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	(93271,5066,'content_description','In an attempt to improve the efficiency of the insurance sector (“Sector”) and improve the quality of the insurance services and products offered to consumers by underwriting new risks...'),
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	(93300,5069,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">The passing of the New Resolutions should come as no surprise with the need for Dubai to further strengthen its Hospitality sector in anticipation of Expo 2020. The New Resolutions fall within the same vision adopted earlier by Dubai, and which we have previously discussed in a paper entitled “Dubai’s New Hotel Industry Initiatives” (See March 2014 Law Update).</p>\r\n<p class=\"MsoNormal\"><strong>Scope of new resolutions</strong></p>\r\n<p class=\"MsoNormal\">The New Resolutions exclusively target Hotel Establishments and Holiday Homes. As per Resolution 48, a Hotel Establishment includes any hotel, resort, hotel apartments, motel, university accommodation, youth houses, economy hotel, floating hotel and any other constructions as determined by the Department of Tourism and Commerce Marketing (the “DTCM”). Pursuant to Resolution 49, a Holiday Home means any furnished property allocated to the conduct of rental service of holiday homes or the activity of renting the same with the purpose of subleasing it to guests in a regular and continuous manner. Such activity must be conducted in accordance with the conditions and standards approved by the DTCM.</p>\r\n<p class=\"MsoNormal\"><strong>Processing fees</strong></p>\r\n<p class=\"MsoNormal\">From 31 December 2014, Hotel Establishments and Holiday Homes are required to pay fees upon applying for approvals, licenses, classification certificates and other formalities before the DTCM. Both New Resolutions are accompanied by a comprehensive list indicating for each type of application the relevant fee to be collected by the DTCM.</p>\r\n<p class=\"MsoNormal\">With respect to Hotel Establishments, Resolution 48 expressly states that the abovementioned fees shall be collected by the DTCM “without prejudice to any applicable fees of any other governmental entity”. In other words, Hotel Establishments shall remain subject to the licensing requirements of the Department of Economic Development (the “DED”) and as such, shall have to abide by the terms of Resolution No. 13 of 2011 issued on 9 June 2011 which sets out fees and penalties payable in connection with matters of general corporate nature, such as the issuance of commercial license, reservation of trade name and so on.</p>\r\n<p class=\"MsoNormal\"><strong>Fines and additional sanctions</strong></p>\r\n<p class=\"MsoNormal\">The New Resolutions also provide for fines that are variable in accordance with the nature of the violation.</p>\r\n<p class=\"MsoNormal\">In relation to Hotel Establishments, these fines range from AED 500 for failure to notify the DTCM prior to commencing any fundamental repairs in the Hotel Establishment, to AED 50,000 for operating a Hotel Establishment prior to the DTCM issuing (a) the license to conduct activity, (b) the classification, or (c) the approval to receive guests.</p>\r\n<p class=\"MsoNormal\">As for Holiday Homes, the fines range from AED 200 for failure to satisfy the secondary classification requirements as determined by the DTCM, to AED 20,000 for operating a Holiday Home despite the issuance of a decision to close it by the DTCM.</p>\r\n<p class=\"MsoNormal\">The amount of a fine provided under the New Resolutions will be doubled in the event of recurrence of the same violation within one year from the date of the initial violation, provided that the fine shall not exceed AED 500,000 in respect of Hotel Establishments and AED 100,000 in respect of Holiday Homes.</p>\r\n<p class=\"MsoNormal\">Also, both New Resolutions allow the DTCM to take various regulatory measures and actions in addition to the imposition of fines.</p>\r\n<p class=\"MsoNormal\">Pursuant to Article 3 of Resolution 48, the DTC may take one or more of the following additional sanctions against the violating Hotel Establishment:</p>\r\n\r\n<ul>\r\n 	<li>Decrease the class of the Hotel Establishment to a lower class;</li>\r\n 	<li>Close the establishment or any of its facilities for a period not exceeding 6 months;</li>\r\n 	<li>Close any facility in the Hotel Establishment permanently;</li>\r\n 	<li>Close the whole of the Hotel Establishment permanently and cancel its license.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">As for Holiday Homes, pursuant to Article 3 of Resolution 49, the DTCM may take any of the following additional sanctions:</p>\r\n\r\n<ul>\r\n 	<li>Issue a warning against the violating person;</li>\r\n 	<li>Suspend the conduct of activity for a period not exceeding 6 months;</li>\r\n 	<li>Cancel the Holiday Home’s license.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">Both new Resolutions are silent on the circumstances in which the DTCM may enforce these additional sanctions and such additional sanctions are currently at the discretion of the DTCM.</p>\r\n<p class=\"MsoNormal\"><strong>Conclusion</strong></p>\r\n<p class=\"MsoNormal\">The New Resolutions mark a significant addition to the laws and regulations currently applied in the tourism sector of Dubai and reinforce the role of the DTCM as a steadfast regulator of the industry.</p>\r\n<p class=\"MsoNormal\">Should you have any questions in connection with this article or the legal issues it covers, please contact Tara Marlow (<a href=\"mailto:t.marlow@tamimi.com\">t.marlow@tamimi.com</a>), Partner, Regional Head of Hospitality.</p>\r\n\r\n<div></div>'),
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	(93314,5069,'_yoast_wpseo_metadesc','On 7 December 2014, the Executive Council of Dubai (“EC”) passed Resolution Nos. 48 and 49 of 2014 (the “New Resolutions”) introducing a new set of fees and fines covering, respectively, Hotel Establishments and Holiday Homes in Dubai.'),
	(93315,5070,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">However, the adversarial nature of litigation and arbitration frequently drives these protagonists (i.e. parties) further apart as they compete to win the case. A case won or lost often does not change the mindset of parties who continue to be adversaries and go on fighting in appeal after appeal. Motivated by the high costs, delays, stresses and uncertainties associated with litigation and arbitration, business is increasingly turning to mediation as the first resort.</p>\r\n<p class=\"MsoNormal\">In sports-related disputes, national and international sporting institutions, such as the Court of Arbitration for Sport, are now actively encouraging parties to attempt mediation at the first opportunity.  The World Intellectual Property Organisation, which offers sports-related intellectual property dispute  resolution services (sponsorship, merchandising, broadcasting etc.), also promotes mediation.</p>\r\n<p class=\"MsoNormal\">Nonetheless common misperceptions about mediation persist e.g. that it is a soft option or that it gives the impression that an athlete, coach or business is weak or exposed.  As a result, opportunities to find the most satisfactory deal, while maintaining valuable business relationships, may be missed.</p>\r\n<p class=\"MsoNormal\"><strong>What is Mediation?</strong></p>\r\n<p class=\"MsoNormal\">Mediation is a process by which a neutral person (i.e. not connected to either party to the mediation) assists athletes, team representatives, officials or business people, whose negotiations have reached a deadlock, to resume negotiation and work constructively towards a resolution of their dispute or difference.</p>\r\n<p class=\"MsoNormal\">In stark contrast to litigation and arbitration, which typically try to put the parties into the position they were in before the dispute, mediation endeavours to put as wide a spectrum of solutions as the parties are prepared to consider onto the negotiating table, and, through the process of assisting parties to better understand the other’s underlying legal, commercial and personal interests, and to contribute to future and stronger business ties.</p>\r\n<p class=\"MsoNormal\">Relationship building is particularly important in sport where the athlete-team/coach relationship is an important factor affecting performance. This also is true in business where considerable time and money is spent building relations that ensure the long term success of the business. The detrimental effect on relations are a disincentive to enter into, or an adverse by-product of, litigation or arbitration.</p>\r\n<p class=\"MsoNormal\">Litigation, arbitration and mediation encourage parties to confront each other, however a skilful mediator can minimise any deterioration in relations and assist each protagonist to better communicate the legal, commercial and often personal issues at stake in the negotiation. The dynamic of discussion is primarily focused on assisting each party to generate a variety of options, which best address the interests of the other party and thus, identifies a deal satisfactory to both parties.</p>\r\n<p class=\"MsoNormal\">It is this dynamic, which assists athletes, coaches, officials and businesses to a better understanding of the other’s underlying commercial and personal interests, to tailor future discussions to better meet these interests, where possible, and thus, preserve and strengthen relations.</p>\r\n<p class=\"MsoNormal\">Further, parties are considerably more likely to adhere to mediated agreements, than court or arbitral tribunal imposed outcomes, which are often subject to appeal after appeal.</p>\r\n<p class=\"MsoNormal\"><strong>What types of sports-related issues are suited to mediation?</strong></p>\r\n<p class=\"MsoNormal\">Mediation is not a universally appropriate process. Litigation or arbitration is sometimes a better option. The key to the successful use of mediation is knowing whether and when to use it.</p>\r\n<p class=\"MsoNormal\">Circumstances where mediation may not be appropriate are when:</p>\r\n\r\n<ul>\r\n 	<li>negotiations are continuing and a deadlock has not been reached;</li>\r\n 	<li>there is need for a court protection, particularly in intellectual property cases where a party may need to protect or seize assets, which may otherwise be removed to frustrate any order of a court or arbitral tribunal;</li>\r\n 	<li>there is need for a binding precedent, which is particularly true in doping cases where an organisation will want to set a precedent for deterrent purposes, although sometimes mediation before the hearing may reduce the issues and facilitate a speedy trial; or</li>\r\n 	<li>a party has no genuine interest in settlement. However, care should be taken to avoid assuming that a party is disinterested in settlement.  Most people do not enjoy litigation or arbitration, as it is generally frustrating and stressful, they are only interested in the outcome that litigation or arbitration can produce.  If terms can be identified that satisfy their interests, settlement can be achieved.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">In my experience, mediation is beneficial to most disputes provided that the timing of the intervention is appropriate and parties are properly prepared. This is an area in which lawyers have a key role to play as the better prepared party will typically do better at mediation.</p>\r\n<p class=\"MsoNormal\"><strong>Common concerns about mediation</strong></p>\r\n<p class=\"MsoNormal\">There can be a mistaken perception that mediation is a “soft option”, that a successful business does not require assistance negotiating, or that the inevitable outcome is to “split the difference”.</p>\r\n\r\n<ul>\r\n 	<li><em>Will I give the impression my case is weak?</em>  It is assumed that mediated outcomes involve splitting the difference.  In fact, mediation should give each protagonist a better understanding of the strengths and weaknesses of its case and thus, the best alternative to a negotiated settlement.  In practice, it is uncommon for the parties to settle for less than can be achieved at litigation or arbitration, and often negotiated settlements can be achieved that are better than the range of outcomes that are available through litigation or arbitration.</li>\r\n 	<li><em>Is mediation merely a delaying tactic?</em>  Few parties engage in litigation or arbitration for the sake of it and would prefer to avoid the associated distraction and cost, particularly if acceptable terms can be identified at the mediation. Often outcomes that do not seem  possible prior to the mediation, can be achieved at mediation as parties will gain a better understanding of the legal, commercial and often personal issues at stake.</li>\r\n 	<li><em>Are there real cost savings?</em>  This objection is often raised once a case has gone through the various trial preparation steps e.g. exchanges of statements of case, party statements, etc.  Frequently an opportunity has been missed earlier in the case, when sufficient information was available to permit a realistic assessment of the legal case and thus, some legal costs could have been avoided.  While the timing of mediation is essential, even if mediation is not attempted until shortly before trial the costs of doing so, compare favourably to the costs of trial.</li>\r\n 	<li><em>Will I have to disclose my hand?</em>  First, mediation is a confidential process so any information obtained should not be deployed in litigation or arbitration. Second, parties can leave discussions about the legal issues to the lawyers and focus on the commercial interest so that only the strengths of the case are disclosed.  Third, parties can discuss weaknesses in private with their lawyers and/or the mediator and thus control the flow of information. If there is consensus in private that an acknowledgment of liability may break the deadlock and generate movement towards settlement, a party may give the mediator permission to share it.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">However, these considerations while important reflect a key misconception about mediation. The focus of mediated discussions is always on commercial options, with litigation or arbitration only used if a negotiated agreement cannot be reached.</p>\r\n<p class=\"MsoNormal\">In this writer’s experience, commercial matters that have been settled through mediation include:</p>\r\n\r\n<ul>\r\n 	<li>design and construction of sports facilities;</li>\r\n 	<li>sport, team, player and event sponsorship;</li>\r\n 	<li>sports franchise and partnerships;</li>\r\n 	<li>licensing, intellectual property and broadcasting; and</li>\r\n 	<li>player contracts and relations between athletes and other stakeholders.</li>\r\n</ul>\r\n<p class=\"MsoNormal\"><strong>\r\nDo legal representatives have a role?</strong></p>\r\n<p class=\"MsoNormal\">The lawyer, whether external or in-house, has a vital role in sports-related mediation.</p>\r\n<p class=\"MsoNormal\">First, it is essential that a party entering into mediation have a proper understanding of its prospects and options if a negotiated settlement cannot be achieved. A party must have a thorough understanding of all the facts and risk factors affecting the case to make a fully informed decision on whether there is a better alternative to settlement offers made at mediation.</p>\r\n<p class=\"MsoNormal\">Second, the lawyer may be required to attend the hearing to demonstrate to the other party that the legal position being presented has substance and needs to be taken seriously. Effective presentation skills are vital to demonstrating credibility and concealing weakness.</p>\r\n<p class=\"MsoNormal\"><strong>Conclusion</strong></p>\r\n<p class=\"MsoNormal\">In the Middle East, there has been huge investment in bringing sports into the region.  In a recent report by Repucom  (a provider of sporting intelligence to business), they were quoted to say <em>“The Middle East and Asia are emerging as global giants in sports sponsorship and ownership and this trend shows little signs of slowing”</em>.  Repucom also concluded that the UAE is the largest single-jurisdiction source of title sponsorship funding in professional sports globally, with 37% of global investments in sport coming from the UAE.  According to a PwC report, the EMEA (Europe, Middle East and North Africa) market is currently ranked as the second largest sports market in the world, and is worth an estimated US$44.8 billion, which represents nearly a third of the global market. In such a valuable and commercial industry, the types of dispute that can arise are varied and often involve complex legal issues. Reputation and relationships are key to maintaining a place in this market.  Mediation should always be an option for any dispute given its primary advantage is to encourage parties to focus on devising commercial solutions that best meet their interests and preserve relationships, with litigation or arbitration prospects informing only whether there is a better alternative to a negotiated offer.</p>\r\n<strong>Niall Clancy (</strong><a href=\"mailto:n.clancy@tamimi.com\"><strong>n.clancy@tamimi.com</strong></a><strong>) is an Associate in the construction &amp; infrastructure disputes practice and a key member of Al Tamimi’s dedicated Sports Law practice.  Niall is a highly experienced Alternative Dispute Resolution Lawyer with more than eleven years of professional experience, having acted for athletes, trainers sporting organisations in a wide range of sports-related disputes.</strong>\r\n<div>\r\n<div>\r\n<div class=\"msocomtxt\">\r\n<p class=\"MsoCommentText\"></p>\r\n\r\n</div>\r\n</div>\r\n</div>'),
