	(155749,5622,'core_values',''),
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	(103409,5622,'lawUpdateArticleMonth','5593'),
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	(103411,5622,'content_description','The Board of Directors of a joint stock company in Egypt is the body that is entrusted with all management and operation aspects of the company. '),
	(103412,5622,'_content_description','field_59b641c07f473'),
	(103413,5622,'pageSummary','The Board of Directors of a joint stock company in Egypt is the body that is entrusted with all management and operation aspects of the company.'),
	(103414,5622,'_pageSummary','field_59e59b307dec8'),
	(103415,5622,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/march-10/does-a-directors-release-suffice-to-negate-liability-in-egypt.html'),
	(103416,5622,'_currentURL','field_59d35123ab1e7'),
	(103417,5622,'lawUpdateArticleWriters_0_lawUpdateArticleWriter','1229'),
	(103418,5622,'_lawUpdateArticleWriters_0_lawUpdateArticleWriter','field_59da2ac06b065'),
	(103419,5622,'lawUpdateArticleWriters','1'),
	(103420,5622,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(103421,5622,'_yoast_wpseo_metadesc','The Board of Directors of a joint stock company in Egypt is the body that is entrusted with all management and operation aspects of the company.'),
	(103422,5623,'content','March 2017\r\n\r\n<hr />\r\n<p class=\"p1\">Accordingly, the Regulation No. 5 of 1989 was passed and is still valid (the “1989 Regulation”). In order to facilitate the mechanism of registration of foreign companies offices and branches in Iraq, the department of Foreign Companies Registry at the Ministry of Trade prepared new draft regulations to replace the 1989 Regulation. The proposed draft will touch upon the most important points covered by the 1989 Regulation and will address several other corporate issues in a different manner.</p>\r\n<p class=\"p1\">This article compares some of the key areas of comparison between the 1989 Regulation and the new proposed draft:</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Obtaining a license for a branch</strong></span></p>\r\n<p class=\"p1\">According to the 1989 Regulation, a foreign company or economic institution cannot be given a license for its branch unless (i) it was licensed to do permanent business in Iraq on the basis of an agreement or a convention with the Government; or (ii) it was contracted to implement a given project with the State organizations or with the Socialist Sector and thereafter upon it serving a written notification to the Companies Registrar (the “Registrar”). However, this service requirement does not apply to companies and institutions contracted to supply commodities and goods unless they have a real physical presence in Iraq, or if their supply agreements included rendering services of any kind. The Registrar should decide within two weeks of receiving the notification as to whether it approves the registration of the branch license.</p>\r\n<p class=\"p1\"><span class=\"s2\"> Now, with the proposed regulation, the above-mentioned conditions are amended so that any foreign company contracting with any Iraqi public/private sector business can register its branch or office in Iraq, provided that the contract’s sum is not less than One Million US dollars. Previously, the company could not register a branch in Iraq unless it had a contract with a governmental entity and was registered as representative office but with the introduction of this law any company can registered a branch whether it has contract or not. </span></p>\r\n<p class=\"p1\">Furthermore, the 1989 Regulation obliges the office [what is an ‘office’ – do we meant the ‘entity’] or the branch to submit the latest balance sheet of the foreign parent company, along with two copies of the Board of Directors’ Report attached or annexed thereto, for each fiscal year, along with the final accounting report of that representative office or branch. The proposed regulation, however, obliges the presentation of the fiscal status report of the parent company only when the articles of association are presented for registration, and the branch is not required thereafter to present the annual accounts of the parent company and it is only necessary to present the final fiscal report for the Iraq branch.</p>\r\n<p class=\"p1\">As with the 1989 Regulation, the proposed regulation retains the obligation on the foreign company to file an application at the Registrar’s office within 75 days from the date of concluding the contract, convention or agreement with a copy requiring to be attached to the application.</p>\r\n<p class=\"p1\">Both the 1989 Regulation and the proposed regulation stipulate that the Registrar shall issue the branch’s license within 15 days from the date of publishing the approval of the registration in the local newspapers, and upon issuing the license, the branch shall acquire legal status.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>The Branch Director’s Residency in Iraq</strong></span></p>\r\n<p class=\"p1\">As for the management of the branch in Iraq, the 1989 Regulation stipulates that the director of the branch, or the manager authorized by the foreign company or institution, shall reside in Iraq. Further, in terms of accountability, that individual is treated equally to the Iraqi companies’ directors, and such an individual is required to appoint a deputy to manage the branch in their absence.</p>\r\n<p class=\"p1\">The proposed regulation provides that the person who manages the branch “has the right to move between Iraq and the countries where his/her business requires his/her presence”.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Supervision of the Branch </strong></span></p>\r\n<p class=\"p1\">As with the 1989 Regulation, the proposed regulation obliges foreign companies and branches to pursue activities that fall within the development plans and they are considered as economic units in the same way as Iraqi companies. In order to regulate their activities, the proposed regulation subjects branch offices to a monitoring system similar to that applied to Iraqi companies. The proposed regulation dictates that the branch or representative office should keep regular account books in the Arabic language for all its activities related to its works in Iraq, according to the accounting system referred to in Article 201 of Companies Law. The branch is also committed to submit an annual plan including a comprehensive report on its intended activities in Iraq for the following year, in addition to submitting regular reports related to the implementation of its previous annual plan, to its parent company at least once a year. The proposed regulation also obliges the branch to provide information to the Registrar about the employees of the branch as per the forms adopted for this purpose. It also gives the Registrar the right to request any further information it deems necessary to facilitate the implementation of the regulation.</p>\r\n<p class=\"p1\">The proposed regulation also stipulates that the branch management should notify the Registrar when the branch ceases to do business in Iraq, giving appropriate justification for the decision, within 30 days as of the date of stopping the business. The branch management should also notify the Registrar if the foreign company or economic institution declares bankruptcy/liquidation, it merges or if it is in the process of amending its articles of association. The proposed regulation allows the Registrar to nominate one or more of competent specialized inspectors to inspect the works of the branch or office if so required, and the office or branch should extend all necessary assistance for the inspector to carry out his inspection.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Liquidation of Branches Working in Iraq</strong></span></p>\r\n<p class=\"p1\">According to the 1989 Regulation, if the license is no longer valid by reason of the branch being required to liquidate, the branch shall commence the liquidation process within 60 days as of the date in which the license is revoked, by a written request being presented to the Registrar stating the reasons of liquidation, accompanied by a statement that shows the financial status of the branch at that date. The liquidation procedures should be finalised, including presentation of the liquidation accounting reports, and the Minister of Tradehas the right to extend this period if a concerned parties so requests, explaining the justifications for such request. Whenever such liquidation is finalised according to the law, the Registrar shall issue a decision to write off the branch from its records, publish the decision within a local newspaper within 10 days after the date of the decision thus completing the liquidation process.</p>\r\n<p class=\"p1\">In the proposed regulation, there are two further examples where the branch may be liquidated:</p>\r\n<p class=\"p1\">First: The branch shall be liquidated by the Registrar without waiting for its management to present their request for liquidation if the branch practices no business, or makes no contract with any public or private sector party within two years of the issuance of the registration certificate in circumstances where it has not: :</p>\r\n\r\n<ul>\r\n 	<li>Appointing a legal advisor for the branch as well as a notarized accountant;</li>\r\n 	<li>Opening a bank account in one of the Iraqi banks, or the licensed international banks in Iraq;</li>\r\n 	<li>Presenting a certified lease agreement for the administration of the branch in Iraq; and</li>\r\n 	<li>Presenting the final annual fiscal statements of the branch.</li>\r\n</ul>\r\n<p class=\"p6\">Second: where the branch has provided the information listed in (a) to (d) above, it shall still be liquidated by the Registrar without waiting for the company to submit a request for liquidation if it does not, within 4 years after the registration of the branch in Iraq, not pursue any business in Iraq or engage in any contract with any entity, whether in the public or private sectors within the above-mentioned period of time.</p>\r\n<p class=\"p1\">In light of the above, in the event that the proposed amendments are adopted, it will provide a smoother mechanism for foreign entities in Iraq in terms of the registration and de-registration (liquidation) procedures. It shall further open the way for a more time-efficient and convenient process in terms of transactions with the private sector where the same level of approvals are no longer a requirement.</p>'),
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	(103425,5623,'_lawUpdateArticleMonth','field_59da2a396b063'),
	(103426,5623,'content_description','The Iraqi Companies Law Number 21 of 1997 (the “Companies Law”) has set the foundations for registering offices and branches affiliated with foreign companies and economic institutions. The Companies Law, however, left all other details for specific regulations to be issued separately.'),
	(103427,5623,'_content_description','field_59b641c07f473'),
	(103428,5623,'pageSummary','The Iraqi Companies Law Number 21 of 1997 (the “Companies Law”) has set the foundations for registering offices and branches affiliated with foreign companies and economic institutions. The Companies Law, however, left all other details for specific regulations to be issued separately.'),
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	(103436,5623,'lawUpdateArticlePractices_0_lawUpdateArticlePractice','542'),
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	(103439,5623,'_lawUpdateArticlePractices','field_59dc7918de021'),
	(103440,5623,'_yoast_wpseo_metadesc','The Iraqi Companies Law Number 21 of 1997 (the “Companies Law”) has set the foundations for registering offices and branches affiliated with foreign companies and economic institutions. The Companies Law, however, left all other details for specific regulations to be issued separately.'),
	(103441,5624,'content','March 2017\r\n\r\n<hr />\r\n<p class=\"p1\">As an overview, the Labour Code is the law that regulates employment relationships in Iraq with very narrow exceptions such as public sector employees who are subject to a civil service code and other categories such as army personnel, police and internal security. The Labour Code sets out the minimum rights and entitlements of employees working in Iraq.</p>\r\n<p class=\"p1\">Specifically, this article considers the discipline and dismissal sanctions within the Labour Code.</p>\r\n<p class=\"p2\"><strong>Discipline &amp; Dismissal Penalties</strong></p>\r\n<p class=\"p1\">As a starting point, it should be noted that an employment contract cannot dilute the requirements of the Labour Code.</p>\r\n<p class=\"p1\">The Labour Code provides that a disciplinary sanction must be put in writing by the employer and the employee must thus be notified of this sanction by way of posting the outcome on a bulletin board or at another prominent place within the work site. Having done so, the employee is unable to assert that he has not been notified of the sanction once a 10 day period has elapsed.</p>\r\n<p class=\"p1\">An employee has a right to file a claim disputing the disciplinary sanction (outside of a dismissal) before the Iraqi Labour Court provided he does so within 15 days of the outcome having been communicated to him by his employer. The court judgment will be final.</p>\r\n<p class=\"p1\">Separately, if the outcome of the disciplinary is that the employee should be dismissed, the employee has a 30 day period to file proceedings before the Labour Court and the Court will issue its judgment within 30 days of the claim being filed.</p>\r\n<p class=\"p1\">In the event that the employer has 10 or more employees, the Labour Code requires it to prepare internal disciplinary rules. Further, the employer has to discuss these rules with any employee representative should one exist. The obligation to do so must be met within three months of the introduction of the rules or within three months of the Labour Code becoming applicable (which, as a reminder was on February 7, 2016).</p>\r\n<p class=\"p1\">The content of the internal disciplinary rules will be relevant and agreed to next list of information as follow:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ul>\r\n 	<li>Hours of operation including starting and finishing times, the site opening time and daily and weekly rest breaks;.</li>\r\n 	<li>Wages in respect of regular hours and overtime;</li>\r\n 	<li>Health and safety procedures;</li>\r\n 	<li>Employees’ duties and discipline rules;</li>\r\n 	<li>Annual and special leave entitlements; and</li>\r\n 	<li>Name and titles of applicable supervisors.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\">In addition, internal disciplinary rules or its amendments are to be approved by legal department at the Iraqi Labour Office. The later has to notify the employer within 30 days of approval request of its opinion or it will considered approved.</p>\r\n<p class=\"p1\">Moreover, the employer has to post the internal disciplinary rules onto its bulletin board after being approved and to keep it readable and on good condition.</p>\r\n<p class=\"p1\">The Labour Code provides that the employer may impose one of the following disciplinary sanctions within 15 days of identification of the employee’s act:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ul>\r\n 	<li>Written warning including implications of further sanctions should the conduct be repeated in the future;</li>\r\n 	<li>Three day suspension;</li>\r\n 	<li>To remove the employee for consideration for any pay increase for a period of no longer that 180 days;</li>\r\n 	<li>Downgrading his position level including his wage according to new demoted level; and</li>\r\n 	<li>Dismissal.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\">However, any of the above discipline sanctions have to be reasonable with reference to the conduct of the employee and the employer is unable to penalise an employee twice for the same infringement.</p>\r\n<p class=\"p1\">Furthermore, before imposing any disciplinary sanction, it is necessary that the employer carry out an investigation and consider the employee’s defence (if any) to the allegations in the presence of an employee representative (if any). and if penalty assigned in cash to be forward to employees social security department.</p>\r\n<p class=\"p1\">At noted, the Labour Code provides that dismissal is one of the available sanctions but that it can only be an outcome in the following situations:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ul>\r\n 	<li>If the employee has committed a serious error that caused a material damage to the employer.</li>\r\n 	<li>If the employee has disclosed one of the employer’s secrets.</li>\r\n 	<li>If the employee violates vocational health and safety instructions provided that employer in such case previously sent a written notice of a dismissal if such violation take place again.</li>\r\n 	<li>If the employee was found drunk, more than once, during work hours according to a medical report from a specialist and employee has been notified more than once regarding same violation.</li>\r\n 	<li>If the employee has committed a behavior that does not comply with work honour and ethics, provided that he has been notified before regarding same behaviour.</li>\r\n 	<li>If the employee has inflicted physical harm on the employer personally or upon a supervisor or colleague, whether or not at work.</li>\r\n 	<li>If an employee has been absent from work without justification for 10 consecutive days, or for 30 non-consecutive days in a given year.</li>\r\n 	<li>If the employee has committed, during work hours, a felony or an offence against one of his colleagues and was convicted with a clear-cut judgment for such felony or offence.</li>\r\n 	<li>If the employee was convicted to serve a one year prison sentence or more with a clear-cut judgment.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\">Furthermore, in terms of dismissal by reason of absence (item VII above) the employer has to warn the employee in writing after five consecutive days of absence or twenty non-consecutive days of absence from work without justification. If so, then the employer can dismiss the employee after a further five consecutive days of absence or after ten extra non-consecutive days of absence.</p>\r\n<p class=\"p1\">Accordingly, if the reason for dismissal is not stated in the Labour Code, the employer can only lawfully terminate any employee’s employment contract in circumstances where the employee has made an error which is repeated once or more provided that the employer has warned the employee about the implications of a committing such an error again. Furthermore, an employer can dismiss an employee by reason of his poor performance provided that it has provided him with sufficient instructions (in order to improve his performance) and a writing warning but where the employee has continued to underperform for thirty days from date of the warning notice. Once again, it is necessary that the employee be provided the right to be supported throughout the process by an employee representative or union or any other person he may chose to be his defendant against allegations regarding his behaviour or performance.</p>\r\n<p class=\"p1\">Court dealing with labour case disputing sanctions imposed by employer may reinstate dismissed employee and may ruling to compensate the same because of any sanction imposed by his employer when find it illegal according to Labour Code and taking on considerations Iraqi Civil Law No. 40 for the year 1951 and Retirement and social security law No. 39 of 1971, all that only if and if employee request compensation/reinstatement on his dispute.</p>\r\n<p class=\"p1\">The Labour Code considers the employee responsible before the employer in respect of any damages caused when an employee has acted in breach of his contractual obligations to the employer. However, the employer has to prove that damages were caused by reason of the breach for the Court to award any compensation to the employer. Further, any such breach requires to be intentional or by reason of gross negligence or as a result of serious error.</p>\r\n<p class=\"p1\">In conclusion, the Labour Code provides a welcome structure to govern the employment relationship in Iraqi and balances the employer and employee interests in a manner that was not evident in previous years. It remains to be seen whether the employment laws in Iraqi will continue to be developed in the future but the Labour Code is a promising starting point.</p>'),
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	(103445,5624,'content_description','The Iraqi Labour Code No. 37 of 2015 (the “Labour Code”) became applicable on 7 February 2016 and represents one of the most important Iraqi legislative introductions since Iraq became open to all foreign businesses post 2003.'),
	(103446,5624,'_content_description','field_59b641c07f473'),
	(103447,5624,'pageSummary','The Iraqi Labour Code No. 37 of 2015 (the “Labour Code”) became applicable on 7 February 2016 and represents one of the most important Iraqi legislative introductions since Iraq became open to all foreign businesses post 2003.'),
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	(103449,5624,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/march-10/discipline-dismissal-penalty-according-to-iraqi-labour-code.html'),
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	(103454,5624,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(103455,5624,'_yoast_wpseo_metadesc','The Iraqi Labour Code No. 37 of 2015 (the “Labour Code”) became applicable on 7 February 2016 and represents one of the most important Iraqi legislative introductions since Iraq became open to all foreign businesses post 2003.'),
	(103456,5625,'content','March 2017\r\n\r\n<hr />\r\n<p class=\"p1\">Financial derivatives also allow parties to take speculative positions in the market. There are many types of derivatives that parties may enter into, such as currency swaps, options, equity derivatives, credit derivatives, asset swaps, basis swaps and interest rate swaps. The term “derivative” is used to describe these classes of financial instruments due to their value being linked to an underlying bond, currency, stock, commodity, interest rate and even including weather data such as inches of rainfall. It is crucial to note that derivatives settle on a financial basis rather than a physical source. For instance, derivatives that are based on a particular commodity are generally settled by the payment by one party to the other and not by the physical delivery of the actual underlying commodity.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>ISDA Documentation</strong></span></p>\r\n<p class=\"p1\">The International Swaps and Derivatives Association (“ISDA”) provides the standard documentary formalities for swaps and derivatives. The use of the ISDA documentation in order to effectuate such derivative transactions is customary in Kuwait. ISDA documentation generally consists of the ISDA Master Agreement (the “Master Agreement”), the ISDA Schedule (the “Schedule”) and the ISDA Confirmation (the “Confirmation”). Credit support documentation may also be supplemented to these documents in the event that the counterparty is providing a collateral in order to mitigate the credit risk arising from the transaction. However, such credit support documents are not mandatory in order for an ISDA governed derivatives transaction to be completed.</p>\r\n<p class=\"p1\">The Master Agreement sets out the general terms of the transaction, essentially identifying and managing the obligations of the respective parties to the Master Agreement. The Agreement also lists in detail how the derivative transactions may be closed out upon the occurrence of certain events of default or otherwise labelled as the ‘termination events’. The Master Agreement does not contain any specific terms of the particular transaction; rather these terms are comprehensively scheduled in the confirmation document.</p>\r\n<p class=\"p1\">The Master Agreement is not commonly amended. Any amendments deemed necessary to ensure that the derivatives transactions governed by the particularised ISDA documentation meet the commercial and legal positions of the counterparties are made in the Schedule. The counterparties will decide what representations, threshold amounts, events of default and termination events, amongst any supplementary provisions, will apply and to which party. The Schedule is applicable to all of the transactions that take place under the Master Agreement. The negotiation of the Master Agreement provisions to be consolidated in the Schedule are largely determined in accordance with the relative strength of the concerned parties.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Kuwait Legal Issues</strong></span></p>\r\n<p class=\"p1\">As mentioned above, many parties in Kuwait, including foreign and local financial institutions as well as corporates, enter into derivative transactions by utilizing the aforementioned ISDA documentation. Consequently, there are many Kuwait specific issues that such parties must bear in mind upon entering into ISDA documentation with a Kuwaiti counterparty.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>a) Authority and Capacity</strong></span></p>\r\n<p class=\"p1\">Generally, under Kuwait law, the capacity of corporate bodies to enter into a particular transaction is connected to its objects which are set out in the subject company’s constitutional documents. The objects of a company determine the capacity of said company to enter into any particular transaction. Therefore, a counterparty cannot assume that a Kuwaiti counterparty’s entry into an ISDA transaction is in the ordinary course of its business. Consequently, a counterparty to an ISDA transaction dealing with a Kuwaiti counterparty should ensure that the Kuwaiti counterparty has either; explicit authority subject to its constitutional documents to enter into the ISDA transaction or has obtained the appropriate corporate authorisations that are required pursuant to the constitutional documentation in order to enter into the ISDA transaction (i.e. a partners’ resolution or shareholders’ resolution).</p>\r\n<p class=\"p1\"><span class=\"s2\"> Furthermore, with respect to the restrictions under the law, it is imperative to note that the Central Bank of Kuwait (the “CBK”) has advised local financial institutions that banks, investment companies and investment funds may not enter into derivative transactions unless it is for ‘hedging’ purposes. Conversely, we are unacquainted of any instances in which the CBK has prohibited a financial institution from entering into an ISDA governed derivatives transaction due to it being deemed as entering into the derivative transaction for speculative purposes. In the event that a Kuwaiti financial institution does intend to enter into an ISDA governed derivatives transaction for speculative purposes, such Kuwaiti financial institution should obtain the prior consent of the CBK. In the event that the CBK discovers any such derivatives transactions that have in fact been entered into for speculative purposes by the Kuwaiti financial institution, sanctions may well be imposed against the said institution.</span></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>b) Documentation Requirements</strong></span></p>\r\n<p class=\"p1\">Part 3(a) of the ISDA Schedule governs the documentation requirements for the counterparties to the Master Agreement. As aforementioned, parties negotiating an ISDA with a Kuwaiti counterparty should ensure that the Kuwaiti counterparty has either specific authority or capacity to enter into the ISDA transaction. Consequently, these documents should be requested from the Kuwaiti counterparty under Part 3(a) of the ISDA Schedule.</p>\r\n<p class=\"p1\">Moreover and depending on the legal form of the Kuwaiti counterparty, the respective parties are obliged to obtain the Kuwaiti counterparty’s Articles of Association/Memorandum of Association, certificates issued by the Ministry of Commerce and Industry as well as the company’s commercial license and commercial registration. In any case, Kuwait legal counsel should be retained for the purposes of providing a formal legal opinion on the Kuwaiti counterparty’s requisite authority and capacity to sign, deliver and perform its obligations under the Master Agreement.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>c) Netting &amp; Set-Off</strong></span></p>\r\n<p class=\"p1\">A significant feature of the ISDA Agreement is ‘close out netting’. Close out netting occurs between a defaulting and a non-defaulting party. Under the close out netting, upon a default or termination event taking place, all derivatives transactions may be closed out and the values calculated and netted off against each other thus providing a single amount to be payable. This is important because in the event of insolvency of either party, the insolvency administrator will be unable to handpick ISDA transactions; insist on the payment of any profitable ISDA transactions and refuse to do so on non-profitable ISDA transactions. The reason the close out netting mechanism is possible across all derivatives transactions taking place under an ISDA Agreement is due to the presence of the specific provisions in the Agreement that provide that the Master Agreement, the Schedule and the Confirmations comprise one consolidated contract and that a counterparty may terminate all transactions (either automatically or, depending upon the provision selected in the ISDA schedule, on notice) upon the event of insolvency proceedings being instituted against a party.</p>\r\n<p class=\"p1\">Although the legal concept of set-off, which is akin to the concept of close out netting in the ISDA Master Agreement, is recognized under Kuwait law, it is not clear that the netting provisions of the ISDA Agreement will be enforceable against a bankrupt Kuwaiti counterparty. It is very possible that a Kuwaiti bankruptcy court could set aside a termination and close out netting under an ISDA Agreement. As these issues have not been litigated in a Kuwaiti court and there are no clear laws regarding the same, it is difficult to predict how a Kuwaiti court will rule.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>d) Central Bank of Kuwait Issues</strong></span></p>\r\n<p class=\"p1\">Although there are no specific regulations or instructions regarding ISDA documentation, the CBK issued an instruction in 2006 whereby licensed Kuwaiti banks may enter into options, financial futures, interest rate futures and forward rate agreements both for hedging and trading purposes. However, as mentioned above, the CBK has advised local banks to not enter into derivative transactions for speculative purposes. Therefore, in the event that a party is negotiating an ISDA with a Kuwaiti financial institution, it may be advisable to include a representation and warranty by the financial institution that it is entering into the derivative transactions for hedging purposes and not for the purposes of speculation.</p>'),
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	(103474,5625,'_yoast_wpseo_metadesc','Financial instruments known as derivatives are widely used across the GCC and in the State of Kuwait. Derivatives are financial instruments that allow parties to hedge against adverse movements in exchange rates, interest rates or market prices.'),
	(103475,5626,'content','March 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\">The Executive Regulations regarding the implementation of the Expatriates’ Law have not yet been released, however, given that many employers in Qatar will have undergone their annual performance appraisal processes in recent months, it seems an appropriate time to review how the new Expatriates’ Law impacts the ability of employees in Qatar to change jobs.</span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Reliance on this article </strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">For the avoidance of any doubt, the opinions expressed in this article do not reflect the views of the Ministry of Administrative Development, Labour and Social Affairs (MADLSA) or the Ministry of Interior (MOI) in Qatar. However, this article is based not only on a reading of the Expatriates’ Law, but also on comments made by MADLSA officials at various presentations regarding the new Expatriates’ Law. The understanding as at the date of this article may be clarified further and/or be amended once the Executive Regulations are released. </span></p>\r\n<p class=\"p1\">Further, the matters contained in this article will not apply to employees working in the Qatar Financial Centre, which has its own (separate) laws regarding employment and immigration matters.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Bans prior to 13 December 2016</strong></span></p>\r\n<p class=\"p1\">Until 13 December 2016 (the date on which the Expatriates’ Law took effect), all transfers of employment in Qatar required a no objection certificate (NOC) from the outgoing employer. If the outgoing employer refused to provide a NOC, the employee was automatically banned from working for any other employer in Qatar for a period of two years.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>The new rules regarding bans</strong></span></p>\r\n<p class=\"p1\"><span class=\"s4\">Under the new Expatriates’ Law, the automatic ban has been softened. The ability of an employee to transfer his/her employment to another employer in Qatar (and the extent of any employment ban) will depend upon factors including the following matters:</span></p>\r\n\r\n<ul>\r\n 	<li>whether the employment contract is stated to be for a fixed term or for an indefinite period;</li>\r\n 	<li>whether the employment contract is terminated by the employer or the employee, or whether termination is due to a “change in circumstances” (discussed below);</li>\r\n 	<li>if the employment contract is terminated by the employer, whether termination is due to “gross misconduct” on the part of the employee;</li>\r\n 	<li>if the employment contract is terminated by the employee, whether this was due to the employer breaching a fundamental term of the employment contract;</li>\r\n 	<li>the length of the employee’s continuous service with his/her employer as at the date of termination;</li>\r\n 	<li>whether the employee is bound by any valid post-termination restrictive covenants (note that a non-compete provision must be reasonable, and should only restrain conduct to the extent necessary to protect the employer’s legitimate business and legal interests. It should therefore be limited in time/duration; place/geographical scope and nature/ business sought to be restricted); and</li>\r\n 	<li>whether there are any overriding “public interest” considerations relevant to the transfer.</li>\r\n</ul>\r\n<p class=\"p7\">In order to illustrate how these considerations impact whether or not an employee will be subject to an employment ban post termination, we have prepared the following summary (this summary is based on a reading of the Expatriates’ Law together with comments made by MADLSA officials regarding the application of the Expatriates’ Law):</p>\r\n\r\n<table class=\"t1\" cellspacing=\"0\" cellpadding=\"0\">\r\n<tbody>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p1\"><span class=\"s1\"><strong>Party Terminating</strong></span></p>\r\n</td>\r\n<td class=\"td2\" valign=\"middle\">\r\n<p class=\"p1\"><span class=\"s1\"><strong>Circumstances of termination</strong></span></p>\r\n</td>\r\n<td class=\"td3\" valign=\"middle\">\r\n<p class=\"p1\"><span class=\"s1\"><strong>Can employee transfer without a NOC and will any ban be imposed?</strong></span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p2\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">Employee</span></p>\r\n</td>\r\n<td class=\"td2\" valign=\"top\">\r\n<p class=\"p2\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">Employee is employed on a <strong>fixed term contract</strong>, employee resigns (without fault of the employer).</span></p>\r\n</td>\r\n<td class=\"td3\" valign=\"top\">\r\n<p class=\"p4\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">If the employee is employed on a fixed-term employment contract:</span></p>\r\n<p class=\"p5\"><span class=\"s2\">for the duration of the agreed fixed term, the employee will continue to require a NOC in order to transfer his employment; however </span></p>\r\n<p class=\"p6\"><span class=\"s2\">once the agreed fixed term expires, with effect from 13 December 2016, the employee may transfer to another employer in Qatar without having to obtain a NOC from his former employer (the employee still needs to notify his former employer and abide by any minimum notice provisions). We understand that the Expatriates’ Law applies with retrospective effect, therefore, the original date of employment will apply (i.e. the term does not restart on 13 December 2016).</span></p>\r\n<p class=\"p7\"><span class=\"s2\">In situation (a) above, if the former employer refuses to provide the NOC, we understand that the employee will be unable to work for another employer in Qatar until the expiry of the fixed term agreed with his/her original employer. The only exception to this is where it would be in the public interest to allow the individual to transfer without having to wait (in which case the authorities have the power to approve the transfer). What is meant by “public interest” in this context remains to be seen, and is perhaps a matter that will be discussed further in the Executive Regulations. </span></p>\r\n<p class=\"p8\"><span class=\"s2\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p2\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">Employee</span></p>\r\n</td>\r\n<td class=\"td2\" valign=\"top\">\r\n<p class=\"p2\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">Employee is employed on an <strong>open/indefinite</strong> term contract, employee resigns (without fault of the employer).</span></p>\r\n</td>\r\n<td class=\"td3\" valign=\"top\">\r\n<p class=\"p4\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">If the employee is employed on an unlimited contract, then:</span></p>\r\n<p class=\"p5\"><span class=\"s2\">if the employee has less than five years’ continuous service with his/her former employer as at the date of termination, the employee will continue to require a NOC in order to transfer his/her employment; however </span></p>\r\n<p class=\"p6\"><span class=\"s2\">if the employee has more than five years’ continuous service with his former employer as at the date of termination, with effect from 13 December 2016, the employee will be able to transfer his/her employment to a new employer in Qatar without having to obtain a NOC from his/her former employer (the employee still needs to notify his/her former employer and abide by any minimum notice provisions). We understand that the Expatriates’ Law applies with retrospective effect, therefore, the original date of employment will apply for the purposes of calculating the five years’ continuous service period (i.e. continuous service does not restart on 13 December 2016, the date on which the Expatriates’ Law took effect). </span></p>\r\n<p class=\"p7\"><span class=\"s2\">In situation (a) above, if the former employer refuses to provide the NOC, we understand that the employee will be unable to work for another employer in Qatar until the date on which the employee would have completed five years’ continuous service with his original employer. The only exception to this is where it would be in the public interest to allow the individual to transfer without having to wait (in which case the authorities have the power to approve the transfer). What is meant by “public interest” in this context remains to be seen, and is perhaps a matter that will be discussed further in the Executive Regulations.</span></p>\r\n<p class=\"p8\"><span class=\"s2\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p2\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">Employee</span></p>\r\n</td>\r\n<td class=\"td2\" valign=\"top\">\r\n<p class=\"p2\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">Employee resigns due to his employer <strong>breaching a fundamental term</strong> of the employment contract (i.e. employer fault).</span></p>\r\n</td>\r\n<td class=\"td3\" valign=\"top\">\r\n<p class=\"p4\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">If the employee resigns (either part way through his/her fixed term contract, or before five years’ continuous service in the case of an indefinite contract), then where the resignation is due to the employer breaching a fundamental term of the employment contract (which must be proven), the employee will be permitted to transfer his/her employment without the need for a NOC from his/her former employer. The employee must lodge a complaint and the employer’s breach must be proven before the transfer will be approved. </span></p>\r\n<p class=\"p7\"><span class=\"s2\">The Expatriates’ Law does not state what type of breach would be sufficient to prove that it was a fundamental breach, however, under the Qatari Labour Law (Law No. 14 of 2004, as amended from time to time), an employee has the right to resign with immediate effect and remain entitled to end of service gratuity (if applicable) in the following cases: </span></p>\r\n<p class=\"p9\"><span class=\"s2\">if the employer commits a breach of its obligations under the employment contract or the provisions of the Labour Law;</span></p>\r\n<p class=\"p10\"><span class=\"s2\">if the employer or its responsible manager commits a physical assault or immoral act upon the employee or any of his/her family members;</span></p>\r\n<p class=\"p10\"><span class=\"s2\">if the employer or its representative has misled the employee at any time in relation to the entering into of the employment contract and/or as to the terms and conditions of the work; and/or</span></p>\r\n<p class=\"p10\"><span class=\"s2\">if continuance with the work endangers the safety and health of the employee provided that the employer is aware of the danger and does not take the necessary steps to remove it.</span></p>\r\n<p class=\"p7\"><span class=\"s2\">The above scenarios (under the Labour Law) may provide some guidance regarding the seriousness of the breach required under the Expatriates’ Law in order to prove that the employer has breached a fundamental term of the employment contract, however, this is perhaps a matter that will be clarified by the Executive Regulations.</span></p>\r\n<p class=\"p8\"><span class=\"s2\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p2\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">Employer</span></p>\r\n</td>\r\n<td class=\"td2\" valign=\"top\">\r\n<p class=\"p2\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">Dismissal for gross misconduct (i.e. for one of the reasons set out in Article 61 of the Labour Law).</span></p>\r\n</td>\r\n<td class=\"td3\" valign=\"top\">\r\n<p class=\"p4\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">If the employee is guilty of gross misconduct and is summarily dismissed by his/her employer, the employee will not be able to transfer his/her employment to any other employer in Qatar. In fact, in accordance with Article 26 of the Expatriates’ Law, the individual will be banned from returning to Qatar for a period of four years.</span></p>\r\n<p class=\"p11\"><span class=\"s2\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p2\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">Employer</span></p>\r\n</td>\r\n<td class=\"td2\" valign=\"top\">\r\n<p class=\"p2\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">Dismissal for any reason other than gross misconduct (e.g. redundancy, poor performance etc).</span></p>\r\n</td>\r\n<td class=\"td3\" valign=\"top\">\r\n<p class=\"p4\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">We understand that where the employer is the party terminating the employment contract, and termination is not due to gross misconduct on the part of the employee, the employee may transfer his/her employment to a new employer in Qatar without the need for a NOC from his former employer. It seems that when the employer is the party terminating the employment, the employee is free to seek suitable alternative employment, however, this matter is not expressly contained in the Expatriates’ Law and the exact position cannot be confirmed until the Executive Regulations are released. </span></p>\r\n<p class=\"p7\"><span class=\"s2\">Relevantly, if the employee has agreed to be bound by a non-compete provision, then provided that the restraint is reasonable (as outlined above) and enforceable, the employer may rely on the provision to prevent the transfer of the employee’s employment to a competitor in Qatar. The mere existence of the restraint will not act as a blanket ban, rather the onus will be on the employer to prove that the new employer is a competing entity, and that the role that the employee would be performing would amount to a breach of the restraint agreed between the original employer and the outgoing employee.</span></p>\r\n<p class=\"p8\"><span class=\"s2\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p12\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">Change of circumstances</span></p>\r\n</td>\r\n<td class=\"td2\" valign=\"top\">\r\n<p class=\"p12\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">Death of employer (if employer is an individual) or company ceases to exist (if employer is a corporate entity)</span></p>\r\n</td>\r\n<td class=\"td2\" valign=\"top\">\r\n<p class=\"p13\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\">If:</span></p>\r\n<p class=\"p14\"><span class=\"s2\">the employer is an individual and the employer dies; or</span></p>\r\n<p class=\"p14\"><span class=\"s2\">if employer is a corporate entity and the company ceases to exist,</span></p>\r\n<p class=\"p7\"><span class=\"s2\">the employee’s employment will terminate due to a “change of circumstances” and the employee may transfer to a new employer in Qatar without the need for a NOC from his former employer.</span></p>\r\n<p class=\"p8\"><span class=\"s2\"> </span></p>\r\n</td>\r\n</tr>\r\n</tbody>\r\n</table>\r\n<p class=\"p1\">In all cases, the employee will still require the usual approvals (namely approval from the MOI and the MADLSA) and will need to provide the usual documentation (such as a police clearance certificate) in order for the transfer to take place.</p>\r\n<p class=\"p1\">A special committee, namely the Expatriates’ Exit Grievances Committee, has been established to hear disputes in relation to the Expatriates’ Law, including disputes regarding requests to transfer employment. The committee comprises members from the MOI, the MADLSA and the National Human Rights Committee.</p>\r\n<p class=\"p2\"><strong>Practical considerations for employers</strong></p>\r\n<p class=\"p1\">Due to the automatic employment bans that applied in Qatar prior to 13 December 2016, in practice, employers did not need to rely on contractual non-compete provisions to prevent an employee from working for a competitor. The previous law (Law No. 4 of 2009 as amended from time to time) acted as an automatic bar to any such competitive activity post termination. In the light of the changes introduced on 13 December 2016, employers should review any post termination restrictions contained in the employment agreements for its key personnel and also consider whether the legitimate interests of their business would be sufficiently protected in the event that a key employee sought to transfer his/her employment under the new rules.</p>\r\n<p class=\"p1\">Once the changes introduced under the Expatriates’ Law become clearer and also more widely understood, we are likely to see employees in Qatar gaining more leverage in terms of their ability to change employers. Undoubtedly, attracting and retaining good employees is a key consideration for any business in any region. However, until recently, employers in Qatar have largely been able to rely on the local laws (and the built in employment ban) to retain key employees. Going forward, given that there is no ready supply of candidates in the market (because employees may only work in the country if they are validly sponsored to do so), employers in Qatar will need to consider practical ways to incentivise employees to stay, particularly key employees, including for example through the use of long term incentive plans. We will continue to closely monitor the position and will provide an update upon issuance of the Executive Regulations and/or any substantive change in approach by MADLSA or the MOI.</p>\r\n<p class=\"p1\"><em>As the largest dedicated specialised employment law team in the Middle East, Al Tamimi &amp; Company’s Employment team regularly advises employers on contentious and non-contentious employment law issues. For further information in respect of Qatari employment law considerations please contact Kamaljit Dosanjh (k.dosanjh@tamimi.com).</em></p>'),
