting them know that this brand is a “must have”. The best way to get the best deal is to create a competition between 3-5 operators and have them bid for the project in several bidding stages, screening candidates for elimination along the way, bearing in mind the developer’s key areas of concern and ensuring a transparent discussion of these areas as part of the process.\r\n\r\nAs soon as the operator is selected, the achieved arrangements should be documented in the form of Letter of Intent or Memorandum of Understanding (LOI/MOU), and subsequently further reflected in the hotel management agreement and concomitant contracts.\r\n\r\nThe better the LOI/MOU is drafted on major commercial and financial issues, the smoother will be the drafting of the main hotel management contracts, and the quicker (and cheaper) the process of finalizing same.\r\n\r\n<strong>CONCLUSION</strong>\r\n\r\nThe above issues are merely examples of some key issues that may be subject to negotiation at the early stage of discussions with an operator, and which should always be considered as part of the operator selection process. These issues will of course vary, depending on the developer’s and operator’s concerns, market conditions, location of the project, the projected profitability of the hotel, the existing competition in the market and other factors.\r\n\r\nRegardless of what particular issues are the key points of concern for a certain developer, all issues should be, by all means, thoroughly considered at the stage of preparation of the Request for Proposal, together with the developer’s negotiation position and benchmarks for further negotiations with operator candidates.\r\n\r\nIn this process one should not underestimate the importance of active engagement of hotel experts and legal advisors. A widespread mistake is inadequate attention to such considerations at this stage, and signature by a developer of a Letter of Intent/Memorandum of Understanding in haste, without having taken commercial and legal advice.\r\n\r\nAlthough developers may consider the LOI/MOU to be a non-binding document, in practice re-negotiation of express commercial terms already agreed and set out in an LOI/MOU is very difficult and will be strongly resisted by an operator. The risk is that, by re-opening negotiation of a particular term in the LOI/MOU, the developer will introduce bad faith and bad feeling, and may ultimately lose the operator, which might have been the perfect operator for its hotel project. This is why undertaking extensive homework and obtaining the right advice before and during the operator selection process is so important for a developer.  It will often be too late to look for such advice after the operator has been selected and an LOI/MOU signed.'),
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	(91416,4969,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nWith effect from 1 May 2014, all transactions that relate to the purchase and sale of property in Dubai must be documented using standard form property contracts, as per a new policy being implemented by Dubai Land Department (“DLD”). There are three versions of these standard contracts available for download on DLD’s eMart portal (http://www.emart.gov.ae/Home.aspx?en):\r\n\r\nForm A – Contract between seller and broker;\r\n\r\nForm B – Contract between buyer and broker; and\r\n\r\nForm F – Contract between seller and buyer.\r\n\r\nThe forms are for use on all sale and purchase transactions, irrespective of the type of property or its state of completion. Each form can be downloaded immediately from the portal and can be filled with the required data for each transaction before being signed by the relevant parties. The contract becomes formal and completed after it has been recorded and documented at DLD.  The forms have been drafted in a neutral manner, in that the details required to be completed do not favour either party to the transaction although, as is discussed later in this Article, the lack of required information could inadvertently prejudice the buyer by leaving the buyer exposed.\r\n\r\nThe standard form contracts have received a mixed response with those in favour of the new mandatory system holding that they are a step in the right direction by promoting a more transparent and efficient property registration system which, in turn, will hopefully allow sale and purchase transactions to be processed in less time.\r\n\r\nTo date, market practice amongst many brokers was to use a brief memorandum of understanding (“MOU”) as a sale and purchase agreement. Unfortunately, these MOUs were lacking in detail and were often poorly drafted and offered insufficient protection to the buyer or seller if an issue with the transaction was to arise. In the main, they were drafted by unscrupulous brokers to provide protection to themselves and ensure payment of their commission, with little else being covered. The hope is that the new standard from contracts will go some way to combat this.\r\n\r\nWith regard to small investors and transactions of lower monetary value for existing buildings, the standard form contracts may help keep transaction costs down, allow the parties to deal directly with each other, reducing the need for legal representation.\r\n\r\nWith more sophisticated investors and larger scale projects in the commercial and residential spheres, including those still under construction or off-plan, the standard form contracts in their present form are insufficient to replace the need for individual transaction-specific sale and purchase agreements. The reason is that the standard form contracts omit certain key information such as the treatment of any deposits payable and the existence of an escrow agent and escrow agreement, construction milestones and any permitted extensions of time including delay caused by force majeure events, remedies if key dates are missed, dispute resolution procedure (e.g. whether the parties are to go to court or to arbitration), to name but a few. As a result of these omissions, the standard form contracts are being supplemented by addenda that are drafted to state that they form part of the standard form and which contain further key information to adequately govern the contractual relationship between the parties, including in those areas listed above and, more generally, obligations, warranties, termination for default and so on.\r\n\r\nDLD’s acknowledgement of the fact that the standard form contracts may be lacking in some areas can in part be seen by the fact that at the time of writing this article there is already an up-dated “Form F” on DLD’s eMart portal. The up-dated form has been extended to require further details, including in respect of mortgages, existing tenancies, legal representation and powers of attorney.\r\n\r\nCurrently, therefore, there are two documents (the standard form and an addendum) being presented to DLD for most sale and purchase transactions. Even so, when it comes to the administration of the sale and purchase contracts the use of the mandatory form should undoubtedly help DLD process the information more quickly as the standard form contracts group together what is, from DLD’s perspective, the salient information for input into the DLD database and to the extent the information is on the standard form contract (which it is) it will allow DLD staff to disregard the second contract and therefore not spend time sifting through pages to identify the required information for their purposes. Further, the fields which must be completed in the standard form contracts should also serve as a reminder to the parties (most notably buyers) of what information is required and documentation to be signed before DLD can process the transaction, thereby saving on the number of transactions which are put to DLD for processing without the requisite documentation.\r\n\r\nPerhaps most notably, since all sale and purchase contracts now must be presented using the standard forms (supplemented as necessary) each party to a transaction should have added peace of mind knowing that DLD has “rubberstamped” the necessary details and so future issues such as wrong property codes, which could be a headache for the buyer further down the line, should be as good as eliminated.\r\n\r\nThis added certainty is one of the reasons why standard form documents in property transactions are welcomed and supported in different jurisdictions across the globe and can significantly cut down on time and cost for the parties involved. While the mandatory standard form contracts in Dubai are insufficient in themselves to provide for all key commercial terms, they undoubtedly introduce a level of clarity and uniformity not previously seen in the DLD registration process and for that reason they should be championed, perhaps more as a work in progress than a complete solution. We, therefore, expect that there will be enhancements to the content of the standard forms in the future to address the issues that have and will come to light in respect of their adequacy to capture all salient details of a sale and purchase transaction.'),
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	(91426,4969,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Eloise Robb'),
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	(91434,4969,'_yoast_wpseo_metadesc','With effect from 1 May 2014, all transactions that relate to the purchase and sale of property in Dubai must be documented using standard form property contracts, as per a new policy being implemented by Dubai Land Department (“DLD”).'),
	(91435,4970,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nIt is no secret that Qatar is currently undergoing a major construction boom. It has been reported that Qatar intends to invest an estimated USD 200bn on construction projects and USD 140bn on transportation infrastructure over the next five years. Construction is underway to build new stadia, re-develop the roads, construct a railway system as well as new shopping malls, public open spaces, tourist attractions such as museums and galleries, together with expansion of the hotel industry and the building of housing and apartment towers to accommodate the expected influx of expatriate workers.\r\n\r\nAs part of the government’s initiative to attract investment into the real estate sector, Law No.6 of 2014 (the “Real Estate Development Law”), has been enacted to regulate real estate developers. Prior to the Real Estate Development Law, the legislative framework in Qatar did not comprehensively deal with issues relating to the sale of units in real estate projects that were under construction (“Off-Plan Units”).\r\n\r\nThe Real Estate Development Law is now in force and was published in the Official Gazette on 7 April 2014. Article 37 of the Real Estate Development Law provides that real estate developers, contractors and sellers of Off Plan Units are expected to become compliant with the Real Estate Development Law within six months of it coming into force. This article sets out the key elements of the new law.\r\n\r\n<strong>Licenses for Developers </strong>\r\n\r\nThe Real Estate Development Law requires that any entity carrying out real estate development must obtain a specific licence (“Developers Licence”) from the designated department of the Ministry of Economy and Commerce (the “Department”). Both Qatari nationals and companies incorporated in Qatar may apply for such a licence. Significantly, a company incorporated outside Qatar may also apply for a Developers Licence provided that the scope of its activities is restricted to areas where non-Qatari nationals are permitted to own properties. Article 29 of the law states that those who practice real estate development works without a licence may be prosecuted and sentenced to a term of up to one year’s imprisonment or fined up to 50,000 Qatari Riyals, or a combination thereof.