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	(93338,5071,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\"><em>Reliable data, along with clear standards and procedures, leads to improved knowledge, efficiency and quality in the delivery of healthcare. In this article, we look at the general approach to data in a healthcare context in both Abu Dhabi and Dubai, with a particular focus on data protection aspects.</em></p>\r\n<p class=\"MsoNormal\"><strong>Abu Dhabi</strong></p>\r\n<p class=\"MsoNormal\"><strong>HAAD Data Standards and Procedures</strong></p>\r\n<p class=\"MsoNormal\">Health Authority – Abu Dhabi (HAAD) is responsible for the healthcare sector in the Emirate of Abu Dhabi. HAAD has identified data transparency and better public information as fundamental to ensuring the efficient delivery of healthcare. It has issued the ‘HAAD Data Standards and Procedures’ (the ‘Standards’, dated 24 January 2008 and most recently reviewed on 14 April 2014) to provide governance structures and regulatory parameters for the collection, use, and publication of health data - subject to obligations to respect privacy and confidentiality.</p>\r\n<p class=\"MsoNormal\">The Standards provide for the establishment of a Data Standards Panel. This panel has representatives of HAAD, as well as healthcare providers and insurers. The panel is responsible for reviewing and recommending changes to electronic data exchange standards, for providing direction with regard to technical standards and implementation, and for communicating data-related developments to relevant parties.</p>\r\n<p class=\"MsoNormal\"><strong>Technical aspects</strong></p>\r\n<p class=\"MsoNormal\">The Standards are primarily focused on technical considerations relating to data in a healthcare context in Abu Dhabi. They address aspects including the applicable codes to use for specific data elements, the permissibility of electronic data storage, and the appropriate guidelines and specifications for implementing, maintaining and improving information security.</p>\r\n<p class=\"MsoNormal\">Along with compliance with HAAD’s data standards, code standards and electronic data exchange standards, the Standards also specify that electronic data exchange between health providers and insurance companies be subject to an effective ‘Electronic Partners Agreement’ - a default version of which has been made available by HAAD.</p>\r\n<p class=\"MsoNormal\"><strong>Confidentiality</strong></p>\r\n<p class=\"MsoNormal\">The Standards contain specific guidance with regard to confidentiality. This includes confidentiality in the context of patient health information, as well as confidentiality in the context of commercially sensitive information that it may be necessary to communicate between different parties.</p>\r\n<p class=\"MsoNormal\">The Standards require all partners to develop, institute and periodically update standard operating policies and procedures that protect confidential health information, and to educate staff about such policies and procedures. The policies and procedures need to be available for inspection, and their use must be demonstrable on request.  While the Standards refer to HAAD making default policies and procedures available, at the time of writing we were unable to determine whether such default documentation has been made available.</p>\r\n<p class=\"MsoNormal\">Within the Standards, there is specific guidance on the following confidentiality-related aspects:</p>\r\n\r\n<ul>\r\n 	<li><strong>Necessary and authorized access</strong>: Access to confidential health information must be limited to only the minimum necessary personnel, and there must be a means to authenticate authorized users of such information.</li>\r\n 	<li><strong>Unauthorized access</strong>: Confidential health information must be kept from unauthorized access, and in the event of any data breach HAAD must be notified (including with specific detail relating to the breach, and any subsequent unlawful disclosure). There must be a published sanctions policy, and this must be communicated to staff.</li>\r\n 	<li><strong>Storage and transmission of confidential health information</strong>: Policies and procedures for protecting stored confidential health information, and for transmitting confidential health data (including data encryption), need to be developed and implemented.</li>\r\n</ul>\r\n<p class=\"MsoNormal\"><strong>HAAD Policies</strong></p>\r\n<p class=\"MsoNormal\">In December 2012, HAAD issued a number of policy manuals intended to define its own responsibilities, as well as those of public and private healthcare providers, healthcare professionals and insurance companies. These policy manuals, and related standards, provide a framework – including minimum acceptable levels – with which HAAD, and all healthcare providers, professionals and insurance companies operating in Abu Dhabi, need to comply.</p>\r\n<p class=\"MsoNormal\">The four HAAD policies are:</p>\r\n\r\n<ul>\r\n 	<li>the Healthcare Regulator Policy,</li>\r\n 	<li>the Healthcare Provider Policy,</li>\r\n 	<li>the Healthcare Professional Policy, and</li>\r\n 	<li>the Healthcare Insurer Policy.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">While not their core focus, each of these policies contains provisions that touch on patient information, and data protection considerations relating to such personal information.</p>\r\n<p class=\"MsoNormal\">The Healthcare Regulator Policy confirms that, as the regulator, HAAD is empowered to define, approve and communicate the Standards, and that the Standards may make provision for all matters relating to the collection, management, reporting and exchange of healthcare data. Along with other aspects reflected in the Standards, the examples referenced in the Healthcare Regulator Policy include the requirement to obtain a patient’s informed consent before collecting healthcare data, and the right of patients to be granted full access, upon request and within a reasonable timeframe, to their own healthcare information.</p>\r\n<p class=\"MsoNormal\">The Healthcare Provider Policy, the Healthcare Professional Policy, and the Healthcare Insurer Policy all reflect duties relating to data management and confidentiality. These include:</p>\r\n\r\n<ul>\r\n 	<li>a duty to ensure compliance at all times with HAAD regulatory requirements relating to the right of patients to access their own information;</li>\r\n 	<li>a duty to treat as confidential all information in relation to patients; and</li>\r\n 	<li>a duty to refrain from releasing patient information unless permitted to do so by HAAD, or pursuant to the applicable HAAD policy.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">HAAD has also issued a Charter of Patient Rights and Responsibilities, and this 2008 document also touches on the protection of patient information. Amongst other rights and expectations, the Charter states that patients have the right to privacy of both person and information, including the following rights and expectations:</p>\r\n\r\n<ul>\r\n 	<li>the right to privacy during treatment,</li>\r\n 	<li>the right to access their medical records and medical information,</li>\r\n 	<li>the right to have all clinical and pharmaceutical records kept fully updated and documented,</li>\r\n 	<li>the right to have personal details and records kept fully confidential and protected from loss and misuse, and</li>\r\n 	<li>the right to have all staff with whom they interact maintain a high degree of professionalism and confidentiality.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">In an earlier edition of Law Update<a class=\"msocomanchor\" href=\"#_msocom_1\">[r1]</a>  (February 2014) we made the observation that underpinning the use of personal data in a healthcare context is trust. Patients need to be able to trust their healthcare providers and medical practitioners. In the absence of trust, patients are less likely to regularly use the same providers or practitioners, and more likely to withhold personal information or provide personal information that is inaccurate. Where there is no trust, patient data becomes less reliable, and treatment outcomes may suffer as treatment decisions are based on incomplete or incorrect information. In this type of environment, healthcare operations are less efficient, and reputations suffer as providers or practitioners are seen as responsible for less-than-ideal outcomes. Where personal data is unreliable, public health suffers as researchers and policy-makers base their theories and projections on incorrect assumptions, and resources are used inefficiently.</p>\r\n<p class=\"MsoNormal\">The various HAAD policies, and the Standards, need to be read together to better understand the scope of obligations relating to patient data placed on those participating in the provision of healthcare in Abu Dhabi, but it is fair to say that the approach taken by HAAD in respect of personal information goes some way to establishing a climate of trust in the context of the provision of healthcare services in Abu Dhabi.</p>\r\n<p class=\"MsoNormal\"><strong>Dubai</strong></p>\r\n<p class=\"MsoNormal\">The Dubai Health Authority (DHA) is responsible for the healthcare sector in the Emirate of Dubai. The DHA also appreciates the importance of having data and information that supports the delivery of quality healthcare. This is reflected in the DHA’s Hospital Regulation 2012, which includes regulations relating to health records and the management of healthcare information. As one would expect, the Health Records requirements include a clear obligation to ensure that patient information is treated as confidential and protected from loss, tampering, alteration, destruction, and unauthorized or inadvertent disclosure.</p>\r\n<p class=\"MsoNormal\">The DHA has also established a department, within its Health Policy and Strategy Sector, to improve access to high quality health information, and to facilitate the efficient flow of information amongst health sector stakeholders - the DHA, healthcare providers, insurers and patients. The Health Data and Information Analysis Department is responsible for creating processes that harmonise standards in the field of healthcare information in Dubai, enabling and improving interoperability of healthcare systems and the exchange of healthcare data, while ensuring information security and privacy concerns are addressed.</p>\r\n<p class=\"MsoNormal\">The Health Data and Information Analysis Department has indicated that its aim is to ensure that patients are able to control what information is collected about them, and how it is used, who is able to access it and for what purposes, and how such information is maintained. Further information as to the manner in which such privacy concerns will be addressed is keenly awaited.</p>\r\n<p class=\"MsoNormal\"><em>Al Tamimi &amp; Company’s Technology, Media &amp; Telecommunications team regularly advises on data and healthcare technology related matters, including data protection and information security matters. For further information, please contact Nick O’Connell</em> – <a href=\"mailto:n.oconnell@tamimi.com\">n.oconnell@tamimi.com</a></p>\r\n\r\n<div>\r\n<div>\r\n<div class=\"msocomtxt\">\r\n<p class=\"MsoCommentText\"></p>\r\n\r\n</div>\r\n</div>\r\n</div>'),
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	(93354,5071,'lawUpdateArticleNoWriters',''),
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	(93356,5071,'_yoast_wpseo_metadesc','A modern healthcare system requires reliable data, and clear standards and procedures for using and transferring such data.'),
	(93357,5072,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">Given the complexity of the issues relating to compensation as a remedy for breach of contract, Iraqi law, namely the Iraqi Civil Code no. 40 of 1951 which is the law regulating the general provisions for the origins of obligations, has addressed the matter of compensation and placed the general rules upon which the courts rely in connection with relevant claims filed before it. In this article we address the rules upon which compensation is awarded and other issues relating to compensation such as liquidated damages.</p>\r\n<p class=\"MsoNormal\">Pursuant to the Iraqi Civil Code, compensation is not owed should any of the following conditions be met:</p>\r\n\r\n<ul>\r\n 	<li>The relevant obligation became impossible to fulfil;</li>\r\n 	<li>The debtor failed to fulfil the obligation due to foreign cause of force majeure;</li>\r\n 	<li>The fulfilment of the obligation was deemed to be overburdening; or,</li>\r\n 	<li>The other party failed to fulfil its obligations as well.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">The creditor may insist on specific performance of the contract, provided that the relevant obligation is inappropriate or impossible unless done by the debtor, the creditor may resort to the court to oblige the debtor to perform and the debtor will face have to paying a deterrent fine “threating” penalty in the event of failing to abide.  If the debtor insists on not performing, the court shall determine the compensation amount to be paid by the debtor, and to take in consideration the losses suffered by the creditor and the intransigence of the debtor.</p>\r\n<p class=\"MsoNormal\">Contractual parties may agree the compensation amount when they enter into a contract or afterwards. If the parties fail to agree the amount of compensation and the law does not specify the amount, the court shall have the power to assess the amount of compensation. If there is no agreed amount of compensation in the contract, or by law, then the court can estimate it based on the principle of “loss of profit or occurred losses” as a result of non-execution or delay.  The damage compensation should cover the expected direct damage of either loss of profit or occurred losses, unless the debtor has committed a fraud or a gross error, then the compensation for the direct damage shall be for the expected and unexpected damages.  In case of estimating and assessing the compensation by the court, the latter shall refer this matter to specialized experts to assess at their discretion.</p>\r\n<p class=\"MsoNormal\">If the parties agreed a compensation amount in their contract, i.e. liquidated damages clause,  and the debtor was successful in proving that the losses suffered by the creditor were less than the agree upon amount, the court may reduce the relevant amount to correspond with the actual damage suffered. Any agreement attempting to restrict the court’s power to review such a clause shall be deemed null.  It is also important to note that the creditor may not claim for compensation more than the agreed upon liquidated damages amount, even if the actual damages exceed that amount unless the creditor proves that the debtor has committed a gross error or fraud.</p>\r\n<p class=\"MsoNormal\"><strong>The compensation when the object of the obligation is cash money</strong></p>\r\n<p class=\"MsoNormal\">If the object of the obligation is an amount of money, which was disclosed at the time when the obligation arose, and there was a delay in payment of the money by the debtor, there will be interest charged against the debtor for the delay. The interest will be calculated at 4% in civil matters and 5% in commercial matters.  In addition, the parties can agree the interest to be assessed against delay of payment but the interest shall not exceed 7%. If the interest exceeds the cap of 7%, then the court will reduce it to 7%.</p>\r\n<p class=\"MsoNormal\">The interest would be payable at the maturity of the debt (legally or by agreement) and the creditor is not required to prove that any damages were suffered due to the delay in payment.   The creditor may claim additional compensation if the creditor proves that it suffered damages which exceeds the interest amount and due to fraud or harmful act of the debtor.</p>\r\n<p class=\"MsoNormal\"><strong>Legal notice requirement</strong></p>\r\n<p class=\"MsoNormal\">Iraqi law requires a creditor to send a notice demanding payment except in certain circumstances (see below).  