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	(103481,5626,'pageSummary','It has been just over three months since Qatar’s new sponsorship law, Law No. 21 of 2015, regulating the entry, exit and residence of expatriates in Qatar as amended (the Expatriates’ Law) took effect.'),
	(103482,5626,'_pageSummary','field_59e59b307dec8'),
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	(103504,5629,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\">The Court found that a party could raise a claim against the imposition of compound interests even after settlement of the bank loan because imposition of compound interests is a violation of public policy. Al Tamimi represented the successful claimant.</p>\r\n<p class=\"p2\"><strong>Background</strong></p>\r\n<p class=\"p2\">The claimant is a businessman who had applied for bank facilities by way of loans from one of the UAE’s largest banks in order to finance his projects.</p>\r\n<p class=\"p1\">The bank offered banking facilities with interest rates that the bank said compared competitively to those offered by other banks in the UAE.</p>\r\n<p class=\"p1\">The claimant accepted the bank’s offer, believing that the proffered interest rate was the best he could get from any bank in the UAE, and he signed four facility agreements with the bank.</p>\r\n<p class=\"p1\">The claimant noticed that, even though he was paying the loan installments regularly, the bank was calculating compound interest rates and additional fees that were not agreed between the parties in the signed agreements. The additional payments presented an onerous burden on the claimant and his business.</p>\r\n<p class=\"p1\">The claimant therefore notified the bank that the compound interest rates they calculated were illegal and exceeded those normally applied by the banking industry, and that the additional rates contravened the terms of the signed agreements. The claimant was forced by the onerous interest rates to approach another bank and obtain another loan with a simple interest rate in order to close his loan accounts with the defendant bank and stop the calculation of the compound interests and additional fees.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>The claim</strong></span></p>\r\n<p class=\"p1\">The claimant subsequently filed a case before the Sharjah courts requesting the appointment of a banking expert who could review the facility agreements and the methods employed by the bank to calculate the interests.</p>\r\n<p class=\"p1\">The expert was duly appointed and, after considering the documentation, he reported that the bank had calculated compound interests and additional fees amount of almost AED 10.5m.</p>\r\n<p class=\"p1\">In its defence, the bank said that the claimant had accepted the additional interest calculations and had assumed an obligation to pay them. It said that this meant the claimant had no right to bring any claim after settling all loan installments and issuance of the clearance letter. Any dispute should have been raised prior to settlement of instalments and issuance of the clearance letter.</p>\r\n<p class=\"p1\">In reply, the claimant argued that compound interest rates are prohibited by Sharia and violate the public policy, and as long as there is a violation of the public policy he had the right to sue the bank even after full settlement of the loan, especially that he had had no choice but to make an early settlement in order to stop the compound interest from accruing.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Court of First Instance </strong></span></p>\r\n<p class=\"p1\">On 27 September 2016, Sharjah first instance court issued its judgment and ordered the bank to pay to the claimant the full sum, as assessed by the banking expert, of almost AED 10.5m, plus interest of 5% per annum from the date on which the claim was raised. The court based its judgment on the prohibition on compound interests found in Sharia law and the violation of public policy that the interest rate represented.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Court of Appeal</strong></span></p>\r\n<p class=\"p1\">Both parties filed appeals and on 22 February 2017, the Court of Appeal issued its judgment upholding the decision of the First Instance Court and confirming that the bank had no right to calculate compound interest rates. The Court of Appeal also agreed that, as a matter of public policy, the claimant had the right to sue the bank in respect of the compound interest rates even after settlement of full loan, because they are prohibited by Sharia.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Analysis</strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">Usually the UAE Courts will not allow a party to resile from the terms of an agreement it has voluntarily entered into. However on this occasion the Court of Appeal has allowed it because the compound interest is prohibited by Shariaa and violates the public policy and the banks should not apply it. </span></p>\r\n<p class=\"p1\">This judgment is not final and may be subject to review by the Court of Cassation. However it nonetheless indicates a willingness by the courts to review the agreements and dis-apply them should they contravene the public policy.</p>\r\n<p class=\"p1\"><em>For further information on this dispute or any of the grounds / merits of this case or judgments, please contact Ahmed El Shaer (Senior Associate / Litigation department – Sharjah)</em></p>'),
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	(103507,5629,'_lawUpdateArticleMonth','field_59da2a396b063'),
	(103508,5629,'content_description','A recent decision by the Sharjah Court of Appeal ( in appeal no 1081/2016 by the claimant “Our client” and appeal no 1073/2016 by the defendant bank) has broken the common rule that the court will not reopen matters related to compound interests after settlement of the bank loan and closure of account by the customer and issuance of clearance letter by the bank. '),
	(103509,5629,'_content_description','field_59b641c07f473'),
	(103510,5629,'pageSummary','A recent decision by the Sharjah Court of Appeal ( in appeal no 1081/2016 by the claimant “Our client” and appeal no 1073/2016 by the defendant bank) has broken the common rule that the court will not reopen matters related to compound interests after settlement of the bank loan and closure of account by the customer and issuance of clearance letter by the bank.'),
	(103511,5629,'_pageSummary','field_59e59b307dec8'),
	(103512,5629,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/april-10/sharjah-court-of-appeal-orders-repayment-of-compound-interest-even-after-settlement.html'),
	(103513,5629,'_currentURL','field_59d35123ab1e7'),
	(103514,5629,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Ahmed El Sha\'er'),
	(103515,5629,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(103516,5629,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','a.elshaer@tamimi.com'),
	(103517,5629,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','field_59e59afcd15de'),
	(103518,5629,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','Sharjah, UAE'),
	(103519,5629,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
	(103520,5629,'lawUpdateArticleNoWriters','1'),
	(103521,5629,'_lawUpdateArticleNoWriters','field_59e59aaed15dc'),
	(103522,5629,'_yoast_wpseo_metadesc','The Court found that a party could raise a claim against the imposition of compound interests even after settlement of the bank loan because imposition of compound interests is a violation of public policy. Al Tamimi represented the successful claimant.'),
	(218957,7662,'_yoast_wpseo_focuskeywords','[]'),
	(103523,5630,'content','<p class=\"p1\"><strong>The Facts </strong></p>\r\n<p class=\"p2\">The Seller had purchased a substantial number of plots in a development through financing from a Bank. All the plots were subject to the Bank’s mortgage.</p>\r\n<p class=\"p1\"><span class=\"s2\"> Subsequently, the Seller sold 20 plots to the Purchaser whilst the mortgage remained on the land. </span></p>\r\n<p class=\"p1\">The Purchaser fell behind on his payments to the Seller after cheques amounting over AED 120 million were dishonoured. The Seller filed a criminal complaint against the Purchaser.</p>\r\n<p class=\"p1\"><span class=\"s2\"> The Purchaser denied the charges on the basis that the Seller had defrauded him by selling property that was mortgaged, a fact the Seller had failed to disclose to him as alleged by him. He sought to be acquitted of the crime of dishonoured cheques. Al Tamimi represented the Seller in this case. </span></p>\r\n<p class=\"p2\"><strong>Court of First Instance</strong></p>\r\n<p class=\"p2\">The Court sentenced the Purchaser on the basis of the dishonoured cheques.</p>\r\n<p class=\"p2\"><strong>Court of Appeal</strong></p>\r\n<p class=\"p2\">The Purchaser appealed to the Court of Appeal.</p>\r\n<p class=\"p1\">The Court of Appeal acquitted the Purchaser on the basis that the Seller had obtained the cheques fraudulently because of the non-disclosure of the mortgages. The Court of Appeal had erroneously applied Law 14 of 2008 because they had relied on Article 10 of Law 14 of 2008 which obliged the Seller to get the consent of the mortgagee to sell the mortgaged property.</p>\r\n<p class=\"p2\"><strong>Court of Cassation</strong></p>\r\n<p class=\"p2\">The Seller appealed the decision before the Court of Cassation and encouraged the Public Prosecutor to appeal. The Public Prosecutor accepted the application and appealed based on the following grounds:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ul>\r\n 	<li>The Court of Appeal applied and based its decision on Article 10 of Law No. 14 of 2008 (Dubai Mortgage Law) which provides that “<em>The Mortgagor shall not sell, gift or otherwise dispose of the Mortgaged Property Unit or Property or create any right in rem or personal right over the Mortgaged Property Unit or Property without the approval of the Mortgagee and subject to the assignee agreeing to take over the obligations of the Mortgagor under the mortgage contract…</em>”. However Law No. 14 was not applicable in this case and could not be applied retrospectively since the sale of the plots of land was executed before Law 14 of 2008 was issued.</li>\r\n 	<li>In relation to the issue of the applicable law, it was argued that the Court should differentiate between the provisions that govern mortgage contracts in Dubai under the new Law No. 14 of 2008 and the provisions under the UAE Civil Code which also deals with mortgage contracts. Under the Civil Code, consent from the bank/mortgagee is not required and the purchaser does not need to be notified of the existence of the mortgage (Article 1412 of the UAE Civil Code) provided that this does not affect the mortgagee’s rights.</li>\r\n 	<li>It is common practice in Dubai for developers to mortgage plots prior to the commencement of a project and sell off-plan units to end users. The Appeal Court’s decision could lead to the invalidity of most sales in Dubai.</li>\r\n 	<li>The validity or otherwise of the sale and purchase agreement had no bearing on the offence of giving a cheque in bad faith.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p2\"><strong>The Court of Cassation’s Findings</strong></p>\r\n<p class=\"p2\"><em>Disposing mortgaged property</em></p>\r\n<p class=\"p2\">The Court of Cassation rejected the Purchaser’s argument pertaining to the failure to disclose to the Purchaser that the land sold was actually mortgaged and could not be disposed of by the Seller. The Court of Cassation accepted the counter-argument that the sale and purchase agreement had no bearing on the offence of giving a cheque in bad faith.</p>\r\n<p class=\"p1\">The Court of Cassation also accepted the argument that the transaction between the parties and receipt of the cheques occurred before the Dubai Mortgage law (14 of 2008) came into force. The Court held that a law takes effect upon its issuance by the relevant authority which is evidenced by publication in the Official Gazette (which is when it becomes public knowledge).</p>\r\n<p class=\"p1\">Law No. 14 of 2008 was issued on 14 August 2008. The law came into force 60 days from the date of publication. Accordingly, the provisions of Law 14 of 2008 should not have been applied to this case, as the transaction took place on 22 April 2008. In relying, amongst other things, upon the provisions of that law, the Court of Appeal erred and its decision should be overturned. Instead, the Civil Code was to be applied, specifically Article 1412 of the Civil Code which states:</p>\r\n<p class=\"p1\">“<em>The mortgagor may dispose of his property, which is pledged by way of security without the same affecting the rights of the mortgagee</em>.”</p>\r\n<p class=\"p1\">Under this article there is no requirement for the mortgagor to obtain the mortgagee’s consent prior to disposing the property.</p>\r\n<p class=\"p1\">The Court of Cassation also confirmed that a person who owns mortgaged property has the right to dispose of the property to which he still holds title. Selling the property or obtaining additional mortgages would not constitute fraud within the meaning of Article 399 of the Penal Code. Exercising a right of ownership does not attract any criminal liability or entail deception.</p>\r\n<p class=\"p1\"><span class=\"s4\"> Finally, the Court of Cassation held that the defence of non-responsibility does not arise if a cheque is issued in connection with a legitimate transaction, regardless of the extent of the defect marring the contract. Article 401 of the Penal Code would only apply if a cheque is issued in connection with any of the property-theft crimes listed in the provision.</span></p>\r\n<p class=\"p2\"><strong>Conclusion</strong></p>\r\n<p class=\"p2\">The Court of Cassation decided to issue its judgment on the merits from the first appeal without returning the case back to the Court of Appeal. The application of Law 14 of 2008 was disregarded and the Court of Cassation applied UAE Civil Code (Article 1412) which does not require the mortgagee’s consent for the owner to sell his mortgaged property.</p>\r\n<p class=\"p1\">This case is important because it confirms that Law No. 14 of 2008 (Dubai Mortgage Law) does not apply retrospectively. If the court had held otherwise then this may have invalidated a number of sales contracts in Dubai. The market can however now take confidence that agreements made before the introduction of law No. 14 of 2008 are still valid and enforceable.</p>\r\n<p class=\"p1\">Sellers of property, however, must now ensure they obtain the consent of both the purchaser and the mortgagee when selling mortgaged property. If consent is not obtained, the courts may consider this as a violation of Article 10 of Law 14 of 2008 and the contract deemed void.</p>'),
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	(103527,5630,'content_description','In Dubai criminal case 124 of 2012, the Dubai Court of Cassation made an important ruling regarding the selling of mortgaged property and the application of the 2008 Dubai mortgage law (Law No. 14 of 2008). '),
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	(103529,5630,'pageSummary','In Dubai criminal case 124 of 2012, the Dubai Court of Cassation made an important ruling regarding the selling of mortgaged property and the application of the 2008 Dubai mortgage law (Law No. 14 of 2008). '),
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	(103532,5630,'_currentURL','field_59d35123ab1e7'),
	(103533,5630,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Naeif Yahia'),
	(103534,5630,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(103535,5630,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','n.yahia@tamimi.com'),
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	(103537,5630,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','Dubai, UAE'),
	(103538,5630,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
	(103539,5630,'lawUpdateArticleNoWriters_1_lawUpdateAuthorName','Zane Anani'),
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	(103541,5630,'lawUpdateArticleNoWriters_1_lawUpdateAuthorEmail','z.anani@tamimi.com'),
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	(103543,5630,'lawUpdateArticleNoWriters_1_lawUpdateAuthorLocation','Dubai, UAE'),
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	(103547,5630,'_yoast_wpseo_metadesc','In Dubai criminal case 124 of 2012, the Dubai Court of Cassation made an important ruling regarding the selling of mortgaged property and the application of the 2008 Dubai mortgage law (Law No. 14 of 2008).'),
	(103548,5631,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\">Software escrow might be requested by a licensee as a means to mitigate its risk during the period the critical business software is being developed for the licensee and the period during which the licensee requires the use of the business critical software. Generally, under a software escrow arrangement, the escrow agent is required to release the software source code to the licensee in specific scenarios (e.g. if the licensor files for bankruptcy). Access to the source code and associated documentation allows the licensee (through its programmers) to maintain the software, modify it (for example, to fix bugs or errors) or to enhance it (for example by building new functionality).</span></p>\r\n<p class=\"p2\"><strong>Considering software escrow</strong></p>\r\n<p class=\"p2\">Software escrow is a useful means of minimising the risk of using third party supplied business critical software. It is an essential part of business continuity and disaster recovery planning. It serves to secure the storage of business critical source code and provides protection whilst the software is being developed, and for as long as the software is in use by the customer in the operation of its business.</p>\r\n<p class=\"p1\">Software escrow should always be considered by the licensee of any third party software, particularly custom developed business critical software. Some factors to take into account as a licensee when deciding whether to request the licensor to place the software in escrow, include:</p>\r\n\r\n<ul>\r\n 	<li>the importance of the software in the operation of the business;</li>\r\n 	<li>the potential impact to the business and customers (such as financial or reputational loss) in the event the software is corrupted or otherwise ceases to function as intended;</li>\r\n 	<li>whether the software is difficult or costly to replace if the solution is no longer supported by the vendor (whether due to insolvency or otherwise); and</li>\r\n 	<li>the organisation’s corporate risk management strategy.</li>\r\n</ul>\r\n<p class=\"p2\"><strong>Software escrow agreement</strong></p>\r\n<p class=\"p2\">A software escrow agreement is typically a three party contract that governs the procedures and terms of the escrow process between the licensor, licensee, and escrow agent. The agreement normally outlines the procedures for the deposit of the source code and handling of the source code by the licensor and escrow agent, including what will be deposited (updates, customisations, etc.), how often the deposits are to occur, how the escrow agent is to receive the source code, and where and how it is to be stored.</p>\r\n<p class=\"p1\"><span class=\"s4\"> The most heavily negotiated provisions in a software escrow agreement are those relating to the events that trigger the release of the source code. In essence, the aim is to ensure that the customer is able to obtain access to the software in the event the licensor is unable to continue maintaining and supporting the software. The trigger events are negotiable and typically include: </span></p>\r\n\r\n<ul>\r\n 	<li>bankruptcy of the licensor;</li>\r\n 	<li>the discontinuance by the licensor of its business;</li>\r\n 	<li>the dismissal of substantially all of the employees of the licensor / service provider, or the employees that develop and/or provide maintenance for the licensed software;</li>\r\n 	<li>failure by the licensor to comply with the licensing agreement (such as failing to provide required support services);</li>\r\n 	<li>the discontinuation of support by the licensor for the type or version of software licensed to the licensee; and</li>\r\n 	<li>the occurrence of a change in control event in relation to the licensor / service provider.</li>\r\n</ul>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Software escrow and the cloud</strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">Under a traditional software escrow arrangement, if the supplier were to become bankrupt, for example, the customer might be able to access the source code and hand it over to a new service provider for the purposes of maintaining the software so that the customer could continue to utilise the software</span></p>\r\n<p class=\"p1\">A software escrow arrangement in the context of a cloud offering is slightly more complicated. Firstly, the supplier may not want to enter into escrow arrangements with all of its customers (particularly those who are paying bargain prices). Secondly, if the parties were to opt for a public cloud SaaS offering, then it is very likely that a standard version of the software will be offered to all customers. Even if the software were to be bespoke, due to the very nature of cloud services there is likely to be very little software installed on the customer’s equipment to begin with as the software would be accessed via a web browser. Finally, if the source code were to be made available to the customer, on its own, it would not be sufficient to allow for continuation of the SaaS. At a minimum, access to the following would also be required to ensure continuation of service:</p>\r\n\r\n<ul>\r\n 	<li>documentation in relation to the source code and access to critical systems and portals;</li>\r\n 	<li>information regarding network configuration and topology; and</li>\r\n 	<li>knowledge of administrative processes and procedures.</li>\r\n</ul>\r\n<p class=\"p1\">The good news is that cloud software suppliers are becoming more open to entering into escrow agreements in order to reassure customers of the vendor’s commitment to best practice around service continuity. Separately, an increase in the use of the cloud is resulting in an evolution in escrow services where the parameters of escrow services are changing to account for SaaS offerings. Escrow is increasingly being used to provide continuity for SaaS; however, it must be carried out properly. An effective cloud escrow service would, for example, provide for verification and integrity tests on each deposit to ensure it is accessible, virus free, and consists of the correct type of material, insists upon regular deposits of code as the supplier updates and maintains the software, and generally ensures that the service delivered is tailored to the cloud’s peculiarities and is as watertight as possible.</p>\r\n<p class=\"p1\"><em>Al-Tamimi &amp; Company’s Technology, Media &amp; Telecommunications team regularly advises on technology related issues including software escrow. For further information please contact Sana Saleem (s.saleem@tamimi.com) or Nick O’Connell (n.oconnell@tamimi.com). </em></p>'),
	(154991,5631,'core_values',''),
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	(103549,5631,'_content','field_59b649b5c8b2b'),
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	(103552,5631,'content_description','Software escrow generally refers to the arrangement whereby the source code of software (and associated explanatory notes and instructions) owned by a vendor is deposited with a trusted, independent third party (known as an ‘escrow agent’) for the benefit of a customer who has rights to use the software. '),
	(103553,5631,'_content_description','field_59b641c07f473'),
	(103554,5631,'pageSummary','Software escrow generally refers to the arrangement whereby the source code of software (and associated explanatory notes and instructions) owned by a vendor is deposited with a trusted, independent third party (known as an ‘escrow agent’) for the benefit of a customer who has rights to use the software.'),
	(103555,5631,'_pageSummary','field_59e59b307dec8'),
	(103556,5631,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/april-10/software-escrow-protecting-business-critical-software-in-the-middle-east.html'),
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	(103562,5631,'_yoast_wpseo_metadesc','Software escrow might be requested by a licensee as a means to mitigate its risk during the period the critical business software is being developed for the licensee and the period during which the licensee requires the use of the business critical software.'),
	(211184,5630,'_edit_last','1'),
	(103563,5632,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\">Reflecting the global trend, there is a lot of buzz around influencers in the UAE right now. Many regional and international influencers are rapidly achieving a significant presence and following within the UAE. Whether it is food, fashion, lifestyle, makeup, or any other consumer product, the UAE public is increasingly plugging into social media to stay on top of ‘what’s hot’.</p>\r\n<p class=\"p1\">With the announcement late last year that Dubai will be launching a new club for social media influencers, and with some local influencers now reportedly earning up to USD 5,000 per post, social media influencers are transforming the branding, advertising, and content creation industry in the UAE and across the globe. Businesses have realised the great potential that influencers have to generate brand awareness and popularity, and are increasingly moving to include influencers within their marketing budgets.</p>\r\n<p class=\"p1\">As the influencer movement has happened so quickly, there is no unified global approach in regards to the specific legal nuances of being an influencer or a sponsor in this context. However, it is clear that failing to address the relevant legal considerations can have detrimental impacts for both influencers and sponsors seeking their services, both in terms of brand management and growth.</p>\r\n<p class=\"p2\"><span class=\"s1\"><strong>Set-up</strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">Influencers, whether they know it or not, are actually running a business. That means that, according to the laws of the UAE, they would require a trade licence. In general terms, a supplier should not be invoicing for any services in the UAE without an appropriate trade licence. If an influencer is charging ‘per instagram post’, for example, they will need to enter into a contract and then invoice for their services. This should be done through a UAE licensed company, as opposed to in a personal capacity. Whilst this might seem problematic for the influencer, it should be noted that this also assists influencers in managing their own legal liability and, if needed, take court action against a sponsor if they are not paid. </span></p>\r\n<p class=\"p1\"><span class=\"s2\"> While this may not have been strictly enforced up until now, it is likely that, as the use of influencers grows and becomes more prominent, it will become increasingly important for an influencer to have the appropriate corporate structure in place. In addition, any sponsor that is securing the services of an influencer needs to be sure that they are able to enter into an enforceable contractual relationship with the influencer.</span></p>\r\n<p class=\"p2\"><span class=\"s1\"><strong>‘Scope’ it Out</strong></span></p>\r\n<p class=\"p1\">It has been common for sponsors to have a very informal arrangement with influencers in this region. However, this is not in line with international best practice. Internationally, sponsors not only have contractual relationships with their influencers, but also enforce stringent terms of behaviour that apply to the material that is created by the influencer.</p>\r\n<p class=\"p1\">When entering into such agreements, it is very important that influencers and sponsors define the scope of work very clearly. Having unclear terms will inevitably lead to disagreement between the parties regarding their disparate expectations. This may not only result in the influencer’s obligations being stretched far beyond what they understood to be required but can lead to a breakdown in the relationship. Leaving terms, such as the number of posts, as undefined or ‘to be agreed’ is certainly a pathway to such a result. These terms, such as USD$1,000 for 1 post per month for three months, should be set out clearly and in writing.</p>\r\n<p class=\"p1\">Some key questions to consider when finalising the contract are:</p>\r\n\r\n<ul>\r\n 	<li>What content is to be included?</li>\r\n 	<li>What is the term of the agreement – how many posts, what frequency, and in what time period?</li>\r\n 	<li>Who gets to choose the style/vibe of the post, i.e. who has the creative control?</li>\r\n 	<li>Will any posts make it clear that they are sponsored, such as using #sponsored or #ad ?</li>\r\n 	<li>What hashtags are required?</li>\r\n 	<li>What analytics are to be provided to each party?</li>\r\n 	<li>Are there to be any approval processes involved prior to posting?</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p2\"><span class=\"s1\"><strong>Disclose</strong></span></p>\r\n<p class=\"p1\">One of the key differences with a sponsor using an influencer to promote a product, instead of a more traditional form of paid advertising, is that the audience does not necessarily know whether an influencer is expressing a genuine opinion or if it is a sponsored post. This point has been the subject of much discussion on a global scale. Different countries have put in place laws and policies to regulate this matter. In the USA, there have been some high profile cases in which the Federal Trade Commission (‘FTC’) has emphasised the requirement for companies to be transparent about what are sponsored posts versus organic posts. In such a case, when a business has sponsored or paid an influencer to create certain content or endorse a product, this needs to be clear to consumers. Failure to do so has been deemed as deceptive marketing conduct. The FTC has also released a policy for the way in which an influencer relationship should operate, which is very prescriptive.</p>\r\n<p class=\"p1\">While the UAE does not currently have express laws in place concerning this matter, we note that Federal National Media Council Resolution 35 of 2012, the National Media Council (‘NMC’) Resolution on Advertising Standards, does include the following:</p>\r\n<p class=\"p6\">‘The advertising identity shall be clearly determined, and it shall appear as unique and separate from other editorial or media material, and there shall be limits separating the advertisement from any other material in addition to time lapses in case of radio or television broadcasting.’</p>\r\n<p class=\"p7\"><span class=\"s3\"> This law is not ambiguous in its requirement that editorial content be separated from advertising content. However, it is not clear whether the NMC would consider the insertion of, for example, one unidentified advertisement into a feed of editorial content as being an infringement of this regulation. It may still be considered to be ‘unique and separated’, notwithstanding that it is not marked as advertising. However, even if it is considered to be unique and separate, it is likely that the advertiser will not be ‘clearly determined’.</span></p>\r\n<p class=\"p1\">As we have not yet seen the NMC apply this law to an influencer, and because we do believe that there is scope within this law for it to be applied if they chose to do so, we strongly recommend that both the sponsor and influencer consider this aspect before they enter into their contract.</p>\r\n<p class=\"p1\">Even without the discussion about this law, there has still been much debate about increasing the transparency of the influencers’ position as a paid representative, and whether express disclosure should be required. For now, it would be extremely wise to ensure that, whatever the parties agree in regard to this point, i.e. whether the influencer must use ‘#sponsored’, ‘#ad’ or a similar hashtag in their posts, it should be clearly included in the contract between the sponsor and the influencer.</p>\r\n<p class=\"p3\"><strong>Protect your brand</strong></p>\r\n<p class=\"p3\">For influencers, protecting their brand is always a key consideration in any transaction, as it can be easy to lose the public’s interest or trust. However, with the dynamics of the brand/influencer relationship, the influencer certainly will feel that giving up too much control to a sponsor over the content creation would result in loss of popularity, as usually it’s the individual’s own creative edge that makes the individuals popular, and therefore an influencer, in the first place. Consequently, the influencer is likely to desire to protect their own brand.</p>\r\n<p class=\"p1\">For the companies using influencers, however, brand protection will be equally relevant. Using an influencer as the face of a brand can be risky business, as we saw with the recent dropping of YouTube star PewDiePie by Disney-owned Maker Studios as a result of a Wall Street Journal investigation into offensive themes in his Youtube channel. As a brand owner, it is always vitally important to ensure that there is a provision to exit a contract with an influencer who fails to live up to the required standards or if the influencer ceases to remain influential.</p>\r\n<p class=\"p1\">If you require assistance with your corporate set-up, negotiating or entering into a contract with an influencer, sponsor, or agency, or want to know how to protect your brand, please get in touch with us.</p>\r\n<p class=\"p1\"><em>The Technology, Media &amp; Telecommunications team at Al Tamimi regularly advises companies on their advertising and marketing practices in the region. Contact Fiona Robertson (f.robertson@tamimi.com) or Amna Qureshi (a.qureshi@tamimi.com) for details.</em></p>'),
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	(103567,5632,'content_description','Social media influencers, those people tasked with impacting trends, topics and brands, continue to be a much-discussed part of the marketing industry. '),
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	(103580,5633,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\">Such issues may relate to, for example, a consumer being charged for a service/product the consumer did not purchase. Often these consumers are not sure of the process for making such a complaint. In this article, we outline the procedure for the making, processing and resolving of a consumer dispute in regard to a UAE licensed telecom service provider. </span></p>\r\n<p class=\"p1\">The Telecommunications Regulatory Authority (“TRA”) is the UAE’s federal regulatory body for the telecommunications industry. The TRA’s Consumer Protection Regulations (“TRA’s Regulations”), which were amended in January 2017, set out the process for consumer complaints and disputes. Under the TRA’s Regulations, the TRA has a broad range of powers and scope to provide suitable remedies for consumers.</p>\r\n<p class=\"p1\">The first point for filing a complaint is with your licensed telecommunications service provider itself. Telecommunications service providers are legally required, under the TRA’s Regulations, to maintain procedures to handle consumer complaints and to provide consumers with information regarding the complaint process. Where possible, telecommunications service providers are supposed to resolve a consumer complaint at the point of first contact, so a consumer who is dissatisfied with the telecommunications services that have been provided, should in the first instance, raise the matter directly with the relevant telecommunications service provider in accordance with its Consumer Complaints procedure.</p>\r\n<p class=\"p1\">In the event that the telecommunications service provider fails to resolve the matter to the consumer’s satisfaction, the matter can be escalated through the TRA’s Consumer Dispute procedure. The TRA will generally handle consumer disputes only after the complaint has been handled by the relevant telecom provider and within a three month period of the last handling by that telecoms provider. Despite this, the TRA’s Regulations provide that the TRA does have the discretion to accept any consumer dispute at any time.</p>\r\n<p class=\"p2\"><strong>Lodging a dispute with the TRA</strong></p>\r\n<p class=\"p2\">The person submitting the dispute must provide the following information and documents to the TRA:</p>\r\n\r\n<ul>\r\n 	<li>the consumer’s name, address and contact details (phone number and email);</li>\r\n 	<li>the telecommunications service provider’s complaint reference number and the consumer’s account number;</li>\r\n 	<li>copies of personal ID documents - UAE ID card or passport;</li>\r\n 	<li>a written description of the dispute;</li>\r\n 	<li>copies of all correspondence with the telecom provider; and</li>\r\n 	<li>written authorisation or power of attorney, if the person submitting the complaint is not the consumer/ account holder.</li>\r\n</ul>\r\n<p class=\"p6\">The TRA will assess the dispute and if it considers the submission to be complete and appropriate, the TRA will correspond directly with the relevant telecommunications service provider on behalf of the consumer. It is important to note that the TRA will reject disputes which it considers to be incomplete, frivolous, capricious or simply designed to damage the interests and reputation of the telecommunications service provider.</p>\r\n<p class=\"p1\">The TRA will advise the telecommunications service provider of the dispute and the telecommunications service provider is required to respond to the TRA within three business days.</p>\r\n<p class=\"p2\"><strong>Review and acceptance of the dispute</strong></p>\r\n<p class=\"p2\">The TRA will conduct an initial assessment of the dispute, particularly with a view to verifying that the dispute is genuine and the submission is complete.</p>\r\n<p class=\"p1\">If the TRA decides not to accept the dispute, the consumer will be notified immediately and the case will be closed.</p>\r\n<p class=\"p2\"><strong>Correspondence with the Telecom Provider</strong></p>\r\n<p class=\"p2\">The TRA will submit a copy of the dispute to the telecommunications service provider, together with any instructions or questions that the TRA may choose to raise.</p>\r\n<p class=\"p1\">The TRA will set a deadline for the telecommunications service provider to investigate and respond to the dispute. The telecommunications service provider shall use its best endeavours to close the dispute by the set deadline, however it can make a written request for an extension if required.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Review of the Telecom provider’s response </strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">The TRA will carefully review the telecommunications service provider’s response to the dispute and, if the TRA is not satisfied with this response, the TRA will provide further instructions to the telecommunications service provider. </span></p>\r\n<p class=\"p1\">Once the TRA is satisfied with the response and actions to be taken by the telecommunications service provider, the TRA will inform the consumer of the outcome and if the consumer is satisfied, the case will be closed.</p>\r\n<p class=\"p1\">If the consumer is not satisfied with the outcome, the TRA may reopen the case and submit further instructions to the telecommunications service provider.</p>\r\n<p class=\"p1\">The TRA’s Regulations also require that during the course of the procedure, the TRA will use its best endeavours to keep consumers informed about the status of their complaints. Under the TRA’s Regulations, the TRA has the authority to resolve disputes and order any remedies accordingly. At any stage during the course of the handling of a consumer dispute by the TRA or at the conclusion of the TRA’s handling of the consumer dispute, the TRA may direct the telecommunications service provider to undertake any remedy it considers to be reasonable and appropriate.</p>\r\n<p class=\"p1\"><span class=\"s1\"> The TRA’s Consumer Dispute Procedure is an efficient and clear-cut process that can be a great relief for consumers in situations where they are unable to resolve disputes directly with their telecommunications service provider. The take away point is that, when considering filing a complaint, it is important to remember that your telecommunications service provider should be the first point of contact. Telecommunications service providers are responsible for ensuring that all consumer complaints are handled efficiently. If your telecommunications service provider is unable to resolve the issue then the matter may be escalated to the TRA. Ultimately, quality of service is high on the agenda and the TRA is taking a much more active role in bringing telecommunications service providers together and finding solutions for consumers with a view to increasing consumer satisfaction. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"><em>Al Tamimi &amp; Company’s Technology, Media &amp; Telecommunications team regularly advises on telecommunications related issues including consumer complaints and disputes relating to telecommunication services. For further information about these matters, please contact Nick O’Connell (n.oconnell@tamimi.com) or Amna Qureshi (a.qureshi@tamimi.com).</em></span></p>'),
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	(103584,5633,'content_description','Consumers will sometimes have issues with their telecommunications provider and may consider filing a complaint. '),
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	(103594,5633,'_yoast_wpseo_metadesc','In this article, Al Tamimi & Company outline the procedure for the making, processing and resolving of a consumer dispute in regard to a UAE licensed telecom service provider.'),