\r\n\r\nThe Department is required to establish a Real Estate Developers Register to record the names and details of entities that have been provided with a Developers License. Article 7 lays down specific obligations on developers including the requirement to commence and to complete construction works as specified in the sale and purchase contract with its customer. The Department has the authority to revoke the Developers Licence on certain grounds including where the developer has failed to commence work within six months from the date on which permission was granted for off-plan sale of units. Developers should be mindful that failure to commence project works once permission is granted also carries a fine of up to 200,000 Qatari Riyals.\r\n\r\n<strong>Issuance of Strata Title </strong>\r\n\r\nThe developer is required to submit to the Department an application to create strata title for the project being developed before units in the project can be sold on an off-plan basis. The application should be accompanied by the relevant architectural plans, engineering drawings etc and the strata title will be issued in collaboration with the Ministry of Municipality and Urban Planning.\r\n\r\nThe Real Estate Department at the Ministry of Justice (the “Real Estate Department”) is to maintain an interim register for recording details of strata title (the “Interim Register”). The details of each Off-Plan Unit will be recorded in the Interim Register including the details of each transaction (sale, purchase, judgment, mortgage) relating to that Off-Plan Unit. If a transaction relating to an Off-Plan Unit is not recorded in the Interim Register, it shall be invalid. The Real Estate Department is required to issue a preliminary title deed for each Off-Plan Unit ( “Interim Title Deed”). Once the project is completed, the Interim Title Deed is converted to a regular title deed.\r\n\r\n<strong>Sale of Off-Plan Units </strong>\r\n\r\nThe developer may only sell Off-Plan Units after obtaining the consent of the Department. Article 10 sets out the requirements for obtaining such consent. These requirements include creation of the strata title for each Off-Plan Unit, opening of the Escrow Account (discussed below) and submitting the cash flow forecasts for completion of the project along with construction milestones. In addition, any promotional material relating to the sale of Off-Plan Units will also require the consent of the Department.\r\n\r\n<strong>Escrow Account</strong>\r\n\r\nThe Real Estate Development Law requires the developer to open an escrow account for each project (the “Escrow Account”). The purchase price paid by customers for purchasing Off-Plan Units is to be deposited directly into the Escrow Account. In addition, the proceeds of any financing obtained for the project is also required to be deposited into the Escrow Account.\r\n\r\nThe withdrawal of monies from the Escrow Account is only permitted based upon achieving construction milestones and subject to a schedule approved by the Ministry of Municipality and Urban Planning. Withdrawals may only be made once 20% of the project has been completed and such withdrawals may be made towards payment of construction costs, purchase costs of land and marketing expenses. Notably, the Escrow Account may not be provided as security for financing obtained by the developer for the project.\r\n\r\n<strong>Real Estate Dispute Resolution Committee</strong>\r\n\r\nThe Ministry of Economy and Commerce will establish a Real Estate Dispute Resolution Committee to hear disputes arising from the Real Estate Development Law and from real estate projects. We expect that purchasers who have grievances regarding delay in completion of projects, other breaches of the sale and purchase agreements and maintenance fee, will refer matters to the Real Estate Dispute Resolution Committee.\r\n\r\n<strong>Impact on Financing Real Estate Projects</strong>\r\n\r\nUnder Article 25 of the Real Estate Development Law, the developer is required to obtain the consent of the Department prior to obtaining the financing for a real estate project. The following are the conditions to be satisfied by the developer to obtain such financing:\r\n<ul>\r\n 	<li>financing can only be obtained where there are unsold Off-Plan Units in a project i.e, there should be a number of units that have not been booked by purchasers as this is relevant in determining the quantum of the loan;</li>\r\n 	<li>the aggregate amount deposited in the Escrow Account should exceed the value of the construction works that has been completed. The amount of construction works that has been completed shall be certified by a consultant;</li>\r\n 	<li>the quantum of the financing obtained should not exceed the value of the un-sold (or un-booked) Off-Plan Units; and</li>\r\n 	<li>the developer is required to submit a statement of the Escrow Account.</li>\r\n</ul>\r\n[Note: the quantum of the loan will also be determined by the Instructions issued by the Qatar Central Bank]\r\n\r\n<strong>Interest and Principal Payments through Escrow Accounts</strong>\r\n\r\nWhile the Real Estate Development Law does not address this issue, our experience in other GCC countries that have implemented similar regulations has been that the Department may permit interest to be serviced from the Escrow Account.\r\n\r\nCurrently, Article 20 states that withdrawals from the Escrow Account shall be used only for payment of construction costs, payments for the plot on which the project is being constructed and project marketing. However, in other jurisdictions, developers typically include interest payments in the cash flow statements submitted for approval to the authority.\r\n\r\n<strong>Mortgage over Project Land and Off-Plan Units</strong>\r\n\r\nThe banks providing financing for the project can take a mortgage over the project land subject to the Department approving the financing (discussed above). Article 25 contemplates the taking of a mortgage over the project land. Having said that, the rights of the mortgagee will be subject to the rights of those customers that have purchased or booked Off-Plan Units in that project. Upon enforcement of the mortgage, the purchaser of the project (in a public auction) will take over the project. However, the rights of the owners of the Off-Plan Units will not be extinguished as a result of the sale of the project.\r\n\r\nIn other jurisdictions, we have seen banks placing restrictions on the developer from selling further units without their consent in order to maintain the value of the project at the time of enforcement.\r\n\r\nIn cases where the developer has defaulted and the financing is being restructured, the banks have taken mortgages over Off-Plan Units as a condition of continuing the financing.\r\n\r\n<strong>Assignment of Escrow Accounts</strong>\r\n\r\nArticle 24 restricts creation of any security over the Escrow Account. The purpose of this is to ensure that the proceeds of the Escrow Account are used for completion of the project. However, once the development is completed, any residual monies in the Escrow Account can be used to pre-pay the financing obtained by the developer.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nThe Real Estate Development Law now provides a framework for the protection of purchasers of Off-Plan Units and seeks to ensure that the proceeds of sale of Off-Plan Units are utilised for the construction of the project. As a result of the changes introduced by the Real Estate Development Law, the purchasers of Off-Plan Units now have rights (rights in rem) in the project land and not just contractual rights under the sale and purchase agreements. Accordingly, banks providing finance for the construction of real estate projects would be impacted by the rights of such purchasers at the time of enforcement of their mortgage over the project land. Further, as a result of the escrow mechanism introduced by the Real Estate Development Law for receipt and disbursement of purchase monies, banks providing finance will no longer have a first right of recourse against the receivables arising from sale of the Off-Plan Units.'),
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	(91452,4971,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nThe Law is relatively short and there remain a lot of unanswered questions about the detailed arrangements for national service. It is anticipated that these will be addressed by way of subsequent Resolutions.\r\n\r\n<strong>Who does the Law apply to?</strong>\r\n\r\nNational service is mandatory for all UAE male nationals that are:\r\n<ul>\r\n 	<li>between 18 and 30 years old;</li>\r\n 	<li>medically fit; and</li>\r\n 	<li>approved by the National and Reserve Service Committee.</li>\r\n</ul>\r\nNational service is optional for women.\r\n\r\nThe Law does not define who will be considered a UAE national. However, the UAE Armed Forces have indicated that the requirement for service will be linked to citizenship papers rather than passports. Therefore, it is envisaged that any male with a UAE family book who falls within the above criteria will have to register for national service.\r\n\r\nThe only son of a family and individuals who are deemed to be medically unfit will receive a permanent exemption from national service. There are a number of temporary exemptions in respect of those who are the sole providers for their families and also those serving jail terms.\r\n\r\n<strong>How long is service?</strong>\r\n\r\nRecruits who have completed their General Certificate of Secondary Education will be required to serve nine months, while those who have not will serve two years. Women who volunteer will serve nine months, regardless of their education level.\r\n\r\n<strong>Can it wait?  </strong>\r\n\r\nNational service can only be postponed where the person:\r\n<ul>\r\n 	<li>is a student of a university, college, institution and training centre, is less than 29 years old and is enrolled in a course with a duration of two years or more, or</li>\r\n 	<li>obtained a 90 per cent grade point average or better in their General Certificate of Secondary Education, or</li>\r\n 	<li>has not completed secondary education.</li>\r\n</ul>\r\n<strong>Is it paid? </strong>\r\n\r\nDuring the period of national service, employees will continue to receive their salary, bonus, allowances, promotions and/or raises as if they were still performing their job duties. These payments will be shared equally between the employer and the UAE Armed Forces.\r\n\r\n<strong>Do jobs remain open? </strong>\r\n\r\nA recruit’s job will have to be reserved until they complete their national service.  This does have much wider implications in circumstances where, for example, an individual is hired on a fixed term contract that will expire during his period of national service or where an employer seeks to either restructure or wind down operations whilst an employee is on national service. At present there is no clarity on these issues.\r\n\r\nThere are no specific anti-avoidance measures mentioned in the legislation, i.e. if an employer terminated a recruit before commencement of national service in an effort to avoid paying his salary during it. From a practical perspective this is unlikely to be an issue, as a private sector employer would require Ministry of Labour approval for any such termination which would not be forthcoming and presumably a public sector employer would not be inclined to do this.\r\n\r\n<strong>Continuous employment</strong>\r\n\r\nAny period of national service whilst employed will not be treated as a break in employment and the service period will be counted towards the continuous period of employment.  This will be relevant when computing service-related benefits such as end of service dues and pension.\r\n\r\n<strong>Call-Up</strong>\r\n\r\nNo provisions have yet been outlined which would allow employers to seek to postpone or stagger the call up of employees on economic or other business-related grounds. Smaller employers may face logistical problems where they have a demographic of young male employees who are called for national service at the same time. The additional Resolutions may address this.\r\n\r\n<strong>Priority </strong>\r\n\r\nIt was widely reported in the media before the publication of the Law that employers would be required to give priority in recruitment and promotion to those who have completed their national service. Although the Law is silent on this issue, the Federal Authority for Government Human Resources announced that current governmental human resources legalisation would be amended to reflect that desire. The position in respect of the private sector is not yet clear, although it has been reported that consultations with relevant stakeholders are to take place.