The creditor and debtor may also agree that the debtor shall be deemed notified as of the due date without the need for the creditor to serve a written notice on the debtor.</p>\r\n<p class=\"MsoNormal\">There is no need to send a notice of demand to the debtor in the following cases:-</p>\r\n\r\n<ul>\r\n 	<li>If the parties agreed that the debtor’s contractual obligation is due once the creditor’s contractual obligation has been performed and the creditor does perform or the debtor’s contractual obligation is to be performed at a certain time and that time has passed;</li>\r\n 	<li>If the contractual obligation of the debtor is to abstain from doing something and the debtor breached this obligation;</li>\r\n 	<li>If the contractual obligation is to restore something the debtor was aware was stolen or received unlawfully;  or</li>\r\n 	<li>If the debtor stated in writing that he is not willing to fulfil his contractual obligations.</li>\r\n</ul>\r\n<p class=\"MsoNormal\"><strong>Limitation of liability</strong></p>\r\n<p class=\"MsoNormal\">Iraqi law permits the parties to agree to limit or exclude the debtor from contractual liability arising from the failure to perform its obligations except the liability that arises from his/her fraud or gross error. Moreover, the parties may not agree to exclude liability for fraud and gross negligence committed by employees of the debtor.  Additionally, the parties may agree that the debtor shall not bear liabilities arising from an act of god or force majeure.</p>\r\n<p class=\"MsoNormal\"><strong>Penalties (Delay penalties)</strong></p>\r\n<p class=\"MsoNormal\">The Iraqi Government Contracts’ law No. 87 of 2004 (The “Government Contracts’ law “) and the Enforcement of the Government Contracts’ Instructions No. 21 of 20142008 (The “Government Contracts’ Instructions “) have addressed the delay penalties in the governmental contracts and provided that the same should be imposed against the contracting party if the party has delayed in fulfilling its contractual obligations provided that the maximum amount of the delay penalties shall not exceed 10% of the relevant contract value. The delay penalties are further adapted to be a financial penalty imposed by the administration against the contracting party for breaching the general laws.  Delay penalties are a manner through which the administration obliges the contracting party to pay its obligations in due time.</p>\r\n<p class=\"MsoNormal\">Iraqi courts, including the Court of Cassation, have confirmed that the delay penalty is a penalty behind which is a security/guarantee in terms of obliging with the contracting obligations.</p>\r\n<p class=\"MsoNormal\">The delay penalty is also a contractual penalty and conventional compensation which shall not be imposed unless stipulated in the relevant contract between the non-governmental contracted parties. Being a conventional compensation; the same shall be imposed without further excuses (unless otherwise provided therein), whereas the Iraqi courts rule for imposing the delay penalties once the  delay and the occurred damage as a result thereof are is proven to have had taken a place for reasons other than force majeure or foreign cause.</p>\r\n<p class=\"MsoNormal\">For non governmental contracting parties, the delay penalty is a contractual penalty and conventional compensation shall not be imposed unless stipulated in the contract. The Iraqi courts will rule regarding the imposition of the delay penalties once the delay and resultant damage are proven to have taken place for reasons other than force majeure or foreign cause.</p>\r\n<p class=\"MsoNormal\"><strong>Conclusion</strong></p>\r\n<p class=\"MsoNormal\">In summary of the above, the compensation in accordance with the Iraqi law is one of the following, which are subject to the conditions defined by virtue of the law:</p>\r\n\r\n<ul>\r\n 	<li>Compensation ordered by court: Compensation is assessed by the competent judge in his discretion to hold a party liable  their breach of contract or delay in performance;</li>\r\n 	<li> Liquidated damages: Where the parties agree on the compensation amount prior to the dispute the court will respect the parties’ agreement but may reduce the amount if the actual losses are less than the agree upon amount; or,</li>\r\n 	<li> Legal compensation: Iraqi law proves for certain compensation by law such as interest on non-fulfilment of obligations related to cash money.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">Notwithstanding the above, a party’s contractual liability may be exempted should the parties agree on exemption or limitation, noting however that the liability arising from fraud or gross negligence cannot be exempted.</p>'),
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	(93370,5072,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(93371,5072,'_yoast_wpseo_metadesc','Given the complexity of the issues relating to compensation as a remedy for breach of contract, Iraqi law, namely the Iraqi Civil Code no. 40 of 1951...'),
	(93372,5073,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">The term “trademark” normally refers to a conventional set of marks (e.g. letters, numerals, words, logos, pictures, symbols, or combinations of one or more of these elements) provided that such signs are capable of distinguishing the goods and/or services of one trader to the other. However, certain types of non-conventional trademarks have become more widely accepted in recent times as a result of legislative changes expanding the definition of \"trademark\".<strong> </strong></p>\r\nA non-conventional trademark, also known as a nontraditional trademark, is any new type of trademark which does not belong to a pre-existing, conventional category of trade mark, and which is often difficult to register, but which may nevertheless fulfil the essential trademark function of uniquely identifying the commercial origin of products or services.  The term is broadly inclusive as it encompasses marks which do not fall into the conventional set of marks mentioned above, and therefore includes marks based on appearance, shape, sound, smell, taste and texture. The most important factor when it comes to conventional or non-conventional trademarks is that the mark is distinguishable.\r\n\r\nNon-conventional trademarks may therefore be <em>visible </em>signs (e.g. colours, shapes, moving images, holograms and positions), or <em>non-visible</em> signs (e.g. sounds, scents, tastes and textures). One famous case is the Tiffany Blue which is synonymous with Tiffany &amp; Co., the New York City jewellery company. <em>Tiffany &amp; Co.’s unique shade of the colour blue, as displayed on its packaging and boxes, is trademarked. Accordingly Tiffany &amp; Co. is protected from other jewellers who would use the same colour for boxes or packaging and thereby cause brand confusion. </em>\r\n\r\nSimilarly in the UAE, colours have been granted trademark protection when used in specific, limited contexts such as packaging or marketing. In fact, in April of 2007, the UAE trademark office granted trademark protection for a particular shade of orange used on the packaging of a rice product. In recent times, sounds have been increasingly used as trademarks in the marketplace. However, traditionally a sound was not considered to be a trademark and it has been difficult to protect sound as a trademark through registration.\r\n\r\nIn Bahrain, by virtue of an official Circular number 14/23-3 dated 18 November 2014, the Trademark Registry has now started accepting trademark applications for sound trademarks.  The requirements to file a sound trademark in Bahrain are:\r\n<ul>\r\n 	<li class=\"MsoNormal\">Musical note composition of the sound trademark;</li>\r\n 	<li class=\"MsoNormal\">Compact Disc containing the music files in MP3 audio file or any other compatible format, together with other required documents for registering a trademark, such as legalised power of attorney and legalised certificate of incorporation of the applicant company.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">In practice, when seeking registration of non-conventional trademarks such as sounds and colors it is important to remember that such identifiers are registrable and enforceable so long as they are capable of identifying the trader as the source of the goods and/or services. As such, maintaining distinctivity and exclusivity is an important factor when considering registration of non-conventional trademarks.</p>'),
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	(93376,5073,'content_description','The term “trademark” normally refers to a conventional set of marks (e.g. letters, numerals, words, logos, pictures, symbols, or combinations of one or more of these elements) provided...'),
	(93377,5073,'_content_description','field_59b641c07f473'),
	(93378,5073,'pageSummary','The term “trademark” normally refers to a conventional set of marks (e.g. letters, numerals, words, logos, pictures, symbols, or combinations of one or more of these elements) provided...'),
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	(93381,5073,'_currentURL','field_59d35123ab1e7'),
	(93382,5073,'lawUpdateArticleWriters_0_lawUpdateArticleWriter','884'),
	(93383,5073,'_lawUpdateArticleWriters_0_lawUpdateArticleWriter','field_59da2ac06b065'),
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	(93386,5073,'lawUpdateArticlePractices_0_lawUpdateArticlePractice','634'),
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	(93388,5073,'lawUpdateArticlePractices','1'),
	(93389,5073,'_lawUpdateArticlePractices','field_59dc7918de021'),
	(93390,5073,'_yoast_wpseo_metadesc','The term “trademark” normally refers to a conventional set of marks (e.g. letters, numerals, words, logos, pictures, symbols, or combinations of one or more of these elements) provided...'),
	(93391,5074,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">For example, Clause 9.4 of the revised LCIA Arbitration Rules provides:</p>\r\n<p class=\"MsoNormal\"><em>Subject always to Article 9.14 below, in the case of emergency at any time prior to the formation or expedited formation of the Arbitral Tribunal (under Articles 5 or 9A), any party may apply to the LCIA Court for the immediate appointment of a temporary sole arbitrator to conduct emergency proceedings pending the formation or expedited formation of the Arbitral Tribunal (the “Emergency Arbitrator”).</em></p>\r\n<p class=\"MsoNormal\">Likewise, Article 29(1) of the ICC Rules provides:</p>\r\n<p class=\"MsoListParagraph\"><em>A party that needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal (“Emergency Measures”) may make an application for such measures pursuant to the Emergency Arbitrator Rules in Appendix V. Any such application shall be accepted only if it is received by the Secretariat prior to the transmission of the file to the arbitral tribunal pursuant to Article 16 and irrespective of whether the party making the application has already submitted its Request for Arbitration.</em></p>\r\n<p class=\"MsoNormal\">In each case, the Emergency Arbitrator procedure applies unless the parties have agreed to opt out of the Emergency Arbitrator provisions (or in the case of the ICC, the parties have agreed to another pre-arbitral procedure that provides for the granting of conservatory, interim or similar measures. Article 29(6), ICC Rules)). Thus, agreement to the LCIA or the ICC Rules entails party consent to the appointment of an emergency arbitrator who has the power to grant interim or conservatory measures unless the parties specifically opt out.</p>\r\n<p class=\"MsoNormal\">Use of the Emergency Arbitrator process is restricted. Thus, it may only be invoked where:</p>\r\n\r\n<ul>\r\n 	<li>The interim or conservatory measure cannot wait the constitution of an arbitral Tribunal; and</li>\r\n</ul>\r\n<ul>\r\n 	<li>Application has been made prior to constitution of the arbitral tribunal</li>\r\n</ul>\r\n<p class=\"MsoNormal\"></p>\r\n<p class=\"MsoNormal\">The Emergency Arbitrator’s  decision is to take the form of an order in the case of the ICC or an order or award in the case of the LCIA. However, the ICC Rules provide that the emergency arbitrator\'s order “<em>shall not bind the arbitral tribunal with respect to any question, issue or dispute determined in the order. Any ICC arbitral tribunal may modify, terminate or annul the order or any modification thereto made by the emergency arbitrator</em>” (Article 27(3)). Further, the LCIA Rules stipulates that an order or award of LCIA Emergency Arbitrator “<em>may be confirmed, varied, discharged or revoked, in whole or in part, by order or award made by the Arbitral Tribunal upon application by any party or upon its own initiative</em>”. (Article 9.11).</p>\r\n<p class=\"MsoNormal\">The foregoing may have serious implications for the enforcement of emergency arbitrator\'s orders in the UAE, considering that such measures:</p>\r\n\r\n<ul>\r\n 	<li>are “orders” and not “awards” (at least in the case of ICC arbitrations); and</li>\r\n</ul>\r\n<ul>\r\n 	<li>may be varied by the arbitral tribunal, when appointed.</li>\r\n</ul>\r\n<p class=\"MsoNormal\"></p>\r\n<p class=\"MsoNormal\">These characteristics may persuade UAE courts not to enforce the emergency arbitrator’s order on the basis that it is not a final award, especially since the UAE civil procedural code only appears to envisage the enforcement of final arbitral awards.</p>\r\n<p class=\"MsoNormal\">The foregoing potential difficulty is not unique to the UAE; the enforcement of the emergency arbitrator’s order may be problematic in other States, as well.  The provisions of the New York Convention may not be applicable to the emergency arbitrator’s decision as it is provided that it shall take the form of an “order” and will not be an award.</p>\r\n<p class=\"MsoNormal\">Where the order or award “debtor” does not comply with the emergency arbitrator’s order or award, as the case may be, it may be found to have breached the arbitration clause (and the contract of which it forms a part), since the ICC rules provide, as noted above, that “<em>the parties undertake to comply with any order made by the emergency arbitrator.” </em>But this will be of little comfort to the “order creditor” if the order is not quickly enforced.</p>\r\n<p class=\"MsoNormal\">There remains room in such a situation for the non-defaulting party to apply to the UAE courts for the appropriate interim relief. For example, Article 29(7) of the ICC Rules provides:</p>\r\n<p class=\"MsoNormal\"><em>The emergency arbitrator provisions are not intended to prevent any party from seeking urgent interim or conservatory measures from a competent judicial authority at any time prior to making an application for such measures, <strong>and in appropriate circumstances even thereafter, pursuant to the Rules</strong>. Any application for such measures from a competent judicial authority shall not be deemed to be an infringement or a waiver of the arbitration agreement. … (emphasis added)</em></p>\r\n<p class=\"MsoNormal\">Hence, it seems open to the non-defaulting party to pursue judicial relief where the other party fails to comply with the Emergency Arbitrator’s order or award, as applicable. However, it is evident that the efficacy of such action will be limited in those circumstances.</p>\r\n<p class=\"MsoNormal\">On the other hand, UAE local courts have an extensive power to grant interim measures even if they do not have jurisdiction, e.g. if there is an arbitration clause between the parties. Article 22 of the UAE Code of Civil procedure provides that:</p>\r\n<p class=\"MsoNormal\"><em>The Court shall have jurisdiction to determine preliminary issues and interlocutory applications in the original action within their jurisdiction and shall also have jurisdiction to determine any application connected with such action which the proper course of justice requires that it be heard with it, and <strong>they shall likewise have jurisdiction to make orders for expedited and preservatory procedures to be carried out in the State notwithstanding that they do not have jurisdiction in the original action</strong>. [our emphasis added]</em></p>\r\n<p class=\"MsoNormal\">Thus, while that an Emergency Arbitrator has 15 days to issue his order,<a href=\"#_ftn1\">[1]</a> paragraph 2 of article 140 of the UAE Civil Procedures Code requires the UAE courts to issue interim relief within 24 hours from the date of making the request for an interim order.<a href=\"#_ftn2\">[2]</a> Moreover, unlike institutional rules, emergency relief may be obtained in the Abu Dhabi courts on an <em>ex parte</em> basis and it is submitted that the threshold for obtaining such relief may be lower than will apply in the case of institutional emergency arbitrator relief.<a href=\"#_ftn3\">[3]</a>  In our view, therefore, seeking an interim measure from the UAE courts in relation to a UAE-related arbitration is likely to be much faster than seeking relief from an Emergency Arbitrator.