	(103595,5634,'content','<p class=\"p1\">This article looks back on recent developments and attempts to predict what else may be enacted during 2017.</p>\r\n<p class=\"p2\"><strong>Centre for Amicable Settlement of Disputes </strong></p>\r\n<p class=\"p4\">The Director General Office of Dubai Courts has issued an Administrative Decision no. 33 of 2017 (“Decision”) concerning the jurisdiction of the Centre for Amicable Settlement of Disputes (“Centre”). The Decision excludes the following disputes from the Centre’s jurisdiction:</p>\r\n<p class=\"p6\"></p>\r\n\r\n<ul>\r\n 	<li>Labor disputes;</li>\r\n 	<li>Personal status disputes; and</li>\r\n 	<li>If one of the parties is a “bank”.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p8\">The Decision is an important change to the current practice in Dubai, which required banks to file their cases before the Centre prior to filing it with the Court of First Instance, which impacted the cost and timelines.</p>\r\n<p class=\"p1\">The Decision was effective on 12 March 2017.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Misdemeanour Court </strong></span></p>\r\n<p class=\"p5\">Dubai has also issued Penal Order Law No. 1 of 2017 to establish a misdemeanour court to fast track certain offences.</p>\r\n<p class=\"p1\">Of particular interest to financial institutions will be the inclusion of two offences related to cheques, being:</p>\r\n\r\n<ul>\r\n 	<li>Giving a cheque with malicious intent; and</li>\r\n 	<li>Signing on the back side of the cheque (without sufficient funds).</li>\r\n</ul>\r\n<p class=\"p2\"><strong>UAE Central Bank Regulation of Electronic Payment Systems</strong></p>\r\n<p class=\"p4\">The Regulatory Framework for Stored Values and Electronic Payment Systems Regulation (the “EPS Regulation”) was issued by the UAE Central Bank pursuant to the Cabinet Decision No.6/6 of 2016 and was effective as of 1 January 2017. The EPS Regulation has been long awaited by the banking industry and marks the formal issuance of regulations by the UAE Central Bank that recognises, governs and licenses the fast growing business of digital payment services. The EPS Regulation enables the issuance of Digital Money and Payment Instruments involving the United Arab Emirates Dirham.</p>\r\n<p class=\"p9\"><strong>The UAE Securities and Commodities Authority Promotion and Introduction regulations</strong></p>\r\n<p class=\"p4\">The SCA issued a new regulation, Board Decision No. (3/R.M) of 2017 regarding the Promotion and Introduction Regulations (the ‘Promotion Regulations’). The Promotion Regulations were published in the Federal Gazette No. 611 on 31 January 2017 and came into force on 1 February 2017. Although the Promotion Regulations are currently in force, implementation is uncertain and clarifications from SCA are awaited.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>UAE Federal Law No. (20) of 2016 on Mortgage over Movables </strong></span></p>\r\n<p class=\"p5\">The Mortgage of Movables Law became effective in March 2017. The Law changes the regime for security over moveable assets and creates a public security register for such security. The Cabinet Resolution contemplated by the law is yet to be issued.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>UAE Federal Law No 9 of 2016 concerning Bankruptcy</strong></span></p>\r\n<p class=\"p5\">The new Bankruptcy Law came into force on 29 December 2016, placing greater emphasis on restructuring and work out solutions.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>UAE Central Bank Regulation of Capital Adequacy </strong></span></p>\r\n<p class=\"p5\">The UAE Central Bank has issued new regulations to ensure capital adequacy of all banks operating in the UAE in accordance with Basel III. The Regulatory Framework for Capital Adequacy was effective as of 1 February 2017.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Dubai Financial Market launches of a trading platform for exchange-traded funds (ETFs)</strong></span></p>\r\n<p class=\"p5\">Dubai Financial Market has launched a trading platform which provides ongoing support to rapidly growing the EFT industry.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Other Securities and Commodities Authority regulations and updates</strong></span></p>\r\n<p class=\"p5\">SCA has recently issued various new regulations which include:</p>\r\n<p class=\"p6\"></p>\r\n\r\n<ul>\r\n 	<li>Licensing the Activity of Administrative Services of the Funds no. 4RM of 2017</li>\r\n 	<li>The regulation covers the licensing requirements and procedures for a Funds’ Administrative Service provider, its obligations towards SCA and its clients.</li>\r\n 	<li>Anti AML and Anti Terrorism Reg. no. 2RM of 2017 (amending the previous one no. 17 R of 2010)</li>\r\n 	<li>The new regulation makes substantial amendments to take into consideration and ensure compliance with changes introduced with the Federal AML law no. 9 of 2014 and Federal Anti Terrorism law no. 7 of 2014.</li>\r\n 	<li>The Administrative Order no. 1 RT of 2017 concerning the criteria of Real Estate Investment Funds</li>\r\n 	<li>This Order aims to set out the purpose, conditions and specifications for real estate investment funds in the UAE.</li>\r\n 	<li>The Administrative Order no. 3 RT of 2017 concerning the criteria of Capital Venture Funds</li>\r\n 	<li>This Order sets out the purpose and conditions for UAE capital venture funds.</li>\r\n 	<li>SCA has on 22 December 2016, issued guidance notes to provide information in relation to the implementation of the Automatic Exchange of Information for tax purposes - the Common Reporting Standard in the UAE. The guidance notes do not have the force of law.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\"><span class=\"s1\"><strong>What is likely for the remainder of 2017?</strong></span></p>\r\n<p class=\"p5\">It is not always possible to predict with any certainty legislative developments in the UAE, especially the timing of enactment. However laws and regulations which could be on the horizon include:</p>\r\n<p class=\"p6\"></p>\r\n\r\n<ul>\r\n 	<li>UAE Netting Law</li>\r\n 	<li>Finance Company Regulations</li>\r\n 	<li>Union Law (amendment)</li>\r\n 	<li>Leasing Law</li>\r\n 	<li>Clarification from SCA on the Promotion Regulations</li>\r\n 	<li>Further Central Bank regulations, including on microfinance and crowd funding</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p8\"><em>For further information on any of the laws and regulations mentioned in this article, please contact the Banking and Finance team at Al Tamimi.</em></p>'),
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	(103599,5634,'content_description','It has been a busy time for legislators in the United Arab Emirates (“UAE”), with the introduction of many new laws and regulations which impact the financial services industry.'),
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	(103601,5634,'pageSummary','It has been a busy time for legislators in the United Arab Emirates (“UAE”), with the introduction of many new laws and regulations which impact the financial services industry.'),
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	(103621,5634,'_yoast_wpseo_metadesc','Al Tamimi & Company looks back on recent developments and attempts to predict what else may be enacted during 2017.'),
	(211180,5634,'_yoast_wpseo_content_score','30'),
	(103622,5635,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\">To safeguard their business interests and protect the integrity of their confidential information, it is understandable that many companies seek to prevent their employees from leaving the company and immediately joining a competitor, given the risk of the company’s commercial information being divulged to the new employer and undermining the former employer’s competitive edge. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> In light of this risk, Article 127 of UAE Federal Law 8 of 1980, as amended (“UAE Labour Law”) allows UAE companies to impose post-termination restrictions on their employees to prohibit them from competing with the company for a period of time following termination of their employment. Article 127 requires that non-compete restrictions are imposed only to the extent necessary to protect the company’s legitimate business interests, and accordingly the restrictions must be limited with respect to time, place and the nature of work.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> However, even where non-compete restrictions are contractually agreed upon between an employer and an employee, it is very difficult for UAE companies to enforce the restrictions in practice once the individual leaves the company. This is primarily because injunctive relief is not an available remedy before the UAE Labour Court and accordingly, companies are unable to obtain a court order preventing their former employees from joining a competitor (the position is different within the Dubai International Financial Centre (“DIFC”) and the Abu Dhabi Global Market (“ADGM”), both of which are separate legal jurisdictions whereby the respective courts do have the power to grant injunctive relief). Accordingly, if a former employee is in breach of their contractual non-compete obligations, in practice the company’s recourse (outside the DIFC and ADGM) is typically limited to seeking monetary damages from the former employee or potentially filing a police complaint against them for breach of confidentiality, both of which give rise to their own challenges in practice. </span></p>\r\n<p class=\"p1\"><span class=\"s2\"> Ministerial Resolution 297 of 2016 seeks to introduce a mechanism for Article 127 of the UAE Labour Law to be enforced in practice. In particular, the Resolution provides that the Ministry of Human Resources and Emiratisation (formerly known as the Ministry of Labour) may refrain from issuing a work permit (or withdraw a work permit that has already been issued) where a final court judgment finds that the individual is (or would be, if a new work permit is issued) in violation of the non-compete obligations owed by the individual to their former employer. This action can be taken by the Ministry in respect of the validity period of the non-compete restriction. For example, if the individual has a six month non-compete restriction, the Ministry may refrain from issuing them a new work permit (or withdraw a work permit that has already been issued) for a period of six months following termination. As a preliminary threshold issue, the contractual non-compete restriction would need to be limited in duration, geographical scope and business activities to the extent necessary to protect the former employer’s legitimate business interests (in accordance with Article 127 of the Labour Law) and accordingly a company cannot rely on the Resolution to enforce an excessively broad or onerous non-compete restriction.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> It is yet to be seen how the resolution will work in practice, including whether it can form the basis of a claim in its own right (or whether it would need to form part of a civil claim for monetary damages, as mentioned above, or be raised as a counter-claim to a labour claim filed by the employee). In any event the company would need to incur the costs of filing (or defending) a court claim and await final judgment. Further, practically speaking the final court judgment would likely be obtained after the individual’s contractual non-compete restrictions have expired (and therefore it remains to be seen whether, in the event of a successful claim and in order to give teeth to the Resolution, the employee’s work permit with the new employer may be withdrawn). Further, the Resolution cannot be relied upon where the former employee wishes to join a competitor in a UAE free zone (or is otherwise not regulated by the Ministry), as they would not require a Ministry work permit to join the new company. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Notwithstanding the potential procedural and practical issues, however, the Resolution may assist UAE companies in enforcing non-compete restrictions against their former employees and help safeguard the company’s sensitive information and commercial interests.</span></p>\r\n<p class=\"p2\"><span class=\"s1\"> </span></p>'),
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	(103626,5635,'content_description','Employees are often privy to a wide range of their employer’s confidential and commercially sensitive information. '),
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	(103628,5635,'pageSummary','Employees are often privy to a wide range of their employer’s confidential and commercially sensitive information.'),
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	(103630,5635,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/april-10/enforcing-non-compete-restrictions-against-former-employees-in-the-uae.html'),
	(103631,5635,'_currentURL','field_59d35123ab1e7'),
	(103632,5635,'lawUpdateArticleWriters_0_lawUpdateArticleWriter','823'),
	(103633,5635,'_lawUpdateArticleWriters_0_lawUpdateArticleWriter','field_59da2ac06b065'),
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	(103636,5635,'_yoast_wpseo_metadesc','Employees are often privy to a wide range of their employer’s confidential and commercially sensitive information.'),
	(103637,5636,'content','<p class=\"p1\">Broadly, copyright law protects the value of a creative work. When making an unauthorized copy of the creative work, copyright infringement occurs. We often see digital copyright warnings in our personal lives, such as before watching a movie, or when accepting a user agreement before downloading software or an application.</p>\r\n<p class=\"p1\"><span class=\"s1\"> Digital piracy in the UAE may constitute copyright infringement under Article 7 of Federal Law No. 7 of 2002 Concerning Copyrights and Neighboring Rights. In a broad context digital piracy is a form of online piracy and includes the unauthorized online distribution of electronic copies of copyrighted material such as software. Violation of local copyright law amounts to a crime, and is subject to criminal prosecution in the UAE. Additionally, unauthorised use of software may be deemed to be an aggravating factor under Article 46 of the Federal Decree Law No. 5 of 2012 On Combating Cybercrimes, as technological means are used to further a crime against the copyright holder. Damages often include paying the price of the illegally-downloaded licenses, and may also lead to serious personal sanctions, such as imprisonment, fines, and even deportation for a company’s top officials. </span></p>\r\n<p class=\"p1\">In respectof commercial software, an end user license agreement is included to protect the software program from copyright infringement. Typically, such licenses state that the user can install the original copy of software bought on one computer and allow a backup copy in case the original is lost or damaged. The user agrees to the licensing agreement in the following forms: (i) once the software package is opened usually referred to as a shrink wrap license; and (ii) when the user installs the software. One of the biggest problems faced by software developers and companies is that their software is often cracked and made available online thereby allowing users to freely download and use an unauthorised version of the software; typically this involves downloading illegal software from peer-to-peer network.</p>\r\n<p class=\"p1\"><span class=\"s2\"> Oftentimes, the risks of infringing digital copyright in software are overlooked by employers whose staff regularly uses the internet. In this regard employees illegally download software on company computers without the knowledge of their employer. Over time, this can lead to serious legal disputes, financial repercussions and major disruptions to day-to-day business operations. In fact, according to a study conducted in 2013 by the IDC (International Data Corporation) it was determined that a third of the PC Software in the world is counterfeit. Through its study, the IDC encountered tracking cookies and spywares 78% of the time when downloading software from the internet and Trojans and other malicious adware 36% of the time. Given these rates, where pirated software is downloaded from the internet, there is a one in three chance that dangerous malware will be contained. It is important to point out that some malware are capable of remotely turning on an infected computer’s microphone and video camera, potentially giving a cybercriminal eyes and ears into a victim’s home or business. Furthermore the risks associated to malware are serious, not only is there risk of loss data and identity theft but there is also serious risks associated to copyright infringement. </span></p>\r\n<p class=\"p1\">In the UAE, as in most jurisdictions, employers may be liable for the actions of its employees. For the employer to be liable, the employee need only show he or she was acting in the scope of their official duties. This is often a fairly low bar. Whether or not the employer is immediately aware of its employees’ actions is generally irrelevant. As such, when employees illegally download software on company property, especially if used in the course of their jobs, the employers may be found guilty of copyright infringement.</p>\r\n<p class=\"p1\">Detecting software piracy is no longer reserved for sophisticated intelligence agencies and cyber police and can easily be traceable. Software companies are able to monitor “cracked” versions of their software thorough what is described as a “phone home” technology. In brief, the “phone home” technology scans the internet for illegal downloads of its software, and provides detailed information about the infringer, including its IP and Machine Access Control (“MAC”) address. These details are linked to the employer through open source methods such as whois.com. Serial keys of illegally downloaded software will often not match the authorized keys known by the copyright holder; thus exposing that the program has been cracked. Hence, when a cracked version of software is downloaded and is being used, the “phone home” technology which is embedded in the software technology, much like a heartbeat, sends signals to the server and provides information which can identify the infringer.</p>\r\n<p class=\"p1\">Once this information is known, copyright holders can take swift legal action against infringing companies. This includes filing a complaint with the police and the local courts. Employers should be aware that deleting illegal software can also be tracked, and is often seen by the courts as the company acknowledging its own wrong-doing and possibly tampering with evidence.</p>\r\n<p class=\"p1\">In order to minimize the risk of liability for software violations, employers can take various steps to safeguards their rights and minimize the risk of exposing themselves to copyright infringement. For one, the employer can conduct regular audits of employee software usage which includes tracking all software downloads on company property. Secondly, the employer can maintain a well-organized library of software licenses, and make sure they are up to date. Lastly, it is important to educate staff by both ensuring that employee policies are clear about the risks and penalties of software piracy and via regular training to employees about copyright and similar legal issues.</p>'),
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	(103641,5636,'content_description','This article considers the issue of pirated software and the risks posed to employers in this context.'),
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	(103657,5636,'_yoast_wpseo_metadesc','Al Tamimi & Company considers the issue of pirated software and the risks posed to employers in this context.'),
	(103658,5637,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\">While most licence agreements provide detailed provisions as to the use of the licensed trademarks, it is common for two important uses of the licensed trademark to either be missed out or mistakenly granted to the licensee. When overlooked, these can have a great impact on the brand owner, especially when the licence is terminated. These two uses are the use of the licensed trademark as a trade name and the use of a licensed trademark within a domain name.</p>\r\n<p class=\"p1\">From a legal perspective, trademarks, trade names, and domain names are three distinguishable concepts and assets of any business, though they are often considered synonymous. The trade name is the legal name of a company under which it conducts its business; a trademark is the name or logo that the company uses to promote its products and services; and the domain name is the name the company uses to communicate online. Accordingly, these three forms of intellectual property can all have the same function, which is to identify the source of the products or services promoted by a company.</p>\r\n<p class=\"p1\">The similarity between trademarks, trade names, and domain names requires attention, especially when a trademark licence is granted in order to guarantee the smooth transfer of the rights in the event of termination of the licence agreement. In particular, the necessary provisions need to be included in the agreement so that the licensee will be prevented from using the brand in the form of a trade name and domain name after termination. In the next paragraphs, we will identify the issues relating to trade names and domain names within the context of trademark licence agreements and explain how to avoid such issues.</p>\r\n<p class=\"p2\"><strong>Trade Names</strong></p>\r\n<p class=\"p1\">A trade name is the legal name of the company under which it conducts its business. Trade names and trademarks can have the same function, and some businesses use their trade name as their trademark.</p>\r\n<p class=\"p1\">A registration of trade name in the UAE requires the establishment of a company. The company will be registered with the Commercial Registry in the relevant Emirate. In the UAE, there is no cross-checking between the Commercial Registry (where trade names are registered) and the Trademarks Registry (where trademarks are registered). Hence, there is always a possibility that a third party may register a trade name that is identical to a registered trademark. Furthermore, depending on the goods and services covered in a trademark registration, there are some challenges when contesting a conflicting trade name registration based on a trademark right.</p>\r\n<p class=\"p1\">Accordingly, in the context of granting a trademark licence, the general rule is that the licensee shall be barred from registering a trade name containing the trademark. However, we have seen many licences where the licensee was granted a licence to register a trade name that includes the licensed trademark. We have also seen licences, which were silent on the registration of the trade name, and where the licensee was subsequently able to obtain a trade name similar to the brand name. Below is a helpful case study.</p>\r\n<p class=\"p1\"><span class=\"s2\"> Company X (the “Franchisor”) entered into a franchise agreement with company Y (the “Franchisee) for the operation of ‘BRIGHT’ branded restaurants. The franchise agreement was signed and granted the Franchisee the right to register the BRIGHT trademark as a trade name to operate the restaurant in the UAE. The restaurant started trading and two years later the Franchisee had stopped paying the royalties, and the franchise agreement was terminated. Despite termination, the Franchisee continued operating the restaurant under the BRIGHT trademark on the basis of the trade name ‘Bright Restaurant and Café’, which the Franchisee registered as the name of the company operating the restaurant (the Franchisee is the legal owner of this trade name). Continuing to use of the BRIGHT trademark in the restaurant, which no longer has any connection to the Franchisor, can cause consumers to mistakenly believe that the restaurant is a franchise or somehow affiliated to the BRIGHT brand of restaurants. Such a scenario can be detrimental to the brand owner as it can affect the brand owner’s, or the Franchisor’s, ability to appoint a new franchisee.</span></p>\r\n<p class=\"p1\">What remedies are available to the Franchisor in the above scenario? The Franchisor can challenge the trade name registration and apply for its cancellation since the trade name ownership will not automatically be cancelled after the termination of the agreement, unless the Franchisee voluntarily cancels or amends it. A trade name cancellation can be carried out through an administrative complaint, however, the administrative authorities may be reluctant to take any action in cases where a contract is presented to them and they are likely to refer the parties to court. The other available option is a court action, thought it will take up to two years to obtain a final judgment and execute it. Although the Franchisor may be able to cancel the trade name, the procedure could be lengthy and costly, and could potentially damage the brand image and reputation of the Franchisor.</p>\r\n<p class=\"p1\">To avoid being in such a situation, trademark owners need to ensure that the registration of the licensed trademark, as the franchisee’s trade name or part of it, is clearly prohibited and contained in the agreement.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Domain Names </strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">Domain names registration is a rather simple process and depends on the availability of the proposed name. However, choosing domain names can be tricky as there are several levels at which they can be registered. For example, there are General Top-Level Domains (gTLDs), which includes ‘.com’, ‘.org’ and ‘.net’ suffixes, and Country Code Top-Level Domains (ccTLDs), which includes ‘.ae’, ‘.us’ and ‘.uk’ suffixes. </span></p>\r\n<p class=\"p1\">Once a domain name is registered, it is under the ownership of the registrant. If a domain name violates any other party’s trademark and it is registered in bad faith, the owner of the trademark may apply for the cancellation or transfer of the domain name under the WIPO Uniform Domain Name Dispute Resolution Policy (UDRP), which requires satisfaction of certain conditions before a complaint will be accepted.</p>\r\n<p class=\"p1\">Similar to what was discussed in the above paragraphs, in the context of granting a trademark licence, the general rule is that the trademark shall not under any circumstances be registered by the licensee as a domain, or part of it, under any gTLDs or ccTLDs. However, we have seen many agreements where the licensee was granted a licence to register a domain name that includes the licensed trademark, and other licences which were silent as to the registration of the domain name and where the licensee were therefore able to obtain a domain name registration.</p>\r\n<p class=\"p1\"><span class=\"s2\"> Using the BRIGHT restaurant example referred to above, the Franchisee was granted the right to register the trademark within a domain name under the franchise agreement. The Franchisee registered the domain name ‘www.brightrestaurant.ae’. Upon termination of the agreement, the Franchisee continued to use the domain name along with the trade name, on the grounds of its legal ownership of the domain name. The use of the domain name by the Franchisee will cause confusion to consumers, who are likely to search for the restaurant under the same domain name, though the Franchisor will not have control over the relevant website.</span></p>\r\n<p class=\"p1\">One of the remedies available to the Franchisor is to file for the cancellation, or transfer of ownership, of the domain name. While the UDRP procedure is not time-consuming, it can be a costly. Accordingly, trademark owners are required to ensure that relevant provisions are included in the licence agreement prohibiting, or limiting, use of the trademark as a part of the licensee’s domain name. Domain names are recommended to be under the name of the trademark owner and under its control.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Conclusion</strong></span></p>\r\n<p class=\"p1\">Trade names and domain names are of great importance to any business. Not regulating the use and registration of a trademark, in connection with a trade name or a domain name, can negatively impact the brand and the goodwill generated by the trademark, especially when the relevant agreement has been terminated.</p>'),
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	(103662,5637,'content_description','When granting a trademark licence, whether in a franchise, distribution, joint venture, or trademark licence agreement, there are a number of factors that need to be considered by the brand owner. Limitations and restrictions on the use of the trademark, and provisions relating to quality control, need to be carefully drafted for enforceability in the event of non-compliance. '),
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	(103664,5637,'pageSummary','When granting a trademark licence, whether in a franchise, distribution, joint venture, or trademark licence agreement, there are a number of factors that need to be considered by the brand owner. Limitations and restrictions on the use of the trademark, and provisions relating to quality control, need to be carefully drafted for enforceability in the event of non-compliance.'),
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	(103676,5637,'_yoast_wpseo_metadesc','When granting a trademark licence, whether in a franchise, distribution, joint venture, or trademark licence agreement, there are a number of factors that need to be considered by the brand owner.'),
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	(103677,5638,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\"><strong>Abu Dhabi Plan 2030</strong></span></p>\r\n<p class=\"p2\">Abu Dhabi Plan 2030 affirms that education is a key growth sector essential for Abu Dhabi’s economic vitality and recommends that schools are incorporated in all new residential developments. Leading international education providers have shown a keen interest to support this aim and several well-regarded providers have opened schools in the Emirate over the last few years.</p>\r\n<p class=\"p2\"><strong>Legal Background</strong><strong> </strong></p>\r\n<p class=\"p3\"><span class=\"s2\">International education providers typically choose to develop custom-built premises to accommodate their schools as suitable existing facilities are not generally available in Abu Dhabi. These premises are costly to build and frequently providers will need to raise finance to meet the costs of construction. Such investment and financing usually requires that the provider is able to hold a secure and long-term legal interest in the school property. In the case of education providers that are wholly owned by UAE nationals it is generally relatively straightforward to ensure that legal title to the school property can be registered at the relevant municipality and a title deed issued, with a mortgage registered on the title if necessary. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Investment Areas</strong></span></p>\r\n<p class=\"p3\"><span class=\"s2\">Education providers that are not wholly owned by UAE nationals face some challenges when seeking to secure their long-term interests in school properties. Generally these providers are restricted to developing schools in those areas of the Emirate that have been designated for foreign real estate investment (“Investment Areas”) pursuant to Abu Dhabi Law No. 19 of 2005 and its subsequent amendments (“Law No. 19”). </span></p>\r\n<p class=\"p3\"><span class=\"s2\"> Law No. 19 allows providers that are wholly owned by Gulf Co-operation Council (“GCC”) nationals to own land and buildings within Investment Areas. For these providers it is possible to purchase a plot of land on a freehold basis within an Investment Area, develop a school, raise finance, obtain a title deed and register a mortgage on the title at Abu Dhabi Municipality (“ADM”).</span></p>\r\n<p class=\"p3\"><span class=\"s3\"> Education providers that are not wholly owned by either UAE or GCC nationals may take leases of land or existing properties for terms of up to 99 years within Investment Areas. These providers may also enter into long-term musataha agreements of land within Investment Areas for terms of 50 years with an option to renew for a further term of 50 years. Musataha agreements are similar to long-term development leases and allow the education providers to arrange construction and then to operate their schools. It is also possible for the rights granted by these musataha agreements to be registered with ADM and title deeds can be issued in favour of the foreign education provider. If the provider wishes it can grant a mortgage over its musataha rights and this mortgage can also be registered on the title at ADM. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Outside Investment Areas</strong></span></p>\r\n<p class=\"p3\"><span class=\"s2\">Outside Investment Areas foreign education providers (including GCC owned providers) are restricted to taking leases of land or leases of existing properties for maximum terms of four years. This restriction on lease terms is imposed by the Tawtheeq rules concerning the registration of leases in Abu Dhabi created pursuant to Executive Council Resolution No. 4 of 2011. Whilst leases can be expressed as being renewable for further terms that is usually not sufficient security for the substantial investment necessary to develop a new school. Obtaining financing for the development is likely to be more difficult as the education provider cannot grant the security of a mortgage over the school due to the short-term nature of its lease. These limitations are a major obstacle holding back development of more schools throughout the Emirate and in areas where there is often a pressing need for new schools to open. All the schools which operated from converted villa premises (“Villa Schools”) have now been closed down by Abu Dhabi Education Council (ADEC) and their operations need to be moved and accommodated in more suitable premises. Villa Schools were frequently located in residential areas on the outskirts of Abu Dhabi City, close to the families they served but far away from the Investment Areas where at present new schools can be most easily developed. It will therefore not be easy to transfer students from Villa Schools to the new schools now being opened in often distant Investment Areas.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Conclusion</strong></span></p>\r\n<p class=\"p3\"><span class=\"s2\">Considerable investment will be needed in new facilities for schools throughout Abu Dhabi over the coming years to ensure that the educational goals set by Abu Dhabi Plan 2030 are achieved. New schools will be required in all parts of the Emirate, not solely within the Investment Areas in Abu Dhabi City, but also in more peripheral areas. Meeting this need will be particularly challenging whilst international education providers are not always able to secure long-term interests in the facilities they wish to develop across the Emirate. We understand that the Abu Dhabi Government is aware of this concern and is currently giving thought as to how the challenge may be overcome. </span></p>\r\n<p class=\"p2\"><span class=\"s2\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><em>Al Tamimi &amp; Company’s real estate team regularly advises on real estate matters in Abu Dhabi, the wider UAE and across the region. For further information please contact David Bowman (d.bowman@tamimi.com).</em></span></p>'),
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	(103681,5638,'content_description','Abu Dhabi’s Urban Structure Framework Plan for 2030 (“Abu Dhabi Plan 2030”) identifies that a primary goal for education policy in Abu Dhabi is “to create the highest quality, comprehensive system of education that applies world-class standards and expertise to the delivery of education at all levels. ”'),
	(103682,5638,'_content_description','field_59b641c07f473'),
	(103683,5638,'pageSummary','Abu Dhabi’s Urban Structure Framework Plan for 2030 (“Abu Dhabi Plan 2030”) identifies that a primary goal for education policy in Abu Dhabi is “to create the highest quality, comprehensive system of education that applies world-class standards and expertise to the delivery of education at all levels. ”'),
	(103684,5638,'_pageSummary','field_59e59b307dec8'),
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	(103686,5638,'_currentURL','field_59d35123ab1e7'),
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	(103689,5638,'lawUpdateArticleWriters','1'),
	(103690,5638,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(103691,5638,'_yoast_wpseo_metadesc','Abu Dhabi’s Urban Structure Framework Plan for 2030 (“Abu Dhabi Plan 2030”) identifies that a primary goal for education policy in Abu Dhabi is “to create the highest quality, comprehensive system of education that applies world-class standards and expertise to the delivery of education at all levels. ”'),
	(103692,5639,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\">It is not only favoured for the absence of foreign ownership restrictions prevalent in onshore UAE but also praised for its international standards of accountability and its consistent approach towards implementing its laws and regulations.</p>\r\n<p class=\"p1\"><span class=\"s1\"> The DIFC provides a comprehensive legal framework together with secure, easy access to an electronic public register for companies incorporated in the DIFC. Companies’ records are maintained by the DIFC Registrar of Companies (ROC). The ROC’s records are linked to an online platform - the DIFC Portal, for each company incorporated in the DIFC, and each company account on the portal is to be maintained and updated by that company itself. However, this framework is costly to maintain, and that cost is compliance obligation, and the time and money involved. </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Beware of Non-Compliance</strong></span></p>\r\n<p class=\"p1\">Compliance with DIFC law is monitored by the Dubai Financial Services Authority (DFSA) and depending on the nature/extent of the breach, non-compliance or breaches result in the prompt levying of administrative fines on companies and their management after the lapse of the applicable grace period (which can be for 30 days).</p>\r\n<p class=\"p1\"><span class=\"s3\"> Fines can range from USD 1,000 (for failing to maintain accounting records open to inspection) to USD 50,000 (for provision of false or misleading information to the ROC) and in some cases, where there is prolonged non-compliance, the ROC has the right to deregister the company (i.e. cancel its license and declare the company defunct). </span></p>\r\n<p class=\"p1\">While the UAE does not have a dedicated data protection law currently in place at a federal level, the DIFC has its own Data Protection Law No. 1 of 2007 and its corresponding regulations in place. When processing personal data, an entity is required to appoint a data controller from amongst its employees and notify the Commissioner of Data Protection in the DIFC if it intends to process personal information. A company’s data controller must notify the Commissioner of any changes related to personal data operations within 14 days. Failing to notify the Commissioner may result in the imposition of a fine of USD 5,000.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>A Culture of Compliance </strong></span></p>\r\n<p class=\"p1\">The DIFC promotes a culture of compliance through its educational seminars, publications, discussion panels as well as its imposition of sanctions. These high standards of accountability have over the past decade, enabled the DIFC to acquire its reputation as an international hub.</p>\r\n<p class=\"p1\">It is crucial for companies operating in sophisticated free zones like the DIFC to allocate the right resources to compliance, including company secretarial functions. Finding the right individuals may be challenging but compliance with DIFC laws should not be compromised. In our experience, professional corporate service providers are under-used by DIFC companies.</p>\r\n<p class=\"p1\">A number of corporate service providers operate in the DIFC and companies willing to outsource their compliance functions can rely on them to maintain their books and records, including DIFC registers and to renew their commercial licences.</p>\r\n<p class=\"p1\">Our experience indicates that many DIFC companies pay insufficient attention to their overall corporate governance, particularly filing of returns with the Registrar ROC. The DIFC monitors the compliance of companies operating in the DIFC and periodically inspects the office premises and in-house corporate records of these companies. Non-compliance with any requirements can lead to sanctions being imposed by ROC and/or the DFSA.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Conclusion</strong></span></p>\r\n<p class=\"p1\">In a challenging economic climate, companies are often focussed on pressing business concerns. Compliance can fall by the wayside.</p>\r\n<p class=\"p1\">We predict companies will increasingly outsource their compliance needs to trustworthy corporate service providers, allowing management to generate profits without undue distraction. For this reason, Al Tamimi and Company is the first regional law firm in the DIFC to spin off a licensed corporate services provider entity, Al Tamimi &amp; Company Corporate Services Limited now operating on the ground and ready to assume responsibility for these outsourced functions. If you are interested, please contact Izabella Szadkowska, Partner, Corporate Commercial department and/or Alyzeh Zahid, Associate, Corporate Commercial department at Al Tamimi &amp; Company on +97143317161 or on I.Szadkowska@tamimi.com or A.Zahid@tamimi.com.</p>'),
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	(103696,5639,'content_description','The Dubai International Financial Centre (DIFC) is often described as the free zone with the most sophisticated legal regime in the UAE. '),
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	(103698,5639,'pageSummary','The Dubai International Financial Centre (DIFC) is often described as the free zone with the most sophisticated legal regime in the UAE.'),
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	(103706,5639,'_yoast_wpseo_metadesc','The Dubai International Financial Centre (DIFC) is often described as the free zone with the most sophisticated legal regime in the UAE.'),
	(103707,5640,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\">This article assesses the impact of the new UAE Bankruptcy Law on directors and managers of distressed companies. However, the assessment will significantly depend on the courts’ application and the infrastructure necessary for an effective implementation. It is believed that although the new bankruptcy law puts bankruptcy under the supervision of the court, and to a certain extent promotes a ‘rescue culture’, it introduces onerous duties on company directors.</p>\r\n<p class=\"p2\"><strong>The General Aspects of the Law</strong></p>\r\n<p class=\"p2\">The Bankruptcy Law introduces a number of detailed processes with expedited timelines to address financial distress. Primarily, these processes include:</p>\r\n\r\n<ul>\r\n 	<li>A framework for the restructuring of financial institutions (the details of the framework have not yet been provided);</li>\r\n 	<li>A rehabilitation process for solvent debtors facing financial difficulties – “the preventative composition”;</li>\r\n 	<li>A rehabilitation process for insolvent debtors – “the restructuring scheme”; and</li>\r\n 	<li>An insolvent liquidation process.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\">It may be argued that these processes are a positive change from the previous system, which did not provide many options to deal with financial distress and which failed to secure protected legal rights or information for creditors.</p>\r\n<p class=\"p1\">Under the new law, a court appointed official or insolvency trustee plays a central role in the aforementioned processes. Pursuant to the preventative composition option, the debtor continues to manage its business, under the supervision of the court appointed insolvency trustee. Comparably, within the restructuring regime, the management of the debtor or its business will essentially be undertaken by the court appointed trustee. In both cases, the law appears to favor a debtor friendly rescue culture, but practical challenges remain, such as the lack of experience available in the UAE to administer these judicial processes.</p>\r\n<p class=\"p1\">However, while the law favors a rescue culture by providing various alternatives to formal insolvency procedures, it imposes significant duties on directors.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Liabilities of Directors under the Law</strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">Following the enactment of the new Bankruptcy Law, individuals, whether directors of a company or not, remain subject to the criminal liabilities imposed by Article 423 of Law No. 3 of 1987 promulgating the Penal Code for acts such as fraud, embezzlement and forgery. The principal statement regarding “directors’ duties” is contained in Article 162(1) of Federal Law No. 2 of 2015 concerning Commercial Companies Law, which states that directors are liable towards the company, shareholders and third parties for all acts of fraud, abuse of authority, breach of the provisions of the Commercial Companies Law or the company’s articles of association, and mismanagement.</span></p>\r\n<p class=\"p1\">Under Article 144 of the Bankruptcy Law, a competent court may obligate the directors and general managers, all or part of them, jointly or not, to pay all or part of the company’s debts in cases where they are held responsible for the company’s losses according to the Commercial Companies Law. This provision applies in cases where the company’s funds are not sufficient to fulfill at least 20% of its debts.</p>\r\n<p class=\"p1\">Further to the aforesaid liabilities provided in the Commercial Companies Law, the Bankruptcy Law implements further penalties against directors and general managers. Article 198 of the Law states that directors and general managers shall be sentenced to a period not exceeding five years and shall be fined an amount not exceeding AED 1,000,000, if, after issuing a final resolution to initiate legal proceedings against the company, they commit any of the following:</p>\r\n\r\n<ul>\r\n 	<li>hide, damage or alter all or some of the company’s records, with the intention of harming the creditors;</li>\r\n 	<li>embezzle or hide a part of the company’s assets;</li>\r\n 	<li>acknowledge unpayable debts and, knowingly, either in writing, verbally, or in the budget, or through refraining from submitting papers or explanations in their possession, know the result of such refraining;</li>\r\n 	<li>obtain the preventive composition or restructure for the company through deception; and/or</li>\r\n 	<li>announce false information of the subscribed or paid up capital, or distribute fictitious profits or receive bonuses higher than the amount stipulated by law or in the memorandum or articles of association of the company.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\"><span class=\"s5\">The previous regime, under the Commercial Transactions Law, specified various scenarios where a debtor might become criminally liable for the offence of negligent insolvency, such as where the debtor fails to file for insolvency when its debts become significantly overdue. Even though the new Bankruptcy Law decriminalizes a number of these scenarios, it is still interrelated to the Commercial Transactions Law, which is evidenced in Article 68 of the Bankruptcy Law. Article 68 obliges a debtor company to submit a request for initiation of procedures to the court if it has stopped paying its debts at its maturity for over 30 consecutive working days, due to the instability of its financial position or if it has a negative asset position. If this scenario befalls the company, it is arguable that the company’s failure to initiate formal procedures will constitute “mismanagement” on the part of the manager, and will therefore, constitute grounds for creditors to bring claims under Article 162(1) of the Commercial Companies Law. </span></p>\r\n<p class=\"p1\">Previously there was no recourse to directors liable for insolvency, as it was a criminal offence under the UAE Penal Code to draw a cheque on an account knowing that there are insufficient funds in the relevant account to meet the amount drawn. Under the new Bankruptcy Law, criminal actions filed for dishonored cheques are suspended if a preventative composition plan or a debt restructuring plan is initiated. In this event, the cheque holder/creditor becomes one of the unsecured creditors. This encourages distressed businesses to initiate composition plans and file for debt restructuring, rather than prompting managers to abscond and exit the UAE. However, the protection offered is only a suspension. This may still mean that directors are inclined to exit the UAE, due to the risk of imprisonment, and undertake any restructuring or bankruptcy from outside the UAE. The new law offers a slight reprieve, yet it remains to be seen whether managers will be personally liable for dishonored cheques following the suspension period, or whether this penalty is reserved only for directors.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Conclusion</strong></span></p>\r\n<p class=\"p1\"><span class=\"s5\">While the new Bankruptcy Law significantly improves the old insolvency regime under the Commercial Transactions Law, for directors and managers it acts as a double edge sword. Whilst it does offer a safe harbor in some situations, in many cases it creates new potential exposures for liability. Like any new law, it will take time for all stakeholders to fully understand how the law will be implemented in practice, and until applications are filed, the practical effects of the Bankruptcy Law can only be analyzed theoretically.</span></p>');