\r\n\r\nIn the public sector the issue of priority is likely to mean preference over another UAE national who has not completed national service. In the private sector the issue will be more complex given that the majority of private sector employees are non-national. Accordingly any measure mandating priority for recruits in the private sector could, for the first time, compel private sector employers to promote nationals at the expense of non-nationals. This is conjecture at this point and the details are awaited but the consequences could be far reaching.\r\n\r\nPriority in relation to recruitment is not likely to be a factor in respect of onshore private sector employers as currently the work permit process contains a mechanism to ensure that a non-national is not being hired to do a job that a national is available for and can do.\r\n\r\n<strong>What next?</strong>\r\n\r\nThe Law has set out the broad parameters of the scheme but more detail is eagerly awaited - by way of Executive Regulations and other measures - whereupon employers will have a better idea of how the scheme will work in practice.\r\n\r\nThe principal concerns of employers are likely to be:\r\n<ol>\r\n 	<li>termination of a recruit for genuine economic reasons;</li>\r\n 	<li>the mechanics of how pension contributions will be recouped from the Armed Forces;</li>\r\n 	<li>sequencing of the call-up to ensure that a lot of employees from the same employer are not called at the same time, which would cause logistical issues and a loss of institutional knowledge for the employer;</li>\r\n 	<li>whether nationals in the private sector who have completed national service must receive priority in respect of promotion over non-nationals and, if so, how this would work in practice.</li>\r\n</ol>\r\nMedia reports indicate that the first batch of recruits being called are just turning 18 years old, which would indicate that the Armed Forces are focussing on the entry level of the 18-30 age group. It remains to be seen whether older recruits will be called in due course or whether the focus will remain on those turning 18. If the latter is the case then clearly the impact on employers will be minimal. The first batch of recruits began to register on 12 July.\r\n\r\nAl Tamimi will continue to monitor the implementation of the Law, any new relevant legislative provisions and the consequences of them for employers.'),
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	(91477,4972,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nThe ongoing legal battle between the major American TV companies and Aereo, a two year old start-up that delivers TV programmes over the internet, has finally reached a conclusion, causing Aereo to cease operations.\r\n\r\nAlthough this decision addresses the interpretation of a particular service in light of US copyright law, the Aereo case is the latest in a line of significant test cases from across the globe which address copyright issues in the context of cloud-based television services.  The decision has immediate implications in the US for content owners and broadcasters on the one hand, and Aereo-type streaming services on the other, whose models essentially rely on primary broadcast transmissions without payment of licence fees for the underlying content or re-transmission rights.\r\n\r\nThe illegal reception of television signals is an issue which pervades the Middle East region, and is an ongoing headache for broadcasters and content owners in the UAE.  In many cases, the nature of the infringement is blatant, with no apparent attempt to operate within the confines of the applicable copyright regime (and in many cases the relevant media regulations and telecommunications laws).  Nevertheless, the Aereo decision remains of interest in the Middle East market where interested parties continue to grapple with television piracy, coupled with the establishment of legitimate services.  We consider the implications for this region later in the article.\r\n\r\nThe decision may also have wider implications for cloud storage and streaming services, despite the Court attempting to limit the application of its decision specifically to TV services.\r\n\r\n<strong>Aereo’s model</strong>\r\n\r\nAereo’s business model was to sell subscriptions to a service which allows users to watch TV programmes over the internet at almost the same time as the primary broadcast of the relevant show.\r\n\r\nThe behind-the-scenes technology involved a system of tiny antennas housed in a centralised warehouse.  At the point a subscriber selected a show from Aereo’s website, an antenna, dedicated to that subscriber alone, would be tuned to receive the relevant signal.  The data would be stored in a cloud-based DVR (Digital Video Recorder) personal to the subscriber and would then be streamed to the subscriber’s screen within a few seconds of the original over-the-air broadcast.\r\n\r\n<strong>The Court’s decision</strong>\r\n\r\nThe question that the Court had to address was whether by using such a model, Aereo was in effect enabling a public performance of copyright works (falling within the scope of the public performance right under the US Copyright Act of 1976, as amended).\r\n\r\nWith regard to the question as to whether Aereo performed content, Aereo argued that it was merely acting in the capacity of an equipment supplier, where its equipment reacted to subscriber selections in the same way that a home antenna and DVR would.  Whereas with cable networks, the signal is always live, Aereo emphasised that under its model the system would lay dormant until the subscriber selected a programme to watch, triggering the delivery of the show.  For this reason, Aereo argued subscribers, rather than Aereo, carried out the performance element.  The Court rejected this argument, looking to previous amendments to the Copyright Act designed to establish the principle that both the broadcaster and the viewer of a television programme perform the programme because they both show the programme’s images and make the sounds audible.  The Court did not accept any practical distinction between turning on a television to access a signal being transmitted constantly and selecting a show online, triggering the stream of the show.\r\n\r\nOn the issue of performance to the public, Aereo essentially argued that its system facilitated the transmission of thousands of private performances, via individually assigned antennas.  Aereo argued that for this reason it was not transmitting to the public.  On this point, the Court took the view that, regardless of the technology employed by Aereo behind-the-scenes, Aereo’s commercial objectives were essentially the same as those of the cable networks, i.e. to make content available publicly (albeit by way of multiple one-to-one transmissions).\r\n\r\nThe Supreme Court therefore found in favour of the broadcasters and overturned an earlier New York Court of Appeal decision.\r\n\r\n<strong>Analysis</strong>\r\n\r\nThe Aereo decision is clearly a good result for content owners and broadcasters, particularly in the US.  However, the 6-3 ruling and elaborated dissenting opinion of Justice Scalia clearly demonstrate that the decision is far from straightforward.\r\n\r\nOne of the main criticisms of the Court’s majority opinion is the unclear standard applied by the Court to reach the conclusion that Aereo’s service was “for all practical purposes” like that of the US cable networks, requiring the consent of copyright owners.  As the dissenting judge highlighted, even if one shares the feeling of the Court as to the existence of justified concerns to prohibit Aereo’s conduct, the analytical track in which the Court channeled its decision, and the “looks-like-cable-TV” test adopted, are vague and could lead to confusion in the future.\r\n\r\nImportantly, the Court rejected Aereo’s argument that it does not perform the content because each user creates a personal stream using their own personal antenna.  Aereo, also unlike broadcasters, does not deliberately select and import distant signals, nor does it originate programmes and sell commercials.  The dissenting judge focused on this issue, drawing a comparison with a “copy shop that provides its patrons with a library card”.  Justice Scalia argued that Aereo does not perform because it does not choose the content.  For this reason it cannot be held directly liable for infringing public performance rights (although the judge acknowledged that Aereo might have been found liable on different grounds under the Copyright Act, had the Court been asked to consider different arguments).\r\n\r\nThis is not the first time principles of copyright law have been confronted with technological revolutions.  The US Supreme Court faced a similar debate in the pre-digital era when the 1980s witnessed the emergence of VCRs (Video Cassette Recorders) and the movie studios sued to block the sale of Sony’s Betamax VCRs.  In Sony Corp. of America v. Universal City Studios, Inc., also known as the “Betamax case”, the US Supreme Court ruled that the making of individual copies of complete television shows for purposes of time-shifting is “‘fair-use’, and does not constitute copyright infringement”.  The Court found consistently with the traditionally settled requirement that the defendant’s conduct be directed to the claimant’s copyright material, and therefore excluded liability for direct infringement by a defendant who solely provides an automated, user-controlled system – like the manufacturers of home video recording devices, such as Betamax and other VCRs.  Back then, the case helped to create a legal safe haven for the technology sector, which ultimately benefited the entertainment industry through the sale of pre-recorded movies.\r\n\r\nJustice Scalia makes a strong argument that by failing to set defined criteria to determine when an automated system is considered similar to a cable-system, the Court disrupts a long time settled jurisprudence that has up to this day consistently applied the test of volitional conduct directed at the copyright work.\r\n\r\n<strong>Implications for the cloud computing sector</strong>\r\n\r\nThe Aereo decision ought to be appreciated for its wider implications.  In today’s digital era, with its flourishing content and cloud service providers, many commentators believe that the ruling is likely to have a chilling effect on the cloud computing sector by creating uncertainty as to when a cloud service is operating within the scope of US copyright law.\r\n\r\nOn the face of it, the US Supreme Court goes some way to alleviating this concern by expressly and narrowly tailoring its decision to the context of TV broadcasting.  In his supporting judgment Justice Breyer stated “We have not considered whether the public performance right is infringed when the user of a service pays primarily for something other than the transmission of copyrighted works, such as the remote storage of content”.\r\n\r\nHowever, there are perceptible shortcomings in the Court’s reasoning which commentators fear could be relied on to attack other cloud streaming models.  On the one hand, the Court refrained from focusing on technical considerations when it came to drawing practical distinctions between the behind-the-scenes cloud operations of Aereo compared to the cable networks’ operations.  However, confusingly, the Court stated that the cloud technologies behind other services “should await a case in which they are clearly presented”, suggesting subtle technical differences could, in fact, be key.\r\n\r\nBy failing to provide clear guidance as to when a cloud-streaming service is like a cable company, the US’s highest court has left businesses in the cloud storage and streaming sector with a degree of uncertainty as to when their operations will fall on the right side of the law, although this decision is not the major setback to the cloud industry which some are claiming.\r\n\r\n<strong>Cloud TV in the Middle East?</strong>\r\n\r\nThe copyright battle over the delivery of television programming is not unique to the US.  Courts in other jurisdictions around the world from the UK to Australia have been faced with similar questions to those raised in the Aereo case.\r\n\r\nBroadcasters and content owners in the Middle East are acutely aware of the threat that pirated television services pose to their businesses.  In this region, rather than seeking to develop sophisticated systems to take advantage of loopholes in the relevant legislation, illegitimate services seek to exploit the difficulties of enforcement in particular jurisdictions.\r\n\r\nThe UAE courts, for example, have not yet had the opportunity to hear similar cases under the Federal Copyright Law No 7 of 2002.  It will be interesting to see if UAE judges hearing infringement cases in the future will be inspired by the US Supreme Court’s approach in their search for some interpretation guidelines in the context of these new technologies.\r\n\r\nIt is also worth noting that that the Gulf States, with high levels of connectivity and a demand for media consumption, provide an excellent market for digital content solutions and we are seeing a spike in legitimate digital content services, not only from the incumbent broadcasters, but also from innovative start-ups, both working in conjunction with the major content owners.\r\n\r\nAl Tamimi &amp; Company’s Technology, Media &amp; Telecommunications team regularly advises on copyright issues, including in the context of broadcasting and online media.  For further information about these matters, please contact Rachael Hammond r.hammond@tamimi.com, or Dania Fahs d.fahs@tamimi.com.'),