</p>\r\n<p class=\"MsoNormal\">Furthermore, the enforcement of interim measures granted by an Emergency Arbitrator in the UAE may prove to be problematic. The UAE courts will retain jurisdiction in relation to such measures even if they do not have jurisdiction to review the merits themselves. In this respect, the Federal Supreme Court has commented, as follows:</p>\r\n<p class=\"MsoNormal\"><em>“Urgent and precautionary decisions that are executed in the State – are decision that fall within the jurisdiction of the State’s courts, notwithstanding the event that the courts  do not have jurisdiction to review the main case..”</em></p>\r\n<p class=\"MsoNormal\">Moreover, the Dubai Court of Cassation has ruled:</p>\r\n<p class=\"MsoNormal\"><em>“If the parties did not agree explicitly – whether in the main contract or in an arbitration deed that follows it – that the arbitrators can undertake interim, precautionary or urgent measures – it means – then that their agreement to refer their dispute to arbitration in relation to the main contract does not give the arbitrators the authority or jurisdiction to decide on such procedures or issue. As may be seen, the Dubai Court is silent on the enforcement of such measures under UAE.</em><em>”</em><strong><em> </em></strong></p>\r\n<p class=\"MsoNormal\"> The foregoing raises doubts concerning the efficacy of  Article 29(6) of the ICC rules, which provides that:</p>\r\n<p class=\"MsoNormal\"><strong><em>“6 . The Emergency Arbitrator Provisions shall not apply if: </em></strong></p>\r\n<p class=\"MsoNormal\"><strong><em>b) the parties have agreed to opt out of the Emergency Arbitrator Provisions..”</em></strong></p>\r\n<p class=\"MsoNormal\">This approach may fail to evidence the explicit prior agreement of the parties that the arbitrator has authority to issue interim orders (which would be achieved if Article 29(6) required the Parties’ express agreement to the application of the Emergency Arbitrator provisions).</p>\r\n<p class=\"MsoNormal\">The foregoing issues, which we have identified in relation to Emergency Arbitrator orders and awards, will become especially problematic if the counterparty or a third party refuses to abide by the order. Parties thus may be better served by resorting to the national courts from the beginning, rather than the Emergency Arbitrator, to obtain such measures in UAE-related arbitrations, since this may be more effective and avoid unnecessary cost and delay.</p>\r\n<p class=\"MsoNormal\">In conclusion we suggest that there may be merit to parties, who have consented to institutional arbitration (which permits emergency arbitrator relief) in the UAE, to expressly opt out of such arrangements, at least as they are currently drafted and pending clarification of UAE judicial attitudes to the enforcement of such measures</p>\r\n\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<hr size=\"1\" />\r\n\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[1]</a> . Article 6. 4 of Appendix V of the ICC Rules states that: “The Order shall be made no later than 15 days from the date on which the file was transmitted to the emergency arbitrator pursuant to Article 2(3) of this Appendix. The President may extend the time limit pursuant to a reasoned request from the emergency arbitrator or on the President’s own initiative if the President decides it is necessary to do so.”</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[2]</a> -Article 140(2) provides that: “2 - The judge or the president of the division, as the case may be, shall make his order in writing on one of the copies of the petition no later than one day following the submission thereof”</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[3]</a> Cf. J. Lundstedt,, “SCC Practice: Emergency Arbitrator Decisions 1 January 2010 – 31 December 2013” (http://www.sccinstitute.com/filearchive/4/46698/SCC%20practice%202010%20-%202013%20emergency%20arbitrator_FINAL.pdf) (last accessed on 18 January 2015)</p>\r\n\r\n</div>\r\n</div>\r\n<div>\r\n<div>\r\n<div class=\"msocomtxt\">\r\n<p class=\"MsoCommentText\"></p>\r\n\r\n</div>\r\n</div>\r\n<div></div>\r\n</div>'),
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	(93393,5074,'lawUpdateArticleMonth','5067'),
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	(93395,5074,'content_description','One of the defining features of recent revisions of leading institutional arbitration rules has been the introduction of Emergency Arbitrator procedures.'),
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	(93411,5074,'lawUpdateArticleNoWriters',''),
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	(93413,5074,'lawUpdateArticlePractices_0_lawUpdateArticlePractice','410'),
	(93414,5074,'_lawUpdateArticlePractices_0_lawUpdateArticlePractice','field_59dc79c8e10ce'),
	(93415,5074,'lawUpdateArticlePractices','1'),
	(93416,5074,'_lawUpdateArticlePractices','field_59dc7918de021'),
	(93417,5074,'_yoast_wpseo_metadesc','One of the defining features of recent revisions of leading institutional arbitration rules has been the introduction of Emergency Arbitrator procedures.'),
	(93418,5075,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">At the time of writing, three of Dubai’s banks have released their annual results and each reported strong growth across the key metrics by which they are measured (profit, net income and assets). Buoyed by such positive news the industry can look forward to continued success into 2015.</p>\r\n<p class=\"MsoNormal\">The Central Bank of the UAE has helpfully assisted in getting a relatively current peek into the banking industry’s future thinking by the release of its Credit Sentiment Survey. This is the first release of its kind by the Central Bank and the survey details UAE lending institutions’ thoughts on credit sentiment based on responses from senior credit officers. Al Tamimi commends the Central Bank on this initiative as it will provide forward guidance against which eventual results can be measured that will create a deep pool of qualitative information over time. Moreover, it will help inform the lending industry and the public about what is an important area of the economy.</p>\r\n<p class=\"MsoNormal\">The results of the survey were widely reported at the time of release and revealed lenders’ views on a number of important areas, including credit growth and credit standards in business and personal lending. Expectations of demand growth in each area was positive (although growth is slowing) and it will be interesting to see if this sentiment continues in the second release in April which will cover the first quarter of 2015 (especially given the trend in oil prices).</p>\r\n<p class=\"MsoNormal\">Of interest to the Al Tamimi banking team were the responses on credit standards and the factors attributable to any change in credit standards. For both business and personal lending credit standards, in the majority, had not changed—although, there was some easing in standards for personal lending. In both cases, the quality of the bank’s asset portfolio was cited as being the paramount factor in any change in credit standards. Hence where the portfolio is poor, credit standards (interest rate margins, credit limits and collateralisation) should tighten and vice versa.</p>\r\n<p class=\"MsoNormal\">If an institution is doing well and views its portfolio as being in good shape a reasonable reaction may be to be more generous to customers against a positive economic backdrop. Credit and risk departments may be drawn into a state of comfort as they take heart in a stable economy and continuing demand. This is a common in any industry that is doing well as the good times make perceivably small problems (e.g. covenant oversights, minor payment delays) seem inconsequential. However, vigilance is a guiding principle for the defenders of any bank’s asset quality.</p>\r\n<p class=\"MsoNormal\">One of the many tools in maintaining vigilance is to check the wellbeing of a portfolio though regular audits of a loan book. Undertaking a legal audit at the beginning of each year is a recommended method of confirming whether actual practice accords with bank policy and meets best practice. Such a review looks at a sample of transactions and their finance documents to (i) ensure all documents contemplated by the term sheet were obtained and duly signed; (ii) confirm all conditions precedent and subsequent were fulfilled; (iii) test the mechanics of the covenants to make certain they are operating as intended; and (iv) identify any omissions or areas for improvement taking into account the bank’s usual procedures and the approach in the market. The benefits of receiving red flags at an early stage include better customer engagement and the maintenance of the lenders contractual rights under the finance documents.</p>\r\n<p class=\"MsoNormal\">At a broader level, the meta-results of these reviews are also are useful means of confirming if existing policies are correct, being applied properly or if standard documentation can be improved. For instance, choice of law and choice of jurisdiction within finance facilities is a perennial issue where the choice of a foreign law is common for large UAE-only transactions. The merit of the choice is always supportable but it requires a thoughtful decision for each transaction and policies that are not set with the right parameters can result in a lender’s interests not being fully realised. Further if standard documentation has not been reviewed for a period of time, it may not reflect the latest legislation or best practice. By way of example, all banks would have needed to review and update their mortgage products following the release of the Mortgage Loan Regulations in October 2013.</p>\r\n<p class=\"MsoNormal\">The overall benefit of a legal review of the loan portfolio is that it gives an institution an immediate insight into existing practices to confirm if all is well and, if not, to take corrective action. Armed with this knowledge banks can sleep well with not just hope, but comfort, that their loan portfolio is robust.</p>\r\n<p class=\"MsoNormal\">For more information on the above please contact your usual Al Tamimi advisor or any member of the Banking &amp; Finance Team.</p>'),
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	(93422,5075,'content_description','One month into the New Year much good news has been released about the UAE banking sector. '),
	(93423,5075,'_content_description','field_59b641c07f473'),
	(93424,5075,'pageSummary','One month into the New Year much good news has been released about the UAE banking sector.'),
	(93425,5075,'_pageSummary','field_59e59b307dec8'),
	(93426,5075,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-11/february-7/comfort-not-hope-how-banks-can-sleep-well-at-night.html'),
	(93427,5075,'_currentURL','field_59d35123ab1e7'),
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	(93431,5075,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(93432,5075,'lawUpdateArticlePractices_0_lawUpdateArticlePractice','411'),
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	(93436,5075,'_yoast_wpseo_metadesc','One month into the New Year much good news has been released about the UAE banking sector.'),
	(93437,5076,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">The borderlines between permitted tax planning/avoidance and unlawful tax evasion have occupied the centre stage across the globe with several modern economies emphasizing the need for corporate transparency and striking a fine balance between fiscal reforms agenda and the need to stimulate inclusive growth.</p>\r\n<p class=\"MsoNormal\">It is well known that several multi-national enterprises are paying very small amounts intaxes in comparison to their global revenues, by shifting and parking their profits in low tax countries, commonly called ‘tax havens’ or ‘tax friendly jurisdictions’. Several corporations are increasingly resorting to shifting their profits, parking their intellectual property and setting up intermediate holding companies (“<strong>IHC</strong>”) in offshore jurisdictions with low or nil taxes, exploiting the distinction between tax planning and tax evasion.</p>\r\n<p class=\"MsoNormal\"><strong>Tax planning with IHC</strong><strong> </strong></p>\r\nTax planning may be defined as an arrangement of affairs by a person to benefit fully and take advantage of all available tax concessions and rebates in accordance with statutory provisions, so that the tax burden is minimised without violating the letter of the law. Several courts in western jurisdictions have held that for tax planning to be legitimate it must be within the legal framework and colourable (sham) devices cannot be part of tax planning.\r\n<p class=\"Default\">A validly established holding structure adopted by the corporations has stood the test of time and the recent aggressive pursuit of revenue authorities across the globe. Establishing an IHC requires not only complex structuring involving corporate, regulatory, tax and corporate governance considerations and significant legal analysis, but also scrutiny of the political stability and investment climate of the jurisdiction of the IHC.</p>\r\n<p class=\"MsoNormal\"><strong>The United Arab Emirates: An economic hub for investment</strong></p>\r\n<p class=\"MsoNormal\">Evaluation of an IHC is done on several parameters including but not limited to political stability, investor-friendliness, financing constraints, business and operational requirements, tax considerations and exchange control and repatriation norms. As may be noted, though tax is a driving force for corporates choosing to establish IHCs, it can never be the sole factor in making the decision for establishing an IHC.</p>\r\n<p class=\"Default\">The United Arab Emirates (“<strong>UAE</strong>”) is not known to be a classical ‘tax haven’, but has been the preferred choice for establishing IHC for several corporates seeking to do business in Asia and Africa, for the reasons outlined below:</p>\r\n<p class=\"Default\"><em>i.   Political stability</em></p>\r\n<p class=\"MsoNormal\">The UAE is amongst the top 10 oil producers in the world, is a market-driven economy and is politically stable and sheltered, which ensures that the country has a robust advantage as a commercial hub for economic activities for corporates.</p>\r\n<p class=\"Default\"><em>ii.  Location advantages</em></p>\r\n<p class=\"Default\">The UAE can be said to be strategically located for conducting and exploring business opportunities in the emerging markets of the Middle East, Asia and Africa.</p>\r\n<p class=\"MsoNormal\">Further, infrastructure in the UAE is well developed with growth in property development in both residential and industrial spaces, which presents an added advantage for multinational corporates seeking to establish an IHC in the UAE.</p>\r\n<p class=\"Default\"><em>iii.  Investor-friendly climate</em></p>\r\n<p class=\"MsoNormal\">The traditional notion that corporations cannot be wholly owned by foreign nationals or a foreign corporation is no longer such a concern with numerous free zones established across different emirates in the UAE. There is no restriction on the nationality of free zone company directors and shareholders.</p>\r\n<p class=\"MsoNormal\">Entities in the UAE free zones can be registered as either new companies or as branches or representative offices of local or international companies. The requisite share capital for setting up companies depends on the chosen free zone, nature of the company’s business activity and the number of shareholders in the company, with few restrictions on use of share capital.</p>\r\n<p class=\"MsoNormal\">The UAE is also a contracting party to the International Centre for Settlement of Investment Disputes Convention (“<strong>ICSID</strong>”)and has signed several bilateral investment treaties with other countries which provide protection to foreign investors in several respects, including fair and equitable treatment and protection against imposition of any unreasonable, arbitrary or discriminatory measures.</p>\r\n<p class=\"Default\"><em>iv.  Nil tax regime </em></p>\r\n<p class=\"Default\">The UAE has a nil-rate tax regime for most corporations with the exception of oil, gas and petrochemical companies and branch offices of foreign banks, which are required to pay taxes.</p>\r\n<p class=\"Default\">The UAE has a broad network of Double Taxation Avoidance Agreements with over 50 countries, which provides investors with favourable treatment in respect of withholding taxes, tax credits and avoidance of double taxation in the residence country and source country.</p>\r\n<p class=\"Default\">With focus being drawn to offshore companies’ tax residency across the globe, establishing IHCs has become complicated. In such an environment, free zone companies established in the UAE with local regulatory authorities offer effective solutions as they draw less attention to themselves from tax authorities.