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	(103725,5640,'_yoast_wpseo_metadesc','This article assesses the impact of the new UAE Bankruptcy Law on directors and managers of distressed companies. However, the assessment will significantly depend on the courts’ application and the infrastructure necessary for an effective implementation.'),
	(103726,5641,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\">Expedited arbitration is a relatively new process in international arbitration that is often used for disputes of limited value. It aims to shorten the duration of arbitral proceedings and reduce the cost of arbitration while preserving its main principles and purposes. The International Chamber of Commerce (ICC) is the latest institution to have introduced expedited arbitration procedures. It joins several other arbitral institutions, including the Stockholm Chamber of Commerce (SCC), International Centre for Dispute Resolution (ICDR), Singapore International Arbitration Centre (SIAC), Swiss Chambers’ Arbitration Institution, and Hong Kong International Arbitration Centre (HKIAC), that have successfully adopted mechanisms for expedited arbitration. All of these mechanisms serve the same purpose – effective, time- and cost-efficient arbitration.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Main Features of the ICC’s Expedited Procedure Provisions</strong></span></p>\r\n<p class=\"p1\">The ICC recently introduced its Expedited Procedure Provisions, which offer an option to conduct arbitration on an expedited or “fast-track” basis for disputes with a limited amount at stake. The Expedited Procedure Provisions came into effect on 1 March 2017 and are set out at Article 30 and Appendix VI of the ICC Rules. The Expedited Procedure Provisions apply to arbitrations in which (1) the arbitration agreement was concluded after 1 March 2017, (2) the amount in dispute is not more than USD 2 million, and (3) the parties have not opted out of the Expedited Procedure Provisions.</p>\r\n<p class=\"p1\">The main features of the Expedited Procedure Provisions that distinguish them from the general arbitration procedures set out in the ICC Rules are summarised in the table below:</p>\r\n\r\n<table class=\"t1\" cellspacing=\"0\" cellpadding=\"0\">\r\n<tbody>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p4\"><span class=\"s2\"> </span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p5\"><span class=\"s1\"><strong>General Arbitration Procedures under ICC Rules</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p5\"><span class=\"s1\"><strong>Expedited Arbitration Provisions under the ICC Rules</strong></span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p5\"><span class=\"s1\"><strong>Maximum Amount in Dispute (USD)</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">Not limited</p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">USD 2 million (or more if agreed by parties) (Article 30(2) and Article 1(2) of Appendix VI of the ICC Rules)</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p5\"><span class=\"s1\"><strong>Terms of Reference</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">Required (Article 23 of the ICC Rules)</p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">Not required</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p5\"><span class=\"s1\"><strong>Case Management Conference</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">To be held “as soon as possible’’ after drawing up the Terms of Reference (Article 24 of the ICC Rules)</p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">Timing is limited to no later than 15 days after the date on which the file is transmitted to the arbitral tribunal (Article 3(3) of Appendix VI of the ICC Rules)</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p5\"><span class=\"s1\"><strong>Number of Arbitrators</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">One or three, as provided in the arbitration agreement (with a default of one if not specified) (Article 12 of the ICC Rules)</p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">One, irrespective of the arbitration agreement (Article 2 of Appendix VI of the ICC Rules)</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p5\"><span class=\"s1\"><strong>Expedited Appointment of Arbitrators</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">No time-limit requirements</p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">Appointment to be made “within as short a time as possible” (Article 2(2) of Appendix VI of the ICC Rules)</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p5\"><span class=\"s1\"><strong>No Oral Hearings/Documents Only</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">Possible, but only if neither party requests otherwise (Article 25(6) of the ICC Rules)</p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">Possible, but for the tribunal to decide (Article 3(4) of Appendix VI of the ICC Rules)</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p5\"><span class=\"s1\"><strong>Submission of New Claims after Constitution of Tribunal</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">Possible</p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">Not allowed (Article 3(2) of Appendix VI of the ICC Rules)</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p5\"><span class=\"s1\"><strong>Deadline for a Final Award</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\"><span class=\"s3\">Six months from the date of the last signature by the arbitral tribunal or by the parties of the Terms of Reference (Article 31 of the ICC Rules)</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">Six months from the date of the case management conference (Article 4(1) of Appendix VI of the ICC Rules)</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p5\"><span class=\"s1\"><strong>Arbitrator Fees</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">Fee scale with a minimum amount of USD 3,000 (Appendix III, Scale B, for general arbitration)</p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p6\">Fee scale with a minimum amount of USD 2,400 (Appendix III, Scale B, for the Expedited Procedure)</p>\r\n</td>\r\n</tr>\r\n</tbody>\r\n</table>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Comparison with Other Institutional Rules </strong></span></p>\r\n<p class=\"p1\">As noted above, the ICC is not alone in offering a mechanism for expediting arbitral proceedings – several other arbitral institutions, including the SCC, ICDR, SIAC, and HKIAC have incorporated such features into their rules as well. This section highlights some of the important similarities and differences in these expedited features among the various sets of rules.</p>\r\n<p class=\"p8\"><em>Amount in dispute</em></p>\r\n<p class=\"p1\">Under the ICC’s rules, the expedited procedures will apply automatically if the amount in dispute is less than USD 2 million, although parties can “opt-out” if they agree that the Expedited Procedure Provisions will not apply. Conversely, parties may also agree to apply the Expedited Procedure Provisions to cases with an amount in dispute of more than USD 2 million if they “opt in” to the Expedited Procedure Provisions for such disputes via the arbitration agreement.</p>\r\n<p class=\"p1\"><span class=\"s3\"> By way of comparison, under the SIAC Rules, expedited procedures can be applied to disputes with an amount in dispute up to the equivalent of USD 4,280,000 (Rule 5.1(a) of Schedule 1 of the SIAC Rules). The recently revised SCC Rules for Expedited Arbitration go even further: they are silent on the amount in dispute in terms of applying the expedited procedures. This approach provides the parties with greater latitude in using the procedures, including in high-value disputes. However, both SIAC and the SCC apply their expedited procedures only in disputes where the parties “opted in” by specifically choosing the expedited procedures in their arbitration agreement. </span></p>\r\n<p class=\"p1\"><span class=\"s4\"> Some institutional rules provide that their expedited rules can apply in cases of “exceptional urgency” (e.g., Rule 5(1)(c) of the SIAC Rules and Article 41.1(c) of the HKIAC Rules), even where the amount in dispute is higher than the amount in dispute stipulated for expedited procedures for non-urgent cases. However, most institutions with expedited procedures, and the ICC in particular, do not require a pre-condition of “urgency” or “emergency” for their expedited procedures to be applied. </span></p>\r\n<p class=\"p1\">Like the ICC’s Expedited Procedure Provisions, the ICDR’s expedited procedures automatically apply to certain low-value disputes, but the cap is set much lower at USD 250,000 as compared to the ICC’s threshold of USD 2 million. Similarly, the cap under the Swiss Rules is set at the equivalent of USD 993,000. The ICC’s calibration of the USD 2 million-threshold may have been driven by the fact that both the number and value of disputes submitted for arbitration under the ICC Rules is growing. According to the ICC Statistical Report for 2015, the average value of the disputes referred to the ICC rose to USD 84 million, which is 25% higher than in 2014, when it was USD 63 million.</p>\r\n<p class=\"p8\"><em>Size and role of an arbitral tribunal </em><em> </em></p>\r\n<p class=\"p1\">Under the ICC’s Expedited Procedure Provisions, the dispute is to be resolved by a sole arbitrator nominated by the parties. If the parties cannot agree, the ICC’s International Court of Arbitration (ICC Court) will appoint an arbitrator. The requirement of a sole arbitrator in the Expedited Procedure Provisions (regardless of the number stipulated by the parties in their arbitration agreement) will foster efficiency in the arbitration process and help reduce the cost of the arbitration. The appointment of arbitrators can be a time-consuming exercise and parties may misuse it as a delaying tactic. Additionally, an arbitration conducted by a sole arbitrator will typically be far cheaper than one in which three members of a tribunal take part.</p>\r\n<p class=\"p1\">The provision for a sole arbitrator is also provided for in the SCC and the ICDR Rules, even when the parties have agreed otherwise. In contrast, the ICDR, SIAC, Swiss, and HKIAC Rules allow a multiple-member tribunal to be appointed by agreement between the parties or by the decision of the arbitration institution.</p>\r\n<p class=\"p1\">With respect to the powers of the tribunal, the ICC’s Expedited Procedure Provisions follow the practise of most other institutions (including the ICDR, SIAC, and HKIAC) by giving the tribunal the full discretion to conduct an arbitration (e.g., to dispense with an oral hearing and to decide a case on the basis of documents only).</p>\r\n<p class=\"p8\"><em>Time limits and procedural matters </em><em> </em></p>\r\n<p class=\"p1\">One of the main purposes of the Expedited Procedure Provisions is to shorten the duration of the arbitration process, which in some complex matters can take years. One of the provisions geared towards keeping the arbitral process brief is the prohibition on parties introducing new claims once the sole arbitrator has been appointed, unless expressly authorized by the arbitrator. Moreover, the Expedited Procedure Provisions provide that the case management conference must be held no later than 15 days after the sole arbitrator has received the file from the ICC. The requirement of a case management conference for expedited arbitrations in most of the institutional rules is consistent with the approach in mainstream arbitration under those institutional rules. A number of institutions, including the ICC, SCC, ICDR, and SIAC, require a case management conference to be held for expedited arbitration.</p>\r\n<p class=\"p1\">Most institutional rules are silent as to whether the application of expedited procedures may be objected to or discontinued after they have been applied. Following the practice of the ICDR Rules and the SIAC Rules, the ICC’s Expedited Procedure Provisions reserve for the ICC Court a right to discontinue the application of the expedited procedure at any stage of the proceedings, either on its own motion or upon the request of a party after consultation with the tribunal and the parties.</p>\r\n<p class=\"p8\"><em>Timing and content of an arbitration award </em></p>\r\n<p class=\"p7\">Award timing differs under the expedited rules of the various institutions. Under the ICC’s Expedited Procedure Provisions, the time limit within which the arbitral tribunal must render its final award is six months from the date of the case management conference.</p>\r\n<p class=\"p1\">In comparison, under most other expedited rules, even those providing a case management conference for their expedited arbitrations (e.g., ICDR, SIAC, and SCC Rules), the time limit for rendering an award is calculated from the date of the constitution of the tribunal (e.g., Rule 5(2)(d) of the SIAC Rules) or from the transmittal of the file to the tribunal (e.g., Article 41(2)(f) of the HKIAC Rules; Article 42(1)(d) of the Swiss Rules).</p>\r\n<p class=\"p1\">The ICC’s six-month time limit for rendering an award follows the practice of most arbitral institutions. However, some institutions provide for a three-month time limit (e.g., Article 43 of the SCC Rules for Expedited Arbitrations). The ICDR Rules establish the shortest deadline for rendering an arbitral award in expedited arbitration, providing that an award must be rendered within 30 days of the closing hearing or of final written submissions.</p>\r\n<p class=\"p1\">There is a tension between, on the one hand, the need to finalise the arbitration within the strict time-limit imposed by the rules, and, on the other, the tribunal’s duty to allow the parties a full opportunity to present their cases. A failure to comply with that duty may make the award unenforceable under Article V(1)(b) of the New York Convention. To avoid this outcome, the ICC’s Expedited Procedure Provisions reserve the right for the ICC Court to extend the time limit for issuing a final award. Hopefully, this provision will apply only in very limited exceptional circumstances.</p>\r\n<p class=\"p1\">The ICC’s Expedited Procedure Provisions require that an award must be reasoned. In contrast, most other expedited rules allow for an award to be in summary form unless the parties have specifically agreed otherwise (e.g., Rule 5.2(e) of the SIAC Rules, Article 41.2(g) of the HKIAC Rules, and Article 42.1(e) of the Swiss Rules).</p>\r\n<p class=\"p9\"><span class=\"s1\"><strong>Conclusion </strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">Mr. Alexis Mourre, the President of the ICC Court, has stated that the ICC’s Expedited Procedure Provisions are “an entirely new offer to the business community and an effective answer to the legitimate concerns of the business community as to the time and costs of arbitration”. Such procedures are indeed a key development in terms of maintaining the attractiveness and utility of international arbitration and have been taken up with enthusiasm. While parties should understand that the Expedited Procedure Provisions are not suitable for all kinds of disputes, parties should seriously consider using these newly established procedure where:</span></p>\r\n\r\n<ul>\r\n 	<li>the dispute is low-value and/or has little impact on the ongoing business of the parties;</li>\r\n 	<li>the case is straightforward and can be dealt with on a documents-only basis;</li>\r\n 	<li>situations where the time and cost of arbitration are material issues; and/or</li>\r\n 	<li>both parties agree to apply the expedited procedure.</li>\r\n</ul>\r\n<p class=\"p1\"><em>Al Tamimi &amp; Company’s Arbitration team regularly advises on dispute resolution and arbitration matters. For further information please contact Thomas Snider (t.snider@tamimi.com). Mr. Snider would like to thank Ms. Iryna Kovalchuk, an intern with Al Tamimi &amp; Co., for her assistance in researching and drafting this article. </em></p>'),
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	(103745,5642,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\">Whatever their designation, such measures involve awards or orders issued for the purpose of preserving the status quo and safeguarding a party from damage during the course of the arbitral process, pending the outcome of the arbitration. Provisional measures are generally available from either the national court or an arbitral tribunal. However, the type of interim relief that a tribunal may grant in arbitration has generated considerable debate for some time now, particularly when it comes to the arbitral tribunal’s power, or lack thereof, to order security for costs.</p>\r\n<p class=\"p1\">Generally, an order for security for costs is an order by a tribunal that orders a party bringing a claim or a counterclaim to provide security for the costs of the other party in case the claim or counterclaim fails and the claiming party does not pay the costs awarded against it. It does not extend to security for any award for damages. In practice, this is provided by way of bank guarantee or payment into an escrow account. Hence, when granted, security for costs allows for predictability regarding the recoverability of the respondent’s costs in arbitration. After all, a respondent has not chosen to go to arbitration, and yet may find itself having to incur substantial legal fees defending a bad claim, only to find that the claimant then refuses to pay its costs or is unable to do so.</p>\r\n<p class=\"p1\">The arbitral tribunal’s power to grant interim measures stems from two sources: the national law of the state in which the arbitration is seated, and (to the extent that law allows) the agreement of the parties (as contained either in the arbitration agreement or the set of arbitral rules that the parties agree to follow).</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>National Legislation </strong></span></p>\r\n<p class=\"p1\">An arbitration tribunal should not grant provisional relief unless satisfied that the applicable arbitration law at the seat of arbitration confers the power on the tribunal to do so. Equally, interim relief ordered by a tribunal will likely not be enforceable in a national court unless the laws governing the arbitration allow such relief. In recent years, we have witnessed a general trend whereby most of the common law based national laws and the rules of most arbitral institutions based in common law jurisdictions expressly provide that arbitrators may order security for costs. In contrast, most of the civil law based national laws and the rules of most arbitral institutions of those jurisdictions do not confer express powers on the arbitrators to order security for costs. The national laws of most civil law jurisdictions do however include broad powers to order ‘any interim measure that they deem necessary’. This general power is considered to be wide enough to include the power to order a party to provide security for costs. Therefore, while in practice it is only ordered in very particular circumstances and the threshold is somewhat high, provided that it is consistent with the parties’ arbitration agreement security for costs is generally available in international arbitration.</p>\r\n<p class=\"p1\">For example, in line with this trend the revised 2006 UNCITRAL Model Law on International Commercial Arbitration provides at Article 17 that “Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, grant interim measures”. It follows that an arbitral tribunal has the power to grant interim relief in an arbitration seated in a jurisdiction that has adopted the Model Law. That said, whilst many national laws grant certain powers to the tribunal to order interim relief, there is still a general lack of express provisions empowering the tribunal to specifically order security for costs.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Common Law Approach </strong></span></p>\r\n<p class=\"p1\">England’s 1996 Arbitration Act and Singapore’s 2012 International Arbitration Act are two examples of national laws which expressly authorize an arbitral tribunal to make an order for security for costs. Article 38(3) of England’s Arbitration Act provides that:</p>\r\n<p class=\"p4\">“The tribunal may order a claimant to provide security for the costs of the arbitration.</p>\r\n<p class=\"p5\">This power shall not be exercised on the ground that the claimant is:</p>\r\n\r\n<ul>\r\n 	<li> an individual ordinarily resident outside the United Kingdom, or</li>\r\n 	<li>a corporation or association incorporated or formed under the law of a country outside the United Kingdom, or whose central management and control is exercised outside the United Kingdom.”</li>\r\n</ul>\r\n<p class=\"p8\">To the same end, the Singapore International Arbitration Act grants the tribunal the power to order security for costs (Article 12(1) (a)). The reason these laws specifically state that the fact the claimant is based abroad is not a grounds for ordering security for costs is because it is the very nature of international arbitration that parties typically will be from different jurisdictions, and parties will not want to arbitrate in a jurisdiction where security for costs order can be made on the mere fact that the claimant is from a different jurisdiction than that of the respondent. It is assumed that the respondent would know the nationality and place of residence of the claimant before entering into business and therefore can fairly be deemed to have assumed the risk of dealing with the claimant.</p>\r\n<p class=\"p1\">Moreover, many of the enforcement risks that might apply in respect of a costs award against a foreign claimant are reduced in the context of international arbitration by the application of the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards. Signatories to the New York Convention, which include (for example) Kuwait, Qatar, Bahrain, UAE, Singapore and England, provide an established legal mechanism for enforcement of the award that is available to the respondent if need be.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Civil Law Approach </strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">Civil law jurisdictions such as Switzerland, France, Bahrain, and Qatar, permit tribunals to order interim measures but with no specific mention of the tribunal’s power to make an order for security for costs. In the French Code of Civil Procedure, for example, both the tribunal and national courts have the requisite jurisdiction to order interim measures. Similarly, in the Middle East, Article 9 of Qatar’s new Arbitration Law (Law No. 2 of 2017) states that the national courts have jurisdiction to order interim measures and Article 17 of the same law provides that:</span></p>\r\n<p class=\"p4\">“Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, grant interim measures or issue preliminary orders as entailed by the nature of the dispute or for prevention of reparable harm, including to:</p>\r\n\r\n<ul>\r\n 	<li>Maintain or restore the status quo pending determination of the dispute;</li>\r\n 	<li>Take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral tribunal itself;</li>\r\n 	<li>Provide a means of preserving assets out of which a subsequent award may be satisfied; or</li>\r\n 	<li>Preserve evidence that may be relevant and material to the resolution of the dispute.”</li>\r\n</ul>\r\nWhilst the aforementioned justifications do not expressly provide for security for costs, they do confer power on the tribunal to order interim measure it deems necessary, which in theory should include security for costs.\r\n<p class=\"p3\"><span class=\"s1\"><strong>Arbitration Rules </strong></span></p>\r\n<p class=\"p2\">Likewise, most major institutional rules nowadays address the tribunal’s power to grant interim measures. For example, Article 26 of the 2010 UNCITRAL Rules does not explicitly refer to security for costs but provides that the tribunal may grant</p>\r\n<p class=\"p4\">“any temporary measure by which, at any time prior to the issuance of the award by which the dispute is finally decided, the arbitral tribunal orders a party, for example and without limitation, to:</p>\r\n\r\n<ul>\r\n 	<li>Maintain or restore the status quo pending determination of the dispute;</li>\r\n 	<li>Take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral tribunal itself;</li>\r\n 	<li>Provide a means of preserving assets out of which a subsequent award may be satisfied; or</li>\r\n 	<li>Preserve evidence that may be relevant and material to the resolution of the dispute.”</li>\r\n</ul>\r\n<span class=\"s3\">Article 28 of the 2017 ICC Rules authorizes a tribunal to order “any interim or conservatory measure it deems appropriate,” subject to contrary agreement by the parties. Along the same line, Article 30 of the DIAC Rules authorizes the tribunal to order various provisional measures as it deems necessary including “injunctions and measures for the conservation of goods”. Some institutional rules do directly refer to security for costs. Article 25 of both the LCIA Rules and the DIFC-LCIA Rules confers on the tribunal the power to order various interim measures, including security for all or part of the amount in dispute including a party’s claim to recover its legal and arbitration costs. </span>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Test for Granting Security for Costs</strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">As can be seen from the above, often the tribunal will have the power to order security for costs. However there is no detailed in guidance in either the law or the arbitral rules as to when such orders should be made. Ordering the claimant to provide security for costs is a serious measure as it may prevent a claimant from being able to pursue a legitimate claim.</span></p>\r\n<p class=\"p1\">The Chartered Institute of Arbitrators (based in London) has issued practice guidelines on security for costs applications (updated in 2016), and recommends that when arbitral tribunal decides whether to make an order for security for costs, they should consider the following points:</p>\r\n\r\n<ul>\r\n 	<li>the prospects of success of the claim and defence. If the defence is clearly hopeless, then there is little prospect of a costs order being given in the respondent’s favour. However tribunal’s are usually careful not to pre-judge the merits on the limited information they usually have at time a security for costs application is made, and will usually assume that the defence has some merit.</li>\r\n 	<li>the claimant’s ability to satisfy an adverse costs award and the availability of the claimant’s assets for an enforcement of an adverse award. This is often the real test, as if the claimant has money and enforcement will be relatively straight forward in the event the claimant does not pay an adverse costs order, then there is little need for security for costs to be granted.</li>\r\n 	<li>whether it is fair in all the circumstances to require one party to provide security for the other party’s costs. So, for example, there could be a situation where although the respondent will likely struggle to enforce a costs order made in its favour, it would be unfair to order security for costs because the claimant’s inability to pay is a result of the respondent’s conduct and it would prevent a seemingly legitimate claim progressing.</li>\r\n</ul>\r\nThis list is not intended to be exhaustive and the guidance is only advisory, but in our experience tribunals follow similar tests. Arbitrators should exercise their discretion and consider any other additional circumstances surrounded the arbitration. A balance must be struck between the rights of a party to pursue its claim against the right of an opposing party to recover the costs of a defence in the event it defeats the claim.\r\n<p class=\"p3\"><span class=\"s1\"><strong>Conclusion </strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">A security for costs order can provide important protection for a respondent against the costs of an action where there is sufficient evidence that the claimant may not be able to pay costs. It is also a useful tool to put pressure on a claimant, or counterclaimant, to settle the proceedings. Care must be taken before making such order though as to avoid unfairly blocking genuine claims made by impecunious parties from moving forward. As demonstrated above, while the majority of national laws and institutional rules empower a tribunal to order interim measures, security for costs is rarely mentioned explicitly. Respondents should however keep the option in mind.</span></p>'),
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	(103768,5643,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\">Although it is called an ‘anti-suit injunction’, it applies to the party itself (being subject to the court’s jurisdiction), and not the suit itself or the court before which the suit has been brought (which would not be in the court’s jurisdiction). Such orders are nonetheless controversial because they will have the effect of interfering with the process of a foreign court (which goes against comity between national courts). This article will explore when such an order might be sought in the DIFC, the tests for seeking it, and whether we can expect to see more of these orders in the future.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Anti-Suit Injunctions – A Brief History</strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">Anti-suit injunctions are a common law creation and have a long history. They developed in the English Chancery Courts and by the 16th century they were being issued to stop defendants filing actions before the various other civil courts that existed at that time (such as the King’s Bench Courts and the Court of Common Pleas). This was in order to stop a defendant oppressing the claimant by bringing claims before the wrong court and so wasting the claimant’s time and money, which is must the same reason that they continue to be issued today.</span></p>\r\n<p class=\"p1\">Anti-suit injunctions are however unknown to civil law jurisdictions, where there is a strong emphasis on the individual’s right to have access to whichever courts they believe they have the right to use. It is then for that foreign court to determine if it has the jurisdiction to deal with the claim as filed. This necessarily involves questions of state sovereignty (the courts being an organ of the state), and it would be considered an affront to comity and an inference in the foreign state’s judicial affairs for an anti-suit injunction to be issued.</p>\r\n<p class=\"p1\">The differences in approach between the civil and common law systems are clearly seen in the UAE, where both systems co-exist in the form of the UAE Courts (civil law) and the DIFC and ADGM Courts (common law).</p>\r\n<p class=\"p2\"><strong>The UAE Courts</strong></p>\r\n<p class=\"p1\">The UAE Courts do not issue anti-suit injunctions. Instead they accept the notion that it is the right of people to file claims before whichever national courts they believe has jurisdiction to deal with the dispute. It is then for that court to determine if it does indeed have jurisdiction. It is not for the UAE Courts to interfere with such rights, or to interfere with the sovereign power of a foreign court to determine its own jurisdiction.</p>\r\n<p class=\"p1\">There is support for this approach in the UAE Civil Code, which states:</p>\r\n<p class=\"p4\">‘Article 104 The doing of what is permitted by law negates liability, and no person who lawfully exercises his rights shall be liable for any harm arising thereout’</p>\r\n<p class=\"p1\">This means that the UAE Courts are unlikely to entertain a claim for damages in relation to the wasted costs incurred defending a claim wrongfully brought by the other party before a foreign court.</p>\r\n<p class=\"p2\"><strong>The DIFC Courts</strong></p>\r\n<p class=\"p1\">The DIFC Courts are a common law court and will issue anti-suit injunctions in support of proceedings before the DIFC Courts, arbitration, and even foreign court proceedings. Breaching such an order would be a contempt of court and may lead to a fine or a person being arrested.</p>\r\n<p class=\"p1\">The DIFC Courts have discretion as to when to issue an anti-suit injunction, and will follow the English Courts’ approach in considering the following factors:</p>\r\n\r\n<ul>\r\n 	<li>Whether the foreign proceedings are the best forum for the dispute, or are oppressive and vexatious on one of the parties.</li>\r\n 	<li>Whether the foreign proceedings breach a binding contract between the parties to arbitrate or to litigate before the DIFC Courts.</li>\r\n 	<li>Whether in the circumstances it is just and convenient to order the injunction. This will also involve a consideration as to whether the application was made promptly.</li>\r\n</ul>\r\n<p class=\"p7\">In <em>Brookfield Multiplex Construction LLC v DIFC Investments</em> (CFI 020/2016) the DIFC Courts were presented with an application for an order to restrain the defendant from pursuing proceedings in the Dubai Courts in alleged breach an arbitration seated in DIFC. The DIFC Court of First Instance ultimately rejected the application because the proceedings before the Dubai Courts were not substantive proceedings, they simply involved the Dubai Court appointing an expert to issue a report on the alleged faulty workmanship without making any binding findings. However the judge in that case, Justice Sir Jeremy Cooke, commented that if the Dubai Courts had taken jurisdiction over the matter, the DIFC Court would have had to have considered whether to issue an anti-suit injunction to restrain the defendant from pursuing the action before the Dubai Courts.</p>\r\n<p class=\"p1\"><span class=\"s2\"> Whilst it has yet to actually occur, this raises the difficult and unusual possibility of parties obtaining anti-suit injunctions from the DIFC Court to restrain claims before the Dubai Courts, whilst the Dubai Courts themselves would not grant such injunctions to prevent a party from pursing an action before the DIFC Courts. Decree 19 of 2016 goes some way to avoid this scenario, as it has created a tribunal to resolve issues of jurisdiction between the two courts. Nonetheless, it highlights some of the tensions that can arise in Dubai where there are two very different judicial systems co-existing. </span></p>\r\n<p class=\"p1\">The ADGM Courts have yet to deal with such issues but will likely take the same approach of the DIFC Courts.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>The Future</strong></span></p>\r\n<p class=\"p1\">The DIFC Courts have made it clear that they are willing to issue anti-suit injunctions, even if they relate to other judicial proceedings within the UAE. The creation of a judicial tribunal under Decree 19 of 2016 to resolve jurisdiction issues means that hopefully the DIFC Courts will not have to do this, but it nonetheless underlines the intent of the DIFC Courts to issue injunctions whenever it considers it appropriate. Indeed the Court issued an anti-suit injunction in early 2017 to restrain a party from continuing a civil claim in Pakistan in breach of an arbitration clause, the first time it has done so.</p>\r\n<p class=\"p1\"><span class=\"s2\"> This represents a significant change in legal environment in the Middle East, which before the DIFC Courts had not seen the issuance of an anti-suit injunction. It is further reason for parties to consider using the DIFC Courts, as the availability of such orders severely reduces the prospect of one party ignoring an arbitration clause or exclusive jurisdiction clause, or otherwise attempting to cause problems by filing proceedings in its home jurisdiction. </span></p>'),
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	(103774,5643,'pageSummary','An anti-suit injunction is an order by a court that demands that a person refrain from pursuing a claim before another court or arbitral tribunal.'),
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	(103778,5643,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Robert Karrar Lewsley'),
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	(103782,5643,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','Dubai, UAE'),
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	(103790,5643,'_yoast_wpseo_metadesc','An anti-suit injunction is an order by a court that demands that a person refrain from pursuing a claim before another court or arbitral tribunal.'),
	(103791,5644,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\">Those decisions left intact, for now, the DIFC Courts’ status as a conduit for the enforcement of foreign arbitral awards and foreign judgments in Dubai. They did, however, effectively stop domestic arbitral award creditors pursuing the same route, at least until challenges to the validity of those awards have been conclusively determined in the Dubai Courts.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>The reaction of the Dubai Court of First Instance to the Decree 19 Tribunal decision in <em>Meydan</em></strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">The Dubai Courts may have started reacting to the Decree 19 Tribunal and its decisions. On 15 February, the Dubai Court of First Instance issued an unusually detailed judgment annulling the DIFC Courts’ decisions, at both first instance and on appeal, in <em>Meydan Group LLC v. Banyan Tree Corporate Pte Ltd</em> (ARB 003/2013 &amp; CA 005/2014). <em>Meydan</em> essentially established the precedent for the DIFC Courts being used to recognise and enforce domestic arbitral awards so that the resulting DIFC Court orders can be taken to the Dubai Courts, and other courts, for execution. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> The procedural history of <em>Meydan</em> is relatively straightforward. Banyan Tree obtained a DIAC arbitration award against <em>Meydan</em> and sought its recognition and enforcement in the DIFC Courts in 2013. At both first instance and on appeal, the DIFC Courts found they had jurisdiction to hear the claim and proceeded to recognise and enforce the award. The outcome of these DIFC Court proceedings was widely commented on because neither <em>Meydan</em> nor <em>Banyan Tree</em> had offices, assets or activities within the DIFC. The underlying contract, a hotel management agreement, was governed by Dubai law rather than DIFC law and the seat of the arbitration was Dubai rather than the DIFC, meaning that the supervisory courts were the Dubai Courts and not the DIFC Courts. </span></p>\r\n<p class=\"p1\"><span class=\"s3\"> <em>Meydan</em> applied to the Dubai Courts to seek the nullification of the DIFC Court orders. The Dubai Court of First Instance considered the actions of the DIFC Courts and nullified the decisions of both the DIFC Court of First Instance and the DIFC Court of Appeal citing their alleged lack of jurisdiction. In doing so, the Dubai Courts considered a matter for which the Decree 19 Tribunal was established, although the latter body has no power under Decree 19 to nullify court orders. It is also worth noting that an earlier jurisdiction challenge by <em>Meydan</em> in the Union Supreme Court failed. </span></p>\r\n<p class=\"p1\"><span class=\"s4\"> The DIFC Courts’ jurisdiction is set out in the Judicial Authority Law (Dubai Law 12 of 2004 as amended by Dubai Law 16 of 2011, the JAL). Article 5 of the JAL gives the DIFC Courts exclusive jurisdiction in cases involving the DIFC, its bodies and establishments; cases involving contractual disputes performed or executed in the DIFC; incidents in the DIFC; or where contracting parties have opted into its jurisdiction in writing. In its annulment judgment, the Dubai Court of First Instance noted this limited jurisdiction of the DIFC Courts and explained that the Dubai Courts’ jurisdiction prevailed in all other circumstances. The Dubai Courts were described as the normal, default courts of the emirate, while the DIFC Courts had only exceptional jurisdiction. Any decisions of the DIFC Courts falling outside this exceptional jurisdiction must therefore fall within the jurisdiction of the Dubai Courts. As none of the jurisdictional gateways set out above were available in <em>Meydan</em>, the Dubai Court of First Instance felt entitled to nullify the DIFC Court orders issued in that case. </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Analysis of the Dubai Court of First Instance judgment in Meydan </strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">A number of observers consider the judgment of the Dubai Court of First Instance to have been wrongly decided. Perhaps most importantly, the judgment does not adequately acknowledge the statutory provisions that underpin the DIFC Courts’ judgments in <em>Meydan</em>. Specifically, it fails to address the key provision in the JAL providing that the DIFC Courts have jurisdiction over any “<em>claim or action over which the [DIFC] Courts have jurisdiction in accordance with DIFC Laws and DIFC Regulations</em>” (Article 5(A)(1)(e)). One of the DIFC’s laws, the Court Law (DIFC Law 10 of 2004) expressly permits the DIFC Courts to ratify any recognised judgments and awards (Article 24). Neither the JAL nor the Court Law apply a DIFC location or asset test to the exercise of this jurisdiction.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> The Dubai Court of First Instance judgment is also inconsistent with the Decree 19 Tribunal’s judgment in <em>Daman Real Estate Capital Partners Limited v Oger Dubai LLC</em> (Cassation 1/2016). In the latter judgment, the Decree 19 Tribunal expressly stated that both sets of courts had jurisdiction to enforce domestic awards. In Daman, the arbitration award debtor had sought to have a DIAC award annulled by the Dubai Courts while the DIFC Courts had in parallel considered and then recognised and enforced the same award. The Decree 19 Tribunal determined that in the interests of due process, and in order to avoid the risk of conflicting judgments, only one of the two sets of courts should hear both the enforcement claim and the annulment application. It added that on the basis of the “general principles embodied in the laws of the civil procedure”, the appropriate forum for the matter was the Dubai Courts, though no further reasoning was provided.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> In contrast, in <em>Meydan</em>, the Dubai Court of First Instance dismissed any jurisdiction of the DIFC Courts to enforce any domestic award at all. It cited the Protocol of Jurisdiction signed by the Dubai Courts and DIFC Courts in support of its annulment decision, ignoring the specific recognition and enforcement powers of the DIFC Courts set out in the JAL, a Dubai statute, and in the Court Law, a DIFC statute. </span></p>\r\n<p class=\"p1\">Furthermore, the Decree 19 Tribunal does not have jurisdiction to annul any judgments. It is therefore surprising that the Dubai Court of First Instance considered that it had the power to declare the DIFC Courts’ judgments in <em>Meydan</em> null and void ab initio when the body established to resolve jurisdictional conflicts between the two sets of courts, the Decree 19 Tribunal, does not have the power to do so. For this reason alone, it seems unlikely that the judgment of the Dubai Court of First Instance in <em>Meydan</em> would survive an appeal.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Amendments to the Decree 19 Tribunal’s procedures</strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">The Decree 19 Tribunal is expressly empowered by Decree 19 to propose the rules necessary to prevent conflicts between the Dubai Courts and DIFC Courts (Article 2(3)) and to set out rules for the Decree 19 Tribunal’s procedures. While some of its rules and procedures are already publicly known, adding greater clarity to them would allow the Decree 19 Tribunal to operate more efficiently, leading to more predictable decision-making and reducing unnecessary delays and costs. As more decisions and rules are issued by the Decree 19 Tribunal, they can be expected to serve as precedents and guidance for affected parties. This should help deter or dismiss applications that are weak and motivated purely by short-term tactical considerations.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> The Decree already places some welcome requirements on the Decree 19 Tribunal, including to issue a final decision no later than 30 days from the date of submission of any application. However, it is silent on key procedural matters such as how an application is communicated to a respondent, in what form a respondent is required to respond, and by when it must do so.</span></p>\r\n<p class=\"p1\">The Decree is also silent on the language of proceedings before the Decree 19 Tribunal; whether the Decree has retrospective effect; and oversight of the Tribunal. We understand a practice direction setting out rules and procedures (beyond those set out in the Decree itself) is being considered. If and when it emerges, it should make the operations of the Decree 19 Tribunal more transparent and effective. Many practitioners will be keen to avoid the Tribunal becoming a general appeal court for parties that have exhausted their options in the DIFC Courts or Dubai Courts, so this issue may also be addressed in any such practice direction.</p>\r\n<p class=\"p1\"><span class=\"s4\"> A preliminary or summary judgment procedure may also prove useful to filter out spurious applications. This could involve a single judge of the Tribunal carrying out a paper review of an application at a permission stage, followed by a summary decision-making by three judges. Arguably the full Tribunal would only need to meet to consider the most complex or controversial applications.</span></p>\r\n<p class=\"p1\">The decisions of the Decree 19 Tribunal are published in both Arabic and English, with the former version being authoritative. The early judgments have been terse and set out limited reasoning or analysis in relation to their conclusions. Sections of the English-version judgments are unclear, which is surprising in view of the fact that they were signed off by experienced DIFC Court judges with international backgrounds. Parties and practitioners are likely to expect the Tribunal to enhance not only its rules and procedures but also the substance of its judgments in order to provide greater predictability of its approach to conflicts of jurisdiction.</p>'),