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	(91481,4972,'content_description','The recent US Supreme Court decision in American Broadcasting Companies, Inc., et al., v. Aereo, Inc. of 25 June 2014 has received significant media attention worldwide.  '),
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	(91487,4972,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Dania Fahs'),
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	(91489,4972,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','d.fahs@tamimi.com'),
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	(91493,4972,'lawUpdateArticleNoWriters_1_lawUpdateAuthorName','Rachael Hammond'),
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	(91495,4972,'lawUpdateArticleNoWriters_1_lawUpdateAuthorEmail','r.hammond@tamimi.com'),
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	(91502,4973,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nConsiderable diligence is to be taken when the core of the transaction consists of assets such as brands, know-how and technologies.  The commercial values of such transactions largely revolve around intellectual property (“IP”); these can include trademarks, patents, industrial designs and copyright.\r\n\r\nThe valuation of IP is therefore essential in the framework of commercial transactions. Unfortunately this aspect is often overlooked by businesses not experienced with these types of deals resulting in transactions that are either overvalued or undervalued and therefore unprofitable or sometimes disastrous situations leading to bankruptcy.  It is therefore essential to analyze and assess the value of the intellectual property during the negotiation process, before the conclusion of the commercial transaction.\r\n\r\nA brand is generally subject to trade mark protection.  A technology can be subject to patent, industrial design and/or copyright protection. Other types of intellectual property may also exist. For example a patent would protect the functional/structural elements of a technology; an industrial design would protect the visual/ornamental shape of a technology; and copyright is mostly directly to the protection of software codes in a technology context.\r\n\r\nMost intellectual property rights require formal registration with the competent authorities in order to exist and/or have full legal effect.  The registration process varies based on the nature of intellectual property right and country of registration.  A registration certificate is usually issued by the competent authority as evidence of registration of intellectual property rights.\r\n\r\nIntellectual property rights, when they exist, have a specific life time and scope.  The time and scope of protection define the boundaries within which the owner has the monopoly of exploiting these rights.  The scope of protection generally extends to two dimensions - a territorial scope and a competitive scope.  The territorial scope is defined by countries where the intellectual property rights are registered, valid and enforceable.  The competitive scope is defined by the competitive edge and monopoly size that these intellectual property rights are able to secure under the law.\r\n\r\nFor example, the life time of a patent is generally 20 years from the time of filing. It generally takes between 1-4 years to have a patent granted from the time of filing. The pendency period varies from one country to another. If at the time of the commercial transaction, the patent has 18 years left of its life time, the temporal scope is wide.  In contrast, if the patent has 2 years left of its life time, the financial weight associated with the temporal scope should be scaled down.   For trademarks, the registration is valid for 10 years and can be renewed every 10 years thereafter and in perpetuity as long as they remain distinctive for the products/services they represent.\r\n\r\nWhen it comes to the territorial scope, the value of patent rights would increase with greater territorial coverage.  For example, a GCC patent (covering all the GCC member states) should have a higher value than a UAE patent (covering only the UAE).  The same principle applies for trademarks and other forms of intellectual property rights.\r\n\r\nWhen assessing the value of a patent, it is essential to first conduct due diligence to determine:\r\n<ul>\r\n 	<li>the existence, validity and enforceability of the patent rights;</li>\r\n 	<li>the territorial scope covered by the patent rights;</li>\r\n 	<li>the competitive scope of the patent rights by analysing the scope of the granted claims;</li>\r\n 	<li>the risk of invalidation of the granted patent;</li>\r\n 	<li>whether the patent is subject to a security interest in favour of a third party;</li>\r\n 	<li>whether the patent rights have been assigned and/or licensed to others;</li>\r\n 	<li>whether there is any issue with the ownership of the patent through an analysis of the chain of title;</li>\r\n 	<li>whether the patent rights are being litigated; and</li>\r\n 	<li>whether the patent rights would rely on third parties’ intellectual property rights in order to mature to commercially viable products.</li>\r\n</ul>\r\nThe above due diligence requires the expertise of a patent attorney as the nature of the analysis is highly technical.  Similar due diligence is also required when transacting other types of intellectual property rights, including trademarks and industrial designs.\r\n\r\nWhen assessing the value of a trademark special consideration should be awarded to the goodwill of the trademark. As opposed to patents, which lose value with age (after 20 years a patent becomes part of the public domain), trademarks gain value over time. As consumer recognition and fame of the brand increases, so does the value of the trademark.  Fame boosts the value of a trademark as long as the trademark does not become generic and preserves its distinctive character. There is a balance to be made between acquiring fame and preserving distinctiveness by avoiding the trade mark being used as a generic. The due diligence completed for trademarks as part of the IP valuation is less revolved around technical features of the asset and more geared toward the market, use of the trade mark and consumer trends.\r\n\r\nOnce the due diligence results are found to be satisfactory, the second step is to assess the value of the intellectual property using known accounting methods. These methods apply in principle with certain adjustments to most intellectual property rights. There are different approaches which can be adopted separately, or in combination, based on the nature of each transaction and the available information, including:\r\n<ul>\r\n 	<li>the Cost approach which measures, quantitatively, the value of IP through the calculation of the cost incurred if the corporation were to develop a similar asset either in-house or externally;</li>\r\n 	<li>the market approach which measures the value of the IP through comparison with prices achieved in recent comparable or similar IP transactions between independent parties; and</li>\r\n 	<li>the Income approach which measures the potential future benefits and future income of the IP in an effort to determine its worth.</li>\r\n</ul>\r\nThe valuation of intellectual property is not a simple operation and not an exact science however, it is essential in order to secure fair and profitable business deals and avoid overpaying and/or giving up a valuable asset for less than it is worth.  IP valuation requires thorough due diligence and analysis of the intellectual property rights at stake as well as the trend of the market in which they are intended to be used.  During the valuation process, IP attorneys and valuers should work hand-in-hand in order to come to a commercially acceptable numerical representation of the intellectual property that is being transacted.'),
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	(91506,4973,'content_description','The rapid economic growth of the GCC is leading to a substantial increase in the number of commercial transactions taking place.  '),
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	(91508,4973,'pageSummary','The rapid economic growth of the GCC is leading to a substantial increase in the number of commercial transactions taking place.'),
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	(91531,4974,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nThis policy has been adopted by the Internet Corporation for Assigned Names and Numbers (ICANN), which has the role of managing the Internet’s global Domain Name System.\r\n\r\nThe article examines how disputes are resolved under the UDRP Policy. This is an increasingly important topic for native business in the Middle East whose brands are starting to become well known internationally. These businesses need to be better informed about the UDRP Policy so that they  can better protect their brands.\r\n\r\n<strong>Registering Domain Names</strong>\r\n\r\nDomain names can be registered through many different companies - known as “registrars” that compete with one another. All ICANN-accredited registrars follow a UDRP Policy. Under that policy, disputes over entitlement to a domain-name registration are ordinarily resolved by court litigation between the parties claiming rights to the registration. Once the courts rule who is entitled to the registration, the registrar will implement that ruling. In disputes arising from registrations allegedly made abusively (such as “cybersquatting” and “cyberpiracy”), the uniform policy provides an expedited administrative procedure to allow the dispute to be resolved without the cost and delays often encountered in court litigation. In these cases, you can invoke the administrative procedure by filing a complaint with one of the dispute- resolution service providers.\r\n\r\nThe UDRP Policy applies to .com, .net and .org, extensions as well as to a number of more recently introduced gTLDs, such as .aero, .asia, .biz, .cat, .coop, .info, .jobs, .mobi, .museum, .name, .pro, .travel and .tel. Since commencing its UDRP service, WIPO has processed some 27,000 UDRP and UDRP-related cases. For the ccTLD .AE and the Dispute Policy adopted by the registration authority is the ‘UAE Domain Name Dispute Resolution Policy’, also called the aeDRP, which only has slight differences with the UDRP Policy.\r\n\r\nIn several cases decided under the UDRP Policy, panels from the WIPO ordered the transfer or cancellation of the infringing domain name.