</p>\r\n<p class=\"Default\"><em>v.   Ease of repatriation</em></p>\r\n<p class=\"Default\">There are no exchange control regulations in the UAE and hence this provides investors with the ability to easily park profits in UAE companies and to use them for financing their activities across the world with no regulatory approvals required to be sought for remittances outside the UAE.</p>\r\n<p class=\"MsoNormal\"><strong>Recent developments</strong></p>\r\n<p class=\"MsoNormal\">In today’s world the only constant is the assurance of continuing change. The developments in several modern tax systems across the globe signify that several countries have introduced the concept of “beneficial ownership” in their tax codes to curb the use of intermediate holding companies.</p>\r\nSome examples of countries adopting legislations to curb use of IHCs are the French General Tax Code which has included the term ‘beneficial owner’ in two provisions involving anti-abuse directions, EC directives, which have included a beneficial ownership condition in relation to interest, royalties and dividends and China, which has issued administrative circulars stating that a beneficial owner must have substantive operating activities and should not be an agent or a ‘conduit’. The courts in several jurisdictions like Canada, India and Indonesia are closely examining holding company structures to determine the beneficial ownership of income.\r\n\r\nThe question that faces every corporation looking to establish an IHC is how safe is it to establish an IHC in a given jurisdiction and it being accorded <em>bona</em> <em>fide</em> status despite any judicial scrutiny.\r\n\r\nThe key is to ensure that the IHC is not merely a ‘conduit’ or a pass-through entity. In the UAE, the free zones and the other competent authorities require all the details of the ultimate beneficial owner at the time of establishing a new entity or introduction of a new foreign shareholder in an existing company. Further, the UAE is not traditionally a tax haven (even though there are no taxes in the UAE) as it has not permanently denied the source country the right to tax the investor at the time of exit and therefore, there is usually a business case or sound commercial justification for the IHC to be located in the UAE rather than merely being a tax evasion device. The UAE has an established history of international trade, finance and business and is not dependant on any other country. The UAE is also not on the black list of the Organisation of Economic Co-operation and Development. Recently in January 2015, Implementing Regulations for Federal Law No. (4) of 2002 concerning anti-money laundering (as amended in 2014) have been published and the UAE has also opened its doors to countries like India, which has posted eight senior tax officers in Abu Dhabi clearly suggesting that it does not portray itself as a tax haven but is a commercial and economic hub for foreign investments.\r\n<p class=\"MsoNormal\"><strong>Concluding remarks </strong></p>\r\nThe UAE was ranked 14<sup>th</sup> on the 2013 A.T Kearney Global Foreign Direct Investment Confidence Index due to its investor friendly legislation and ease of access to emerging markets in the Middle East, Asia and Africa. In summary, it can be said that the UAE continues to be a preferred choice for setting up IHCs due its investor-friendly climate despite the tendency of the tax authorities around the world to seek to curb the use of IHCs.'),
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	(93441,5076,'content_description','Tax planning has always been a topic of international debate and adjudication. '),
	(93442,5076,'_content_description','field_59b641c07f473'),
	(93443,5076,'pageSummary','Tax planning has always been a topic of international debate and adjudication.'),
	(93444,5076,'_pageSummary','field_59e59b307dec8'),
	(93445,5076,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-11/february-7/taxing-times-does-the-uae-remain-unaffected.html'),
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	(93451,5076,'_yoast_wpseo_metadesc','Tax planning has always been a topic of international debate and adjudication.'),
	(93452,5077,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">Most of these cases have arisen from real estate disputes in which the purchaser of an off-plan unit has sued the developer on the basis that the unit was not registered and accordingly the sale invalid. The court has repeatedly held that issues of property registration are not arbitral and any award upholding such a claim is to be annulled.</p>\r\n<p class=\"MsoNormal\">In a recent a case the Dubai Court of Cassation has underlined this principle by explaining that even if the award is justified on other grounds, if the award contains a determination on a matter of public policy, the entire award will be annulled and not just the decision concerning public policy.</p>\r\n<p class=\"MsoNormal\"><strong>Severability</strong></p>\r\n<p class=\"MsoNormal\">The Dubai Court of Cassation has in the past severed elements of an arbitral award which the court found the Tribunal did not have jurisdiction to make.</p>\r\n<p class=\"MsoNormal\">A recent example is Dubai Court of Cassation Property Appeal No.282-2012 (dated 3 February 2013). In this case, a purchaser sued a developer for the return of money paid under a sale and purchase agreement. The purchaser succeeded in a domestic DIAC arbitration, receiving an award for the return of his payments (AED 4 million), interest, and his legal costs of AED 110,000.</p>\r\n<p class=\"MsoNormal\">The developer challenged the award before the Dubai courts. Among a number of arguments raised, the developer claimed that the Tribunal did not have the power to award legal costs as no such power existed under Dubai law or the DIAC rules, and the parties had not agreed to confer such a power. The award was therefore to be annulled because the Tribunal had exceeded its jurisdiction.</p>\r\n<p class=\"MsoNormal\">The Court of Cassation agreed with the developer that the Tribunal had exceeded his jurisdiction when awarding legal costs. However the Court did not agree that this meant that entire award was to be annulled, but instead annulled the award regarding legal costs, and upheld the remainder.</p>\r\n<p class=\"MsoNormal\"><strong>Cassation Case 320 of 2014</strong></p>\r\n<p class=\"MsoNormal\">In the recent case of Dubai Court of Cassation Property Appeal No.320-20123 (dated 22 June 2013), the Court annulled the entire award rather than just that section in which the Tribunal had exceeded its jurisdiction be considering a matter of public policy.</p>\r\n<p class=\"MsoNormal\">In this case, a purchaser sued a developer for failing to handover and construct the unit in accordance with the completion date in the sale and purchase agreement. The basis of the claim was that the agreement was to be terminated and the purchaser’s money repaid because (1) the developer had failed to handover by the completion date and (2) the unit had not been registered. In the award the Tribunal accepted both of these arguments, and accordingly terminated the sale and purchase agreement and ordered the developer to repay the money paid by the purchaser.</p>\r\n<p class=\"MsoNormal\">The Court of First Instance ratified the arbitral award, as did the Court of Appeal. Before the Court of Cassation the developer argued that the award should be annulled because it dealt with an issue concerning registration under Article 3 of Dubai Law 13 of 2008, which is an issue of public policy not capable of being settled by the parties and, by extension, arbitration.</p>\r\n<p class=\"MsoNormal\">The Court of Cassation accepted this argument, holding that where a dispute includes issues that are not subject to conciliation (and by extensions arbitration) the overall dispute cannot be arbitrated. If the arbitrators accept jurisdiction over the non-arbitral issue and issue an award on it, the entire award is to be annulled.</p>\r\n<p class=\"MsoNormal\">In this case the Tribunal found that the purchaser had established a right to terminate under the terms of the agreement (as the unit had not been handed over in time) and also under Law 13 of 2008 for failure to register. Since the award was based on an issue that was matter of public policy falling outside the jurisdiction of the Tribunal, the entire award was to be annulled.</p>\r\n<p class=\"MsoNormal\"><strong>Comment</strong></p>\r\n<p class=\"MsoNormal\">Although the Court of Cassation in Property Appeal No.320-20123 could have considered severing the offending part of the award or allowing the award to be enforced on the basis that there were other non-public policy related grounds for the order made by the Tribunal, it is probably that it did not do so because under like the order for legal costs in Property Appeal No.282-2012, it could not easily sever the offending section. This is because the order for legal costs would have been one separate item found in the operative part of the award (i.e. the order conventionally found on the last page), whereas the issue of public policy would have been in the main body of the award dealing with the reasoning for the decision. This is why, although in both cases the Tribunal exceeded its jurisdiction, in one the Court agreed to sever the offending part, but in the other it was unable to do so.</p>\r\n<p class=\"MsoNormal\">It often happens that when bringing a claim a claimant will plead a number of different grounds for the relief sought. This case shows that care must be taken not to raise issues of public policy, as if dealt with by the Tribunal they will cause the award to be annulled even if the claim succeeds on other grounds unrelated to public policy. Tribunal’s themselves should simply refuse to consider any issue that it believes falls under public policy or which is otherwise outside of its jurisdiction.</p>'),
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	(93456,5077,'content_description','For the past two years, the Dubai Court of Cassation has issued a series of rulings concerning the limit of arbitrators to deal with matters of public policy. '),
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	(93458,5077,'pageSummary','For the past two years, the Dubai Court of Cassation has issued a series of rulings concerning the limit of arbitrators to deal with matters of public policy.'),
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	(93470,5077,'_yoast_wpseo_metadesc','For the past two years, the Dubai Court of Cassation has issued a series of rulings concerning the limit of arbitrators to deal with matters of public policy.'),
	(93471,5078,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">For this reason, substantial amounts of time, money and effort are spent on the fit out of shops, restaurants and offices so that their appearance aligns with the image that the owners wish to portray, creating an environment that is conducive to making sales and conducting business.</p>\r\n<p class=\"MsoNormal\">In a construction contract the employer is at risk of being exposed (and potentially out of pocket) if a fit out is not completed on time, on budget and at the required quality.</p>\r\n<p class=\"MsoNormal\">Notwithstanding the importance of fit outs, fit out contracts are not always given the attention  they merit. Indeed, we have experience of high value and high profile fit out projects being procured on the basis of flimsy letters of intent and on the contractor’s standard terms of engagement, which are invariable biased in the contractor’s favour.</p>\r\n<p class=\"MsoNormal\">This can result in contracts under which the employer’s contractual entitlements may be ambiguous, limited or which fail to correspond with the rights that an employer may assume that it would have, especially given the significant sums of money concerned.</p>\r\n<p class=\"MsoNormal\">Against this background, the purpose of this article is to provide a snapshot of some key issues that employers should ensure are properly addressed in any fit out contract.</p>\r\n<p class=\"MsoNormal\"><strong>Procurement</strong></p>\r\n<p class=\"MsoNormal\">Selecting the contractor is the first step and it is usually prudent for employers to run a tender process to determine the most competitive offer for the project, taking into account issues of quality, price, and the experience of the contractor (i.e. it may be particularly valuable to have a  contractor familiar with the base build of the building where the fit out is taking place).</p>\r\n<p class=\"MsoNormal\">The tender process should be completed in good time so that the contractor has sufficient opportunity to mobilise and to place orders for materials, while careful consideration should be given to identifying the party who is responsible for obtaining the necessary consents and approvals (such as a the building permit) for the project.</p>\r\n<p class=\"MsoNormal\"><strong>Design and construction</strong></p>\r\n<p class=\"MsoNormal\">A further important issue is to decide the extent to which the contractor is required to undertake design.</p>\r\n<p class=\"MsoNormal\">As a general rule, specialist designers are likely to be engaged for intricate and complicated designs while design responsibility will probably reside with the contractor (who may have its own design team) if the design is relatively functional and straightforward. The contract period is usually quicker if the fit out is both designed and constructed by the contractor.</p>\r\n<p class=\"MsoNormal\">Regardless of the identity of the designer, it is important for the terms of engagement to include a design review process (to ensure that the design is satisfactory to the employer, including in terms of aesthetics and as against any design requirements for franchise stores) as well as a ‘fitness for purpose’ warranty.  All design obligations should be backstopped by the designer’s professional indemnity insurance.</p>\r\n<p class=\"MsoNormal\">Once the design is sufficiently advanced, construction works can begin. The contractor should be subject to appropriately robust construction obligations. In particular, it is important that the Contractor is required to construct the works in accordance with ‘best industry practice’ and with good quality materials.</p>\r\n<p class=\"MsoNormal\">It is important that the employer engages a project manager to supervise the works, to report back to the employer on progress and to certify payments.</p>\r\n<p class=\"MsoNormal\"><strong>Payment</strong></p>\r\n<p class=\"MsoNormal\">The scope and nature of fit out works is usually relatively certain and this lends itself to lump sum pricing structures which, in turn, increase certainty of price for the employer. That said, no contract price can ever be completly ‘fixed’ as, for example, it will inevitably increase if the employer instructs the contractor to perform additional works or changes the work to be done.</p>\r\n<p class=\"MsoNormal\">As with any other construction contract, it is important for the employer to have the express right to instruct variations (including decreasing or omitting part of the works) and the variation process must be subject to a clear pricing mechanism. For example, variations could be priced in accordance with analogous prices under the contract or in accordance with prevailing market rates (which can be determined through obtaining quotes from the market). However, it is important that the price should not be subject to any approval from contractor, otherwise the employer may find that the contractor can apply pressure by refusing to agree payment terms when the employer is keen to have the work completed.</p>\r\n<p class=\"MsoNormal\"><strong>Third parties</strong></p>\r\n<p class=\"MsoNormal\">Fit outs often take place within close proximately to operating neighbouring businesses (such as in malls). This means that contractors must perform the fit out works in such a way that they do not cause nuisance or inconvenience to third parties and in accordance with the requirements of the landlord/building owner (i.e. regarding the times when the contractor is permitted to perform the works, noise levels and access to and from the site).</p>\r\n<p class=\"MsoNormal\">On account of the interface with third parties, it is therefore vital that the contractor carries robust public liability insurance, which names the employer as a co-insured party.</p>\r\n<p class=\"MsoNormal\"><strong>Timely completion</strong></p>\r\n<p class=\"MsoNormal\">As the employer will almost certainly be prevented from trading (and therefore generating revenue) while the fit out works are being undertaken, fit out contracts must be subject to a definitive commencement date (which should not be subject to the date that approvals are obtained) and a fixed completion date.