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	(103795,5644,'content_description','In the last edition of Law Update, Diego Carmona and Muhammad Mahmood considered the implications of four of the first decisions of the Judicial Tribunal (also known as the Joint Judicial Committee) established by Dubai Decree 19 of 2016 (‘Decree 19 Tribunal’). '),
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	(103797,5644,'pageSummary','In the last edition of Law Update, Diego Carmona and Muhammad Mahmood considered the implications of four of the first decisions of the Judicial Tribunal (also known as the Joint Judicial Committee) established by Dubai Decree 19 of 2016 (‘Decree 19 Tribunal’).'),
	(103798,5644,'_pageSummary','field_59e59b307dec8'),
	(103799,5644,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/april-10/the-decree-19-judicial-tribunal-and-its-consequences-redefining-the-scope-of-the-difc-courts-jurisdi.html'),
	(103800,5644,'_currentURL','field_59d35123ab1e7'),
	(103801,5644,'lawUpdateArticleWriters_0_lawUpdateArticleWriter','901'),
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	(213949,5644,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(213948,5644,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Tarek Shrayh'),
	(103805,5644,'lawUpdateArticleWriters','1'),
	(103806,5644,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(103807,5644,'_yoast_wpseo_metadesc','In the last edition of Law Update, Diego Carmona and Muhammad Mahmood considered the implications of four of the first decisions of the Judicial Tribunal (also known as the Joint Judicial Committee) established by Dubai Decree 19 of 2016 (‘Decree 19 Tribunal’).'),
	(103808,5645,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\">This is a natural by-product of an economy that has been stimulated by massive investment and managed by large-scale economic entities and financial institutions. Growing wealth and prosperity naturally encourages increases in criminal activity, particularly crimes involving seemingly-normal commercial transactions. In this article, we shed light on an example of a common criminal activity: fraud. </span></p>\r\n<p class=\"p1\">Article 399 of UAE Federal Law No. 3 of 1987, as amended, (the ‘Penal Code’) stipulates that:</p>\r\n<p class=\"p2\">‘Whoever captures for himself or for others transferable money or documents or signing such document or cancelling, damaging or amending it through trickery or using a false name or personality for the purpose of tricking the victim and forcing him to deliver such shall be punished with a jail or a fine.</p>\r\n<p class=\"p3\"><span class=\"s2\"> The same penalty shall be applied to whoever disposes of a building or a movable that he knows he does not own or that he has no right to dispose of such or who disposes of anything of the same kind with the knowledge that another person has disposed of such or contracted on and hence he shall harm the other.</span></p>\r\n<p class=\"p3\">The attempt shall be punished with a jail for a period not exceeding two years or a fine not exceeding ten thousand dirhams.’</p>\r\n<p class=\"p4\">The layman’s understanding of fraud is that it is an offence that involves deception; however, the elements of the crime are more nuanced. The act of fraud, under UAE law, is the act of acquiring or receiving, through fraudulent means, money, moveable goods, or immoveable real property that is owned by another person. Those means, to be fraudulent, have to convince the victim to surrender the money, goods, or property to the offender. While deception is a necessary aspect of fraud, it is not sufficient in and of itself to establish the offence. Fraud is only considered to have occurred when the act has involved both deceit and the use of fraudulent means to obtain property or assets.</p>\r\n<p class=\"p6\"><span class=\"s3\"><strong>Deceit and fraud distinguished</strong></span></p>\r\n<p class=\"p1\">These requirements are reflected in the decision of the Dubai Court of Cassation in judgment 19 of 1995. In that case, the Court stipulated that the act of lying on its own does not lead to the establishment of fraud. Both deceit and fraudulent means to obtain property or assets had to be established for the offence to have occurred. ‘Merely false sayings and allegations are not sufficient for fraudulent means to take place. Lying should be accompanied with material acts or external appearances [that] cause the victim to believe in the truth of the lie and to surrender his money as a result of such belief’, the Court explained.</p>\r\n<p class=\"p1\">The element of the offence, ‘using fraudulent means’, is defined by Article 399 of the Penal Code as constituting any of the following actions committed with the intention of deceiving others:</p>\r\n\r\n<ul>\r\n 	<li>using a false name or acting in a false capacity;</li>\r\n 	<li>disposing of money, or moveable or immoveable property, while knowing that it is not the disposer’s property or that he is not entitled to dispose of the same; or</li>\r\n 	<li>falsely imitating an act previously carried out by another.</li>\r\n</ul>\r\n<p class=\"p4\"><span class=\"s2\">These acts are not only characterised as being deceitful but are also defined as using external instruments for the purpose of supporting the act of fraud. </span></p>\r\n<p class=\"p4\"><strong>Requirement of an ‘external instrument’</strong></p>\r\n<p class=\"p1\">An external instrument, in this sense, refers to measures taken to lend credibility to the deception involved in the fraud. For instance, a criminal may establish a fraudulent company, open headquarters, appoint support staff, and take other steps to create the illusion of a legitimate business. Constructing an appearance of legitimacy confers a level of trust that makes it easier to coerce funds from victims. Commonly fabricated qualities include appearances of wealth, professionalism, or morality to encourage greater levels of trust.</p>\r\n<p class=\"p1\">External instruments or appearances can be used in other ways, depending on the type of fraud in question. For example, they can also be used to convince a victim of the occurrence of a false incident, as is common in insurance fraud. For example, a criminal may commit arson to obtain the monetary value of an insured property or conceal the whereabouts of a vehicle before claiming that it had been stolen.</p>\r\n<p class=\"p1\"><span class=\"s4\"> Where a fraudster is assisted by another person in carrying out a deceit, the use of an accomplice is also deemed an external instrument and constitutes fraud. According to the Dubai Court of Cassation in a judgment dated 12/03/2005, in Challenge No. 1/2005 Penal Code, however, the accomplice is only considered an external instrument if their participation was ‘a result of the effort, intention, and organisation of the criminal’ and was not independently solicited by the accomplice. The accomplices support and intervention will be considered when evaluating the criminal’s lying to a crime of fraud.</span></p>\r\n<p class=\"p6\"><span class=\"s3\"><strong>Abuse of position</strong></span></p>\r\n<p class=\"p1\">The act of taking a false identity refers to the criminal availing itself of a false identity to provoke a desired response from the victim. For example, a fraudster may pretend to be a lawyer to obtain confidential information from a victim. It is important to note that, whilst this would be a blatant lie, Article 399 of the Penal Code does not refer to this offence explicitly as identity fraud, but rather as simple fraud.</p>\r\n<p class=\"p1\"><span class=\"s4\"> This differs, however, in instances where the fraudster has presented themselves in their true capacity, but abused the trust associated with the given role in an attempt to convince the victim to surrender monies. A policeman, for example, may apprehend a victim and convince them of their obligation to pay a contrived fine. The fraudster has not taken a false identity but has rather abused their position and added certain elements to deceive the victim. In such cases, the judiciary will generally consider the misuse of position or office as a form of fraudulent means. </span></p>\r\n<p class=\"p6\"><span class=\"s3\"><strong>Deceit</strong></span></p>\r\n<p class=\"p1\">Deceit is that which would cause a victim to believe in an untruth, thereby causing an ordinary person to surrender property. The test for deceit requires that an ordinary or reasonable person would be deceived by the misrepresentation. Actions that were too incredible or outlandish do not fall within the scope of the rule.</p>\r\n<p class=\"p1\">With regards to deceit with the intent of gaining control or disposing of property to which the fraudster has no claim, it is possible for an ordinary lie, without an external instrument, to constitute a fraud. The law has been framed to encompass the situation where a victim believes in the validity of the financial transaction even though the perpetrator has not made specific misrepresentations on their position or capacity. Even if a false name or capacity has been assumed as part of an ordinary lie, without the support of external instruments, such actions are still deceitful and should be punished according to the law of fraud. In these cases, if the victim believes that the accused’s identity is authentic, without the usual accompanying evidence, the fraudster is still considered guilty of taking a false name or capacity. It is important to note that deceit may occur in many forms, but wherever it occurs in writing, it may also constitute forgery.</p>\r\n<p class=\"p6\"><span class=\"s3\"><strong>Identifying the victim</strong></span></p>\r\n<p class=\"p1\">The law assists in identifying the true victim of a fraud. The law states that the victim is the possessor, at the time of the crime, of the object of fraud, such as the money or property stolen, rather than the owner of the property.</p>\r\n<p class=\"p1\">For instance, consider the position of a couple who have been sold a property by a man claiming to be a property developer. After signing the deal, it transpires that the man does not in fact own the property in question and has disappeared with the couple’s money. In this case, the victims of the fraud are the couple who now have completed an invalid purchase, and not the true owner of the house. The true owner is not directly harmed by the crime in the sense of having suffered any damage, although his compromised right to possess the property would still be considered a criminal harm.</p>\r\n<p class=\"p1\">The above rules apply in all instances where the fraudster is not in possession of the property that is subject to a sale, whether it is moveable or immovable in nature. However, if the property is moveable and the fraudster is the possessor, then the original owner is also a direct victim of the crime. It is important that the law distinguishes between movable and immovable property and the law relating to ownership. In offences relating to immovable property, such as houses, the title of deed will constitute proof of the ownership of the building, irrespective of who has control of the property. For movable property, or chattels, the individual in control is assumed to be the legal owner until proven otherwise.</p>\r\n<p class=\"p6\"><span class=\"s3\"><strong>The circumstances of the victim</strong></span></p>\r\n<p class=\"p1\">The criminal law takes into account the intention of the victim as well as the perpetrator of fraud, making this element of the offence different from the element of deceit.</p>\r\n<p class=\"p1\">In cases where the fraud involves the victim committing an illegal offence, the criminality of the victim does not absolve the fraudulent nature of the act. For example, if a perpetrator assumes the role of an arms dealer to broker a transfer of stolen weapons to a victim who intends to use the weapons for a criminal purpose but disappears with the payment monies before the weapons have been handed over, a fraudulent scheme has still taken place, and the illicit nature of the victims’ activity does not prevent them from being victims.</p>\r\n<p class=\"p1\"><span class=\"s4\"> To avoid being classified as fraud, the conditions that are used to persuade the victim to surrender money must be correct and devoid of any falsification. In the Court authority cited above, the defendants used the victim’s prior knowledge of an existing case of theft in the area to convince the victim of an imminent risk of robbery and attack. The use of such information, by itself, does not constitute a fraudulent act. </span></p>\r\n<p class=\"p6\"><span class=\"s3\"><strong>Conclusion</strong></span></p>\r\n<p class=\"p1\">Individuals and companies should be careful when dealing with other parties in transactions involving the transfer of funds or properties. Parties must verify powers, ownership, and other lawful capacities before concluding any transaction. It is not sufficient simply to rely on the appearance of any counter party or to make assumptions as to the other party’s powers.</p>'),
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	(103812,5645,'content_description','Hand-in-hand with the virtually continuous development of economic activity within the UAE, there has been a steady rise in the complexity of commercial transactions. '),
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	(103814,5645,'pageSummary','Hand-in-hand with the virtually continuous development of economic activity within the UAE, there has been a steady rise in the complexity of commercial transactions.'),
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	(103822,5645,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Mohamed El Deessouky'),
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	(103824,5645,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','m.dessouky@tamimi.com'),
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	(103834,5645,'_yoast_wpseo_metadesc','Hand-in-hand with the virtually continuous development of economic activity within the UAE, there has been a steady rise in the complexity of commercial transactions.'),
	(103835,5646,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\">In this article, we look at the facts of the case, a dispute between two Bahraini companies, and provide commentary and analysis on it in light of our own experiences in a similar case.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Facts</strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">The appellant (the defendant in the underlying dispute) began proceedings before the High Civil Court to annul the arbitral award number 74/2013 issued against it by the Centre. The High Civil Court rejected the appellant’s action and it appealed to the Court of Appeal. During the appeal, the appellant challenged the constitutionality of Article 36 of the Centre’s Arbitration Rules. </span></p>\r\n<p class=\"p1\">Article 36 reads as follows (unofficial translation):</p>\r\n\r\n<ol>\r\n 	<li>An award passed by the Tribunal pursuant to these Rules shall be binding and final. It shall be enforceable in the GCC member States once an order is issued for the enforcement thereof by the relevant judicial authority.</li>\r\n 	<li>The relevant judicial authority shall order the enforcement of the arbitration award unless one of the litigants files an application for the annulment of the award in the following specific events: (a) If it was passed in the absence of an arbitration agreement or in pursuant to an invalid arbitration agreement, or if it was prescribed by the lapse of time or if the arbitrator goes beyond the scope of the agreement. (b) If the award was passed by arbitrators who have not been appointed in accordance with the law, or if it was passed by some of them without being authorised to hand down a ruling in the absence of others, or if it was passed pursuant to an arbitration agreement in which the matter of the dispute was not specified, or if it was passed by a person who was not legally qualified to issue such award.</li>\r\n</ol>\r\n<p class=\"p6\">Upon the occurrence of any of the events indicated in the above two paragraphs, the relevant judicial authority shall verify the validity of the annulment petition and shall pass a ruling for non-enforcement of the arbitration award”.</p>\r\n<p class=\"p7\">Constitutional Court Legislative Decree No. 27 of 2002 allows parties in a dispute to challenge the constitutionality of an article, whether in a law or in a regulation. If the relevant court deems that such challenge is serious, it shall adjourn the case and grant a period of no more than a month in which the appellant must file a challenge in the form of a case before the Constitutional Court. Otherwise, the party’s challenge must be dropped.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Grounds of appeal </strong></span></p>\r\n<p class=\"p2\">The appellant challenged Article 36 of the Arbitration Rules and alleged that this Article violated the Articles of the Constitution of Bahrain, namely Article 20(f), which guarantees the rights to litigate under the law, and Article 30, which states: “<em>The organising of rights and freedoms laid down in this Constitution and their delimitation will be as per law or based on it. Such organisation or determination will not be prejudicial to the essence of the right or the freedom.</em>”</p>\r\n<p class=\"p1\"><span class=\"s1\"> The appellant argued that both the restriction on filing a direct annulment action against an award issued by the Centre (in a similar way to an ad-hoc arbitration, where an annulment action against an award must follow any enforcement application by the successful party) and the limited annulment grounds under Article 36 removed the appellant’s constitutional right to litigate before the Bahraini courts. </span></p>\r\n<p class=\"p1\">The appellant also claimed that Article 36 breached the Constitution because it treats parties unequally and discriminated between those who referred a dispute to arbitration from those who referred a matter to the civil courts.</p>\r\n<p class=\"p1\"><span class=\"s1\"> The appellant also argued that the Arbitration Rules were unconstitutional because they had not been issued by the Bahraini parliament as the competent legislative authority, but were instead ratified by the King as head of the executive authority. </span></p>\r\n<p class=\"p9\"><span class=\"s2\"><strong>The ruling of the Constitutional Court</strong></span></p>\r\n<p class=\"p1\">The Constitutional Court ruled in its judgment that Article 36 of the Arbitration Rules was constitutional because there had been no violation of either Articles 20(f) or 30 of the Constitution.</p>\r\n<p class=\"p1\"><span class=\"s1\"> The Constitutional Court addressed the appellant’s allegations by stating that the Arbitration Rules were issued pursuant to Article 28 of the Centre’s Charter, which was ratified by Legislative Decree No 6 of 2000. The Constitutional Court noted that Article 36 of the Arbitration Rules provided detail for what was described in general terms at Articles 14 and 15 of the Centre’s Charter. The Court also found that the Centre’s Rules could be regulated by the executive authority without violating the Constitution, by taking into consideration the contractual nature of arbitration.</span></p>\r\n<p class=\"p1\">On the other hand, the Constitutional Court indicated that parties who voluntarily choose to resolve their disputes through arbitration are different in their legal status compared with those who seek to resolve their disputes through ordinary courts. Each has its own legal status, obligations, and procedures. In light of these differences, equal treatment is not a necessity and, accordingly, any inequality between litigants in arbitration and those before the courts does not breach the general right of equality before the law. The Court further explained that legislators may vary the regulation of the right to litigate, distinguishing between different types of dispute resolution without breaching the principle of equality before the law.</p>\r\n<p class=\"p9\"><span class=\"s2\"><strong>Commentary</strong></span></p>\r\n<p class=\"p8\">It appears that the appellant attempted all possible methods to attack the arbitral award issued by the Center, as the appellant began an application to annul the award before the other party could commence execution of the award. After the court of first instance refused the annulment application, the appellant then brought the claim on the grounds of unconstitutionality at the appeal stage. It is likely that the ruling of the court of first instance described in detail the reasons for rejecting the application, leaving the appellant with no recourse but to bring proceedings in the Constitutional Court.</p>\r\n<p class=\"p1\">The issue of the Constitutional Court’s ruling does not necessarily end the journey for the appellant as it may still file a second application for the annulment of the arbitral award when the claimant, as judgment creditor, files for execution as under Article 36 of the Center’s Arbitration Rules. The path to requesting annulment of the arbitral award remains open despite the rejection of the claim of unconstitutionality including the rejection of the annulment action.</p>\r\n<p class=\"p1\">In our view, the rash action of the appellant in requesting annulment of the arbitral award at the outset brings to mind a rule of jurisprudence which states that “<em>whoever hastens what is not yet due, is to be deprived of it.</em>” The Arbitration Rules do allow a request for annulment but this must be conducted in a specific timeframe i.e. only once the application for the enforcement of the award is made.</p>\r\n<p class=\"p1\">The Court of Cassation gave its opinion on the judicial authority that may be requested to annul an arbitral award: “<em>What is meant by the competent judicial authority in these articles (i.e. the Centre’s Arbitration Rules) that looks into enforcement of the award is the competent judicial authority in the state where the award will enforced, and where the award is deposited if required by local law. There is nothing in the Arbitration Rules or the Center’s Charter that affords the High Civil Court in the State of Bahrain competency in this regard, and this is notwithstanding the fact that the Center’s premises are in Bahrain and established as an independent and active judicial authority and subjected to its own regulation of arbitration and rules of proceedings.</em>” Case No. 101/2010, session of 2/4/2012. As such, it was incumbent upon the appellant to wait until notified of the request to enforce the arbitral award. Only then could the appellant bring a request for annulment of the award according to the reasons cited by Article 36 of the Arbitration Rules, if any. For instance, if enforcement was requested in the United Arab Emirates, the courts of the UAE would be the competent judicial authority to bring an annulment request before them regardless of the Center’s location being in the Kingdom of Bahrain.</p>\r\n<p class=\"p1\">Despite upholding the constitutionality of the Arbitration Rules in this case, such claims – whether upheld or rejected – contribute to the enrichment of legal jurisprudence. If there is any consolation to the appellant, it may perhaps be that such important constitutional principles emerge that related to both litigation and arbitration.</p>\r\n<p class=\"p1\">The Constitutional Court’s judgment is final and not subject to any form of appeal. The appellant is likely to bring annulment proceedings once enforcement proceedings are issued.</p>\r\n<p class=\"p9\"><span class=\"s2\"><strong>Other case law</strong></span></p>\r\n<p class=\"p1\">In a similar case, where we are representing the defendant who received an arbitral award in its favour, the High Civil Court in Bahrain issued a ruling in which it refused to enforce the arbitral award despite the facts that (a) the defendant had not submitted a request for enforcement in Bahrain, and (b) the complete absence of any evidence to justify this decision. The enforcement request was actually submitted in the UAE.</p>\r\n<p class=\"p1\">The High Civil Court determined that it had competency to consider such a case after making the following points:</p>\r\n<p class=\"p1\">“<em>..The court makes reference to its competence and judicial specialisation,</em></p>\r\n<p class=\"p1\"><em> And with regards to the defence presented by the defendant claiming non-competence of the courts of Bahrain to consider the case,</em></p>\r\n<p class=\"p1\"><em> And with the arbitral award being unenforceable except by virtue of an order by the head of the court where the original award was deposited based on a request of any of the parties,</em></p>\r\n<p class=\"p1\"><em> And in view of the annulment request normally being submitted to the competent court in compliance with Article 243 of the Civil and Commercial Proceedings Law, which is the High Civil Court as related to the presented case,</em></p>\r\n<p class=\"p1\"><em> And based on the foregoing, and with the arbitral award in this case having been issued from the GCC Commercial Arbitration Center, and is therefore subject to Law No. 6 of 2000 and its Arbitration Rules that have been ratified by the GCC Commercial Cooperation Committee in 16/11/1994, as amended in 5/10/1999,</em></p>\r\n<p class=\"p1\"><em> And since Article 36 of Centre’s Arbitration Rules stipulates that an arbitral award issued by the tribunal is binding and final and enjoys enforceability at GCC member states after being ordered to be enforced by the competent judicial authority, unless a party requests annulment, in which case it must verify the accuracy of such request and rule against enforcing the arbitral award,</em></p>\r\n<p class=\"p1\"><em> And since the competent judicial authority in the presented case is the High Civil Court as described earlier, and the appellant submitted this case to prevent enforcement of the arbitral award which is a competency of the court since it is the judicial authority responsible for verifying the accuracy of the annulment request, which is in addition to the fact that the award enjoys enforceability in GCC member states, and Bahrain is such a member state,</em></p>\r\n<p class=\"p1\"><em> As such, the courts of Bahrain are competent to consider the dispute, and the defence becomes without basis and must be rejected.</em>”</p>\r\n<p class=\"p1\">It is obvious that the decision of the High Civil Court concerned a mixture of laws, including the arbitration provisions of the Civil and Commercial Procedures Law (which have since been repealed) and the Arbitration Rules of the Center. This is despite the fact that legal provisions concerning arbitration in the Civil and Commercial Procedures Law are not applicable in an institutional arbitration that is subject to the rules and procedures of a given center (in our case, the Centre). This also represents an unusual departure from the usual position of upholding the arbitration agreement of the parties.</p>\r\n<p class=\"p1\">Establishing that arbitral awards issued by the Center are enforceable in GCC member states does not automatically assign competency to all courts of the member states. Establishing competency is intrinsically tied to the order to enforce from the competent judicial authority, as stipulated by Article 15 of the Centre’s Charter. It was incumbent on the court to firstly verify the existence of such an enforcement request or enforcement order.</p>\r\n<p class=\"p1\">As such, it is legally unsound to establish competency for all courts of GCC member states based on the general principles of the local, Bahraini Civil and Commercial Procedures Law, especially with regards to the annulment of arbitral awards issued by the Center in particular or generally any other institutional or international arbitration. Each such type of dispute resolution avenue has its own considerations and requirements.</p>\r\n<p class=\"p1\">The High Civil Court’s decision has been appealed in a manner that coincides with the principles previously established by the Court of Cassation, and we eagerly await the results by the end of April 2017.</p>'),
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	(103839,5646,'content_description','The Bahraini Constitutional Court issued its judgment on 25th January 2017 in the constitutional case number D/1/2016, rejecting a constitutional challenge to Article 36 of the Arbitration Rules of the GCC Commercial Arbitration Centre (the “Centre”). '),
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	(103853,5646,'_yoast_wpseo_metadesc','The Bahraini Constitutional Court issued its judgment on 25th January 2017 in the constitutional case number D/1/2016, rejecting a constitutional challenge to Article 36 of the Arbitration Rules of the GCC Commercial Arbitration Centre (the “Centre”).'),
	(103854,5647,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\">The Jordanian Parliament, following increasing calls for a legislative regime change catering to the flexible needs and requirements of a diverse workforce, has recently enacted a new regulation pertaining specifically to flexible working arrangements in the Hashemite Kingdom of Jordan. Such regime, which is contained in the Regulation of Flexible Employment (Regulation No. 22 of 2017) (the “Regulation”), was published in the Official Gazette on 16 March 2017 and came into effect immediately as of such date. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> In short, the Regulation offers certain categories of employees (see below) the right and opportunity to choose, with their employers consent, a flexible working arrangement tailored to their personal and familial circumstances, needs and/or requirements – ultimately fostering a very tangible and concrete work-life balance and, in turn, employee satisfaction and engagement. </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Who is covered by the Regulation?</strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">The Regulation covers the following specific categories of employees only (collectively, the “Employees”): </span></p>\r\n\r\n<ul>\r\n 	<li>An employee who has spent at least 3 consecutive years working for the employer;</li>\r\n 	<li>An employee who bears “family responsibilities”, which are defined as encompassing a pregnant employee; an employee who assumes parental ‘responsibility’ of a child; or an employee who assumes responsibility for disabled or ill members of their family (including the elderly or infirm).</li>\r\n 	<li>University students [who are employed with the employer]; and</li>\r\n 	<li>Disabled employees.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p2\"><strong>What is the scope of the Regulation? </strong></p>\r\n<p class=\"p1\"><span class=\"s1\">The Regulation provides the Employees with different forms of flexible working arrangements, patterns or schedules of work, including the following: </span></p>\r\n\r\n<ul>\r\n 	<li>The option to work part-time: where the Employee is entitled to work for reduced working hours (the standard normal working hours are 8 hours per day excluding an hour break, 48 hours per week which can be distributed throughout the week provided that the working day does not exceed 11 hours (exclusive of overtime). The option to work a flexible daily working pattern: for example, commencing work at 10:00 am instead of 9:00 am. The Employees, however, are still obliged to ensure that they work their full standard daily working shift</li>\r\n 	<li>The option of a varied working weekly schedule or pattern: for example, if the original working days are 5 with daily working hours being 8, the Employees could elect to stagger their working hours across the working week such as 10 hours on Sunday and Monday and 6 hours on Tuesday, Wednesday and Thursday. This option is subject to the provision that the daily working hours should not exceed 10 per day (exclusive of overtime).</li>\r\n 	<li>The option of a varied yearly schedule or pattern: for instance, the Employees could elect to work for 6 days a week from January-June and thereafter, work for 4 days a week throughout the rest of the year. This arrangement is, however, restricted by the prohibition mandated under Article 60 of the Jordanian Labour Law (Law No. 8 of 1996) (the “Labour Law”), under which it is stipulated that the employee is prohibited from working for more than 4 weeks in a row without taking any day off.</li>\r\n 	<li>The option for remote working.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\"><span class=\"s1\">The above options are, of course, subject at all times to the prior approval of the employer. It is not, therefore, an unconditional automatic right for the Employees. There will need to be an element of mutual consent to such arrangements taking into consideration the business needs and requirements of the employer at the relevant time. An employer cannot, however, compel an Employee to adhere to a specific arrangement, as otherwise, such arrangement would be deemed as void. </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Additional considerations </strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">Where an Employee and his/her employer agree to a flexible working arrangement subject to the Regulation, the following key points should be considered: </span></p>\r\n\r\n<ul>\r\n 	<li>The Employee should be paid pro-rata to his/her working hours and days but not less than the minimum wage applied in Jordan (which amounts to 220 for Jordanian employees and 150 for non-Jordanian employees).</li>\r\n 	<li>The Employee’s leaves and entitlements should be provided by the employer pro-rata to his/her working hours and days.</li>\r\n 	<li>The Employee should still be entitled to take advantage of all the rights and advantages provided under the Labour Law unless his/her original employment contract or flexible contract provide for a more advantageous right.</li>\r\n 	<li>The Employee should be entitled to request to revert to his/her original employment contract at anytime during the flexible arrangement and such request can only be affected upon the approval of the employer.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p2\">In order to ensure unhindered implementation of the Regulation, the Regulation obliges the employer to periodically report to the Tripartite Committee (a committee specifically formed by Article 52 of the Labour Law) of its application, where relevant, of the Regulation. Such report should include (i) the forms of flexible arrangements adopted, (ii) the number of Employees who have adopted a flexible working arrangement and the start date of their employment, (iii) the strategy that was implemented by the employer to adopt a flexible working arrangement and (v) the number of all employees working with the employer. The Tripartite Committee shall look into and examine the reports provided by the employer and regularly issue its recommendations to the Minister of Labour in this regard, as required under Article 11 of the Regulation.</p>\r\n<p class=\"p4\"><span class=\"s2\"><strong>Conclusion </strong></span></p>\r\n<p class=\"p5\"><span class=\"s1\">The Regulation has received notable positive feedback from various industry circles and is a welcome step in the direction of catering to, and ultimately accommodating, a workforce shouldering differing familial circumstances for female workers, in particular, and in general, the possibility of reducing traffic and avoiding stress of commuting during rush hours. However, certain residual creases still need to be ironed out with regards to the Regulation, including the necessity of amending the Labour Law to align it to the terms of the Regulation and separately, the “employer consent” element attached to the flexible working options generally. Whilst it is acknowledged that any flexible working arrangement requests will invariably need to be considered in the light of an employers business needs and requirements, there should be a careful balance and mechanism in place to ensure that such requests are not flatly rejected or denied by employers arbitrarily; particularly as such an approach would go against the very spirit and aim of the Regulation. </span></p>'),
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	(103858,5647,'content_description','The Employee should be entitled to request to revert to his/her original employment contract at anytime during the flexible arrangement and such request can only be affected upon the approval of the employer.'),
	(103859,5647,'_content_description','field_59b641c07f473'),
	(103860,5647,'pageSummary','The Employee should be entitled to request to revert to his/her original employment contract at anytime during the flexible arrangement and such request can only be affected upon the approval of the employer.'),
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	(103872,5647,'_yoast_wpseo_metadesc','The Employee should be entitled to request to revert to his/her original employment contract at anytime during the flexible arrangement and such request can only be affected upon the approval of the employer.'),
	(103873,5648,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><strong>Who is affected?</strong></p>\r\n<p class=\"p1\">The changes affect Oman taxpayers, as well as foreign companies without a local permanent establishment that receive certain types of income from Oman. In addition, the changes will also impact small and medium enterprises.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Key changes</strong></span></p>\r\n<p class=\"p1\"><em>Changes to corporate tax rates</em></p>\r\n<p class=\"p1\">The standard corporate income tax rate has increased from 12% to 15%.</p>\r\n<p class=\"p1\"><span class=\"s3\"> A new lower rate of 3% has been introduced for small businesses that meet certain turnover, capital, and minimum employee conditions, and do not fall within specified industry sectors. The lower rate will be irrelevant to most “foreign” (i.e. non-GCC) controlled companies because of the relatively high share capital requirements imposed on these foreign companies under the current Foreign Investment Law of Oman. </span></p>\r\n<p class=\"p1\">Both of these rate changes will apply retrospectively for all financial years beginning on or after 1 January 2017.</p>\r\n<p class=\"p1\"><em>Exemption threshold removed</em></p>\r\n<p class=\"p1\">The exemption which previously applied to the first OMR 30,000 of taxable profits has been removed. As a consequence, businesses that were not subject to tax will now be required to file a tax return and pay tax for the first time.</p>\r\n<p class=\"p1\"><em>Withholding tax scope extension</em></p>\r\n<p class=\"p1\">The scope of withholding tax has been broadened to include payments of dividends and interest, and payments for services to foreign persons without a permanent establishment in Oman. Ministries and government bodies will now also be required to withhold. Previously, withholding tax only applied to management fees, royalty payments, consideration for the use of, or right to use, computer software, and consideration for research and development.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Other changes</strong></span></p>\r\n\r\n<ul>\r\n 	<li>A minimum period of activities is now required to create a permanent establishment in the case of a building site, place of construction, or an assembly project.</li>\r\n 	<li>All taxpayers must obtain a tax card and use the tax card number on all contracts, invoices, and tax authority correspondence.</li>\r\n 	<li>Tax exemptions for most industry sectors are no longer available (i.e. whilst existing tax exemptions will be respected, any applications for the renewal of a tax exemption will be impacted if they fall within a sector for which no tax exemption is available).</li>\r\n 	<li>The old assessment regime will shift to a self-assessment based system.</li>\r\n 	<li>Stricter penalties have been introduced to enforce compliance in cases of certain deliberate violations of the tax law. These take the form of both higher fines and imprisonment of the Principal Officer.</li>\r\n 	<li>Electronic filing of tax returns will be introduced.</li>\r\n 	<li>Islamic finance transactions will be taxed in the same way as their conventional equivalent.</li>\r\n</ul>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Al Tamimi’s view</strong></span></p>\r\n<p class=\"p1\">Given the impact of low oil prices and the resultant budget deficit, diversifying revenue streams through taxes has been under consideration for some time. In addition to the introduction of VAT, which will be implemented across the GCC by 2018-19, amendments to the Oman income tax law were widely expected in order to generate additional revenue in the form of taxes. The increase in the standard tax rate, the expansion in the scope of withholding tax, the removal of tax exemptions, and stricter penalties to encourage compliance are all measures designed to achieve this objective.</p>\r\n<p class=\"p1\">However, the removal of the exemption threshold and the expansion of the withholding tax base will result in a higher compliance cost for businesses operating in Oman. In addition, foreign companies are likely to push the withholding tax burden to local businesses through contractual gross-up clauses further increasing the cost of doing business in Oman. Accordingly, it will be important to consider whether the withholding tax will be reduced or eliminated by an applicable double tax treaty between Oman and the country in which the foreign recipient is resident. Companies operating in Oman will need to review their contracts to assess potential withholding tax liability and consider the implications of additional compliance.</p>\r\n<p class=\"p1\">Despite the amendments to the tax law, Oman remains a jurisdiction without any personal income tax legislation and where disposable incomes, particularly in highly skilled sectors, are high by Middle Eastern standards. Furthermore, the Government’s continued adherence to its Vision 2020 plan in promoting tourism, manufacturing, logistics, and various other sectors should lead to a higher permanent and visiting population, which may serve to offset the cost of taxation on corporations.</p>\r\n<p class=\"p1\">Al Tamimi will be pleased to help you understand how the changes affect your business.</p>\r\n<p class=\"p1\"><em>Al Tamimi &amp; Company has a regional tax practice. For further information please contact Arif Mawany (A.Mawany@tamimi.com) or Shiraz Khan (S.Khan@tamimi.com).</em></p>'),
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	(103877,5648,'content_description','In February 2017, significant changes were implemented to the corporate tax regime in Oman. The main amendments, which include an increase in the standard corporation tax rate and an extension of the withholding tax scope, are set out below.'),
	(103878,5648,'_content_description','field_59b641c07f473'),
	(103879,5648,'pageSummary','In February 2017, significant changes were implemented to the corporate tax regime in Oman. The main amendments, which include an increase in the standard corporation tax rate and an extension of the withholding tax scope, are set out below.'),
	(103880,5648,'_pageSummary','field_59e59b307dec8'),
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	(103892,5648,'_lawUpdateArticlePractices','field_59dc7918de021'),
	(103893,5648,'_yoast_wpseo_metadesc','In February 2017, significant changes were implemented to the corporate tax regime in Oman. The main amendments, which include an increase in the standard corporation tax rate and an extension of the withholding tax scope, are set out below.'),