\r\n\r\n<strong>The UDRP Policy Process</strong>\r\n\r\nThe process under the UDRP Policy is straightforward. Complaints are filed with the WIPO Arbitration and Mediation Center. The Complainant, who should be the trademark owner, is required to provide evidence of the ownership of the trademark. The Respondent, who is the registrant of the domain name has to prove a legitimate interest for using the domain name.\r\n\r\nThe Complainant has the option of choosing the panel. The number of panelists can be either 1 or 3, with the identity of the panelist to be elected from the official list available on the WIPO website.\r\n\r\nIn addition the Complaint at the time of filing has the choice of the remedy sought and can choose between the transfer of the domain name from the Respondent to the Complainant or the cancellation of the domain name registration (in case the Complainant has no interest in the domain). However, the Complainant must monitor the cancelled domain name as it becomes free and available to any other party seeking to register the domain name.\r\n\r\nTo be successful under the UDRP, a complainant must prove the following:\r\n<ol>\r\n 	<li>The domain name registered is identical, or confusingly similar to, a  trademark or service mark in which the complainant has rights;</li>\r\n 	<li>The respondent has no rights or legitimate interest in respect of the domain name; and</li>\r\n 	<li>The domain name has been registered and is being used in bad faith.</li>\r\n</ol>\r\nThese conditions are cumulative, meaning the complainant must prove each of the three elements in order to be successful in its claim.\r\n\r\nTo satisfy the first requirement of the UDRP, the complainant must prove that it has acquired rights, including trademark rights, over the disputed name or part of the name that constitute the litigious domain name.\r\n\r\nThe second element is in relation to any potential relationship that may exist between the parties or any legitimate interest that the Respondent could have in the name (for example, an individual may wish to register a family name, in which case an argument can be made that the registrant has a legitimate interest in the name and potentially the domain name).\r\n\r\nThe third element, bad faith, is often the easiest to satisfy and can usually be demonstrated with the content of the website which may show that it is merely a “parking domain” for instance, or any other lucrative domain.\r\n\r\nOften, companies or individuals who have no legitimate interest in the domain name purposely use trademarks that are not yet registered domains, and seek monetary value form the trademark owners who would like to register the domain names. This practice is commonly referred to “cyber squatting”. Although the URDP is taking efforts to monitor and prevent such activity, unfortunately brand owners are often left with the reality that they can be faced with paying out for domain names which contain their trademarks. Brand owners must therefore be aware of the importance of domain names. At the time of launching a new brand, care should not only be provided to associated trademarks but also to domain names and registration of these. In order to avoid contentious matters that may arise through the URDP, brand owners can be proactive and register the domain names under their trademarks and any variations of it in order to protect themselves against cyber squatting.\r\n\r\nAlthough the URDP complaint is a faster and cheaper process than court proceedings, it is far from being a ‘one size fits all’ alternative to Court Proceedings, as complaints filed under the UDRP are reviewed with a high level of scrutiny. The principles and requirements of the UDRP must be observed and respected by complainants and their legal counsel in order to succeed.'),
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	(91568,4977,'content','September 2014\r\n\r\n<hr />\r\n\r\nOne of these formalities is a specific authorization granted by the parties to their representatives who are signing the arbitration agreement on their behalf. Such authorization must explicitly vest the representatives with the power to agree to arbitrate.\r\n\r\nWhen one of the parties to the arbitration agreement is a company, the legal form of the company determines the formalities required to allow the company’s representative to bind the company to an arbitration clause.\r\n\r\nIn the following judgment, Abu Dhabi Court of Cassation commercial appeal no. 351 of 2014 issued on 26 June 2014, Al Tamimi and Company was successful in obtaining a decision from the Abu Dhabi Court of Cassation in which the court confirmed the formalities required to bind a public joint stock company to an arbitration agreement.\r\n\r\n<strong>Summary of the facts</strong>\r\n\r\nThe Claimant, the owner of a hotel, initiated proceedings before the Abu Dhabi Court of First Instance for the ratification of an arbitral award issued by the Abu Dhabi Centre for Conciliation and Commercial Arbitration. The dispute had arisen from a concession agreement entered into with the Respondent hotel management company (a Public Joint Stock Company).\r\n\r\nThe Respondent, represented by Al Tamimi &amp; Co., filed a counterclaim before the Abu Dhabi Court of First Instance seeking to set aside the arbitral award.\r\n\r\nThe Court of First Instance decided to dismiss both the main and the counter claim for procedural reasons. The Claimant and the Respondent appealed before the Abu Dhabi Court of Appeal which cancelled the appealed decision and returned the case back to the lower court to render a decision.\r\n\r\nIn the second round, the First Instance Court ratified the arbitral award and dismissed the counterclaim.\r\n\r\nThe Respondent appealed to the Court of Appeal, which upheld the First Instance Court’s decision.\r\n\r\nThe Respondent consequently filed an appeal to the Abu Dhabi Court of Cassation, which quashed the Court of Appeal decision and referred the case back to the Appeal Court. The Appeal Court then dismissed the main claim and upheld the counterclaim, setting aside the arbitral award.\r\n\r\nThe Court of Appeal held that the manager who signed the concession agreement on behalf of the Respondent did not have a specific authority to bind the Respondent to an arbitration agreement.\r\n\r\nThe Claimant challenged the decision before the Court of Cassation.\r\n\r\n<strong>The Court of Cassation: </strong>\r\n\r\nThe Claimant argued that the Appeal Court had decided the matter wrongly because the Respondent was a Limited Liability company and as such the signature of the general manager was sufficient to bind the company to arbitration without the need of a special authorization.\r\n\r\nThe Court however found as follows:\r\n<ol>\r\n 	<li>Article 58 of the Civil Procedures Law provides that a specific authorization is required to enter into an agreement to arbitrate. Article 216 of the same law sets out the conditions on which arbitration award can be set aside, among which is if the arbitration agreement was concluded by a signatory who does not hold a specific authorization to agree on arbitration on behalf of one of the parties.</li>\r\n 	<li>Furthermore, Articles 203 of the Civil Procedures Law and Articles 95, 103 and 104 of the Commercial Companies Law together indicate that an agreement to arbitrate is only valid when the signatories to such agreement have the capacity to dispose of the right subject of the dispute.</li>\r\n 	<li>The effect of these legal provisions is that in respect of a Public Joint Stock Company only the board of directors has the authority required to perform the activities of the company, acting in accordance to its articles of association and the law. However, the board of directors does not have the authority to enter into an arbitration agreement on behalf of the company unless it is permitted by the company’s articles of association; falls within the objectives of the company’s business (i.e. the company’s trade license explicitly refers to arbitration); or the company’s General Assembly has given specific approval.</li>\r\n 	<li>It is established from the case documents that the Respondent is a Public Joint Stock Company and its Articles of Association entitles the Board of Directors to agree to arbitration as an exception to Article 103 of the Commercial Companies Law. The Respondent’s Articles of Association also entitled the Chairman of the Board or his deputy (or a delegated board member or any other member delegated by the Board) to separately sign on behalf of the Respondent.</li>\r\n 	<li>However the concession agreement (and the arbitration agreement it contained) was signed by the manager of the Respondent without furnishing evidence that he was acting on behalf of the Board Chairman or his delegate or deputy, or that he had delegated authority from  the Board to enter into the agreement.</li>\r\n 	<li>Therefore the manager, who signed the concession agreement on behalf of the Respondent, did not have the legal capacity to bind the Respondent to an arbitration agreement. The arbitral award is therefore to be annulled.</li>\r\n</ol>\r\n<strong>Practice note: </strong>\r\n\r\nThis case is a sharp reminder that it is imperative for both parties to ensure that the signing representatives are entitled to bind their respective companies to arbitration. Otherwise any final award may be annulled\r\n\r\nIf the parties have doubts about the authority of the other party’s representative, they should request that the agreement be signed before a public notary, part of whose role is to check and confirm the authority of the signatories.\r\n\r\nIf before filing an arbitral claim a claimant has concerns about the validity of the arbitration agreement, then they should first consider filing the claim before the local court. If the opposing party relies on the arbitration clause the Court will refer the dispute to arbitration, thereby confirming that the clause is valid. This does however incur some costs, and creates a risk that the opposing party will choose not to rely on the arbitration clause, which would result in the dispute being dealt with by the court rather than arbitration as originally agreed.\r\n\r\nFor more details on these issues and the reported case, please contact Mohammed Al Marzouqi.\r\n\r\n&nbsp;'),
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	(91597,4978,'content','September 2014\r\n\r\n<hr />\r\n\r\n<strong>Background </strong>\r\n\r\nThe Borrower obtained a mortgage to finance the purchase of a property in Abu Dhabi. The mortgage contract was duly registered at the Properties Registrar at the Lands Department in Abu Dhabi Municipality.\r\n\r\nAt the time of entering into the mortgage the Borrower issued cheques for the installments of the loan for the first six months. However the cheques for the first and second installments were dishonoured and returned unpaid. The Lender notified the Borrower repeatedly to repay the amount of the loan but the Borrower failed to respond to the legal notices served on him.\r\n\r\n<strong>Summary Court</strong>\r\n\r\nThe Lender applied to the Summary Court for an order that the mortgage be affixed with an Execution Deed so that it could be enforced by the Execution Court (i.e. foreclose on the property). The Lender argued that a mortgage is an authenticated deed in accordance with Article 225 of the UAE Civil Procedure Law since it was registered with the competent authorities. This allows the Lender the right to enforce the mortgage immediately without a need to obtain a judgment (on the merits) on the basis of the Borrower’s default. The Summary Court accepted the application and ordered that the mortgage contract be sealed with the Execution Deed so as to allow immediate enforcement. The matter was then transferred to the Execution Court for enforcement.\r\n\r\n<strong>The Execution Court</strong>\r\n\r\nThe Execution Court issued a decision temporarily staying execution on the basis that a final judgment (on the merits) was needed which granted permission to sell the property. The Lender appealed this decision to the Court of Cassation.\r\n\r\n<strong>The Court of Cassation</strong>\r\n\r\nThe issue before the Court of Cassation was whether the duly registered mortgage contract between Borrower and the Lender constituted a valid Execution Deed for purposes of Article 220 and 225.\r\n\r\nThe Court held that it was. Once a mortgage is registered with the appropriate authority it becomes an ‘Execution Deed’ under article 225 of the UAE Civil Procedure Law. In the event of a default by the Borrower it can then be enforced against the mortgaged property without the need for any other procedure.\r\n\r\nThe Court therefore ruled to reverse the appealed judgment and to return the case to the Execution judge to consider the matter again. The Execution judge then proceeded as directed by the Court of Cassation.\r\n\r\n<strong>Comment</strong>\r\n\r\nThis judgment provides valuable confirmation of the Abu Dhabi Court’s stance on the issue and will be welcomed by mortgage lenders. Whilst there have been similar decisions from other courts in the Emirates, this is believed to be the first such judgment from the Abu Dhabi Court of Cassation.\r\n\r\n&nbsp;'),