</p>\r\n<p class=\"MsoNormal\">If the works are not completed on time, consideration should be given as to whether delay damages should be levied against the contractor for each specified period of delay (i.e. a day or week). It is important that the rate of delay damages is sufficient to incentivise the contractor to complete the works as quickly as possible, while a further incentive can be added by providing that the employer may terminate the contract if any cap on delay damages (which is customarily 10% of the contract price) is exhausted.</p>\r\n<p class=\"MsoNormal\">In addition to imposing penalties for late completion, employers sometimes agree to pay bonuses if the works are completed before the contractual completion date, especially if it is commercially important for the works to be completed by a particular date (i.e. in time for a shopping festival).</p>\r\n<p class=\"MsoNormal\">In order to avoid any ambiguity, the contract should clearly set out the standards that the works are required to attain in order for them to be taken over.</p>\r\n<p class=\"MsoNormal\">Aesthetic appearance is important so, at the very least, the employer must be satisfied that the works have been performed in accordance with agreed designs and with the specified materials.  Additionally, the contractor must have obtained all necessary consents and approvals (i.e. from Civil Defence and the relevant municipality) for the works to be occupied and used for their intended purpose while the contractor must have a good reason for not remedying any outstanding defects or completing any outstanding works.</p>\r\n<p class=\"MsoNormal\"><strong>Defects</strong></p>\r\n<p class=\"MsoNormal\">Notwithstanding the taking over of the works, it is almost inevitable that defects will subsequently emerge. Defects are inconvenient and compromise the appearance of a fit out and therefore must be promptly remedied by the contractor when directed by the employer, bearing in mind the need to minimise disruption to the employer’s business.</p>\r\n<p class=\"MsoNormal\"><strong>Incentivising performance</strong></p>\r\n<p class=\"MsoNormal\">Dispute resolution is invariably expensive (and the cost can be disproportionate to the actual value of the fit out project) so it is prudent to include mechanisms in the contract to enable the employer to recover money from the contractor in the event of breach. This approach also serves to incentivise the contractor not to breach its obligations and to quickly make good any breaches that do occur.</p>\r\n<p class=\"MsoNormal\">In this regard, employers usually require the contractor to provide the employer with a performance security. The best option for the employer is to obtain an on-demand performance bond from a bank operating in the same jurisdiction in which the employer is located, which remains in force until the expiry of the defects liability period (provided that employer is satisfied all defects have in fact been remedied).</p>\r\n<p class=\"MsoNormal\">However, contractors sometimes resist providing performance bonds because of their cost (which may also lead to an increase in the contract price).</p>\r\n<p class=\"MsoNormal\">A pragmatic solution to this is for the contractor to furnish the employer with a signed but undated security cheque, which the employer may cash if it suffers loss on account of a breach by the contractor. To comfort the contractor, drafting can be inserted to clarify that employer will account to the contractor to the extent that the amount received by the employer from cashing the security cheque exceeds the loss suffered.</p>\r\n<p class=\"MsoNormal\">A further mechanism is for employers to seek to retain 10% from each payment and press for this amount to only be paid to the contractor with the final account (after all defects have been remedied).  If this is unacceptable to the contractor, a typical compromise is for half the retention to be paid upon takeover, with the balance falling due following the remedy of all defects.</p>\r\n<p class=\"MsoNormal\">A ‘back loaded’ payment structure which is paid in instalments against the completion of specified milestones can also be used to enhance the employer’s position, while employers should always look to include a clear right of set-off in the fit out contract.</p>\r\n<p class=\"MsoNormal\"><strong>Termination</strong></p>\r\n<p class=\"MsoNormal\">As with any other contract, a fit out contract should be subject to clear rights of termination, including in respect of breaches that remain outstanding following the expiry of a cure period; insolvency; as well as if a cap on delay damages is exhausted. Any applicable local law formalities regarding termination should be properly addressed in the drafting.</p>\r\n<p class=\"MsoNormal\"><strong>Concluding thoughts</strong></p>\r\n<p class=\"MsoNormal\">Fit out projects are subject to the same issues and risks that apply to any construction project and failure to properly address these concerns can seriously backfire on an employer.</p>\r\nFor this reason, we recommend that time is invested in engaging fit out contractors upon clearly drafted and robust ‘short form’ construction contracts that adequately protect the interests of the employer.'),
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	(93489,5078,'_yoast_wpseo_metadesc','First impressions are important – they can only be made once.'),
	(93490,5079,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">Adequate corporate governance controls are particularly important in the banking sector, where the financial risks are relatively high, affecting not only the individual bank in question, but also the banking sector as a whole and the sustainability of the financial market in that country. The financial crisis of 2008 provided a clear, irrefutable example of the substantial costs of failing to have effective controls in place. Recognizing this, the Organization for Economic Co-operation and Development (OECD), the Basel Committee on Banking Supervision, and the Financial Stability Board each issued international standards and/or guiding principles for the enhancement of corporate governance controls, including those applicable to banks.</p>\r\n<p class=\"MsoNormal\">Most recently, the Central Bank of Jordan (“<strong>Central Bank</strong>”) issued the Corporate Governance Instructions for Banks no. 58 for the year 2014 (“<strong>Corporate Governance Instructions</strong>”) codifying and developing the principles provided under the Bank Directors’ Handbook of Corporate Governance and the Corporate Governance Code for Banks in Jordan issued in 2007, as they apply to conventional banks.</p>\r\n<p class=\"MsoNormal\">The Corporate Governance Instructions are based on the following principles:</p>\r\n\r\n<ul>\r\n 	<li>separation of the authorities of the Chairman of the Board and the General Manager (CEO);</li>\r\n 	<li>the independence of the Chairman of the Board of Directors;</li>\r\n 	<li>regulatory and administrative frameworks for the allocation of authorities and responsibilities, and for risk control;</li>\r\n 	<li>treatment of all stakeholders in a fair and transparent manner, including the importance of proper disclosure for the purposes of accountability;</li>\r\n 	<li>accountability of management to stakeholders;</li>\r\n 	<li>appropriateness test re the qualifications, competence, integrity, and reputation of the management of the bank.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">The Corporate Governance Instructions aim to achieve the foregoing by introducing the following requirements:</p>\r\n<strong>I.       </strong><strong>Board Composition  </strong>\r\n<p class=\"MsoNormal\">Pursuant to the Corporate Governance Instructions, the Board of Directors shall be composed of not less than 11 Board members, unless the bank is owned by one shareholder. None of the Board members shall be an \"<em>executive director</em>\", in the sense that none of them shall be entitled to consideration for the day-to-day management of the bank.</p>\r\n<p class=\"MsoNormal\">Additionally, a minimum of 4 Board members shall be “<em>independent</em>”. In order to qualify as an independent director, the relevant Board member must satisfy, as a minimum, the following requirements (Article 6(d) of the Corporate Governance Instructions):</p>\r\n\r\n<ul>\r\n 	<li>not to have been an executive director of the Board within the last three years;</li>\r\n 	<li>not to have been an employee of the bank or any subsidiary thereof, within the last three years;</li>\r\n 	<li>not to be related, up to the second degree, to any other Board member or to a member of any board of any subsidiary of the bank, or to any “<em>qualifying shareholder</em>” of the bank (i.e. a person holding directly or indirectly 5% or more of the share capital of the bank);</li>\r\n 	<li>not to be related, up to the second degree, to any of the senior executive management of the bank, or any senior executive manager of any subsidiary of the bank;</li>\r\n 	<li>not to be a partner or employee of the bank’s external auditor, currently or within the last three years, and not to be related, to the first degree, to the person responsible for auditing the bank;</li>\r\n 	<li>not to be a “<em>qualifying shareholder</em>” (as defined above) of the bank, or a representative of or affiliated to a qualifying shareholder, or otherwise holding in concert with its affiliates a qualifying shareholding, or be a qualifying shareholder of a subsidiary of the bank or of the bank’s group;</li>\r\n 	<li>not to have occupied the position of Board member or member of a management committee of the bank or any of its subsidiaries for more than 8 consecutive years;</li>\r\n 	<li>for said member, nor any company in which he is a Board member or qualifying shareholder, to have been granted credit by the bank exceeding 5% of the subscribed share capital of the bank, nor have been a guarantor to a credit exceeding the same threshold; and</li>\r\n 	<li>to be of high financial or banking expertise and qualifications.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">It should be noted that this marks the first time Jordanian laws and regulations have imposed a legal requirement to have \"<em>independent directors</em>\", as opposed to only best practices or guiding principles, and as such, is seen as a positive step towards ensuring that the banks\' Board of Directors are performing their duties to the best interest of the bank <em>itself</em>, with regard to all stakeholders.</p>\r\n<p class=\"MsoNormal\">In addition to the foregoing, all Board members are further required to satisfy an appropriateness test, in accordance with the respective bank\'s internal policies bearing in mind the minimum standards provided under Article 12 of the Corporate Governance Instructions (e.g. minimum 25 years of age, no less than 5 years of banking, financial or similar experience, not acting as a board member or other senior personnel at another bank, etc.).</p>\r\n<p class=\"MsoNormal\"> <strong>II.   </strong><strong>Responsibilities of the Board</strong></p>\r\n<p class=\"MsoNormal\">The Board of Directors of the bank is tasked with, <em>inter alia</em>, the supervision of the senior executive management of the bank, as well as with the adoption of appropriate policies and procedures for the purpose of supervising the performance of the bank as a whole, including in relation to its strategic objectives. For this purpose, the Board of Directors shall adopt KPIs to measure performance against targeted objectives, adopt strategic policies for the control and operation of risks, ensure the installation of an adequate Management Information System (MIS), etc.</p>\r\n<p class=\"MsoNormal\">The Board of Directors shall be held responsible for (i) the integrity of all banking operations (ii) the financial position of the bank, (iii) the extent of its compliance with the requirements of the Central Bank and other competent regulatory bodies, (iv) the extent to which it has regard to stakeholders’ interests, (v) the extent of its operation within the framework of applicable laws and its internal policies, and (vi) the continuous effective supervision of the activities of the bank, including its outsourced activities.</p>\r\n<strong>III.     </strong><strong>Board Committees</strong>\r\n<p class=\"MsoNormal\">The Corporate Governance Instructions provide for the establishment, composition, and duties of certain committees of the Board, including a Corporate Governance Committee, an Audit Committee, a Nomination and Rewards Committee, and a Risk Management Committee.<strong> </strong></p>\r\n<strong>IV.     </strong><strong>Senior Executive Management</strong>\r\n<p class=\"MsoNormal\">Similar to the requirements in relation to Board members, Senior Executive personnel are also required to satisfy an appropriateness test. This includes being persons of high integrity and credibility, holding certain educational qualifications, having not less than 5 (or depending on the position, 10) years of relevant experience, being free to act for the bank full-time, etc.</p>\r\n<p class=\"MsoNormal\">Additionally, in order to ensure that said personnel continue to perform in the manner which best serves the interests of the bank, their performance and remuneration are subject to review in accordance with the bank\'s internal policies, having regard to the minimum conditions provided under the Corporate Governance Instructions.</p>\r\n<p class=\"MsoNormal\">In relation to the General Manager (CEO), it is important to note that the same person may not act as both the General Manager and the Chairman of the Board of Directors. Further, the General Manager shall not be related, up to the fourth degree, to the Chairman of the Board, any Board member, nor any qualifying shareholder.</p>\r\n<p class=\"MsoNormal\"> <strong>V.     </strong><strong>Limiting the Influence of Qualifying Shareholders</strong><strong> </strong></p>\r\n<p class=\"MsoNormal\">To ensure more effective management of banks, the Corporate Governance Instructions provide for certain safeguards as against the influence of qualifying shareholders, by requiring that:</p>\r\n\r\n<ul>\r\n 	<li>no qualifying shareholder may occupy a senior executive position at that bank; and</li>\r\n 	<li>the senior executive management shall be subordinate to the Board of Directors only, and shall act within the framework of the delegation granted to it by said authority.<strong> </strong></li>\r\n</ul>\r\n<strong>VI.     </strong><strong>Disclosure, Confidentiality of Information and Conflicts of Interest</strong>\r\n<p class=\"MsoNormal\">The Corporate Governance Instructions build upon the conditions provided for under the Jordanian Banking Law, in relation to each of (i) disclosure of information to stakeholders, (ii) the requirement to maintain confidentiality of certain information, and (iii) the manner for dealing with conflicts of interest, including highlighting the minimum standards and courses of action to be undertaken in said context.</p>\r\n<strong>VII.     </strong><strong>Corporate Social Responsibility</strong>\r\n<p class=\"MsoNormal\">The Corporate Governance Instructions further require Boards of Directors of banks to ensure that their respective bank has adopted appropriate social initiatives in the Environment, Health and Safety, and Education fields, and to further the grant of financing to small and medium sized enterprises (“<strong>SMEs</strong>”) at appropriate prices and terms.</p>\r\n<p class=\"MsoNormal\">With regard to the above, it is important to note that banks are granted certain interim periods in which to comply with the Corporate Governance Instructions. Importantly, banks are required to amend their respective Corporate Governance Handbooks to account for the additional requirements provided pursuant to the Corporate Governance Instructions, and forward the same to the Central Bank for approval, within 120 days of the date the Instructions came into force.</p>\r\nThe shift towards a more regulated corporate regime is vital in today\'s modern world. Not only does history show us time and time again that it pays well to abide by corporate governance, but also the requirements and expectations of the global market dictate that in order for Jordanian banks to be able to compete on an international level, certain safeguards are necessary to ensure the continued prosperity and sustainable growth of the relevant banks and the Jordanian financial market as a whole.'),