	(103894,5649,'content','April 2017\r\n\r\n<hr />\r\n<p class=\"p1\">The Saudi national team is one of the most successful national teams in Asia. In fact, the team has won the Asian Championship three times and has qualified for the FIFA World Cup four times, the first of which was in 1994. Al Hilal FC has tallied a record of forty-three domestic titles, six trophies in various Asian championships, and a record of eight Arab championships. Similarly, Al Nassr FC holds the distinction of being the first Asian club to play on an international level. Both teams are considered to be amongst the leading football clubs in Asia.</p>\r\n<p class=\"p1\">How nations go about organising sporting pursuits, particularly what legal status and forms are chosen to manage their sports clubs, can be a complex matter including considerations of history, culture, resources, and administrative goals. For the purposes of this article, we are going to consider the plans for privatisation of sports clubs in KSA or, in other words, the transfer of operational and financial control from government hands to the private sector.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Background to Privatisation of Football Clubs in KSA</strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">Subject to effective implementation and the absence of significant market distortion factors, the privatisation of sports clubs can be beneficial in terms of providing not only access to capital for short-term use, in player purchases or infrastructure investment (the KSA could benefit from stadium redevelopment), but also for establishing the necessary business framework to nurture talent and encourage the adoption of best practices in club management. Indeed, the prospect of attracting owners who will be incentivised to bring in the best and brightest management teams to drive commercial success could bode well for growing match-day revenues with stadium development and furthering international competitiveness with player investments. </span></p>\r\n<p class=\"p1\">KSA has recently added a number of new imperatives to its long-standing position that privatisation of certain state-owned assets can and should play a significant role in economic development. The transformative Saudi Vision 2030 plan looks to reduce Saudi Arabia’s dependence on oil by diversifying the economic model for the nation across a wide range of fronts. It expressly refers to the promotion of physical and social well-being and healthy lifestyles as specific goals, together with the reduction of costs and increase in efficiency (noting that government is working with the private sector to establish additional facilities and programmes).</p>\r\n<p class=\"p1\">Top-division clubs competing in the Saudi Professional League, are all presently government-owned. While this may be counterintuitive for those based in other jurisdictions, it stems from historically centralised growth and development of socially desirable sporting initiatives across a range of sports, including sports that may not have the commercial appeal and the sustainability of football. These clubs are the flagship clubs of the KSA sports industry and although club finances are not currently public information, the PRO League has robust domestic revenues. While official revenues are not public information, certain sources suggest that the KSA domestic TV revenues alone provide substantial income (reportedly exceeding those of the MLS by as much as 50%). It is logical to anticipate that those clubs should be at the forefront of the ambitious plans for sports sector development. Additionally, the KSA government commissioned Deloitte to prepare a feasibility study of the privatisation of leading clubs in KSA. This fact, combined with recent announcements (noted below) that moves are afoot, suggest a serious review of relevant factors has been taken in earnest.</p>\r\n<p class=\"p1\"><span class=\"s3\"> While privatisation has been identified as pivotal in KSA’s economic development plans for some time, it was not until late 2016 when more specific goals for the potential role of privatisation in football were announced. Those goals include elevating the quality and status of the league and positioning it to diversify revenues and make a greater contribution to the national economy. Privatisation measures will be considered for clubs that are playing in the country’s top league. Further, anecdotal reports suggest that the initial solicitation for investment will be limited to between two and four clubs only. We speculate that it is only the most commercially viable clubs that are being considered for privatisation, at least initially, as the fate of the process may well rely on the early results. </span></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Structural Developments Enabling Football Privatisation in KSA</strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">The Saudi Professional League enjoys strong support and a number of high-profile clubs have a track record of accomplishment in the AFC Champions League. Football clubs in the Gulf Cooperation Council (“GCC”) tend to be supported by a combination of traditional revenue sources (broadcasting, commercial, match-day revenues etc.) and contributions from wealthy groups and individuals affiliated, formally or informally, with the clubs. Accordingly, wholesale structural changes overnight will not be easy, as investors will need to maintain traditional support while understandably expecting corporate control with clear guidelines and the freedom to implement their new business plans within clear guidelines. </span></p>\r\n<p class=\"p1\">The announcement of Saudi Vision 2030 in April of 2016 was quickly followed in May by the General Presidency of Youth Welfare being rebranded as the General Authority for Sports and given greater responsibilities for developing sports clubs and facilities. Shortly thereafter in June, the National Transformation Program 2020 (“NTP”) was launched as the first stage of implementation of Saudi Vision 2030 with interim targets. In July the General Authority for Sports and the Ministry of Commerce and Investment (“MoCI”) organised a campaign to increase awareness amongst football clubs and other parties in the sector regarding the need to register trademarks and logos to protect the value of IP. This is a positive sign and an indicator that we would expect to see more campaigns as professional business processes are embraced and clubs position themselves to exploit available revenue streams.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Mechanism and Procedures for Privatisation</strong></span></p>\r\n<p class=\"p1\">Specific details concerning the necessary procedural steps for transforming the clubs into corporate entities and subsequently formalising the process of private investment, including timelines, applicable regulations, and execution documentation, have not been provided at the date of this article’s publication. However, it is understood that the privatisation plan will likely be carried out in phases. It has also been suggested that for the purposes of investment, every club will have two components, assets and real estate, and that any given privatisation need not include an obligation to purchase the accompanying property or headquarters. This would provide some flexibility to investors in considering various business plans and strategies to optimise growth and development in years to come.</p>\r\n<p class=\"p1\">The Council for Economic Development and Affairs has approved the formation of a committee to oversee the completion and implementation of football club privatisation and directed that the General Authority and other stakeholders should create a Sports Development Fund, inter alia, to provide loans and facilities for clubs. This committee is headed by the Chairman of the General Authority for Sports, and includes representatives of the Saudi Professional League and the Saudi Arabian Football Federation. In respect of set up and regulation, whether or not a specific corporate vehicle will be required to hold the assets and what form and scope a designated long-term regulator may take in the process, is currently unclear. The success of privatisation programs in general can turn on the quality and oversight of a credible regulatory body moving forward, so it would be in the committee’s best interests to ensure that this point is given due consideration.</p>\r\n<p class=\"p1\">The size of the Sports Development Fund earmarked for assisting with this process and the precise details of planned allocations are not officially available at present but the establishment of the fund does suggest an understanding and appreciation that there will be certain costs involved in helping even the top clubs achieve immediate sustainability.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Potential Challenges</strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">Privatisation in general can include a number of challenges both predictable and unforeseen. In the current context, it is instructive to note where at least some of those issues may arise.</span></p>\r\n\r\n<ul>\r\n 	<li><strong>Lack of Market Comparators: </strong>In implementing a new legal structure on a going concern in a relatively unique sector, it is beneficial to have current, similar examples to “stress-test” as potential models. In the present context, models from neighboring GCC jurisdictions are limited, as KSA will likely lead this movement.</li>\r\n 	<li><strong>Management of Accounts &amp; Transparency:</strong> For a number of the selfsame reasons why privatisation is desirable (prudent and stable corporate management, imposition of sustainable commercial strategies etc.) investors are likely to be cautious and thorough in gaining an understanding of the existing business. As such, it is important that government exercise full disclosure in dealing with qualified bidders. With respect to early efforts to sell the Saudi Telecommunications Company (STC), negotiations broke down with three potential investors (NTT of Japan and France Telecom both opted out during negotiations, while the Saudi government rejected the US-based Southern Bell Corp’s proposed terms), reportedly in part because of concerns including a lack of transparency and the historical management of accounts. In the context of football privatisation, such issues could lead to unnecessary delays and increased costs in terms of agreeing valuation, conducting comprehensive due diligence and subsequently preparing deal documentation.</li>\r\n 	<li><strong>Limiting the Scope of Investor Pool:</strong> The information currently available suggests that for the initial phase at least, only KSA national investors will be entertained as bidders for sports clubs. A limited field of investors may accordingly limit the range and dynamism of business proposals and deny access to otherwise skilled and enthusiastic sources of capital for sports investment. The STC privatisation referred to above indicates that for the right opportunities, and under the right conditions, significant international investors will be interested in the KSA market. Recent activity in the world of football also suggests that casting the net wider, to include Chinese investors for example, could bring rewards. This restriction could be ameliorated to attract investors with foreign capital and skilled sector-experience, even on the basis of permitted minority stake investments.</li>\r\n 	<li><strong>Regulatory Oversight:</strong> Even after identifying and attracting suitable investors, if an appropriate procedural model for executing the investment can be accomplished, previous privatisation efforts in other sectors within KSA have taught us that the lack of clear guidelines and strict regulatory monitoring may be detrimental to the government’s ultimate goals for the sector. Over the past decade, Saudi Arabia has privatised elements of its utilities, including in the water supply, electricity, and telecommunications sectors. In each of these areas, consumers have raised serious concerns about the performance of the privatised entities. For this reason, the government should give sufficient consideration to the nature, powers and processes through which ongoing regulation will be implemented. The identification and assembling of suitable regulatory requirements and personnel should be considered a pre-requisite for successful privatisation.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\"><span class=\"s1\"><strong>Comment</strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">The background and motivation for taking the significant step of privatising Saudi football clubs is clear. Vision 2030’s expectations for the sector’s contribution to the national economy, including anticipated job growth and diversification of revenues, are aggressive. The structural development of necessary organs to oversee the plan has been put in place rapidly. The necessary mechanisms and legal procedures to complete club privatisations are not yet entirely clear. Appropriate privatisation guidelines and benchmarks will be necessary to (i) attract the optimal profile and number of investors; (ii) facilitate comprehensive inventory of assets; (iii) efficiently manage the investment mechanics; and (iv) implement suitable regulatory checks and balances post privatisation.</span></p>\r\n<p class=\"p1\">Some delay is to be anticipated and is not necessarily a bad thing as some procedural flexibility can be beneficial (e.g. given the need to read and react to the investor pool and reduce the potential for missteps). The impetus for growth and the opportunity for private entities to get involved provide substantial encouragement for job growth from developing a sector rather than just a team or even a league. Additionally, the potential benefits of encouraging investment in sporting facilities, as well as developing local talent and increasing competition, are benefits we would all look forward to seeing reflected on the pitch. This should be balanced against a concern that not casting the bidder pool wide enough to include foreign investors may preclude willing, able and experienced team owners.</p>\r\n<p class=\"p1\">How the process moves in the next few months will determine how successful the plan will be and it would be unfortunate if the momentum created by recent statements is lost. A number of factors, including the relative strength of the top clubs, the size of the market, the potential for sustainable revenue generation, the government’s willingness to place specialists in key roles, a long history of passion for football, the relative dearth of comparable entertainment, the parallel/collaborative investment in public participation, and the commitment to develop grass-roots sports, as well as sports facilities, all combine to suggest that there are significant reasons to believe the time may be right to proceed with this long mooted plan.</p>\r\n<p class=\"p1\">Experience suggests delays should be anticipated as we see the development of a publicly available bidding process and clear regulatory guidelines. Beyond those hallmarks, any feedback from bidders during the process will provide valuable information. Indeed, a stutter-step between the bidding process and any award, even if it results in a slippage of timelines, could be indicative of a willingness to read and react to bidder feedback, which could be positive as successful privatisation should be a collaborative undertaking. In any event, with a number of high-level statements pointing to impending developments, it will be an interesting time to keep an eye on developments in the long-planned privatisation of KSA sports clubs.</p>\r\n<p class=\"p1\"><em>Steve Bainbridge is the Head of our Sports Law &amp; Events Management practice. Ahmad Ayoub is a Trainee Lawyer in Al Tamimi &amp; Company’s Corporate &amp; Commercial Department, supporting and advising corporate clients registered and operating in the DIFC and/or the UAE across a range of corporate commercial matters. Ahmad also routinely supports our Sports Law &amp; Events Management practice on commercial and administrative projects. </em></p>\r\n<p class=\"p2\"><em> </em></p>\r\n<p class=\"p1\"><em>The original version of this article was first published on 10 February 2017 at www.lawinsport.com</em></p>\r\n<p class=\"p1\"><em>https://www.lawinsport.com/articles/item/how-saudi-arabia-plans-to-privatise-its-sports-teams</em></p>'),
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	(103897,5649,'_lawUpdateArticleMonth','field_59da2a396b063'),
	(103898,5649,'content_description','Sports in the Kingdom of Saudi Arabia (“KSA”) first and foremost means football. While sports clubs typically sustain and manage teams across a number of sports, as their mandate has historically been to develop and promote broader athletic pursuits rather than just single-sport success, there can be no doubting that football takes prime place in terms of public interest, the pursuit of excellence and commercialisation of sporting endeavours. '),
	(103899,5649,'_content_description','field_59b641c07f473'),
	(103900,5649,'pageSummary','Sports in the Kingdom of Saudi Arabia (“KSA”) first and foremost means football. While sports clubs typically sustain and manage teams across a number of sports, as their mandate has historically been to develop and promote broader athletic pursuits rather than just single-sport success, there can be no doubting that football takes prime place in terms of public interest, the pursuit of excellence and commercialisation of sporting endeavours.'),
	(103901,5649,'_pageSummary','field_59e59b307dec8'),
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	(103916,5649,'_yoast_wpseo_metadesc','Al Tamimi & Company consider the plans for privatisation of sports clubs in KSA or, in other words, the transfer of operational and financial control from government hands to the private sector.'),
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	(103931,5652,'content','May 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\">The UAE legislator opted to use one term “arbitration instrument” in the UAE Civil Procedures Code, and it is not always clear whether this is referring to an arbitral agreement or the terms of reference. In a series of decisions the Abu Dhabi Court of Cassation has helpfully clarified which of the Procedures Code provisions apply to the arbitral agreement, and which provisions apply to the terms of reference. The Abu Dhabi Court of Cassation has also explained how these terms relate to each other, as well as other key issues, thus helping to clarify the applicable formal requirements applying to arbitration under UAE law. </span></p>\r\n<p class=\"p2\"><strong>Background </strong></p>\r\n<p class=\"p2\">Arbitration agreements can take one of three forms: an arbitration clause in the contract; an arbitration deed entered into after the dispute arises; and an arbitration clause incorporated into the contract by reference.</p>\r\n<p class=\"p1\">In Case No.467/2013, the Abu Dhabi Court of Cassation stated that the arbitration clause constitutes an agreement between the contracting parties in their contract that any dispute resulting from the execution or interpretation of their contract shall be referred to arbitration. The arbitration clause exists before the dispute arises. Where there is no arbitration clause or any other arbitration agreement between the parties to refer a dispute arising between them to arbitration, the parties may enter into an agreement to refer the dispute to arbitration. Such an agreement is known as an “arbitration deed”. Unlike the arbitration clause, the arbitration deed begins its existence only after the dispute arises between the parties.</p>\r\n<p class=\"p1\">In case No.214/2014, the Abu Dhabi Cassation Court stated that if the contract entered into between the parties refers to another document, which includes an arbitration clause, then this is considered an arbitration clause by incorporation. However, the Abu Dhabi Cassation Court stipulated that in order to have a valid arbitration clause by incorporation, the reference to the document which includes the arbitration clause must include an explicit and specific reference to the arbitration clause in the referenced document.</p>\r\n<p class=\"p1\">Article number 203(1) of the Civil Procedures Code states that:</p>\r\n<p class=\"p4\"><em>“It shall be permissible for contracting parties generally to stipulate in the original contract or in a subsequent agreement to refer any dispute between them concerning the implementation of a specified contract to one or more arbitrators and it shall likewise be permissible to agree by special conditions to arbitration in a particular dispute.”</em></p>\r\n<p class=\"p5\">This recognizes the difference between an arbitration clause and an arbitration deed. It highlights that the parties may agree on the arbitration in their original contract (i.e. an arbitration clause), or can agree in a subsequent agreement (i.e. an arbitration deed).</p>\r\n<p class=\"p1\">The meaning of “Arbitration Instrument” in articles 203 and 216</p>\r\n<p class=\"p1\">Aside from the arbitration clause, arbitration deed, and arbitration clause by incorporation, the Abu Dhabi Court of Cassation judgment No. 467/2013 noted the existence of “terms of reference”. This refers to a procedural document that is prepared by the arbitrators to evidence the parties’ agreement of the procedural matters relating to the arbitration proceedings.</p>\r\n<p class=\"p1\">As noted before, the Civil Procedures Code refers only to one term, which is “arbitration instrument”, it does not use the terms “terms of reference” or “arbitration deed”. How then are we to recognise those provisions using ‘arbitration instrument’ to refer to ‘arbitration deed’, and those using it to refer to ‘terms of reference’? The Abu Dhabi Court of Cassation, in judgment No.467/2013, confirmed that the UAE legislator meant to refer to the “terms of reference” in some of the Civil Procedures Code articles, and to the “arbitration deed” in some other articles:</p>\r\n\r\n<ul>\r\n 	<li>Article 203(3) states that “The subject matter of the dispute must be defined in the arbitration instrument or during the trial of the action even if the arbitrators are empowered to effect a conciliation, failing which the arbitration shall be void”. The Court confirmed that the UAE legislator meant to refer to the “arbitration deed”, and did not mean to refer to the “terms of reference”.</li>\r\n 	<li>Article 216(1)(a). This article states that either party to an arbitration award may request the court to nullify it if, among other things, the award is issued without “arbitration instrument”, or an invalid “arbitration instrument”. If the UAE legislator meant to refer to the ‘arbitration deed’ in this article, then the “arbitration deed” must be signed by the parties for the award to be valid because article 203/2 stipulates that the arbitration agreement cannot be evidenced unless it is in writing. However, if the UAE legislator meant to refer to ‘terms of reference’, then these do not need to be signed and so a party unhappy with the process cannot void the proceedings by simply refusing to sign the terms of reference. The Abu Dhabi Court of Cassation held that the UAE legislator was referring to the ‘terms of reference’, and not to the ‘arbitration deed’. The Abu Dhabi Court of Cassation confirmed, among other things, that if either party declines to sign the terms of reference, this ought not to result in the setting aside of the arbitration award.</li>\r\n 	<li>There is another precedent issued by Abu Dhabi Court of Cassation in judgment No. 112/2015, in which one of the parties sought the nullification of an arbitration award on the basis that the terms of reference were not signed by the respondent during the arbitration proceedings. The Cassation Court highlighted that the respondent was given five chances to sign the terms of reference, but refused to do so without a valid reason. The Court characterised this as an abuse of right by the respondent, and one that the respondent should not be allowed to benefit from it, and the award was upheld.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p2\"><strong>Conclusion</strong></p>\r\n<p class=\"p2\">The use of the term ‘arbitration instrument’ in the Civil Procedures Code has caused some confusion as it could be referring to ‘arbitration deed’ or ‘terms of reference’.</p>\r\n<p class=\"p1\">The “arbitration deed” is a type of arbitration agreement. The “terms of reference” is a procedural document that is prepared by the arbitrators to evidence the parties’ agreement regarding the procedural matters related to the arbitration proceedings.</p>\r\n<p class=\"p1\"><span class=\"s1\"> The Abu Dhabi Court of Cassation has confirmed that Article 203(3) of the Civil Procedures Code is referring to the “arbitration deed”. Article 216(1)(a) is referring to the “terms of reference”. Unlike the arbitration agreement, the “terms of reference” does not have to be signed by the parties in order to be valid. This interpretation by the Court makes the arbitral process more robust in the UAE.</span></p>'),
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	(103935,5652,'content_description','The terms, “arbitration deed”, “arbitration instrument”, and “terms of reference” are often used interchangeably in arbitration practice leading to some confusion. '),
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	(103937,5652,'pageSummary','The terms, “arbitration deed”, “arbitration instrument”, and “terms of reference” are often used interchangeably in arbitration practice leading to some confusion.'),
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	(103944,5652,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(103945,5652,'_yoast_wpseo_metadesc','The terms, “arbitration deed”, “arbitration instrument”, and “terms of reference” are often used interchangeably in arbitration practice leading to some confusion.'),
	(103946,5653,'content','<p class=\"p1\">The compensation amount was determined based on the nature of the contract and appropriate proportion to the incurred losses. This judgment is a deviation from the familiar approach adopted by the Qatari courts and this article explores matters in some further detail.</p>\r\n<p class=\"p2\"><strong>Case Facts</strong></p>\r\n<p class=\"p2\">A foreign subcontractor (the “Claimant”) entered into a subcontract agreement with a local contracting company (the “Defendant”). The contractual works included the design, supply, testing and commissioning of certain technical systems for a large project worth approximately 2 billion Qatari Riyals.</p>\r\n<p class=\"p1\"><span class=\"s2\"> The Claimant filed a civil case against the Defendant when the Defendant withheld payments over an extended period of time against the contractual works (including works performed under variation orders made by the Defendant) completed by the Claimant. The alleged outstanding payment amounted to more than US$15 million. The Claimant also asserted that any delays in completing the works was due to the Defendant’s variation orders and not by any fault of the Claimant.</span></p>\r\n<p class=\"p1\">The Defendant filed a counter-claim alleging that the Claimant caused delays in completing the contractual works, and at times, failed to complete the contractual works. The Defendant sought compensation from the Claimant for damages incurred by such delays. The Defendant requested the appointment of an engineering expert to assess the claims and seek to prove default on the part of the Claimant.</p>\r\n<p class=\"p1\">The Court appointed an engineering expert, and the expert verified the validity of the documents presented by the Claimant. The expert produced evidence of completed works by the Claimant for which the Defendant had not paid, and also confirmed that the issuance of the variation orders and suspension instructions by the Defendant had caused delays.</p>\r\n<p class=\"p2\"><strong>Ruling of the Court of First Instance</strong></p>\r\n<p class=\"p2\">The Court of First Instance joined the Claimant’s case and the Defendant’s counter-claim and issued a combined judgment. The Court found the following:</p>\r\n\r\n<ul>\r\n 	<li>Regarding the Defendant’s breach of contract, the Court took the view that the contract is the law of the contracting parties, and as such, it is not up to any party to unilaterally rescind, amend or waive the contract unless the contract or the law so provides. Therefore, the Court ruled that it was not up to the Defendant to stop payments for the contractual works completed, and that any concerns about delay should have been notified to the Claimant in order that it be provided with the opportunity to challenge the Defendant’s position. By simply withholding payments, the Defendant had denied the Claimant the benefit of the contract despite the Claimant having performed its contractual obligations. Accordingly, the Court ruled in favour of the Claimant and obliged the Defendant to pay the outstanding amounts as proven in the expert’s report.</li>\r\n 	<li>Regarding compensation, the Court ruled that the Claimant had indeed suffered consequential losses that flowed from the Defendant’s breach of the contract as the Claimant could not use or benefit from the amounts unpaid by the Defendant. The Court stated that it has the authority to determine an appropriate compensation amount, which should include direct losses incurred by the Claimant plus loss of profit resulting from the Defendant’s breach of contract. Accordingly, the Court ordered the Defendant to compensate the Claimant with the total amount of US$800,000. In addition, the Court awarded that the Defendant meet the cost of the expenses, including the costs associated with the appointment of the expert.</li>\r\n 	<li>The Court rejected the Defendant’s counter-claim for lack of a factual or legal basis.</li>\r\n</ul>\r\n<p class=\"p2\"><strong>The Effect of the Judgment – Can Subcontractors Rest Assured?</strong></p>\r\n<p class=\"p2\">Firstly, the judgment would give some comfort to subcontractors in situations of breach of contract for non-payment by the contractor after the subcontractor has performed the relevant contractual obligations (sufficiently supported by evidence). In such cases, if the Courts continue to adopt the same approach as set out above, the defaulting contractor will be held liable to reimburse the non-defaulting subcontractor. To date it has been (in practice) quite common for subcontractors to cease performance of the contract (to avoid further waste of time, money and efforts) upon realising that the contractors have stopped making further contractual payments with no apparent intention to make such payments.</p>\r\n<p class=\"p1\"><span class=\"s4\"> Secondly, the judgment is highly significant as regards the amount of compensation that was awarded to the Claimant. Traditionally, the Courts in Qatar have been wary to render judgments with large compensation amounts. Compensation is awarded (if at all) at the Court’s discretion which may not necessarily be based on calculations considering concepts of proportion. Accordingly, it is often the case that the awarded compensation is not sufficient in serving the actual purpose of recouping losses suffered by a claimant. In contrast, in this judgment the Court of First Instance has taken a more generous and unrestricted approach, as the compensation awarded is sizeable compared to previous similar cases, and is proportionate to the nature of the case, (i.e. non-payment for works performed towards a sizeable and expensive project involving significant investment). </span></p>\r\n<p class=\"p1\">If the Court maintains a similar approach in future cases, such judgments would also preserve and protect the sanctity and integrity of such projects in Qatar in addition to the protection of non-defaulting subcontractors against defaulting contractors. Further, the award of increased compensation in such cases may well encourage foreign direct investment in Qatar.</p>\r\n<p class=\"p1\">While the judgment is not final and remains subject to appeal, we anticipate that it is a stepping stone towards the Courts being set free from its prior restraint in terms of infamous compensation shackles.</p>'),
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	(103952,5653,'pageSummary','In a refreshing and reassuring judgment, the Court of First Instance recently took an unusually generous approach for the Qatari Courts, by awarding direct damages and compensation to an innocent subcontractor as a result of the defaulting contractor’s breach.'),
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	(103968,5653,'_yoast_wpseo_metadesc','The compensation amount was determined based on the nature of the contract and appropriate proportion to the incurred losses. This judgment is a deviation from the familiar approach adopted by the Qatari courts and this article explores matters in some further detail.'),
	(103969,5654,'content','May 2017\r\n\r\n<hr />\r\n<p class=\"p1\">It was established that a customer’s negligence in failing to notify the bank of possible fraudulent or suspicious use of a debit card, after receiving numerous automated SMS messages from the bank indicating a suspicion of such use, must be considered when determining liability for the losses resulting from fraud.</p>\r\n<p class=\"p1\">The case passed through the Court of First Instance and the Court of Appeal in favour of the customer and against the bank, where neither of the lower courts considered the responsibility or fault to be that of the customer. The lower courts’ decision was eventually overturned by the Court of Cassation on the basis that the customer’s negligence or mistake must be considered. The Court of Cassation ordered the case to be remitted back to the Court of Appeal.</p>\r\n<p class=\"p2\"><strong>Case Facts</strong></p>\r\n<p class=\"p2\">The case relates to a claim filed by a customer against a renowned international bank present in Qatar. The customer’s bank account was allegedly hacked from a foreign country and several transactions of large amounts of Qatari Riyals were carried out on the customer’s debit card over a period of approximately one month.</p>\r\n<p class=\"p1\"><span class=\"s2\"> During this time, the customer received hundreds of individual automated SMS messages from the bank regarding such transactions. Such messages are required to be sent to each customer as part of a security system introduced by the Qatar Central Bank (“QCB”). Every time a transaction is made on a customer’s debit or credit card, an automated message is sent to the customer containing the date and amount of the transaction and the place where the transaction was made, as well as a helpline number for enquiries and suspicions. </span></p>\r\n<p class=\"p1\">The customer acknowledged that he received all of the messages from the bank, but took no action immediately upon receipt of the messages. Instead, at the end of the one month period, the customer contacted the bank when he received his monthly account statement. Upon such notification, the bank immediately froze the account, cancelled the card, and commenced an investigation. The customer refused to accept a settlement offer from the bank and filed a case in the Qatari Courts seeking compensation from the bank for the full value of the fraudulent transactions.</p>\r\n<p class=\"p2\"><strong>Court of First Instance</strong></p>\r\n<p class=\"p2\">The Court of First Instance found that the bank was fully liable for the customer’s losses and therefore was obliged to reimburse the customer for the full value of the fraudulent transactions. The Court did not provide any reasoning for such a conclusion. From this decision, it was inferred that banks were responsible to protect their customer accounts and debit/credit cards from fraudulent use, regardless of the customer’s omission to notify the bank of such transactions.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Court of Appeal</strong></span></p>\r\n<p class=\"p1\">The bank filed an appeal on the basis that it had fully adhered to all of its duties and obligations under Qatari law and QCB regulations. The bank also argued that the customer had failed to inform it of the suspicious transactions at an early stage, despite being notified of such transactions. The bank argued that should the customer have notified it at the outset of the fraudulent use, his losses would have been minimal as the bank would have taken immediate preventive measures.</p>\r\n<p class=\"p1\">The Court of Appeal did not agree with the defence put before it by the bank and upheld the Court of First Instance’s decision, affirming that the bank was solely responsible for the losses incurred by the customer and was obliged to compensate the customer for the full amount of the fraudulent transactions.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Court of Cassation</strong></span></p>\r\n<p class=\"p1\">The case was subsequently challenged before the Court of Cassation. At this stage, the arguments made before, and dismissed by, the lower courts had to be demonstrated before the Court of Cassation in the form of flaws in the application of the law by the lower courts, as opposed to incorrect findings of fact.</p>\r\n<p class=\"p1\">The Court of Cassation accepted the appeal on the basis that the lower courts did not consider or address the legal impact of all the facts and issues involved in the case. Accordingly, the case was remitted to the Court of Appeal to be reheard in light of the customer’s failure to notify the bank of the fraudulent transactions, after having received several automated SMS notifications over an extended period of time.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Significance of the Judgment </strong></span></p>\r\n<p class=\"p1\">The Court of Cassation’s ruling reflects a contemporary approach taken by the judges. It is pleasant to see that the impact of technology and the important role it can play in our daily lives has been recognised. By acknowledging the SMS security system implemented by the banks, and bringing attention to the significance of a customer’s acting on the same, the Court of Cassation has set a principle that protects the efficiency and workability of this security measure. In our opinion, the decision appropriately balances the interests of the banks and the customers in the context of hacking and fraudulent transactions. Furthermore, the approach taken by Court of Cassation is in concert with the QCB regulations.</p>\r\n<p class=\"p1\">Should the Court of Cassation have rejected the notion that it was the responsibility of customers to act upon such SMS messages, the SMS security system would have been a waste of public funds and efforts of the QCB to introduce the system. A judgment to the contrary would have created a discrepancy between the Qatari Courts’ stance and the QCB’s intention in this regard. The judgment is a welcome step in paving the way for a similar contemporary approach in future cases.</p>\r\n<p class=\"p1\">The bank was represented by another law firm at the First Instance and Appeal stages, after which Al Tamimi represented the bank before the Court of Cassation.</p>'),
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	(103995,5654,'_yoast_wpseo_metadesc','In a recent judgment dated 14 March 2017, the Qatari Court of Cassation established a new principle regarding the responsibility of banks’ customers to ensure the safety and protection of their accounts from hacking and/or fraudulent use by third parties.'),
	(103996,5655,'content','<p class=\"p1\"><strong>US Laws with Extraterritorial Application</strong></p>\r\n<p class=\"p2\">As in other jurisdictions, laws in the US presume no extraterritorial effect unless expressly identified otherwise. There are three key federal laws (amongst others) which have expressly been given extraterritorial effect as follows:</p>\r\n\r\n<ul>\r\n 	<li>Title VII of Civil Rights Act of 1964;</li>\r\n 	<li>Americans with Disabilities Act; and</li>\r\n 	<li>Age Discrimination in Employment Act (collectively, the “Laws”).</li>\r\n</ul>\r\n<p class=\"p6\">The Laws prohibit discrimination in a number of cases such as on the basis of age, race, national origin, colour or gender.</p>\r\n<p class=\"p7\"><strong>Scope</strong></p>\r\n<p class=\"p7\">The Laws seek to protect American citizens working as employees of US companies, whether inside the US or abroad, including within the UAE. The Laws would not afford protection to consultants or other workers. Since American nationals working in the UAE must obtain a residence visa and work permit in order to work lawfully in the UAE, they will generally considered to be ‘employees’ and thus, assuming all other conditions are satisfied, they will fall under the protection of the Laws.</p>\r\n<p class=\"p1\">The scope of the Laws would not extend to UAE companies with no links to the US or which do not employ American citizens. However, it should be noted that the definition of a ‘US company’ for the purpose of the Laws is fairly broad. In the event of a dispute, a number of factors may be considered to determine whether an entity is sufficiently connected to an US company, including (but not limited to):</p>\r\n\r\n<ul>\r\n 	<li>whether the UAE entity has a US parent;</li>\r\n 	<li>the location of the company’s principal place of business;</li>\r\n 	<li>the nationality of the company’s shareholders, officers and directors;</li>\r\n 	<li>whether the company is controlled by an US entity when considering matters such as:\r\n<ul>\r\n 	<li>degree of interrelated operations;</li>\r\n 	<li>extent of common management;</li>\r\n 	<li>application of common policies;</li>\r\n 	<li>extent of common ownership or financial control;</li>\r\n 	<li>andshared cost-centres.</li>\r\n</ul>\r\n</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\"><span class=\"s1\"><strong>Defences</strong></span></p>\r\n<p class=\"p1\">The extraterritorial effect of the Laws is potentially onerous and gives rise to a range of legal implications that the UAE entity may not have envisaged. However, in deference to the sovereignty of UAE law within the UAE’s borders, there are a two primary defences available to UAE companies seeking to avoid the application of the Laws as follows:</p>\r\n<p class=\"p10\">1. Foreign Law Defence</p>\r\n<p class=\"p11\"><span class=\"s2\">In certain circumstances, complying with the Laws would mean breaching other applicable laws in the jurisdiction within which an entity is based. To give an example, Federal Law No. 8 of 1980 (the “Labour Law”) provides that women shall not be required to work at night. When applying the Laws, that provision would likely be considered to be discriminatory on the basis of gender. However, complying with the Laws and allowing both male and female employees to work night shifts would be a breach of the Labour Law. In those circumstances, employers to whom the Laws may potentially otherwise apply could rely on the existence of an obligation in the Labour Law as a valid reason for failing to comply with the Laws.</span></p>\r\n<p class=\"p12\">In order to successfully rely on this defence, the employing entity must be able to prove that a specific legal provision exists and that complying with the Laws would be a breach of that provision. In the UAE, this may prove to be a difficult hurdle since there are very few legal provisions which actively require discrimination. Therefore, as a general rule, where employers fall under the scope of the Laws, the relevant provisions should be complied with.</p>\r\n<p class=\"p10\">2. Foreign Sovereign Compulsion Defence</p>\r\n<p class=\"p11\">It is also possible for a company to defend actions which would otherwise amount to a breach of the Laws if the company can demonstrate that a foreign sovereign compelled the employer to engage in a practice which would otherwise be unlawful.</p>\r\n<p class=\"p11\"><strong>Potential Difficulties (UAE vs. US employment laws)</strong></p>\r\n<p class=\"p2\">There are a number of common practices in the UAE which may give rise to breaches of the Laws for companies falling within the remit of the Laws and therefore require additional thought to be given to potential risks in the US. For example, the following actions could create a risk:</p>\r\n\r\n<ul>\r\n 	<li>choosing men over women for manual roles;</li>\r\n 	<li>employing individuals with a particular gender or religion as a result of client preference; or</li>\r\n 	<li>refusing to consider hiring certain nationalities due to likely difficulties with obtaining a residence visa. (It is worth noting however that an assumption that a visa will not be granted will likely be treated differently to circumstances in which an application for a visa is submitted and is then rejected by the UAE authorities.)</li>\r\n</ul>\r\n<p class=\"p2\"><strong>Conclusion</strong></p>\r\n<p class=\"p2\">On balance, an employer’s focus in the UAE should be on compliance with UAE laws. However, care should be taken where UAE entities have an US nexus and may be the subject of extraterritorial application of the Laws. It is therefore imperative for organisations to be alert to foreign laws which may apply to them and to recognise that being based in the UAE does not necessarily mean that their obligations begin and end with UAE laws.</p>\r\n<p class=\"p2\"></p>\r\n<p class=\"p1\"><em>As the largest dedicated specialised employment law team in the Middle East, Al Tamimi &amp; Company’s Employment team regularly advises employers on contentious and non-contentious employment law issues. For further information please contact Gordon Barr (G.Barr@tamimi.com) or Natalie Jones (N.Jones@tamimi.com).</em></p>'),
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	(104000,5655,'content_description','This article considers the extraterritorial application of US employment laws in the UAE. \r\n\r\nIt is well understood that UAE laws will apply and its courts have jurisdiction within the UAE’s borders. Alongside that, there is a general presumption against extraterritoriality (i.e. the application of laws issued outside the UAE). '),
	(104001,5655,'_content_description','field_59b641c07f473'),
	(104002,5655,'pageSummary','This article considers the extraterritorial application of US employment laws in the UAE. \r\n\r\nIt is well understood that UAE laws will apply and its courts have jurisdiction within the UAE’s borders. Alongside that, there is a general presumption against extraterritoriality (i.e. the application of laws issued outside the UAE). '),
	(104003,5655,'_pageSummary','field_59e59b307dec8'),
	(104004,5655,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/may-10/extraterritorial-application-of-us-labour-laws-in-the-uae.html'),
	(104005,5655,'_currentURL','field_59d35123ab1e7'),
	(104006,5655,'lawUpdateArticleWriters_0_lawUpdateArticleWriter','847'),
	(104007,5655,'_lawUpdateArticleWriters_0_lawUpdateArticleWriter','field_59da2ac06b065'),
	(104008,5655,'lawUpdateArticleWriters_1_lawUpdateArticleWriter','891'),
	(104009,5655,'_lawUpdateArticleWriters_1_lawUpdateArticleWriter','field_59da2ac06b065'),
	(104010,5655,'lawUpdateArticleWriters','2'),