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	(91615,4978,'_yoast_wpseo_metadesc','On 26 January 2014 the Abu Dhabi Court of Cassation issued a judgment confirming that a mortgage can be enforced immediately through the Execution Court, without the need for the bank to first obtain a judgment.'),
	(91616,4979,'content','September 2014\r\n\r\n<hr />\r\n\r\nThe arrangement is governed primarily by a hotel management agreement (‘HMA’), which is usually for a long duration (greater than 20 years) and will contain detailed provisions so as to make clear the parties’ respective rights and obligations and avoid misunderstandings and disputes.\r\n\r\nNonetheless the relationship is complex and not without inherent tension. During the life of the HMA the market will inevitably fluctuate, and the Owner will be concerned that the Operator is managing and marketing the hotel well, responding to changes in the market and not becoming complacent. Meanwhile the Operator will want to ensure the Owner continues to invest in the maintenance of the hotel and does not interfere with its operation. There is also the risk that one party will become disenchanted with the fee arrangements or occupancy rates and seek to renegotiate the payment terms or generate a pretext to enable termination.\r\n\r\nThis article considers some particular issues that arise from the management of hotels in the UAE, and which should be kept in mind by the parties before entering into the HMA.\r\n\r\n<strong>HMAs in the UAE</strong>\r\n\r\nHMAs in the UAE tend to be governed either by UAE law or English law. As explored further below, this can have important repercussions for the rights of the parties when disputes arise and the type and scope of damages that can be recovered.\r\n\r\nWhere the parties choose English law (or any other non-UAE law) then they must also choose arbitration because in practice the UAE courts do not apply foreign laws. Even if the governing law is that of the UAE, most HMAs will nonetheless contain an arbitration clause because arbitration is often considered a neutral forum, and one that will be in a language and format familiar to at least the Operator (and often the Owner as well). The complexities of the relationship and the issues that arise are also arguably better dealt with at arbitration because the parties have an opportunity to choose sophisticated arbitrators experienced in such matters.\r\n\r\n<strong>Interim Injunctions</strong>\r\n\r\nIn Western jurisdictions it is often the case that prior to the issuance of a final judgment, a party can seek an interim injunction from the local court to force the other party to do or refrain from doing a certain action pending the court’s final decision on the dispute. For example, an Operator might seek an injunction restraining the Owner from continuing to use the Operators signage, or an Owner may seek an order that the Operator continue operating the hotel.\r\n\r\nTechnically, this type of relief is available from UAE courts. The courts have broad powers and parties can file applications to request that they exercise them. However, in practice whilst the courts may seize and attach assets before a final judgment is made, they very rarely if ever grant interim orders compelling a party to do or refrain from doing something before final judgment is issued. The position taken by the courts is that if a party is behaving wrongly, the appropriate remedy for the aggrieved party is damages; if the party continues to behave wrongly, this simply increases the other party’s claim for damages.\r\n\r\nIt is possible that during an arbitration the Tribunal may issue an order directing one party to take certain actions, and often a party will voluntarily comply with the order rather than defy the wishes of the Tribunal. But if not, then a party would have to seek enforcement of the order through the local UAE courts. Although technically possible, there have not been any recorded cases of such an attempt being successful.\r\n\r\nThe unavailability of interim injunctions means that both parties can find themselves in situations in which they are desperately unhappy with the current state of affairs and may be suffering loss and reputational harm, but must either endure the situation until the dispute is formally resolved (which may take many months or years), or reach an alternative solution with the opposing party. These issues are now discussed in greater detail below.\r\n\r\n<strong>Disputes over fees</strong>\r\n\r\nThe conventional arrangement in an HMA is that the Operator handles the financial operation of the hotel. Each month its fees are determined in accordance with the fee structure agreed in the HMA, and the Operator is then paid from the operating account by the hotel’s General Manager (technically an employee of the Owner but appointed and loyal to the Operator).\r\n\r\nDisputes over fees rarely occur, but they do happen. Sometimes, either by design or accident, a situation emerges whereby the Owner has control of the hotel finances and withholds payment to the Operator or fails to provide additional working capital in circumstances where the hotel has made a loss so that fee cannot be paid. On other occasions, the Operator may try to engineer a default so that it has a pretext to terminate a long-term agreement (as a failure to pay is a relatively easy contractual breach to claim and prove).\r\n\r\nWhen disputes do arise it is often the Operator that is most exposed because it may find itself obliged to continue operating the hotel (for the sake of its brand if nothing else) despite not being paid. It is sometimes difficult for the Operator to countenance bringing arbitral proceedings because the costs of such proceedings may be high, and such a claim will usually destroy whatever was left of the relationship between the parties. However, it is also a situation that the Owner cannot allow to continue for very long as the smooth running of the hotel and its profitability may be adversely affected.\r\n\r\nThese types of disputes are therefore generally resolved through negotiation, with the Operator continuing to operate the hotel and seeking to preserve the relationship. If however the outstanding fees keep accruing then the Operator may well reach a level at which arbitrating or litigating the dispute becomes inevitable, although this is rare in our experience.\r\n\r\nA practical step sometimes taken by an Operator to elevate the issue is to stop operating the Hotel, thereby placing pressure on the Owner to resolve the matter. This is however a risky tactic, although it may succeed in forcing the Owner to enter into serious negotiations sooner rather than later. The tactic is risky as the Operator’s reputation may be tarnished by a refusal to perform, even though under UAE law it may arguably have a right to take such action (Article 247 of the UAE Civil Code states that if one party refuses to perform the other party may also withhold performance).\r\n\r\nAn Operator should also be aware that under UAE law it may find itself liable to cover the losses sustained by the Owner as result of the refusal to operate the Hotel. Article 106(2)(c) of the UAE Civil Code states that the exercise of a right is unlawful ‘if the interests desired are disproportionate to the harm that will be suffered by others’. This means that if ceasing operation will cause disproportionate harm to the Owner (which it often will), the Operator may be liable to compensate the Owner for this loss.\r\n\r\nThe best approach for an Operator may therefore be to negotiate a settlement, or once the outstanding fees become too great, to terminate the HMA and sue for damages, but such a step is not without risk and requires careful legal advice.\r\n\r\n<strong>Unlawful Ejection of the Operator</strong>\r\n\r\nEven when there is a total breakdown between the Owner and Operator, it is rare for the Operator to be unlawfully ejected from the premises, but it can happen.\r\n\r\nThe reason it is rare is because both parties have a strong incentive to ensure that even if the relationship has ended, any handover in operation is smooth. The Owner wants the operation of the hotel to be unaffected by the handover, and will need the Operator’s cooperation to achieve this; the out-going Operator will want to remove its signage and ensure any outstanding fees are paid without hassle.\r\n\r\nHowever, there have been cases where the working relationship collapses to such an extent that the  Owner has ordered the Operator to leave and effectively seized operation of the hotel, transferring it to a new operator or operating the hotel itself under the old operator’s brand. This may expose the Owner to a significant claim for damages by the Operator, who will likely claim, amongst other things, many years of lost profits.\r\n\r\nThe difficulty for the Operator in these situations is that, whilst it may have a good claim for damages against the Owner, it is not possible to get an order forcing the Owner to remove the signage without first obtaining a court judgment (or ratified arbitral award), which will take time. If the Operator unilaterally attempts to remove its signs the police may be called and the Operator prosecuted for trespass. Resolving the dispute by formal dispute resolution (i.e. arbitration or litigation) is likely to be the only course of action available. If the ejection was carried out without any lawful prior termination then the Operator will likely have a good case.\r\n\r\n<strong>Termination and Liquidated Damages</strong>\r\n\r\nHMAs often contain clauses stating that the Owner can terminate the agreement early for convenience, but that if this right is exercised some damages or fee must be paid to the Operator. This may be a set figure and/or an amount calculated on the basis of the profits generated over previous years.\r\n\r\nThe difficulty is that if the HMA is governed by UAE law such clauses may not be entirely upheld. Article 390 of the UAE Civil Code states that parties may fix the amount of compensation in advance, but that ‘the judge may in all cases, upon the application of either of the parties, vary such agreement so as to make the compensation equal to the loss’. This is based on the Sharia notion that compensation must be equivalent to the damage in fact suffered and not be made subject to chance.\r\n\r\nIn order to get around this, some parties try to carefully word such provisions so as to suggest that one party is paying a fee to the other for the right to terminate, rather than the payment being a penalty or a pre-estimate of damages. The UAE Courts however will likely look to the substance of the arrangement rather than its form and use its right under Article 390 to reassess damages if one party requests it.\r\n\r\nThis does not however mean that such clauses are redundant. The courts are generally willing to consider the agreed figure as an accurate assessment of damages and it will be for that party trying to reopen the assessment of damages to prove the actual loss. This usually shifts the burden on to the Owner, who may sometimes struggle to prove what the Operator’s losses were. The Operator can also apply to reopen the assessment if it believes its losses were in fact greater than the amount agreed in the HMA.