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	(93513,5080,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">This was a highly anticipated and long awaited event as the regulations were expected to clarify certain issues necessary for the effective implementation of Law No. 116 of 2013 regarding the Promotion of Direct Investment (the “<strong>Direct Investment Law</strong>”). During the past year, we have received regular inquiries from numerous foreign clients seeking more information about the Direct Investment Law and whether Kuwait Direct Investment Promotion Authority (“<strong>KDIPA</strong>”), the relevant authority whose main function is to attract and encourage foreign and local direct investment within the State of Kuwait, was accepting investment license applications (the “<strong>Applications</strong>”).</p>\r\n<p class=\"MsoNormal\">The Executive Regulations are composed of 45 articles divided into nine chapters. What follows is a summary of its main provisions:</p>\r\n<p class=\"MsoNormal\"><strong>One-Stop Shop</strong></p>\r\n<p class=\"Default\">One of the most exciting aspects of the Direct Investment Law is the “One-Stop Shop”. The Direct Investment Law provides that KDIPA will have a “One-Stop Shop”  which is a specialized unit comprising of all relevant officials from the various relevant government departments in coordination with KDIPA which will assist with the establishment and licensing for such entities. The Executive Regulations expand on this to specify that in addition to the One Stop Shop unit being responsible for transactions relating to an investor’s establishment of an investment entity, the One Stop Shop unit will also be responsible for preparing introductory guidelines setting out relevant requirements and responding to any inquiries raised in connection with such guides. These guides will likely prove to be useful for investors and specialized companies who are currently unfamiliar with the new Applications.</p>\r\n<p class=\"Default\">In addition to the above, the Executive Regulations state that KDIPA will prepare a list of specialized companies, firms and offices that are prequalified and approved to submit and follow-up on Applications in the name and on behalf of an investor. Such measures appear to be taken in order to encourage more foreign investment by easing the process for foreign investors to submit investment license applications and establishment of investment entities. This should hopefully reduce ‘red tape’ for foreign investors and assist investors to navigate the procedures and requirements of the Direct Investment Law and its Executive Regulations.</p>\r\n<p class=\"MsoNormal\"><strong>Investment Entity</strong></p>\r\n<p class=\"MsoNormal\">Pursuant to Article 12 of the Direct Investment Law, an investment license may be sought for (i) all company forms, as outlined under Law No. 25 of 2012 (the “<strong>Companies Law</strong>”), (ii) branch offices of a foreign company licensed to operate within Kuwait, and/or (iii) a representative office whose main purpose is limited to the study of markets and production. Similarly, Article 8 of the Executive Regulations confirms Article 12 of the Direct Investment Law but clarifies that a foreign investor may obtain an investment license to own 100% of the capital of a company with limited liability, a joint stock company or single-person company.</p>\r\n<p class=\"Default\">In addition to the Executive Regulations, Director General Decision No. 35 of 2014 on Principles, Rules and Procedures for Licensing Branches and Representative Offices of Foreign Companies in the State of Kuwait was also issued to identify the requirements for obtaining an investment license from KDIPA to open a branch of a foreign company or a representative office in Kuwait.</p>\r\n<p class=\"MsoNormal\"><strong>General Submissions to KDIPA</strong></p>\r\n<p class=\"MsoNormal\">When the Direct Investment Law was issued, we noted that Article 13 indicated that its executive regulations would establish the principles, rules and procedures for the submission and registration of Applications to obtain an investment license as permitted by the Direct Investment Law.</p>\r\n<p class=\"MsoNormal\">Chapter IV of the Executive Regulations state that KDIPA will prepare application forms for various types of requests including (i) licensing of an investment entity; (ii) granting of incentives and exemptions; (iii) amendments to the name, address, purpose, capital or domicile of an investment entity; or (iv) amendments to the percentage of shareholders’ equity in an investment entity. Further, Article 10 of the Executive Regulations states that submission of Applications, papers and documents to KDIPA by an investor or his representative may be made by any means specified by KDIPA including in person, by registered mail or e-mail. Upon submission of an Application, KDIPA will provide a receipt evidencing acceptance of such Application and will record the Application in its internal application register.</p>\r\n<p class=\"Default\">Ministerial Decision No. 503 of 2014 (Regarding the Issuance of Stated Fees Schedule for Services Rendered by KDIPA), which was issued at the same time as the Executive Regulations, specifies KDIPA service fees ranging from KD 10 for a certificate of record in the investment register, KD 50 for issuance of an investment license, and KD 100 for submission of an Application.</p>\r\n<p class=\"MsoNormal\"><strong>License Applications</strong></p>\r\n<p class=\"MsoNormal\">Chapter V of the Executive Regulations further sets out the information and statements that must be contained in, or attached to the Application and the conditions to be met by the applicant, the appropriate methods of notice and notification and the fees for the issuance of the investment license as undertaken in Article 13 of the Direct Investment Law.</p>\r\n<p class=\"MsoNormal\">Pursuant to Article 14 of the Executive Regulations, the Application for establishment of a Kuwaiti company must be accompanied by an initial study which is to include certain information including but not limited to the type of proposed activity or project, the size of the investment and the economic and environmental impact of such investment.</p>\r\n<p class=\"MsoNormal\">In addition to the above, the Executive Regulations also identify the requirements for the licensing of a branch of a foreign company as well as a representative office.</p>\r\n<p class=\"MsoNormal\">The Direct Investment Law states that KDIPA must respond to an Application within 30 days of receipt of a complete Application. The Executive Regulations reiterate this in Article 17, which provides that KDIPA “shall decide on the merits of the Application within 30 days as of the fulfillment of all conditions, data, papers and documents required by KIDPA and the competent authorities.” Therefore, foreign investors with strict timelines should be able to obtain a response on whether or not establishment through the Direct Investment Law is possible within a relatively short amount of time subject to when required documents are submitted to KDIPA.</p>\r\n<p class=\"MsoNormal\">The Executive Regulations provide that the investor will be notified of KDIPA’s acceptance (in which case the establishment of the investment entity and issuance of the commercial license will proceed) or rejection of the Application. In the event an Application is rejected, KDIPA will provide written notice of such rejection including reasons for the same.</p>\r\n<p class=\"MsoNormal\">The investment entity must obtain the necessary approvals to commence preliminary procedures and activities (prior to full operation by the investment entity) within one year from the date of issuance of the license, unless KDIPA provides for a longer period. Furthermore, the investor is required to notify KDIPA of the actual date of commencement of operations within thirty days from such date.</p>\r\n<p class=\"MsoNormal\"><strong>Incentives and Exemptions </strong></p>\r\n<p class=\"MsoNormal\">Chapter VI of the Executive Regulations discusses the procedures for obtaining incentives and exemptions including, but not limited to, tax exemptions, customs exemptions and allotment of land and real estate. In addition, Chapter VI also details the procedures for conversion of an investment entity.</p>\r\n<p class=\"MsoNormal\"><strong>Grievance Procedures</strong></p>\r\n<p class=\"MsoNormal\">The Executive Regulations also include an important feature in Chapter VII - a grievance procedure which permits stakeholders to submit grievances relating to decisions issued by KDIPA. This grievance procedure provides investors with an opportunity to attend a hearing before a committee formed by the Board of Directors of KDIPA to discuss such grievance. The grievance committee’s deliberations shall be confidential, passed by majority and issued within thirty days from the date of its registration.</p>\r\n<p class=\"MsoNormal\"><strong>Supervisory Officers</strong></p>\r\n<p class=\"MsoNormal\">Chapter VIII of the Executive Regulations reveals that the Minister of Commerce and Industry will appoint certain employees to act as judicial officers in order to monitor whether investment entities are complying with the Direct Investment Law, the Executive Regulations, any implementing decisions or instructions issued by KDIPA. The role of these judicial officers is important as it will allow KDIPA to ensure that any licenses, incentives or exemptions issued are not being misused.</p>\r\n<p class=\"MsoNormal\"><strong>Negative List</strong></p>\r\n<p class=\"MsoNormal\">The first question that is commonly raised by potential foreign investors is the list of sectors which are excluded from direct investment within the scope of the Direct Investment Law (the “<strong>Negative List</strong>”). Ministerial Resolution No. 75 of 2015 (Specifying a List of the Direct Investments which are not subject to the Provisions of Law 116 of 2013) was issued on 26 January 2015 and published in the Official Gazette – Issue No.1211 dated 01 February 2015. Prior to the issuance of Resolution 75, KDIPA accepted Applications for investment licenses and the determination of whether a company was eligible to obtain an investment license was made by KDIPA on a case by case basis upon submission of an Application.</p>\r\n<p class=\"MsoNormal\">Article 1 of Resolution 75 now sets out the Negative List which includes ten different sectors which are not eligible for an investment license including any companies in the crude oil or natural gas extraction sector.</p>\r\n<p class=\"MsoNormal\"><strong>Conclusion</strong></p>\r\n<p class=\"MsoNormal\">The Executive Regulations greatly impproves how the Direct Investment Law works. We are hopeful that the Direct Investment Law will prove effective in attracting direct investment, whether foreign or local, to the Kuwaiti market in order to to meet the objectives of Kuwait’s 2035 Plan “to transform Kuwait into a world class financial and commercial centre, with the private sector leading economic activities, fostering competitiveness, increasing productivity, supported by viable public institutions, while maintaining the deep rooted values and national identity, towards achieving balanced economic and human development, supported by adequate infrastructure, legal framework, and enabling business environment.”<a href=\"#_ftn1\">[1]</a> Although the Executive Regulations were recently issued, we are aware that several applications have already been submitted to KDIPA and we anticipate numerous more applications will be submitted based on the number of inquiries we receive from our clients on a daily basis. If you have any further questions about the Direct Investment Law, please feel free to contact our Kuwait office.</p>\r\n\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<hr size=\"1\" />\r\n\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[1]</a> KDIPA: Why Kuwait (http://www.kfib.com.kw/LivingInKuwait.aspx); 2035 Vision of His Highness the Amir of Kuwait, Sheikh Sabah Al Ahmad (http://www.da.gov.kw/eng/festival/vision_his_highness.php).</p>\r\n\r\n</div>\r\n</div>\r\n<div>\r\n<div>\r\n<div class=\"msocomtxt\">\r\n<p class=\"MsoCommentText\"></p>\r\n\r\n</div>\r\n</div>\r\n</div>'),
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	(93517,5080,'content_description','On 14 December 2014 Kuwait issued the Executive Regulations of Law No. 116 of 2013 regarding the Promotion of Direct Investment in the State of Kuwait (the “Executive Regulations”). '),
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	(93519,5080,'pageSummary','On 14 December 2014 Kuwait issued the Executive Regulations of Law No. 116 of 2013 regarding the Promotion of Direct Investment in the State of Kuwait (the “Executive Regulations”).'),
	(93520,5080,'_pageSummary','field_59e59b307dec8'),
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	(93522,5080,'_currentURL','field_59d35123ab1e7'),
	(93523,5080,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Sonia Salah'),
	(93524,5080,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(93525,5080,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','s.salah@tamimi.com'),
	(93526,5080,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','field_59e59afcd15de'),
	(93527,5080,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation',''),
	(93528,5080,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
	(93529,5080,'lawUpdateArticleNoWriters','1'),
	(93530,5080,'_lawUpdateArticleNoWriters','field_59e59aaed15dc'),
	(93531,5080,'_yoast_wpseo_metadesc','On 14 December 2014 Kuwait issued the Executive Regulations of Law No. 116 of 2013 regarding the Promotion of Direct Investment in the State of Kuwait (the “Executive Regulations”).'),
	(93532,5081,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">It is an established principle of UAE Courts of Cassation that the termination of any contract means that the primary obligation (i.e. the obligation to execute the contract) also terminates and consequently any other obligations set out  in the said contract, including the Liquidated Damages clause (the ”LD”) and/or the penalty clause, shall terminate  and cannot be applied anymore. Accordingly, the legal basis for claiming compensation, if any, will be based on tortous liability and not contractual liability.</p>\r\n<p class=\"MsoNormal\">In Abu Dhabi Court of Cassation Commercial Appeal 790 of 2013 (dated 22 October 2014), the Abu Dhabi Court of Cassation developed this established principle further, as it held that termination does not always prevent the court from applying a liquidated damages clause or a penalty clause. The Cassation Court highlighted that as long as the liquidated damages clause or penalty clause is an independent clause which the parties have agreed will survive termination, it will be effective after the termination of the contract.</p>\r\n<p class=\"MsoNormal\">Al Tamimi &amp; Company successfully represented the claimant in this case before the Abu Dhabi Court of Cassation.</p>\r\n<p class=\"MsoNormal\"><strong>The facts of the case</strong></p>\r\n<p class=\"MsoNormal\">The claimant entered into a development agreement with the defendant, whereby the claimant agreed to grant rights to the defendant to enable the latter to develop a plot of land by constructing a tower and thereafter to use, enjoy and deal with the tower and pay the premium in accordance with the terms of the contract.</p>\r\n<p class=\"MsoNormal\">The defendant paid instalments amounting to 50% of the premium but failed to pay the remaining instalments.</p>\r\n<p class=\"MsoNormal\">After terminating the defendant on notice, the claimant filed a case before the Abu Dhabi Court of First Instance seeking (i) approval of its right to terminate the contract (ii) compensation amounting to AED 64,048,522 representing its loss of profit sustained due to the defendant’s failure to execute the contract.</p>\r\n<p class=\"MsoNormal\"><strong>The Abu Dhabi Courts’ findings</strong></p>\r\n<p class=\"MsoNormal\">The First Instance Court issued a judgment approving the claimant’s termination of the contract and awarding compensation of AED 31,285,656 (as per the evaluation of the court appointed experts).</p>\r\n<p class=\"MsoNormal\">Al Tamimi &amp; Co was appointed to represent the claimant before the Court of Appeal. On appeal the claimant argued that the contract includes a liquidated damages clause which stipulates that in case of termination of the contract due to the defendant’s breach, the claimant will be entitled to have all the due instalments up to the date of termination. Therefore, the claimant requested from the Appeal Court an order for compensation amounting to AED 55,972,800 instead of AED 31,285,656.</p>\r\n<p class=\"MsoNormal\">The Court of Appeal rejected this argument and highlighted that the court was not allowed to apply liquidated damages clauses after the termination of a contract.</p>\r\n<p class=\"MsoNormal\">The claimant filed an appeal to the Court of Cassation. The claimant argued that the Court of Appeal  had failed to notice that the parties had agreed in the contract that the liquidated damages clause would stand and be effective after termination, and that it did not simply apply during the execution of the contract. Accordingly, the judicial principle that the Appeal Court relied on did not apply.