	(104011,5655,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(104012,5655,'_yoast_wpseo_metadesc','This article considers the extraterritorial application of US employment laws in the UAE. It is well understood that UAE laws will apply and its courts have jurisdiction within the UAE’s borders. Alongside that, there is a general presumption against extraterritoriality.'),
	(211095,5655,'_yoast_wpseo_content_score','30'),
	(104013,5656,'content','<p class=\"p1\">One of the most popular online games in the world (some estimates state there are close to 40 million players in the United States alone) continues to be plagued by the age old query of whether it is a game of chance - and therefore illegal as gambling - or a game of skill.</p>\r\n<p class=\"p1\"><span class=\"s1\"> The confusion arose from the fact that George W. Bush, when trying to stop the early spread of unlicensed internet gambling, excluded fantasy sports from the Federal Unlawful Internet Gambling and Enforcement Act (UIGEA). In brief, this law states that fantasy sports are exempt from the law, as long as people are not betting on the outcome of a single game or the performance of a single player. This allowed each state to determine its own position. The ensuing confusion has lead to a diverse opinion amongst the states in the USA, and more particularly the Attorney Generals in each state. There is a contrasting approach between those states that permit the online activity, those that restrict it to players with no ability to pay and win, and those that do not permit it at all.</span></p>\r\n<p class=\"p1\">So how would fantasy sports fare in the Middle East?</p>\r\n<p class=\"p1\">Pursuant to the Constitution of the UAE, Islam is the official religion.  There is also a general prohibition on gambling. This provides some context in which to understand references in the law to ‘sin’ and in determining conduct that conflicts with ‘public morality’.</p>\r\n<p class=\"p1\">The key source of law relating to gambling is Federal Law No. 3 of 1987 (the “Penal Code”). Article 413 of the Penal Code defines gambling as “<em>a game in which each party agrees that if he loses, he will pay the party who wins the game an amount of money or anything else agreed upon.</em>” The Penal Code makes participation in gambling an offence, punishable by imprisonment for a term not exceeding two years (if it takes place in public) and/or a fine of up to AED20,000. This provision is replicated in the laws of several Emirates as well.</p>\r\n<p class=\"p1\"><span class=\"s1\"> Interestingly, whilst some US states have been arguing that fantasy sports may not constitute gambling because of the (claimed) high element of skill involved in creating a team, this element would not be relevant in the UAE. The simple fact that the stake of the losing competitor is used to pay the winner would be sufficient to create an offence under UAE law. Because most fantasy sports contests include entry fees and prizes, these contests would be deemed illegal under UAE law. </span></p>\r\n<p class=\"p1\"><span class=\"s2\"> In the UAE, issues clearly lie with the creation of any game where the object is to win money. There can be no doubt that paying to play in a fantasy football tournament with the aim of collecting winnings would be considered gambling. </span></p>\r\n<p class=\"p1\">Opening or managing a venue for gambling, or organizing a game of chance in a public place or in a venue for gambling, is also an offence, with the penalty being imprisonment for a term of up to ten years.</p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>Gambling and the Cyber Crimes Law</strong></span></p>\r\n<p class=\"p1\">There have been ongoing issues, as noted above, in many overseas jurisdictions, arising from the difficult distinction between putting up a stake on your fantasy football team and outright gambling on sport itself. In the UAE, the position is not so difficult.</p>\r\n<p class=\"p1\">Federal Law No 5 of 2012 on Combating Cybercrimes (the “Cyber Crimes Law”) contains prohibitions in relation to gambling and sets out penalties including imprisonment and/or fines ranging from AED250,000 to AED500,000. In particular, Article 17 of the Cyber Crimes Law states sets out the penalties for “<em>whoever establishes, manages or runs a website or transmits, sends, publishes or re-publishes through the computer network pornographic materials or gambling activities and whatever that may afflict the public morals” and for anyone who “produces, draws up, prepares, sends or saves for exploitation, distribution, or display to others through the computer network, pornographic materials or gambling activities and whatever that may afflict the public morals.</em>”</p>\r\n<p class=\"p1\">The definition of gambling is not provided, leaving us with only the definition within the Penal Code (above). But clearly the act of simply setting up a fantasy sports league in the UAE would attract attention, as would distributing it (for example, posting the link on social media, even if you did not create the fantasy sports league yourself), or displaying it to others (this may mean something as innocuous as merely sharing your success in a fantasy sports league to others in the UAE).</p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>What if there were no stakes involved?</strong></span></p>\r\n<p class=\"p1\">Interestingly, the key element that determines whether an activity is gambling is the payment by the loser to the winner. So what if there was no payment required for the entry and/or no prizes to be won?</p>\r\n<p class=\"p1\"><span class=\"s1\"> The position in this respect is obviously improved for the players and the operators, but we consider that it remains slightly unclear. If there is no payment by a loser then there would be an argument that no gambling has occurred and hence there is no issue under the Penal Code. However Article 17 of the Cyber Crimes Law does also extend to “<em>whatever … may afflict the public morals</em>”. Article 15 adds that it is prohibited to use the internet or IT services for “<em>encouragement of sin</em>”. Given the status of gambling itself as a sin, if a game were developed based on a recognized form of gambling but were free to play, would the authorities consider that an activity afflicting public morals or promoting sin? The answer is probably no, they would not. However we do believe that the continued or emphasised use of ‘gambling-like activities’, even within a free game, could very easily attract attention by members of the public and could result in a complaint being raised with the authorities. Ancillary to this, we believe that whilst the provision of a prize to the winner may not alter that position legally, provided that the losers were not required to pay towards, or otherwise supply, any part of that prize, the fact that a person could win anything at all might also increase the likelihood of the authorities investigating the game if a complaint were raised.</span></p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>The ongoing game vs. the daily game? Will it make any difference locally?</strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">The Attorney General in Texas, in discussing the potential new law, has said that whilst compiling a fantasy team for a season may conceivably take quite a bit of skill, the daily fantasy game, now growing in popularity in many countries, is much different. This is because the chances of something happening to a particular player during a game, or something unrelated to the game or which took a player out of a game entirely could substantially impact the outcome. If this were to happen in one game during the course of a full season, it may not vastly affect the outcome of the season. However, if one is taking a chance on a single game on a particular day, it could have a significant impact on the game and therefore on the results.</span></p>\r\n<p class=\"p1\">This analysis, whilst interesting from a legal perspective, has no relevance in a jurisdiction where the provision of a stake is the indicator for the illegal activity. Hypothetically, for games where no stake is required, the higher level of skill that is involved in a season of fantasy sport could make a difference in the analysis if the authorities were to be asked to determine whether the game was encouraging sin (as opposed to the daily fantasy games where there is an significantly increased element of chance).</p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>Practical considerations – the TRA</strong></span></p>\r\n<p class=\"p1\">The Telecommunications Regulatory Authority (TRA) has established the “Internet Access Management” policy which, amongst its powers, requires internet service providers (in this case du and Etisalat) to block access to websites providing illegal content or content that is inconsistent with the moral or public norms of the UAE.</p>\r\n<p class=\"p1\">The practical ramification of this is that many fantasy sports websites are blocked in the UAE. Indicating that the government does not have an issue with fantasy sports as a game - as long as no stakes are required - websites such as EA Sports Fantasy Premiere League and ESPN Fantasy Football remain available in the region.</p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>Adding fantasy to a brand – other legal issues</strong></span></p>\r\n<p class=\"p1\">Finally, it is important to remember that any competition that is designed to promote a brand would generally require the approval of the relevant Department in each Emirate. The running of a fantasy sports league, even without a stake, that is designed to promote a brand and results in a prize for a winner may require a permit. This would be even more relevant if there is a requirement to purchase goods in order to enter, and this fact may give rise to a more considered analysis of the competition by the authorities.</p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>Conclusion</strong></span></p>\r\n<p class=\"p1\">A game of chance or a game of skill – it can be argued that chance plays a role in everything in life. However the strict legal regime that applies to gambling and associated conduct in the UAE, coupled with the high penalties for infringing the Cyber Crimes law, mean that the risk of undertaking any form of fantasy sports in the UAE is probably not worth the potential pay out.</p>\r\n<p class=\"p2\"></p>\r\n<p class=\"p1\"><em>Fiona Robertson (f.robertson@tamimi.com) is a Senior Associate in the TMT department and a key member of Al Tamimi’s dedicated Sports Law practice. Fiona is a highly experienced lawyer who regularly advises clients in the sports industry on a variety of issues relating to the exploitation and protection of their media rights. </em></p>'),
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	(104017,5656,'content_description','In April this year, lawmakers in Texas became the latest politicians to turn their attention to the perplexing issue of fantasy football. '),
	(104018,5656,'_content_description','field_59b641c07f473'),
	(104019,5656,'pageSummary','In April this year, lawmakers in Texas became the latest politicians to turn their attention to the perplexing issue of fantasy football. '),
	(104020,5656,'_pageSummary','field_59e59b307dec8'),
	(104021,5656,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/may-10/fantasy-sports-in-the-uae-legal-or-a-red-card.html'),
	(104022,5656,'_currentURL','field_59d35123ab1e7'),
	(104023,5656,'lawUpdateArticleWriters_0_lawUpdateArticleWriter','845'),
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	(104027,5656,'_yoast_wpseo_metadesc','There is a contrasting approach between those states that permit the online activity, those that restrict it to players with no ability to pay and win, and those that do not permit it at all. So how would fantasy sports fare in the Middle East?'),
	(104028,5657,'content','May 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\">For this reason, it is critical that customers of IT services negotiate for the provision of comprehensive disengagement / termination services in any outsourcing contract. These services commence where the arrangement comes to an end either due to expiry or earlier termination. This will ensure service continuity through an orderly transition of the services from the supplier to either another supplier or to the customer itself. </span></p>\r\n<p class=\"p1\">A contract that does not contain adequate obligations on the supplier to provide disengagement services will likely result in the customer being held hostage as the contract nears expiry or is in the process of being terminated (whether due to an ongoing dispute or for any other reason). In such a situation, the customer would be left stranded with no alternative but to agree to whatever terms that are dictated by the supplier. Worst still, the customer may not practically be able to exercise its termination rights, even where it wishes to terminate the contract for cause as it has no means of migrating the provision of the services from the supplier in an orderly fashion, without causing disruption to its commercial activities.</p>\r\n<p class=\"p1\">This article will outline some aspects of disengagement services that customers ought to turn their minds to when negotiating IT outsourcing contracts.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Scope </strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">Disengagement / termination assistance is essentially just another type of service, except that the service gradually ceases rather than being switched off at once. It is therefore essential that the scope be clearly defined and that associated fees are agreed upfront. Commitments should be obtained from the supplier to perform whatever services are necessary or reasonably required by the customer to effect a smooth transition of the services. Well-drafted contracts lay out (in the text or an exhibit) the scope of the termination services and such matters as: (i) support for a migration plan; (ii) transfers of assets and personnel; and (iii) transfers of work in progress, data, working documentation and contracts. </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Fees </strong></span></p>\r\n<p class=\"p1\">Most, if not all, termination assistance activities are performed by the same supplier staff who are assigned to support the customer in the provision of the steady state services. The supplier staff are paid for through the base charges for the service. The Supplier will likely argue that the customer should bear the cost of additional resources or skills (such as a transition manager) that are not ordinarily provided by the supplier in performing the steady state services. Similarly, if the customer needs additional supplier staff to complete disengagement and continue normal operations, the customer may be required to either pay for the additional support, or to relieve the supplier from service level requirements or other performance obligations. This will allow the supplier staff to support both daily operations and the transition.</p>\r\n<p class=\"p1\">It would be very difficult for the customer to obtain termination services without charge, even where the customer terminates the contract for default by the supplier. In the case of termination by the customer for default, the customer may of course pursue damages through disputes procedures and formal proceedings. Note however, that consequential losses may not be recoverable – for example, in Saudi Arabia, courts will only award direct damages actually incurred by a party. In any event, it is in the interest of the customer to pay for the disengagement services so as to incentivize the supplier to carry out an efficient disengagement without affecting the commercial operation of the customer’s business. This is particularly important in jurisdictions (such as Saudi Arabia) where the courts do not ordinarily compel a party to perform its contractual obligations (including disengagement services) by mandatory injunction or similar remedies.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Timing and Extensions</strong></span></p>\r\n<p class=\"p1\">Time periods (such as notice periods for convenience termination) should be realistic, bearing in mind operational realities, the complexity of the service and other relevant considerations.</p>\r\n<p class=\"p1\">Customers need to have some flexibility about timing so it is important that the supplier phase out the services in a sequence that is determined by the customer. Also, it is possible that transition may be delayed, so it is worthwhile having a right to request that some or all services, be extended on a month-to-month or similar basis even after the disengagement services are due to expire. Naturally, this will need to be balanced against the supplier’s demands re notice periods, time limits on the provision of disengagement services, relief from service levels and refresh obligations. Inevitably, suppliers will push for higher fees to be payable on the basis that the thencurrent fees for steady state services are predicated on large volumes and therefore not economically feasible for discrete or limited services.</p>\r\n<p class=\"p4\"><strong>Asset Transfers</strong></p>\r\n<p class=\"p1\">Dedicated hardware and other assets used in providing the steady state services to the customer, such as assets at customer sites should be transferred to the customer. Suppliers will strongly resist transferring shared assets to the customer (ie those assets that the supplier uses to provide services to other customers as well). The workaround for the client may be to place an obligation on the supplier to procure assets the same as the shared assets for the customer. Also, the supplier will want to recover its unamortised or stranded costs (the value of assets purchased by the supplier for the purpose of providing the services to the customer). The supplier will ordinarily recover such costs through payment of book value of the assets or through termination charges that include the unamortised asset costs.</p>\r\n<p class=\"p1\"><span class=\"s4\"> Similar considerations apply to leveraged contracts (such as software licenses) or subcontracts that are used by the supplier to support multiple customers. Customer specific third party contracts must contain terms that allow the supplier to transfer such contracts to the customer. This would make it easier for the customer to require that those contracts be transferred to it under the prime contract between the customer and the supplier. As for master or leveraged software licenses that the supplier uses to support multiple supplier customers, they are typically not transferable. To address this, the customer can require the supplier to obtain the relevant software licenses for it. Naturally, suppliers will either seek to pass through the expense to the customer or build it into their cost models and pricing.</span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Personnel Transfers</strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">It is important for customers to have an opportunity to recruit (or allow the successor supplier to recruit) the supplier’s personnel who have been involved in the provision of services to the customer, particularly those that are dedicated to the customer. Where the customer or the successor supplier wishes to acquire the business of the supplier, employment law advice for the relevant jurisdiction should be sought as to whether:</span></p>\r\n\r\n<ul>\r\n 	<li>the staff may transfer automatically through operation of acquired rights; and</li>\r\n 	<li>there are any laws and regulations that may affect staff reductions, transfers and severance.</li>\r\n</ul>\r\n<span class=\"s2\"><strong>Transfers of Data, Knowledge and Intangibles</strong></span>\r\n<p class=\"p1\">The supplier should be required to comply with the following requirements without jeopardising service levels or disrupting the steady state performance of the services:</p>\r\n\r\n<ul>\r\n 	<li>transfer customer data, proprietary software and other intangible property to the customer;</li>\r\n 	<li>provide copies of procedures manuals and other working documents (at least those parts of a procedures manual or other document that are specific to the customer);</li>\r\n 	<li>provide supplier tools, utilities and other proprietary software for the customer’s use during a reasonable transition period;</li>\r\n 	<li>provide commercial software products;</li>\r\n 	<li>make knowledgeable personnel available for debriefing and knowledge transfer to other IT professionals; and</li>\r\n 	<li>train customer or successor supplier personnel.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\"><span class=\"s1\"><em>Al Tamimi &amp; Company’s TMT team regularly advises on IT outsourcing contracts. For further information please contact Haroun Khwaja (h.khwaja@tamimi.com) or Nick O’Connell (n.oconnell@tamimi.com).</em></span></p>'),
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	(104030,5657,'lawUpdateArticleMonth','5650'),
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	(104032,5657,'content_description','IT services are the backbone of most public and private sector entities nowadays including those in the banking, retail, airline, hotel, manufacturing and mining industries. '),
	(104033,5657,'_content_description','field_59b641c07f473'),
	(104034,5657,'pageSummary','IT services are the backbone of most public and private sector entities nowadays including those in the banking, retail, airline, hotel, manufacturing and mining industries.'),
	(104035,5657,'_pageSummary','field_59e59b307dec8'),
	(104036,5657,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/may-10/it-disengagement-services-thinking-ahead-for-a-smooth-exit.html'),
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	(104039,5657,'_lawUpdateArticleWriters_0_lawUpdateArticleWriter','field_59da2ac06b065'),
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	(104041,5657,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(104042,5657,'_yoast_wpseo_metadesc','Al Tamimi & Company outlines some aspects of disengagement services that customers ought to turn their minds to when negotiating IT outsourcing contracts.'),
	(104043,5658,'content','May 2017\r\n\r\n<hr />\r\n<p class=\"p1\">Whilst legal complexities can arise under residential leases, they are generally uniform in that the demise or premises is the entire real estate unit and the care and maintenance of the premises is shared in a common sense fashion. However, forms of commercial lease arrangements can vary significantly depending on the nature of the property, the relevant tenant’s business and the commercial objectives of the parties.</p>\r\n<p class=\"p1\">Below we outline some of the fundamental aspects to any commercial lease arrangement as well as possible variants having regard to the circumstances. We also explore some of the key risks that arise due to incomplete or unclear documentation.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>The Demise</strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">The first issue to be determined in any lease is what is being demised. The demise is the area of the building or facility designated for the exclusive use of the tenant. Often it is referred to as the “premises”. Whilst this may seem, on the surface, a fairly simple exercise, there can be a number of possibilities each of which has consequences on the obligations of the landlord or the tenant in relation to repairing, maintaining, servicing and insuring the premises or building. We set out some examples of different demises below. </span></p>\r\n<p class=\"p4\"><em>Building Demise</em></p>\r\n<p class=\"p1\">The simplest form of demise would be a demise of the entire building or facility to the tenant. Such arrangements are more likely to apply in purpose built facilities such as factories, warehouses, schools or hospitals where the tenant requires the use of the entire building or facility.</p>\r\n<p class=\"p1\"><em>Unit Demise</em></p>\r\n<p class=\"p1\">The other form of demise is where only part of the building or facility is leased to the tenant. In this circumstance, the tenant would only be entitled to exclusively use and occupy the relevant part demised. Often the landlord will lease other parts of the building or facility to other tenants and reserve to itself and all tenants the right to use the common parts of the building or facility.</p>\r\n<p class=\"p1\"><em>Licensed Areas</em></p>\r\n<p class=\"p1\">From a common law perspective, a license is a right over an area but one where the licensee does not have exclusive possession (i.e. the area may be shared with others or the landlord, or others may have rights of access to the area). Licenses may also be used for temporary facilities such as kiosks or promotional stands. From a common law perspective, a license would not be a lease. This distinction between a license and lease is, however, less clear in Dubai. Licensed areas may also be included in the lease alongside the demised areas. Common examples are:</p>\r\n\r\n<ul>\r\n 	<li>rights to terraces for restaurant seating;</li>\r\n 	<li>rights of access to and exit from the premises;</li>\r\n 	<li>car parking rights; and</li>\r\n 	<li>signage rights.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\"><span class=\"s1\"><strong>Landlord Reservations</strong></span></p>\r\n<p class=\"p1\">Whilst “demising” the whole or part of a building or facility gives the tenant exclusive possession of such premises, landlords usually reserve the right to enter into the demised premises for various purposes including:</p>\r\n\r\n<ul>\r\n 	<li>conducting repairs that the landlord accepts responsibility for;</li>\r\n 	<li>inspecting the premises to ensure that the tenant is meeting its repairing, maintenance and other obligations;</li>\r\n 	<li>ensuring that any services running through the premises (and serving the common parts or other premises let to other tenants) are not interrupted;</li>\r\n 	<li>for the provision of services that the landlord has agreed to provide; and</li>\r\n 	<li>in the case of emergencies.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p8\">It is common for the landlord to have to give the tenant some notice as to when they may access the premises except in cases of emergency.</p>\r\n<p class=\"p2\"><strong>Fit-Out &amp; Reinstatement Obligations</strong></p>\r\n<p class=\"p2\">Once the demise is determined, a common issue would be whether the demised premises are fitted out and ready for use or are provided as “shell and core”. Shell and core means that the premises comprise just the utility service connections, premises shell and structure and no suspended ceilings, wall or floor coverings.</p>\r\n<p class=\"p1\">If the premises are shell and core or if the existing fit out is not sufficient, the tenant would usually assume the obligation to fit out the premises to meet its requirements. This can be a substantial obligation for a tenant and, in addition, the tenant will not have the benefit of the use of the premises for the period whilst the fit out occurs. In recognition of this, landlords may agree to a “rent free period”. Often a tenant may be required to remove its fit-out at the end of the term of the lease and reinstate the premises to its prior condition, excluding fair wear and tear.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Repairing and Maintaining Rights and Obligations</strong></span></p>\r\n<p class=\"p1\">A key part to any commercial lease is determining the rights and obligations of the landlord and tenant with respect to repairs and maintenance. As a general rule, the tenant would assume the majority of obligations to repair and maintain the demised area. However, there are exceptions to this general rule as often either the landlord or the tenant may want certain infrastructure to be taken care of by the landlord.</p>\r\n<p class=\"p1\">Good examples would be civil defence systems like sprinklers or integrated IT or telecommunications systems. Often a landlord may accept repair responsibility for mechanical, electrical and plumbing systems within the premises. Where only part of a building or facility is demised, the landlord would also assume responsibility for the maintenance and repair of the common parts.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Services &amp; Service Charges</strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">Although related to repairing and maintenance obligations, the rights and obligations for the provision of services is best considered separately. Services may comprise utilities, security, cleaning, mechanical, electrical and plumbing maintenance and repairs and many other aspects of the maintenance and operation of the premises or the building. The tenant would usually accept responsibility for many services in relation to the premises including utilities (where separately metered), and cleaning. In line with the obligations for repairing and maintaining, the landlord may accept responsibility for certain services within the premises. A key aspect of any commercial lease is whether the cost of such services (and insurance and other landlord costs) are payable by the tenant as “service charges” in addition to the rent or whether such charges are included in the rent. </span></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Insurance &amp; Risk</strong></span></p>\r\n<p class=\"p1\">As the owner of the relevant building or facility, a landlord will invariably insure it against the usual property risks. A key aspect for discussion between landlord’s and tenants is whether the tenant gets the benefit of the landlords insurance in this regard as, if they do not, and the tenant causes damage to the building, the insurer may look to recover directly from the tenant. Where the tenant does not get the benefit of the landlord’s property all risk insurance, the tenant should arrange its own insurance for such risks.</p>\r\n<p class=\"p1\">A landlord will not insure the tenant’s fixtures, fittings, and contents and, accordingly, the tenant will need to insure for the same. In addition, a landlord may want a tenant to hold other insurances such as builders’ risks (during the fit-out), and third party risks, with such insurance to also benefit the landlord.</p>\r\n<p class=\"p1\">The allocation of the various risks as between the landlord and the tenant will usually be set out in the lease as a corollary of the insurance matrix (i.e. each of the landlord and tenant may accept certain risks and be required to insure them, sometimes with the other party also getting the benefit of this insurance). Landlords may also take out “loss of rent” insurance to cover any period during which the building or facility may be damaged and rent abatements may apply.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Mall Leases</strong></span></p>\r\n<p class=\"p1\">Malls are distinctive properties and accordingly commercial leases in malls often have distinct clauses. Common examples include:</p>\r\n\r\n<ul>\r\n 	<li>turnover rents (the mechanics of which vary but are calculated by reference to revenue generated by the tenant from the premises);</li>\r\n 	<li>obligations on tenants to contribute towards the costs of marketing the mall;</li>\r\n 	<li>“keep open” obligations (whereby the tenant is obliged to keep the premises open during the opening hours of the mall); and</li>\r\n 	<li>relocation clauses (where the tenant agrees to accept alternative premises if the landlord wishes to reconfigure the tenant mix).</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\"><span class=\"s1\"><strong>Key Risk Issues</strong></span></p>\r\n<p class=\"p1\">The above sections constitute an overview of the fundamental aspects of commercial leases. It is important to recognise however that these fundamentals are matters set out in the contractual terms of the lease. If a lease does not express a clear position in relation to the above issues a tenant should not assume that it is covered under the general law. Below are some of the key risk issues when agreeing commercial leases.</p>\r\n<p class=\"p1\">Key problems that we are familiar with as lawyers include:</p>\r\n\r\n<ul>\r\n 	<li>The failure to adequately define the demise. As you will note from the above, defining the demise is critical to determining the extent of the maintaining, repairing, services, service charges and other rights and obligations of the landlord and the tenant.</li>\r\n 	<li>The failure to clearly define ancillary rights such as the right to certain licensed areas. Such areas can be critical to the success of a tenants operations and therefore should be secured and collateral to the rights of the tenant under the lease.</li>\r\n 	<li>Complications around the execution and finalisation of fit-outs. Fit-outs can be relatively complex construction arrangements with obligations on both tenants and landlords. Clearly if fit-out completion is delayed disputes between the landlord and the tenant with regard to the responsibility for the delays can arise. It is therefore important for the rights and responsibilities in relation to the fit-out to be clearly defined and for the tenant to ensure its contractors and consultants are experienced and any contractual documentation with them adequately protects the tenant.</li>\r\n 	<li>Failing to clearly define the “permitted use” of the premises. What the premises can be used for and even the brand name associated with the tenant can be very important considerations for both landlords and tenants.</li>\r\n 	<li>The tenant failing to secure fair and reasonable rights to assign the lease or subleasing rights. Assignments of lease and subletting in Dubai are restricted unless the parties agree otherwise. Certain regulatory issues may also arise with subleasing.</li>\r\n 	<li>A lack of clarity as to who is responsible for completing or paying for repairing or maintaining the premises or building or providing services. The cost of services can be significant as can resultant damage if the necessary repairs or maintenance are not undertaken accordingly. It is time well spent to clearly document such rights and obligations.</li>\r\n 	<li>Failing to clearly document the standard and conditions upon which the premises are handed over to the tenant (and therefore the condition upon which they must be handed back to the landlord).</li>\r\n 	<li>Unclear allocations of risk and insufficient insurance cover. Thankfully accidents are relatively rare. However given the extent of liability possible, the allocation of risk and insurance are key issues to be considered in every commercial lease.</li>\r\n 	<li>Break options, rent reviews and renewals. To a large extent such issues are regulated in Dubai. Landlords and tenants may however want to plan ahead as a means of creating greater certainty as to rents, the potential need to break a lease, and additional renewal terms.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\"><span class=\"s1\"><strong>Conclusion</strong></span></p>\r\n<p class=\"p1\">This article is intended to give the reader an overview of the fundamentals of commercial leasing and highlight the key issues for consideration. Tenants should always seek appropriate legal and surveying advice before entering into lease arrangements.</p>\r\n<p class=\"p10\"><em>This article was first published online by Property Weekly on 10 May 2017.</em></p>'),
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	(104047,5658,'content_description','Most residents in Dubai will be familiar with a basic residential lease arrangement. '),
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	(104049,5658,'pageSummary','Most residents in Dubai will be familiar with a basic residential lease arrangement.'),
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	(104061,5658,'_yoast_wpseo_metadesc','Al Tamimi & Company outlines some of the fundamental aspects to any commercial lease arrangement as well as possible variants having regard to the circumstances. We also explore some of the key risks that arise due to incomplete or unclear documentation.'),
	(104062,5659,'content','May 2017\r\n\r\n<hr />\r\n<p class=\"p1\">For example, by the endowment of an entire building, the <em>waqif</em> dedicates all rental income generated from that building to the benefit of a specific recipient. It also prohibits any use or disposition of that building by anyone other than the specified recipient.</p>\r\n<p class=\"p1\">Dubai Local Law No. 9 of 2007 (“AMAF Law”) establishing the Awqaf and Minors Affairs Foundation (“AMAF”) codifies the Sharia position and defines a <em>waqf</em> as “<em>Every item being endowed, whether movable or immovable, for the sake of other persons who are in need and with the intention of seeking the Almighty’s satisfaction by such endowment</em>”.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>The Advantages of a <em>Waqf</em></strong></span></p>\r\n<p class=\"p1\">The advantages of establishing or granting a <em>waqf</em> cannot be measured in terms of income and expenses only. The benefits will accrue to the <em>waqif</em>, the community as a whole, and the poor and disadvantaged in general.</p>\r\n<p class=\"p1\">A <em>waqf</em> has the following benefits and advantages:</p>\r\n\r\n<ul>\r\n 	<li>creating a long-term and large community capital fund;</li>\r\n 	<li>establishing and supporting projects from the revenues of the AMAF on a sustainable basis;</li>\r\n 	<li>aiding the poor and disadvantaged communities;</li>\r\n 	<li>raising the self-esteem of the poor and the disadvantaged;</li>\r\n 	<li>contributing towards poverty alleviation;</li>\r\n 	<li>empowering society and encouraging people to contribute in charity;</li>\r\n 	<li>contributing towards forming a united community; and</li>\r\n 	<li>leaving a legacy that future generations will be proud of and incentivising them to follow the footsteps of the <em>waqif</em>.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\"><em>Waqfs</em> play an important role in nurturing solidarity and charity in society and provide a significant economic aid to the poor and disadvantaged.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>The Role of AMAF in Dubai</strong></span></p>\r\n<p class=\"p1\">The main objectives of the AMAF are the guardianship of minors, managing and investing their funds, guiding their education and social development, and ensuring their empowerment. Furthermore, it aims to promote the grant of <em>waqf</em>s through a contemporary Islamic perspective by encouraging individuals to participate for the public good.</p>\r\n<p class=\"p1\">The AMAF is a public foundation that enjoys the independent corporate character and the legal competence to perform all activities in pursuit of its objectives. The AMAF may also contract with others legal persons, participate in litigation, and delegate to any other person for these purposes, generally under the supervision of the Executive Council.</p>\r\n<p class=\"p1\">Article 21 of the AMAF Law states that the AMAF shall undertake the legal superintendence of endowments, taking care of, investing, raising and managing funds, and disbursing their proceeds in accordance with the conditions stipulated by the <em>waqif</em>.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong><em>Waqf</em> Requirements</strong></span></p>\r\n<p class=\"p1\">The <em>waqf</em> is a contract and therefore the <em>waqif</em> must have the capacity to enter into a contract. In summary, the <em>waqif</em> must:</p>\r\n\r\n<ul>\r\n 	<li>be an adult;</li>\r\n 	<li>be of sound mind;</li>\r\n 	<li>be capable of handling his or her own financial affairs; and</li>\r\n 	<li>not be subject to bankruptcy.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\">The AMAF Law is silent with respect to the faith of the <em>waqif</em> and although <em>waqf</em> is an Islamic concept, being a Muslim, or even a resident of Dubai, are not mandatory requirements to be a <em>waqif</em>. The AMAF encourages individuals from all faiths and nationalities to participate and donate to aid the poor and the disadvantaged.</p>\r\n<p class=\"p2\"><strong>Registration of a <em>Waqf</em> at AMAF</strong></p>\r\n<p class=\"p1\">A <em>waqf</em> must be registered at the AMAF following the attestation of a Dubai Courts judge. In this regard, Article 38 of the AMAF Law states that: “The endowment shall emanate from a court’s attestation”.</p>\r\n<p class=\"p1\">The requirements for registration of a <em>waqf</em> on a property at the AMAF are the following:</p>\r\n\r\n<ul>\r\n 	<li>original property title deed and site plan;</li>\r\n 	<li>letter from the Dubai Land Department confirming that the property is clear from any encumbrances or liabilities and that it can be converted into a <em>waqf</em>;</li>\r\n 	<li>passport copy and Emirates ID of the <em>waqif</em>;</li>\r\n 	<li>identity of the charity income recipient;</li>\r\n 	<li>selection of the superintendent of the <em>waqf</em> (e.g. the AMAF or any third party); and</li>\r\n 	<li>two witnesses for the certification of the <em>waqf</em>.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p8\">The <em>waqif</em> may register a <em>waqf</em> on a property that was granted to him by the Ruler of Dubai. However, the <em>waqif</em> must first seek the consent of the Ruler through the Ruler’s Court to proceed and register a <em>waqf</em> on the granted property.</p>\r\n<p class=\"p10\"><span class=\"s1\"><strong>The Commencement and Term of a <em>Waqf</em></strong></span></p>\r\n<p class=\"p1\">A <em>waqf</em> may commence at the time of registration during the life of the <em>waqif</em> or may commence following the death of the <em>waqif</em>. In this regard, Article 45 of the AMAF Law states that: “<em>The endowment which depends on the death of the waqif is not compulsory during his life. However, following the death of the waqif, it is necessary to carry out the endowment as registered by the waqif</em>”.</p>\r\n<p class=\"p1\">Paragraph 1 of Article 40 of the AMAF Law states that the <em>waqf</em> shall be considered perpetually constrained from any kind of disposition whatsoever, whether it be sale, donation or mortgage, unless it is in the interest of preserving the <em>waqf</em> which stipulates otherwise, and any such disposition shall not be made without the court’s permission.</p>\r\n<p class=\"p1\"><span class=\"s2\"> Furthermore, paragraph 2 of Article 40 of the AMAF Law states that the endowment of a mosque shall always be perpetual. However, the endowment of other property can be either temporary or perpetual depending on the choice of the <em>waqif</em>’.</span></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Supervision of a <em>Waqf</em></strong></span></p>\r\n<p class=\"p1\">The supervision of the <em>waqf</em> is decided by the <em>waqif</em> and in the event that the <em>waqif</em> appoints a third party, other than the AMAF, the third party must provide detailed annual reports to the AMAF, inlcuding the income and expenses of the <em>waqf</em>. In this regard, Article 47 states that: “<em>The superintendent of the Waqf (endowment) shall provide the Foundation with periodical statements of account regarding the returns of managed endowments, and such statements shall be provided at a date fixed by the Foundation. The Foundation may fix a separate date for each endowment (separately)</em>”.</p>\r\n<p class=\"p1\">In the event that the <em>waqif</em> does not specify a superintendent, the AMAF will be the superintendent by law. The AMAF is granted this authority by Article 39 of the AMAF Law, which states: “<em>Provided that the waqif does not appoint any relative or any other specific individual as a superintendent, the Foundation shall be the superintendent, being the authority in charge of the general custodianship regarding charity and the returns of charities for the public benefit</em>”.</p>\r\n<p class=\"p1\"><span class=\"s3\"> Furthermore, the <em>waqif</em> has the right to choose any beneficiary to receive the charity and income from the <em>waqf</em> and such beneficiaries may be individuals or institutions with or social purposes, such as health, education, social services etc.</span></p>\r\n<p class=\"p1\">In the event that the <em>waqif</em> does a charity recipient of the <em>waqf</em>, Article 44 of the AMAF Law provides the AMAF with the authority to disburse the returns totally or partially to a party that is deemed to be the most suitable and rightful in accordance with Islamic Law.</p>\r\n<p class=\"p1\">The supervision of the property that is the subject of a <em>waqf</em> is generally administered under a property management agreement, governing issues related to distribution of the income generated from the property and the maintenance of the property. We recommend that parties intending to grant a <em>waqf</em> seek legal advice to ensure that the property is managed by the <em>waqif</em> in the manner, and for the purposes, intended.</p>'),
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	(104066,5659,'content_description','The Islamic Sharia defines waqf over a property as the endowment of a building, a plot of land or other asset for charitable purposes, with no intention of reclaiming the donated assets. The donated assets may be held by a trust and the person endowing his assets in such a manner is known as the waqif (i.e. the donor).'),
	(104067,5659,'_content_description','field_59b641c07f473'),
	(104068,5659,'pageSummary','The Islamic Sharia defines waqf over a property as the endowment of a building, a plot of land or other asset for charitable purposes, with no intention of reclaiming the donated assets. The donated assets may be held by a trust and the person endowing his assets in such a manner is known as the waqif (i.e. the donor).'),
	(104069,5659,'_pageSummary','field_59e59b307dec8'),
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	(104072,5659,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Abdullah Khaled'),
	(104073,5659,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(104074,5659,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','a.khaled@tamimi.com'),
	(104075,5659,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','field_59e59afcd15de'),
	(104076,5659,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','Dubai, UAE'),
	(104077,5659,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
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	(104079,5659,'_lawUpdateArticleNoWriters','field_59e59aaed15dc'),