\r\n\r\nIf the governing law is English law, then such clauses have a far better chance of being upheld. English law will in principle respect a liquidated damages clause, provided it does not constitute a penalty clause.\r\n\r\n<strong>Problems faced by the Owner</strong>\r\n\r\nThe above may suggest that it is the Operator who is more exposed when the relationship deteriorates, but this is not the case. In many ways the Owner has more to lose, since it will have invested greatly in the asset, often spending tens of millions of dirhams fitting out and designing the hotel to meet the stringent demands of the Operator. The Owner expects to recover this significant investment over the long term of the agreement, so an early dispute with the Operator can result in huge losses.\r\n\r\nEqually the Operator should be careful to undertake all that is required of it under the HMA because if the Operator breaches the agreement such that the Owner is entitled to terminate, the Operator may be liable to compensate the Owner for the huge losses the Owner may suffer in changing signage and meeting the standards of a new replacement operator.\r\n\r\nThe HMA should clearly state the Owner’s rights to terminate in the event of poor performance by the Operator. If the HMA is terminated the Operator will often make arrangements to leave, but if not the Owner may have to seek a court order to force them out. Since interim injunctions are not available, this will mean initiating arbitral proceedings or court proceedings, depending on the HMA’s dispute resolution clause. This can result in the difficult situation where the Operator continues to operate the hotel, and uses the fees generated to fund its legal fight against the Owner.\r\n\r\nIn the UAE the police are unlikely to force the Operator to leave without a court order, although proof that the HMA has been terminated may in such situations be sufficient. More often than not however the police will view the matter as a civil disputes and decline to become involved.\r\n\r\nIn circumstances where the Owner has concerns about the financial running of the hotel, it is possible to approach the local court to have a Guardian appointed. The Owner will need to demonstrate to the court that the situation is urgent and that there is a genuine fear of significant financial loss. A Guardian will supervise the financial running of the hotel to make sure that it is being run appropriately until the dispute is resolved. The problem with this option is that will take at least 6 months for such a Guardian to be appointed, and although the parties can jointly nominate the Guardian, if they cannot agree or the court refuses in its discretion to accept the nomination, the court will appoint the Guardian with no guarantee that the Guardian will be effective.\r\n\r\n<strong>Mediation</strong>\r\n\r\nPrior to starting any arbitral or court claim, the parties should carefully consider whether mediation might be more effective in resolving their dispute. Although mediation does not result in a binding award or judgment, it more often than not can result in an amicable agreement which resolves the dispute in way that is quicker and cheaper than arbitration or litigation. It does however depend on both parties having a genuine desire to consider compromising their positions, and may not be suitable in all cases.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nGiven the complexity and length of an HMA, it is inevitable that disputes will arise. Most of these matters are dealt with amicably by the parties, as provided the hotel is reasonably profitable both will stand to lose more if the relationship ends. Terminating an HMA should always be seen as a last resort, and should only be done after taking detailed legal advice.'),
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	(91639,4980,'content','September 2014\r\n\r\n<hr />\r\n\r\nIn this edition, we had intended to address the obligations owed by the employing club to a player, but the actions of Mr Suarez at the FIFA World Cup 2014, have added an extra dimension. We identify not only the employer’s obligations, but also the potential impact of a player’s conduct on the relationship with the employing club.\r\n\r\n<strong>Club/Employer Obligations to the Player</strong>\r\n\r\nThe “Player Contract” as a hybrid commercial and employment arrangement, must give the employer a substantial degree of protection and place significant obligations on the player.\r\n\r\nOpportunities can arise for players to take advantage of their commercial value  and the employing club will want to ensure adherence to its contractual obligations to minimize the risk of disputes which might ultimately lead to the loss of their asset.\r\n\r\nThe club has a number of obligations (non-exhaustive examples below).\r\n<ul>\r\n 	<li>Remuneration: The key term for many players is the remuneration package they will receive.  Optimizing incentives is common practice, and  the club must be clear as to the circumstances in which potentially lucrative elements of the package arise (for example, a “win bonus” or a “clean-sheet bonus”). It may be advisable in some circumstances for the contract to have a lower base salary but to reward the athlete with generous bonuses. Certainty is essential to avoid potentially costly disputes. A player’s image rights are now also a lucrative element of the contractual relationship. For example, it is not unusual for a player transfer to stall at the last minute because of a dispute over the percentage of income receivable by the player in respect of shirt sales. It should also be noted that there is no “implied” right to withhold remuneration from a player (for example, in a case of misconduct) unless the contract expressly makes such a provision.</li>\r\n 	<li>Medical and similar care: The club will normally be required to provide timely medical examinations and treatment at its expense. However, this will usually expressly exclude any injury arising out of activities prohibited under the contract. Many governing body standard or approved contracts will have clear criteria for determining the period for which an injured player is entitled to receive any continuing remuneration. They will also identify the circumstances in which the Player contract may be terminated on grounds of incapacity after lengthy absence through injury.</li>\r\n 	<li>Indemnification of the Player: Although there is a recognised principle of vicarious liability in Common Law jurisdictions (whereby the employer is liable for the acts or omissions of its employee in the course of performance of his duties under the contract), it is usual for a player to require an express indemnity from the employing club in respect of any damages or compensation to an injured third party (including legal fees). However, one might question to what extent a club will indemnify a player for a claim arising from a violent incident beyond  the ordinary performance of   a professional footballer.</li>\r\n 	<li>Health &amp; Safety: It is implicit (see Implied Terms below) that an employer will maintain an appropriate Health &amp; Safety policy. However, it is usual to see this expressly stated in the contract. Any breach of the provision would therefore lead to a potential breach of contract claim rather than  a claim based solely in reliance upon principles of negligence.</li>\r\n 	<li>Insurance: Insurance against losses flowing from an injury is not an implied club obligation. Thus this must be expressly stated in the contract.</li>\r\n</ul>\r\nRelease the Player for representative duty: This is a key term in a professional sports contract for those who aspire to play at the highest level. This is not “implied” because the primary focus of the contract is the performance of the player for and on behalf of the club (for which he is remunerated). The Suarez affair also highlights the risks for a club which has no control over the on-field behaviour of a player away on international/representative duty.\r\n\r\nThe club will also have a number of negative obligations which will usually be subject to the consent of the player. For example, it is usual for the club to essentially undertake that it will not take or permit photographs of the player to be used for any purpose(s) other than those expressly agreed under the contract. Likewise, the club would usually expressly state that it will not make public any medical reports or records without player consent (save where it is required under the Rules of the governing body or as a matter of law).\r\n\r\nHowever, even the most comprehensive express terms cannot cover every eventuality.\r\n\r\n<strong>Implied Terms</strong>\r\n\r\nCertain terms may be implied into the performance of the contract. There will be a common expectation of minimum standards of behaviour and that certain types of conduct are unacceptable.\r\n\r\nThe employer typically has a number of non-exhaustive implied duties towards the player.\r\n<ul>\r\n 	<li>To act in good faith and in a reasonable manner  towards the player: This mirrors the employee’s duty to act in good faith towards the employer. This mutual obligation underpins all employment relationships and this principle is broadly recognised impliedly or expressly in legislative provisions.</li>\r\n 	<li>The right to work: A professional sportsman cannot have a legitimate expectation to be selected for every fixture and a manager may properly rotate his squad and select those who are more suitable for a particular fixture. Form, physical condition, discipline and team selection dynamics may determine whether or not a particular player is selected. This is implied into the relationship and generally no express term would be required to cover this aspect. Yet a point may come where the player asserts that he has an implied right to work if he has unreasonably been prevented from displaying his talents. Selection disputes may be avoided or mitigated by a suitable provision in the contract identifying relevant regulations or procedures which address such matters. The club may have its own selection panel and set out clear criteria for the selection or non-selection of a player.</li>\r\n 	<li>A Duty of Care: This is no different from the duty owed in an ordinary employment relationship. However, the commercial considerations are such that the standard expected may be high. For example, the professional player would reasonably expect that the employing club would have access to appropriate medical professionals to correctly diagnose and treat an injury in a timely manner. The playing surface and other equipment supplied by the club must be suitable and free from defects which might cause harm to the player.</li>\r\n</ul>\r\n<strong>The Consequences of Player Misconduct</strong>\r\n\r\nDepending on the sport at issue, the impact of player misconduct upon the employer is not often considered. Instead, there can be a shrugging acceptance that a player with behavioural misconduct issues will ultimately end up on the transfer market (a result sometimes engineered by the player’s agent) and the club will realise some meaningful cash for its now “damaged goods”.  If a potential purchaser offers the right price, it can be difficult for a club to steadfastly insist upon an unenthusiastic player’s performance of his contract. The commercial value of a player is often referable to the unexpired term of his contract.  In most circumstances a player who sees out his contract is ultimately a free-agent. Hence, clubs are rarely forced to the transfer table if they are intent on refusing a transfer.\r\n\r\nGiven that Mr. Suarez’s move to Barcelona has now been concluded, the comments below remain hypothetical, but they serve to illustrate the potential issues for the employing club (Liverpool FC) in the face of the player’s conduct.\r\n\r\nSuarez’ contract included a release clause which could be triggered by an offer of £75m. However, the reportedly higher offers on the table pre World Cup could have been susceptible to reduction in the wake of Suarez’ biting offence and subsequent ban. An expensive and productive “asset” would be unavailable for several weeks of the English Premier League campaign. Far better that someone else absorb the period of non-productivity and that Liverpool have the cash to acquire a replacement for their potentially depreciating asset (and one which might be devalued further in the event of another substantial ban). In that latter eventuality, theoretically it would have been open to Liverpool FC to adopt a similar approach to Chelsea FC in the “Mutu” case (Law Update issue 269, May 2014) where the player was dismissed and was successfully sued for substantial damages.\r\n\r\nThere might indeed be an argument that Liverpool FC could recover the loss in value by seeking damages from the player. However, the employer has a commercial choice to sell or not and to accept or reject a bad bargain. Where Liverpool FC were not compelled to sell Suarez, they would be accepting the return on their investment; even if that devaluation flowed from the player acting in a manner far removed from an acceptable and “natural incidence” of the professional game.\r\n\r\nWhere an employing club can properly show that it has accepted a fundamental and repudiatory breach by the player it will be far easier to support a damages claim as in the case where Chelsea FC dismissed Adrian Mutu for drug offences. The theory is that where the misconduct is sufficiently serious as to amount to a repudiatory breach by the player, the employer may accept that breach and terminate the contract. Inevitably, commercial considerations are likely to weigh heavily on any employer considering such a course of action.\r\n\r\nA Senior Associate in the Employment Department, John routinely works with the Sports Law practice group and his experience includes acting for English Premier League football clubs and a football charitable foundation during various restructuring processes. He has also represented rugby players and clubs in disputes and disciplinary hearings before governing bodies. John is a Judicial Officer for the UAE Rugby Federation and a Registered Lawyer under the UK Football Association Player Agents Regulations.'),
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	(91264,4961,'content','July - August 2014\r\n\r\n<hr />\r\n\r\nIn light of such diversity, parties may have different expectations regarding the effect of their substantive rights under the contract, or the process and treatment of disputes, when these arise.\r\n\r\nWith respect to standardised construction contracts (which help to conform divergent expectations), perhaps none are better known than the suite of contracts published by the Fédération Internationale des Ingénieurs-Conseils (“FIDIC ”), which are commonly used throughout the Middle East.\r\n\r\nAmong other things, the different forms of FIDIC Contracts reflect different procurement approaches (particularly regarding design responsibility). For instance, while the “FIDIC  Red Book”  is scoped around works predominantly designed by the Employer, the “FIDIC  Yellow Book” is used for works primarily designed by the Contractor.  Additionally, the “FIDIC Silver Book” is intended for use on turnkey projects while the “FIDIC Gold Book” is appropriate for ‘Design-Built-Operate’ projects.\r\n\r\nConstruction projects undertaken by Multilateral Development Banks (such as the World Bank, Asian DB etc.) are frequently procured under FIDIC Contracts.  However, the Multilateral Development Bank recently published the “Multilateral Development Bank Harmonised Edition” (MDB Conditions), which contains some important departures from the FIDIC forms.  This article identifies some important differences between the FIDIC Red Book (1999 Edition) (FIDIC Conditions), and the MDB Conditions.\r\n\r\n1. Sub-clause 2.5 [Employer ’s claims]\r\n\r\nThe FIDIC Conditions provide, at sub-clause 2.5, that if an Employer considers himself entitled to any payment from the Contractor, a notice “shall be given as soon as practicable after the Employer became  aware of the event or circumstances giving rise to the claim”. The MDB conditions however state that such notice shall be given “no longer than 28 days after the Employer became aware or should have become aware”, thus mirroring the timeframe within which the Contractor has to provide notice of its own claims under the its own claims under the Contract. This also means that, unlike the FIDIC conditions, the Employer under the MDB Conditions must comply with a 28 day deadline, otherwise the claim may be time barred.\r\n\r\n2. Sub-Clause 3.1 [Engineer’s Duties and Authority] and sub-clause 3.4 [Replacement of the Engineer]\r\n\r\nUnder sub-clause 3.1 of the FIDIC Conditions, the Employer “undertakes not to impose any further constraints on the Engineer’s authority, except as agreed with the Contractor”. To the detriment of the Contractor however, the MDB Conditions change this stance, as they allow the Employer to unilaterally change the authority of the Engineer with only an obligation to notify the Contractor of such a change. This may result in the Engineer assuming a more significant role under the Contract, which is important because the Engineer is “deemed to act for the Employer”.\r\n\r\nAn additional important difference to clause 3.1 in the MDB Conditions is that the Engineer needs to obtain ”specific approval” of the Employer before agreeing an extension of time or additional cost or instructing a variation.\r\n\r\nFinally, under clause 4.1 of the MDB Conditions the Employer is only required to give “full and fair consideration” to any objections raised by the Contractor regarding the replacement of the Engineer  However, the FIDIC Conditions provide that the Engineer shall not be replaced if the Contractor “raises reasonable objection by notice”.\r\n\r\n3.   Sub-Clause 3.5 [Determinations]\r\n\r\nSub-clause 3.5 of the FIDIC Conditions provides that when the Engineer proceeds to agree or determine any matter, he should consult with the parties and make a fair determination if he cannot reach agreement with them.\r\n\r\nThe MDB Conditions however introduce a 28 day time limit from receipt of the request for the Engineer to make such a determination. The intent behind the amendment is clearly to encourage the Engineer to make prompt determinations, which is in the interest of all parties.\r\n\r\n4. Sub-clause 4.2 [Performance Security]\r\n\r\nThe MDB Conditions amend this sub-clause to allow for the Performance Security to be denominated in a freely convertible currency acceptable to the Employer, rather than restricting the same to the currency of the contract.\r\n\r\nWhilst this does grant more flexibility to both parties, it may be a potential trap for the Contractor. This is because the sub-clause is silent with regard to the effect of currency fluctuation on the performance security. For instance, a currency devaluation may render the value of the performance security less than what is required under the Contract. This in turn may be considered a breach of sub-clause 4.2, potentially justifying termination by the Employer, as provided for under sub-clause 15.2. Consequently extra vigilance must be exercised with regard to the provision relating to performance security. In order to mitigate this risk, the exchange rate should be agreed upon in the contract.\r\n\r\nThe MDB Conditions also forgo the requirement that the entity issuing the performance security must be approved by the Employer, replacing this with the requirement that said security be issued by a “reputable bank or institution”, which may be “selected by the Contractor”.\r\n\r\nAnother notable change relates to the conditions under which the Employer can claim the Performance Security. In the FIDIC Conditions there must be breaches of contract which entitle the Employer to make a claim under the Performance Security as stated in the FIDIC Conditions (which including affording the Contractor 42 days in which to remedy any breach). However sub-clause 4.2 has been amended in the MDB Conditions so as to refer to claims for amounts to which the Employer is entitled under the Contract, irrespective of any breach.  This is clearly advantageous for the Employer.\r\n\r\n5.   Sub-Clause 16.2 [Termination by the Contractor]\r\n\r\nThe grounds upon which the Contractor can terminate have been broadened and clarified under the MDB Conditions. In respect of sub-clause 16.2(d), additional wording has been added to clarify that any “substantial failure to perform” by the Contractor must “materially and adversely affect the economic balance of the Contract and/or the ability of the Contractor to perform the Contract” in order for a right of termination to arise. Additionally, the Contractor now has a right to terminate if the Contractor does not receive the Engineer’s instruction regarding the agreed commencement date.\r\n\r\n6.    Sub-Clause 17.6 [Limitation of Liability]\r\n\r\nImportant exclusions to the prohibition against recovery of “loss of profit, loss of any contract or any indirect or consequential loss or damage” have been inserted in the MDB Conditions.  These exclusions apply to delay damages, the cost of remedying defects, payments upon termination, indemnities, the consequences of Employer’s Risks and liability resulting from a breach of intellectual property rights.\r\n\r\n7.    Sub-clause 20.1 [Contractor’s Claims]\r\n\r\nThe MDB conditions, as opposed to the FIDIC Conditions, expressly clarify that “If the Engineer does not respond within the timeframe defined in this Clause [20.1], either party may consider that the claim is rejected by the Engineer and any of the Parties may refer the matter to the Dispute Board in accordance with Sub-clause 20.4 [Obtaining Dispute Board’s Decision]”. This amendment may prove useful where the dispute relates to a time sensitive matter, and as such is an amendment that benefits both Contractor and Employer.\r\n\r\n8.    Sub-clause 20.2 [Appointment of the Dispute Board]\r\n\r\nA further change made by the MDB Conditions is the introduction of the Dispute Board (“DB”), replacing the Dispute Adjudication Board (“DAB”). Pursuant to Sub-clause 20, DB decisions are immediately binding on both parties, who shall promptly give effect to it unless and until it shall be revised in an amicable settlement or an arbitral award, and in that regard is equivalent to the DAB. The DB is available throughout the duration of the contract, which if tactfully utilized may be a useful and time efficient manner through which to resolve disputes and minimize any delays to the progress of the works. The MDB Conditions further introduce the requirements of the members to be not only fluent in the language of communications defined in the Contract, but require the members of the DB to be professionals experienced in the type of construction involved in the contract works, in addition to experienced in the interpretation of contractual documents.\r\n\r\n<strong>Concluding Remarks</strong>\r\n\r\nStandardized contracts provide a contractual framework within which the parties’ potentially confrontational relationship can survive the execution of the contract to attain a common end. In reality, the execution of these provisions may often be impeded with ambiguities and potential traps, a situation amplified by the disregard parties sometimes have of the details found within them. The amendments noted above are only some of the changes made by in the MDB Conditions, many of which  rebalance the obligations of the parties to the contract, sometimes in subtle ways.\r\n\r\nIn our experience, it is frequently the case that a potential party to a construction contract fails to properly assess the risks inherent in the contract that has been produced and in particular, scrutinize the contract for amendments to the standard form that might work against them. It is essential that there be a review by legal counsel of the conditions of contract before a party agrees to sign the agreement, and an appropriate sum should be budgeted for this purpose at the outset of any potential contract discussions.'),
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