	(104080,5659,'_yoast_wpseo_metadesc','The Islamic Sharia defines waqf over a property as the endowment of a building, a plot of land or other asset for charitable purposes, with no intention of reclaiming the donated assets. The donated assets may be held by a trust and the person endowing his assets in such a manner is known as the waqif (i.e. the donor).'),
	(104081,5660,'content','May 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\"><strong>In general, it’s difficult</strong></span></p>\r\n<p class=\"p3\">They can also hear claims against parties who are based elsewhere if certain conditions set out in Article 21 of the CPC are met, such as where the claims relate to assets held in Dubai. While the Dubai Courts fall outside the UAE federal court system, in practice their approach to jurisdiction and the recognition of foreign court judgments is the same as elsewhere in the UAE as they apply the CPC, a federal law.</p>\r\n<p class=\"p3\"><span class=\"s2\"> Contracting commercial parties often agree that the courts of a particular jurisdiction should hear claims brought under or in relation to their contract. The Dubai Courts will ignore a contractual choice of a foreign jurisdiction (and usually also a contractual choice of governing law) if they themselves have jurisdiction to hear the claim under the CPC. The Dubai Court of Cassation, Dubai’s highest court, has held that jurisdiction clauses are void on public policy grounds in cases where the UAE Courts have jurisdiction over a claim.</span></p>\r\n<p class=\"p3\">As a result, international parties with foreign court judgments against parties based in Dubai have historically been unable to enforce such judgments in Dubai because the Dubai Courts themselves have jurisdiction, under the CPC, to hear the underlying claims and will decline to enforce foreign court judgments on that basis.</p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Prevention is better than cure</strong></span></p>\r\n<p class=\"p3\">At best, there is a large question mark over whether judgments from foreign courts against Dubai-based parties have any practical value in the Dubai Courts. Claimants should carefully consider in which forum to bring their claims from an enforcement perspective, not just on the basis of where they believe they will obtain a favourable judgment on the merits. If a judgment is issued in the right forum, any difficulties with its enforcement in the Dubai Courts are reduced or eliminated altogether.</p>\r\n<p class=\"p3\">Commercial parties do not always pay much attention to the dispute resolution provisions of their agreements until a dispute has arisen. Once that happens, a claimant can be left with a choice of court in its contract that is unsuitable or unenforceable in Dubai. Parties with claims against Dubai-based entities or individuals may feel bound to commence proceedings in a foreign court because their agreements require them to do so, even though the Dubai Courts would be the appropriate forum to hear their claims as a matter of UAE law. They may also prefer the courts of their home countries which they are familiar with, as opposed to the Dubai Courts which are based on the civil law system, operate in Arabic language and whose judges have different backgrounds to those of common law jurisdictions.</p>\r\n<p class=\"p3\"><span class=\"s3\"> Claimants seeking to bring claims against Dubai-based parties but who wish to avoid using the Dubai Courts have other forum options that present much less of a challenge from an enforcement perspective than foreign court judgments. One such option involves parties agreeing, in a contract, to submit any disputes arising between them to arbitration. The UAE acceded to the New York Convention in 2006 and despite occasional setbacks, its courts have adopted an increasingly positive approach to the recognition and enforcement of arbitral awards, particularly international awards. </span></p>\r\n<p class=\"p3\"><span class=\"s2\"> A second option available to contracting parties is to submit their disputes to the jurisdiction of the Dubai International Financial Centre (DIFC), a financial free zone with its own laws and courts (DIFC Courts). The DIFC Courts are English-language common law courts that are also courts of Dubai. Their judgments have the same legal status as judgments of the Dubai Courts, including when it comes to enforcement. Apart from having jurisdiction over claims involving parties, contracts and incidents within the DIFC, the DIFC Courts have since 2011 been able to hear claims brought by parties who have opted into the DIFC’s jurisdiction in their contracts but who have no other link to the DIFC. The DIFC’s jurisdiction was expanded in this way as a result of Dubai Law No. 16 of 2011, which amended Dubai Law No. 12 of 2004 establishing the DIFC Courts. The amended law is often referred to as the Judicial Authority Law.</span></p>\r\n<p class=\"p3\">Judgments of the DIFC Courts can be enforced in Dubai outside the DIFC pursuant to Article 7 of the Judicial Authority Law. By specifying that any disputes between them are to be resolved by the DIFC Courts, contracting parties can ensure that their disputes are heard by courts that are fundamentally similar to the English Courts but whose judgments can be enforced across Dubai and the wider UAE without the difficulties associated with the enforcement of foreign court judgments.</p>\r\n<p class=\"p2\"><strong>If a cure is required</strong></p>\r\n<p class=\"p3\">If claimants do, for whatever reason, obtain foreign court judgments against Dubai-based parties, they can try to enforce those judgments in either the Dubai Courts or the DIFC Courts.</p>\r\n<p class=\"p3\">If they select the Dubai Courts route, Article 235 of the CPC governs the enforceability of foreign court judgments. Although this provision does envisage such enforcement if it is reciprocated by the country from where the judgment originates, it goes on to specify as a condition of enforcement that the UAE Courts must not have had jurisdiction over the underlying claim. As noted above, the Dubai Courts have jurisdiction over claims against parties based in Dubai, or foreign parties with assets in Dubai.</p>\r\n<p class=\"p3\">Consequently, Article 235 of the CPC bars the Dubai Courts from recognising foreign court judgments if they themselves have jurisdiction over the underlying claims. The additional enforcement conditions set out in Article 235, such as the requirement for foreign court judgments to be final, will not even be relevant in those cases as the Dubai Courts will not generally enforce such judgments against Dubai-based parties in any event.</p>\r\n<p class=\"p3\"><span class=\"s2\"> The approach of the DIFC Courts to the enforcement of foreign court judgments is different to that of the Dubai Courts. The DIFC Courts can, as a matter of DIFC law, recognise foreign court judgments. Article 7(6) of the Judicial Authority Law and Article 24(1)(a) of the DIFC Court Law (DIFC Law No. 10 of 2004) grant the DIFC Courts jurisdiction to ratify any judgment of a recognised foreign court. </span></p>\r\n<p class=\"p3\">The enforcement of a foreign money judgment in the DIFC Courts against a defendant located within the DIFC itself, or with assets there, is straightforward. This is particularly the case for money judgments from the English Courts. In January 2013 a non-legally binding Memorandum of Guidance as to Enforcement was signed by the DIFC Courts and the English Commercial Court to facilitate the mutual enforcement, subject to certain conditions, of money judgments issued in the two jurisdictions.</p>\r\n<p class=\"p3\">The DIFC Courts may also be used as a conduit jurisdiction in which claimants have their foreign court judgments (and arbitral awards) recognised despite the absence of any link to the DIFC. Following that, they can apply to have the resulting judgment of the DIFC Courts enforced outside the DIFC by the Dubai Courts. The enforcement of DIFC Courts judgments is possible in the Dubai Courts (and vice versa) as a result of Article 7 of the Judicial Authority Law.</p>\r\n<p class=\"p3\">The status of the DIFC as a conduit jurisdiction was affirmed by the DIFC Court of Appeal in the leading case of <em>DNB Bank v Gulf Eyadah Corporation &amp; Gulf Navigation Holding </em>(in which Al Tamimi &amp; Company represented the claimant), which opened the door to the possible enforcement of foreign court judgments across Dubai using the DIFC as a gateway. In that case, an English Court judgment was recognised and enforced by the DIFC Courts even though none of the parties to the case had a presence or assets in the DIFC.</p>\r\n<p class=\"p3\">The use of the DIFC Courts as a conduit jurisdiction for the enforcement of foreign court judgments outside the DIFC remains relatively untested. It is one example of the DIFC Courts’ expanding jurisdiction, a development that led to Dubai Decree 19 of 2016 and its establishment of the Judicial Tribunal comprising judges from both the Dubai Courts and DIFC Courts to resolve conflicts of jurisdiction between them. The Judicial Tribunal has already issued several decisions on applications to it by parties claiming that the DIFC Courts exceeded their jurisdiction. While the DNB Bank case withstood such a challenge, any sign of a flood of foreign court judgments being recognised by the DIFC Courts acting as a conduit jurisdiction could lead to an intervention by the Judicial Tribunal due to the inconsistency of such decisions with the approach of the Dubai Courts and the CPC to the enforcement of foreign court judgments.</p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Having a treaty helps</strong></span></p>\r\n<p class=\"p3\"><span class=\"s2\">The New York Convention is not the only treaty that supports the enforcement of foreign decisions in the UAE. Foreign court judgments will, in principle, be enforceable if they originate from a state with which the UAE has a treaty providing for the reciprocal recognition and enforcement of judgments. The UAE is party to a series of such treaties, both multilateral ones such as the Riyadh Convention or the GCC Convention, and bilateral ones with France, India and several other states.</span></p>\r\n<p class=\"p3\">In practice the most relevant of these treaties is the 1996 GCC Convention, which at Article 1 provides that “<em>the GCC countries shall execute the final judgments issued by the courts of any member state in civil, commercial and administrative cases...</em>”, subject to the condition that the originating court must have had jurisdiction over the underlying claim. Under Article 238 of the CPC, the Dubai Courts are required to enforce qualifying GCC (and other treaty-governed) court judgments without reconsidering their merits, even where they have concurrent jurisdiction over the original claims. This is an important exception to Article 235 of the CPC, which as noted above prevents the enforcement of foreign court judgments in cases where the Dubai Courts have jurisdiction over the underlying claims.</p>\r\n<p class=\"p3\">Both the Dubai Courts and the DIFC Courts are courts of the UAE, a GCC member state, and on this basis other GCC states should enforce judgments of both these courts in accordance with Article 1 of the GCC Convention. The DIFC Courts are themselves legally bound to comply with the terms of treaties for the mutual enforcement of judgments, pursuant to Article 24(2) of the DIFC Court Law.</p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Conclusion</strong></span></p>\r\n<p class=\"p3\">If a party is based in Dubai, the Dubai Courts will have jurisdiction over it, regardless of what a contract says. Claimants therefore need to consider carefully where they bring their claims against such parties. Obtaining a foreign court judgment may not be of any use to them in Dubai, but there are alternative forums available to them. If the claim involves a relatively straightforward debt, the Dubai Courts may be the most suitable forum for a claimant. If the subject-matter of a claim is of a technical nature, and if having proceedings conducted in English is important, submitting disputes to arbitration or the DIFC Courts may be the most appropriate option for contracting parties as the enforcement of such awards or judgments should be relatively straightforward across the UAE. However, where a claimant has already obtained a foreign court judgment, it may be enforced against a Dubai-based party by using the DIFC Courts as a conduit jurisdiction applying the DNB Bank precedent, as confirmed by the subsequent DIFC Courts judgment in <em>Barclays Bank &amp; Others v Essar Global Fund Limited</em>.</p>'),
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	(104085,5660,'content_description','The Dubai Courts have jurisdiction to hear claims against parties based in Dubai, according to Article 20 of the UAE Civil Procedure Code (CPC). '),
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	(104087,5660,'pageSummary','The Dubai Courts have jurisdiction to hear claims against parties based in Dubai, according to Article 20 of the UAE Civil Procedure Code (CPC).'),
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	(104089,5660,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/may-10/enforcing-foreign-court-judgments-in-dubai.html'),
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	(213986,5660,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(213985,5660,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Tarek Shrayh'),
	(104093,5660,'lawUpdateArticleWriters',''),
	(104094,5660,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(104095,5660,'_yoast_wpseo_metadesc','The Dubai Courts have jurisdiction to hear claims against parties based in Dubai, according to Article 20 of the UAE Civil Procedure Code (CPC).'),
	(104096,5661,'content','May 2017\r\n\r\n<hr />\r\n<p class=\"p1\">This law defines the bodies and entities which are subject to the law (and in fact provides for a list of such entities to be issued by the Chairman of the Department of Finance after the Executive Council’s approval). It also sets out limitation periods in relation to recovery of debts due from such entities. It is therefore important for anyone dealing with such bodies and entities to be familiar with the approval process in relation to the commitments of the relevant bodies and entities.</p>\r\n<p class=\"p2\"><span class=\"s1\"><strong>Who does the law apply to?</strong></span></p>\r\n<p class=\"p1\">The law applies to:</p>\r\n\r\n<ul>\r\n 	<li>the Government of Abu Dhabi;</li>\r\n 	<li>Government Agencies, comprising local departments and corporate bodies affiliated to the Government of Abu Dhabi, which have full legal capacity and which either manage a public facility or provide a public service;</li>\r\n 	<li>Government Institutions, which are public corporate bodies, owned entirely by either the Government of Abu Dhabi or a Government Agency, whose principal activity is commercial in nature;</li>\r\n 	<li>Government Companies, which are companies owned entirely and directly by either the Government of Abu Dhabi or a Government Agency; and</li>\r\n 	<li>Companies in which a Government Institution or Government Company holds directly or indirectly, jointly or severally, more than 50% of the capital.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p2\"><span class=\"s1\"><strong>What is the aim of the law?</strong></span></p>\r\n<p class=\"p1\">The intention behind the law is to set out the budget and approvals process in respect of the incurrence and payment of expenses in relation to the Government of Abu Dhabi and related entities.</p>\r\n<p class=\"p2\"><span class=\"s1\"><strong>Budgets and Approvals</strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">The law provides for the Abu Dhabi Department of Finance to, amongst other responsibilities, prepare the public budget, oversee compliance with the budget, and manage public debt and government guarantees. This Department will also be empowered to lend in the name of the Government of Abu Dhabi, where it has the consent of the Executive Council of Abu Dhabi. </span></p>\r\n<p class=\"p1\">The public budget will include spending by the Government of Abu Dhabi and Government Agencies, but will not include budgets for Government Institutions and Government Companies (each of which should maintain independent budgets).</p>\r\n<p class=\"p1\">Any borrowing by the Government of Abu Dhabi will be entered into by the Chairman of the Department of Finance, provided that the consent of the Executive Council has been obtained. The law provides a list of the purposes for which the Government is permitted to borrow and this includes a general limb applicable to ‘other borrowing approved by the Executive Council’.</p>\r\n<p class=\"p1\">Government Agencies cannot borrow and no person or party is permitted to lend money to Government Agencies, save as expressly provided in the law. Under the law, a Government Agency can only incur or pay a liability where it has an applicable Financial Credit (which is essentially an authorisation under the law that permits the incurrence and payment of an expense from the Treasury of Abu Dhabi). Government Agencies are not permitted to enter into commercial sponsorship agreements to finance events or activities unless those activities or events are specified in the annual budget. Government Agencies can, however, enter into commercial sponsorship agreements which are financed by the private sector.</p>\r\n<p class=\"p1\"><span class=\"s3\"> Government Institutions and Government Companies are, however, obliged to comply with the Ownership Policy and Financial Performance Intent Statement (the former of which will be prepared by the Department of Finance and approved by the Executive Council, and the latter of which will follow a form prescribed by the Department of Finance). Their budgets will need to be approved by the respective board of directors and a copy submitted to the Department of Finance. Importantly, there is a wide ranging provision of the law which prohibits Government Institutions, Government Companies and Subsidiaries from increasing their capital, borrowing or giving guarantees, or lending, save in accordance with rules to be issued by the Department of Finance and approved by the Executive Council. The law clearly states that the Government of Abu Dhabi is not responsible for the liabilities of Government Institutions, Government Companies and Subsidiaries and goes on to exclude any responsibility for liabilities of a company or other party which the Government contributes to, controls, or has an interest in. </span></p>\r\n<p class=\"p1\">Government Agencies, Government Institutions and Government Companies are prevented from providing or receiving grants, subsidies, donations, or aid, unless these are within their approved budgets.</p>\r\n<p class=\"p7\"><span class=\"s1\"><strong>Government Guarantees</strong></span></p>\r\n<p class=\"p1\">Importantly, the definitions of Public Debt and Government Guarantees require that the relevant loans and guarantees are approved in writing by the Government and, in the case of guarantees, include the Government committing itself explicitly to pay a loan in the case of the borrower’s failure to pay. This makes clear that any informal agreement is unlikely to be accepted and parties believing they have this type of loan or guarantee would be well advised to review their arrangements to ensure they meet the relevant requirements.</p>\r\n<p class=\"p1\">The law makes clear that no person is permitted to give a guarantee or indemnity on behalf of the Government unless the law is complied with. The process under the law for the giving of such guarantees is as follows:</p>\r\n\r\n<ul>\r\n 	<li>the Executive Council provides its consent;</li>\r\n 	<li>the Chairman of the Department of Finance provides the Government Guarantee; and</li>\r\n 	<li>the beneficiary of the relevant guarantee must periodically notify the Department of Finance about paying the guaranteed debt. The law is unclear as regards the meaning of beneficiary, but we believe this is a reference to the borrower whose debt is guaranteed, rather than the recipient of the guarantee (i.e. the lender).</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p8\">The law requires that Government Institutions, Government Companies and Subsidiaries who ‘issue a debt’ must explicitly state that the debt is not guaranteed by the Government (save where a Government Guarantee is approved and provided in accordance with the law).</p>\r\n<p class=\"p1\">Although the law does not have retrospective effect, it provides that the Chairman of the Department of Finance shall, within 3 months of the issuance of the law, reissue any government guarantee submitted prior to the issuance of this law. Therefore, parties benefitting from an existing government guarantee would be well advised to request its reissuance or otherwise confirm its validity and continuation.</p>\r\n<p class=\"p7\"><span class=\"s1\"><strong>Government Fees and Services</strong></span></p>\r\n<p class=\"p1\">The law provides for the Department of Finance to issue a Government Services Pricing Guide, which is expected to be the basis on which services provided by Government Agencies will be priced. There is also an anticipated review of existing fees and tariffs imposed by Government Agencies to measure such fees against the new pricing guide. This may lead to changes in Government Agency fees.</p>\r\n<p class=\"p1\"><span class=\"s5\"> There are also provisions providing that money held by the Government of Abu Dhabi or Government Agencies which is not claimed within one year from maturity will become public money and be transferred to the Government of Abu Dhabi. There is a saving provision which allows a person to come forward in respect of any such money within a period of ten years. If that person can prove their claim to the original monies, then the relevant amount will be paid to them.</span></p>\r\n<p class=\"p2\"><span class=\"s1\"><strong>Government Procurement</strong></span></p>\r\n<p class=\"p1\">The Department of Finance is given responsibility for government procurement and bidding, including developing the legal framework and IT platform applicable to bids, and signing contracts with suppliers.</p>\r\n<p class=\"p2\"><span class=\"s1\"><strong>Limitation Period</strong></span></p>\r\n<p class=\"p3\">The law includes the following limitation periods applicable to debt claims against:</p>\r\n\r\n<ul>\r\n 	<li>the Government of Abu Dhabi, Government Agencies, Government Institutions and Government Companies – the limitation period being the end of the fifth year that follows the fiscal year in which the debt became due; and</li>\r\n 	<li>natural persons or corporate bodies in respect of debts due from Government Agencies, Government Institutions and Government Companies – the limitation period being the end of the tenth year that follows the fiscal year in which the debt became due.</li>\r\n</ul>\r\n<p class=\"p2\"><span class=\"s1\"><strong>Conclusion </strong></span></p>\r\n<p class=\"p1\">We hope that this law will give greater clarity around dealing with certain government related entities and the way in which their activities are approved. In particular, the issuance of a list of entities covered by the law, as contemplated, would be a welcome development, providing certainty to parties transacting with companies with some government involvement as to capacity and authority. Historically, this area has been quite difficult to navigate, given the variety of legal structures involved.</p>\r\n<p class=\"p1\"><em>Al Tamimi &amp; Company’s banking and finance team regularly advises on capacity and authority in respect of financing transactions. For further information please contact Renata Rai (r.rai@tamimi.com).</em></p>'),
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	(104100,5661,'content_description','Law No. 1 of 2017 on the Financial System of Abu Dhabi Government was issued on 10 January 2017 and was published in the Official Gazette on 31 January 2017, at which point it came into effect. '),
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	(213995,5661,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(213994,5661,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Renata Rai'),
	(104108,5661,'lawUpdateArticleWriters',''),
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	(104110,5661,'lawUpdateArticlePractices_0_lawUpdateArticlePractice','411'),
	(104111,5661,'_lawUpdateArticlePractices_0_lawUpdateArticlePractice','field_59dc79c8e10ce'),
	(104112,5661,'lawUpdateArticlePractices','1'),
	(104113,5661,'_lawUpdateArticlePractices','field_59dc7918de021'),
	(104114,5661,'_yoast_wpseo_metadesc','Law No. 1 of 2017 on the Financial System of Abu Dhabi Government was issued on 10 January 2017 and was published in the Official Gazette on 31 January 2017, at which point it came into effect.'),
	(104115,5662,'content','May 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><strong>GCC VAT Framework Agreement </strong></p>\r\n<p class=\"p2\">The GCC VAT Framework Agreement, which is yet to be published, has now been signed by all six countries in the GCC. It is understood that it will be made public after it has been ratified by all the GCC countries, which is expected to happen shortly.</p>\r\n<p class=\"p1\">The GCC VAT Framework Agreement sets out broad principles to be followed by all the GCC countries whilst giving individual member states some freedom to adopt a different VAT treatment in respect of certain matters. Each GCC country will issue its own domestic legislation to implement VAT based on the underlying principles in this common framework.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Implementation date</strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">All GCC countries have agreed to implement VAT from 1 January 2018 and by 1 January 2019 at the latest. Currently only the UAE, which has been at the forefront of the GCC VAT drive and appears to be at the most advanced stage in terms of implementation, has formally announced that it will introduce VAT on 1 January 2018. </span></p>\r\n<p class=\"p1\">The other GCC countries are likely to face many challenges and obstacles in finalising the domestic legislation and pushing it through by 1 January 2018 and so it is anticipated that not all the GCC countries will achieve implementation simultaneously as has been reported. VAT is expected to be effective in the Kingdom of Saudi Arabia in the first quarter of 2018 and in Bahrain by the middle of 2018. Qatar, Oman and Kuwait have not yet made any official announcements on the specific timing.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>The UAE VAT Administration and Legislative Framework </strong></span></p>\r\n<p class=\"p1\">A federal tax authority (“FTA”), which is currently in the process of recruiting staff, was established last year and is entrusted with the management, collection and enforcement of VAT.</p>\r\n<p class=\"p1\">The Federal National Council recently approved the tax procedure law and this is expected to be issued before Ramadan (June 2017). The tax procedure law will be relevant for all current and future taxes, including VAT, and will set out the procedures for tax registration, collection, audits, penalties, appeals etc.</p>\r\n<p class=\"p1\">The VAT rules and obligations will be governed by a separate Federal VAT law. This will be supported by executive regulations which will provide guidance on the detailed application of the VAT law. As there are still a number of key policy decisions to be taken, it is likely that the VAT law will be issued around mid-2017 with the executive regulations to follow later in the year.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>VAT Basics </strong></span></p>\r\n<p class=\"p1\">VAT is a consumption tax that is levied on the value added at each stage in the supply chain. VAT registered businesses will charge VAT on the goods and services supplied to customers and pay VAT on goods and services received from suppliers. The difference will be accounted for by the business and paid to, or reclaimed from, the government as appropriate.</p>\r\n<p class=\"p1\">Although VAT is collected by businesses on behalf of the government, it is generally ultimately borne by the final consumer. Unless the goods or services are exempt or zero rated, the supply of the goods or services will be subject to VAT at the standard rate.</p>\r\n<p class=\"p1\">The distinction between zero rated and exempt supplies is important. Businesses that make zero rated supplies may be entitled to register for VAT and recover VAT on their purchases but exempt businesses will not.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>What do we know about VAT in the UAE?</strong></span></p>\r\n<p class=\"p1\">Under the GCC VAT Framework Agreement, VAT will apply at the standard rate of 5% across the GCC. Additional details have emerged from the first Ministry of Finance VAT awareness session on the specific features of the future VAT regime in the UAE. However, the VAT treatment described below may be subject to change and can only be confirmed once the VAT law is approved.</p>\r\n<p class=\"p1\">VAT will be charged based on the destination principle on the local supply and importation of goods and services (i.e. VAT applies where the goods and services are consumed in the UAE), with exports subject to VAT at zero rate.</p>\r\n<p class=\"p1\">Businesses must register for VAT if they have annual turnover that exceeds the mandatory registration threshold of AED 375,000 - reduced from AED 3.75 million, which was proposed last year. An option to register for VAT will be available if the taxable supply and imports are below the mandatory registration threshold but exceed the voluntary registration threshold of AED 187,500 - reduced from AED 1.875 million. The previous limits were set high to alleviate the compliance burden on businesses; however, in a shift to the strategy designed to enable businesses to recover VAT, these limits have been significantly lowered.</p>\r\n<p class=\"p1\"><span class=\"s2\"> For businesses with no turnover, it will be possible to register voluntarily if the expenses exceed the voluntary registration threshold, which gives start-up businesses the ability to recover input VAT. The Ministry of Finance has indicated that it will be possible to register for VAT on a voluntary basis from the third quarter of 2017, before VAT registration becomes compulsory from the final quarter of 2017. </span></p>\r\n<p class=\"p1\">Group registrations will also be available for companies that meet the criteria of a “VAT Group”. A VAT group will be treated as a single person for VAT purposes with the consequence that only one VAT return will be required to be submitted for the group.</p>\r\n<p class=\"p1\">Although VAT will be levied at the federal level, businesses will be required to report revenue for each Emirate in the Federal VAT return. This will result in an additional compliance burden for businesses that will need to ensure that their systems record sales in this manner.</p>\r\n<p class=\"p1\">Healthcare and education services will be zero rated rather than exempt, which was widely expected to be the case. Zero rate will also be applicable to medicine and medical equipment.</p>\r\n<p class=\"p1\">It is expected that margin-based financial services will be exempt due to quantification issues while fee-based products will be subject to the standard rate of VAT. The VAT treatment of Islamic finance will be aligned with the conventional equivalent. General insurance services will be subject to the standard rate of VAT except life insurance, which will be exempt.</p>\r\n<p class=\"p1\">In terms of real estate, sale and lease of commercial property will be subject to VAT at the standard rate whereas the sale and lease of residential property will be exempt. However, the first sale of new residential property will be zero rated, which is good news for property developers who will be able to recover VAT on costs (including construction costs). Supplies of bare land will be exempt.</p>\r\n<p class=\"p1\">Local passenger transport, such as taxis, buses and trains, will be exempt from VAT. Jewellery will be standard rated whereas investment grade gold, silver and platinum will be zero rated.</p>\r\n<p class=\"p1\"><span class=\"s3\"> The import of goods into the UAE will be subject to the reverse charge mechanism, which means that there will be no cash impact for most businesses because though VAT will be charged by the recipient there will be a corresponding deduction for the input tax. On the other hand, import VAT will apply on import of goods into other GCC member states transhipped through the UAE with no right to recover the VAT in the UAE.</span></p>\r\n<p class=\"p1\">Exports of goods and services outside the GCC and international transportation are expected to be zero rated. Given the low rate of VAT, it is currently anticipated that initially there will no VAT refunds for tourists, but this is subject to further deliberation.</p>\r\n<p class=\"p1\">The VAT treatment of supplies within free zones is still under consideration, including whether there should be a different VAT treatment adopted for businesses operating in “fenced” free zones and “unfenced” free trade zones as well as the treatment of supplies to, within, from and between free zones. The Ministry of Finance will issue further guidance on this area in due course.</p>\r\n<p class=\"p1\"><span class=\"s4\"> There will be no special “body” level exemption for the government and, accordingly, supplies to government bodies will be subject to VAT at the standard rate and a VAT refund claim would need to be made by the relevant government authority.</span></p>\r\n<p class=\"p1\">VAT returns will be due on a quarterly basis for most businesses with returns and payments required to be submitted within a month after the quarter end. There is a possibility that larger businesses may be permitted to file on a monthly basis. The UAE will introduce an electronic registration, filing, payment and refund system. There is a requirement to keep records, including invoices, for five years.</p>\r\n<p class=\"p1\">There will be strict penalties for non-compliance - including business closure for three days and penalties up to 500% of the VAT owed in cases of fraud. The FTA will also have the power to conduct VAT audits with five days notice, unless fraud is suspected.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Final thoughts</strong></span></p>\r\n<p class=\"p1\"><span class=\"s4\">The introduction of VAT will help the UAE generate additional revenue to fund public expenditure and to reduce its dependence on hydrocarbons, in line with the national diversification strategy. VAT is a popular tax for governments because it is easy for them to administer and enforce, as the compliance burden is transferred to businesses and it is cheaper for them to operate than direct taxes. It also allows governments to generate sustainable tax revenue which is collected on a regular basis at each stage of the production and distribution chain. The fact that it will be levied on transactions at the low rate of 5%, compared to the global average rate of about 15% for VAT and similar taxes, combined with the VAT recovery mechanism for businesses and exceptions for some sectors means that it should not have an adverse impact on foreign investment and the economy in general. </span></p>\r\n<p class=\"p1\">The UAE Ministry of Finance delivered on its promise to be transparent about this tax and to educate businesses. Its clarification on how the VAT regime is expected to operate in the UAE and how some of the key sectors will be affected is a welcome development. There are many positives which indicate that the UAE government have taken into account socio-economic policy considerations and carefully assessed the potential effect of VAT on certain types of businesses and industry sectors.</p>\r\n<p class=\"p1\">The zero rated treatment for healthcare, education and property development is unlikely to affect prices for these services and, therefore, businesses and customers in these sectors should not be impacted. The reduced mandatory VAT registration threshold and a low voluntary VAT registration threshold will enable many small and medium enterprises and start-up businesses to register and recover VAT.</p>\r\n<p class=\"p1\">While VAT is not imposed on and should not be a cost to businesses, ultimately the responsibility of accounting for VAT resides with them. There will be significant compliance costs for companies in ensuring that they collect and remit the tax to the UAE Ministry of Finance and otherwise comply with the reporting requirements Given that VAT will be introduced from 1 January 2018 in the UAE, businesses will be under pressure to get ready within a limited time. The challenges are compounded when you take into account that the VAT legislation will not be finalised and issued until later this year. However, the clarity provided by the UAE Ministry of Finance in the interim will help UAE businesses to prepare their people, vendors, customers and systems even before the VAT law is issued.</p>\r\n<p class=\"p1\"><span class=\"s2\"> It is important for businesses to start preparing now by proactively assessing the impact of VAT on their operations across all functions including finance, legal, procurement, sales, marketing, IT and human resources. Existing functions, processes, invoicing, operating models, enterprise resource planning systems and commercial contracts should be reviewed and any changes implemented as soon as possible in order to be compliant with requirements in the VAT legislation. </span></p>\r\n<p class=\"p1\">Companies should not only consider including clauses in new contracts to address any VAT risks which were previously not relevant, but existing long term contracts, such as construction contracts, that straddle VAT implementation and agreements with automatically renewable terms should also be examined and potentially renegotiated. The lack of adequate protection in the agreements may have the unintended consequence of the suppliers bearing the VAT cost rather than the customers. Contracts with long payment terms should also be renegotiated to manage cash flow otherwise businesses will end up funding the VAT cost. Putting appropriate systems and measures in place is the key and will help to reduce compliance costs, maintain margins and minimise cash-flow issues.</p>\r\n<p class=\"p1\"><span class=\"s2\"> As the VAT should ultimately be borne by the final consumer, it should have a neutral impact on most UAE businesses if the risk is properly managed. In practise, however, the ability of suppliers to shift the VAT burden to customers will be a matter of commercial negotiation. Companies will have to decide whether to bear the burden of the VAT cost or pass on the cost to customers. It will be a difficult balancing act between maintaining margins and risk low revenue due to reduced customer demand and so some businesses are likely to or will be forced to absorb a share of the VAT cost to remain competitive. Companies that make exempt supplies, such as financial institutions, will suffer an absolute cost unless the VAT cost is passed on to customers because they will not be able to recover the VAT on their purchases. </span></p>\r\n<p class=\"p1\"><em>A version of this article was originally published in the National on 13 April 2017</em></p>'),
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	(104133,5662,'_yoast_wpseo_metadesc','This article provides an update on the status of the VAT implementation across the GCC, the future legal framework of VAT in the UAE and the expected features of the UAE VAT system based on the first workshop recently held by the UAE Ministry of Finance.'),
	(104134,5663,'content','May 2017\r\n\r\n<hr />\r\n<p class=\"p1\">Through such agreements, the licensee (company or person to whom the trademark has been licensed), is responsible for providing the goods and services bearing the trademark in a specific region and for a specific term.</p>\r\n<p class=\"p1\"><span class=\"s1\"> Corporations extend significant time and resources in choosing, marketing, and developing a trademark, as such there is a duty of care to exercise quality control over the goods and services bearing the trademark. In brief, quality control provisions extend to the trademark owner a right to control and monitor the quality of the goods and services provided by the licensee. Accordingly, the level of standards on the goods and services offered by the licensee need not be higher than those provided by the licensor; however, the quality must be equal to the quality of the goods and services of the licensor. Quality control provisions are necessary to maintain brand uniformity and it is also an important aspect for brand longevity. To this end, quality control provisions ensure the quality of a product or service that consumers have come to expect from the brand. In the same light, a brand owner or licensor with numerous licensees in various regions can ensure that all licensees are subject to the same quality of standards, and, furthermore, ensure that the consumer experience is consistent and uniform, despite the region or location where the goods and services have been purchased or acquired.</span></p>\r\n<p class=\"p1\">Licensor’s have a variety of tools to exercise control over the licensees and verify that the goods or services meet the licensor’s standard of requirements. Such provisions can include: 1) a right to inspect the licensee’s premises; 2) the licensee can be required to periodically provide samples for the licensor’s review; 3) advertising and promotional materials should be subject to the licensor’s approval; 4) at the onset of the licensor/licensee agreement, the licensee is provided a trademark usage guideline outlining the appropriate methods of use of the trademark.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Monitoring Licensee’s Premises</strong></span></p>\r\n<p class=\"p1\">Licensors should reserve provisions allowing them to periodically inspect a licensee’s facilities, manufacturing products, finished products, company records, and stock inventory, in order to ensure that the licensee is in compliance with the licence agreement and is adhering to the quality control standards. Oftentimes, provisions allowing access to the licensee’s premises include conditions as to the licensor’s visit. Such conditions can include: 1) visits to the licensee’s premises, which should be limited to normal business hours; and 2) advance notice should be provided to the licensee, such as 24 hours notice.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Sample Requirements </strong></span></p>\r\n<p class=\"p1\">In order to protect the quality of the brand and conformity of the goods, the licensor should insist on provisions within the licence agreement requiring the licensee to submit samples of proposed uses of the trademark, or in case of a licensed product, the licensee should provide samples for licensor’s review and approval. Sample requirements and approval from the licensor will effectively control how the goods and services are being offered to the consumers and ensure that the goods and services are on par with the licensor’s standards. Sample requirement provisions can include: 1) request for samples can be made without prior notification; 2) licensor’s review of the sample and written approval thereafter may be required, including a timeframe for the licensor to either refuse the sample and provide its comments or accept the sample; and 3) in the event of disapproval, licensor should provide suggestions or suggested improvements and can request that the licensee discontinue manufacturing the licensed product until the deficiencies have been rectified.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Trademark Usage guidelines</strong></span></p>\r\n<p class=\"p1\">A licence agreement should leave no room for ambiguity as to the allowed trademark, artwork, logo, colour, trademark placement, and font that can be used by the licensee. Such provisions are imperative so that the licensee is not provided a leeway to create its own version of the licensed trademark. Trademark usage guidelines can include the following elements: 1) the licensed trademark is required to be used in its entirety, without any abbreviation or variations thereof; 2) the licensed trademark should not be used in combination with another trademark or trade name; 3) licensor can request that the trademark is used along with the appropriate notice symbols, such as ™ or ®, which indicate that the word or logo is being used as a trademark.</p>\r\n<p class=\"p1\">Under the provisions of the UAE trademark law, article 34 of the law specifies that a trademark licence agreement may include restricting provisions, namely:</p>\r\n\r\n<ul>\r\n 	<li>Limiting the geographic area of the licensed trademark;</li>\r\n 	<li>Limiting the period of use of the licensed trademark;</li>\r\n 	<li>Control of the quality of the products under the licence agreement; and</li>\r\n 	<li>Licensee should abstain from acts that may negatively impact the licensed rights.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\">Although the language in the UAE trademark law suggests that quality control provisions are not mandatory and, instead, may be included in a trademark licence agreement, for the reasons discussed above, quality provisions are nevertheless highly advisable in order to avoid disputes over the misuse of a licensed trademark.</p>\r\n<p class=\"p1\">Quality and brand association are the very essence of trademark rights and, therefore, cannot be severed from the rights associated to licensed trademarks; therefore, it is in the licensor’s and licensee’s mutual interest to protect the goodwill and reputation of the trademark. It is recommended that defined quality control standards are incorporated within the licence agreement. Furthermore the licensor should retain the ability to terminate the licence agreement in case the licensee deviates from the terms of the parties’ agreement or fails to meet the quality standards. In order to effectively terminate the agreement, the licensor should provide the licensee a written notice and a reasonable time to remedy the deficiencies. In the scenario that the licensee fails to mitigate the deficiencies, the licensor may decide to unilaterally terminate the licence agreement.</p>');