</p>\r\n<p class=\"MsoNormal\">The Court of Cassation accepted this argument by the claimant, holding that:</p>\r\n\r\n<ul>\r\n 	<li>Although there  is a judicial principle which holds that the termination of any contract means that the contract and all its clauses (including the LD or penalty clause) terminates, this is only applicable if the LD clause or penalty clause represents a penalty for any failure to perform the contractual mutual obligations during the execution of the contract.</li>\r\n 	<li>However, if the LD clause or penalty clause provides that it will survive and be effective after termination of the contract as a penalty for said termination, rather than being a penalty that is due upon any failure on performing the mutual contractual obligations during the execution of the contract, then such a clause is to be considered as a separate and independent agreement even though it is stipulated in the terminated contract.</li>\r\n 	<li>Therefore, the judicial principle that the Appeal Court referred to and relied on is not applicable in the subject case and accordingly the LD clause or the penalty clause is to be applied.</li>\r\n</ul>\r\n<p class=\"MsoNormal\"><strong>The importance of the judgment</strong></p>\r\n<p class=\"MsoNormal\">The judgment is important for a number of reasons.</p>\r\n<p class=\"MsoNormal\">On a practical level, it firmly clarifies, for the first time in UAE, that LD clauses and penalty clauses are classified into two types according to the text of the clause.</p>\r\n<p class=\"MsoNormal\">The first type are those that are to be applied when one party has failed to perform a contractual obligation during the execution of the contract. Such a clause falls down upon the termination of the contract and cannot be applied anymore as it is considered as a secondary obligation that follows the primary obligation (i.e. the execution of the contract).</p>\r\n<p class=\"MsoNormal\">An example of this first type of clause is the LD clause set out in the 1999 FIDIC Red book at clause 8.7<a href=\"#_ftn1\">[1]</a>. This provides that:</p>\r\n<p class=\"MsoNormal\"><em>“If the Contractor fails to comply with Sub-Clause 8.2 [Time for Completion], the Contractor shall subject to notice under Sub-Clause 2.5 [Employer’s Claims] pay delay damages to the Employer for this default. These delay damages shall be the sum stated in the Contract Data.\"</em></p>\r\n<p class=\"MsoNormal\">The abovementioned LD clause constitutes a penalty on the contractor in case the latter breaches its contractual obligation to complete the project on the agreed date and the aforementioned penalty is effective during the execution of the contract. Accordingly, if the employer terminated the contract, this LD clause (clause 8.7) will not be valid anymore and cannot be applied as it falls down after the primary obligation of the contractor (i.e. to execute the contract) ceases upon the termination of the contract.</p>\r\n<p class=\"MsoNormal\">The second type of LD clause or penalty clause are those that consist of an independent agreement between the parties regarding the due compensation or penalty that will be due after the termination of the contract. Accordingly, in this type of clause the LD clause or the penalty clause represents the due compensation as a penalty for terminating the contract and not a measure that will be applied during the execution of the contract in case a breach of a contractual obligation.</p>\r\n<p class=\"MsoNormal\">Before this Cassation judgment, the UAE Courts would not apply LD clauses and penalty clauses after the termination of the contract and were awarding compensation, if any, based on tort liability, which means that the claimant had to prove the actual damages sustained. Accordingly the compensation awarded was equivalent to the value of the damages suffered.</p>\r\n<p class=\"MsoNormal\">After this judgment, the Court has clarified that a claimant can request that the other party pay the amount of the LD clause or the penalty clause, if any, after terminating the contract, if the clause can be shown to be an independent agreement granting damages in the even the contract is terminated.</p>\r\n\r\n<div>\r\n<div>\r\n<p class=\"MsoNormal\"><em> </em></p>\r\n\r\n</div>\r\n</div>'),
	(93533,5081,'_content','field_59b649b5c8b2b'),
	(93534,5081,'lawUpdateArticleMonth','5067'),
	(93535,5081,'_lawUpdateArticleMonth','field_59da2a396b063'),
	(93536,5081,'content_description','It is an established principle of UAE Courts of Cassation that the termination of any contract means that the primary obligation...'),
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	(93538,5081,'pageSummary','It is an established principle of UAE Courts of Cassation that the termination of any contract means that the primary obligation...'),
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	(93540,5081,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-11/february-7/abu-dhabi-court-of-cassation-judgment-on-liquidated-damages-clauses-after-termination.html'),
	(93541,5081,'_currentURL','field_59d35123ab1e7'),
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	(93554,5081,'lawUpdateArticleNoWriters',''),
	(93555,5081,'_lawUpdateArticleNoWriters','field_59e59aaed15dc'),
	(93556,5081,'_yoast_wpseo_metadesc','It is an established principle of UAE Courts of Cassation that the termination of any contract means that the primary obligation...'),
	(93557,5082,'content','February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">The Court recently allowed GCC companies to conduct economic activities in the state of Qatar, in the areas of industry, agriculture, animal resources, fisheries and contracting, without the need to establish a Qatari company with a Qatari shareholder.</p>\r\n<p class=\"MsoNormal\"><strong>The Case at First Instance</strong></p>\r\n<p class=\"MsoNormal\">In 2010, the Claimant (a construction company) filed a civil case before the Court of First Instance in Qatar, seeking the termination of the contract and compensation in relation to a construction agreement. The Defendant (the contractor) submitted to the Court a counter claim seeking the remainder of his outstanding money in relation to the same agreement in addition to compensation.<ins cite=\"mailto:ahmeda\" datetime=\"2015-02-04T09:31\"> </ins>The Court appointed an expert who approved the Defendant\'s dues towards the Claimant.</p>\r\n<p class=\"MsoNormal\">In 2012, the Court of First Instance took a decision to dismiss the original claim filed by the Claimant and in the counter claim, ordered the Claimant to pay the amount of USD $107,000 but refused to order any compensation to be paid.</p>\r\n<p class=\"MsoNormal\"><strong>Ruling of the Court of Appeal</strong></p>\r\n<p class=\"MsoNormal\">In 2012, the Claimant and the Defendant brought the decision of the Court of First Instance before the Court of Appeal. In a judgment handed down in 2012, the Court of Appeal upheld the finding of the Court of First Instance but in addition awarded the Defendant a further compensation amount of USD $20,000 as damages for the delay caused by the Claimant’s non-payment.</p>\r\n<p class=\"MsoNormal\"><strong>Judgment of the Court of Cassation</strong></p>\r\n<p class=\"MsoNormal\">In 2013, the Claimant lodged a further challenge with the Court of Cassation, seeking to overturn the judgment and based its argument inter alia on the following ground:</p>\r\n<p class=\"MsoNormal\">The Defendant is a non-Qatari company and hence does not have the right to conduct any economic activities in Qatar.  Consequently, the construction contract between the Defendant and the Claimant is null and void as it was entered into in violation of Law No. (13) of the year 2000, which prevents foreign investors from conducting contracting activities in Qatar without forming a Qatari company with a Qatari shareholder who holds at least 51% of the capital of the company.</p>\r\n<p class=\"MsoNormal\">The Court of Cassation rejected all grounds of the Claimant’s appeal and reasoned as follows:</p>\r\n<p class=\"MsoNormal\">Article 3 of Law No. (6) of the year 1983 relating to the executive measures for the Unified Economic Treaty between the countries of the Cooperation Council for the Arab States of the Gulf effective from 1/3/1983 provides that:</p>\r\n<p class=\"MsoNormal\">\"<em>it is permitted to the nationals of the countries of the Cooperation Council for the Arab States of the Gulf - either the juridical persons or the natural persons – to perform economic activity in Qatar in industrial, agricultural, fishing, animal wealth and contracting sectors provided that in order for the nationals of the council for the Arab States of Gulf to conduct business in any of the pre-mentioned sectors, they have to share their business with Qatari nationals with not less than 25% quota in the business. This sharing shall continue to a period not less than 5 years starting from the date of enforcement of this law</em>.” The explanatory memorandum of the law provides that \" <em>in enforcing the resolution of the committee of financial and economic cooperation issued on June 1982 in Riyadh, the principle of the freedom of practicing the economic activity in industrial, agricultural, fishing, animal wealth and contracting sectors shall be started provided that each country member in the Cooperation Council to stipulate the partnership of its nationals in a percentage not exceeding 25% for a period of five years. After that period, practicing these activities shall be free from any restrictions. The justification of this rule is to grant the nationals of the other countries of the GCC the national treatment granted to its own nationals</em>.”</p>\r\n<p class=\"MsoNormal\">The Court of Cassation explained the above by stating that the restriction on GCC citizens to conduct these aforesaid activities in Qatar is limited to five years only.  After the five years have elapsed, these activities can be practised freely by nationals of the GCC States without any further restrictions.  The judgment confirmed that the aim of such a provision is to protect the commercial activity of the State from any losses sustained as a result of foreign competition. As such, the business shall be released from this restriction after this period.</p>\r\n<p class=\"MsoNormal\">Accordingly, and with reference to the principle prevailing before this Court of Cassation, the provisions of the specific law shall prevail and apply over the provisions of the general law.  Moreover, the later general law does not impliedly supersede the previous specific law but the specific law remains applicable to accomplish the purpose for which it was issued. This constitutes an exception to the new general law unless the new law governs the discrepancies between the two laws.</p>\r\n<p class=\"MsoNormal\">The Court went on to say the provisions of the specific Law No. (6) of the year 1983 shall prevail over the provision of the general Law No. (13) of the year 2000 regarding foreign investment in Qatar in case of discrepancy. As a result, the Court concluded that the Defendant, which is a Kuwaiti company, is permitted to practise the contracting activity in Qatar without a Qatari partner.</p>\r\n<p class=\"MsoNormal\"><strong>Conclusion</strong></p>\r\nThis judgment is considered a practical application of the provisions of Law No. (6) of the year 1983 which ratifies the economic treaty between the GCC States pursuant to the articles of incorporation of the Cooperation Council (which calls for stronger ties and cooperation between the States of the GCC). The principle of treating other GCC nationals as nationals in Qatar will promote a stronger cooperation between juridical and natural persons especially in relation to incorporation of companies and all economic activities and investments.');

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	(96615,5247,'content_description','The Minister of Labour introduced some important changes to the UAE labour regulations by means of three decrees issued on 27 September 2015. \r\n'),
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	(96617,5247,'pageSummary','The Minister of Labour introduced some important changes to the UAE labour regulations by means of three decrees issued on 27 September 2015.'),
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	(96626,5248,'content','October 2015\r\n\r\n<hr />\r\n\r\nTo recap, the importation of medical devices and pharmaceuticals into any of the emirates of the UAE is controlled by the Ministry. As we discussed in our Part I article, in order to import pharmaceuticals or medical devices into the UAE, the importing company must be an individual or entity established in the UAE and licensed to import medical products into the UAE. With regard to an individual, only UAE nationals may apply in their individual capacity to be a registered importer of pharmaceuticals and medical devices. While in the past only companies wholly owned by UAE nationals could apply for a licence to import medical products, currently companies owned by both a UAE shareholder and a foreign shareholder may also apply for such a licence. Companies with 100% foreign ownership cannot yet apply for a medical product importation licence. Therefore, for companies wishing to import pharmaceuticals or medical devices into the UAE, there are two options: 1) incorporate a UAE entity in which they are a shareholder jointly with a UAE national, and undertake the licensing process with the Ministry or 2) engage a distributor or agent which is already licensed through the Ministry. Our Part I article further discusses these options.\r\n\r\nIn this article, we will look at the registration of medical devices and pharmaceutical products, in order to permit their importation into and sale within the UAE.\r\n\r\n<strong>Registration of Medical Devices and Pharmaceuticals</strong>\r\n\r\nUnder federal law, no medical device, medicine or pharmaceutical preparation may be put into circulation except after registration of the product with the Ministry. Thus, even if a company is licensed to import medical products, it will not be permitted to import a medical device or pharmaceutical unless that specific product is registered with the Ministry. There are certain exemptions from this requirement, which will be discussed in this article.\r\n\r\nIn order to register a medical device or pharmaceutical with the Ministry, an application for medical device or new drug application, as appropriate, must be submitted to the Ministry for review and approval. The application must be made by the manufacturer from the country of origin (the market authorisation holder in case of pharmaceutical products) jointly with the local authorised representative. The local authorised representative must be explicitly designated by the foreign manufacturer to act in the UAE, on behalf of the manufacturer, with regard to the manufacturer’s legal obligations and responsibilities.\r\n\r\nThe local authorised representative may be the licensed distributor of the product or a separate authorised representative. If the distributor is to act as the local authorised representative as well, the distributor must show evidence of its ability to effectively fulfil the regulatory responsibilities required by the Ministry. The local authorised representative is entirely responsible for the product and the post-market plan for handling complaints or recall. Further, the local authorised representative is responsible for fully complying with the requirements of the Ministry after placing the product on the market.\r\n\r\nThe application to be submitted to the Ministry must contain information about the pharmaceutical or device as well as the details of the manufacturer, local authorised representative, and local distributor of the product. A medical device will be classified as Class I, II, III, or IV, depending on its intended use; the required documentation will vary depending on the classification of the device. However, all applications must include a legalised free sale certificate or letters of regulatory approval, clearance to manufacture, sell, import and export the product, from the competent authority in the export country. The Ministry will accept accreditation of conformity assessment bodies from the European Union, Australia, Canada, the United States of America, Japan and Singapore, and will also consider any approval obtained for a product from other competent authorities.\r\n\r\nFurther, the applicant must submit provisions for an audit plan, details of the manufacturing site, a general post-marketing surveillance plan, as well as details concerning the product’s intended use, indications, precautions, instructions for use, safety and effectiveness data, and labelling. Once submitted, the application will be evaluated and the Ministry may request additional data or samples of the product.\r\n\r\n<strong>Importation of Unregistered Pharmaceuticals</strong>\r\n\r\nThere is an exception to the general position under Federal law, which provides specific approvals for the importation of an unregistered medical product. The intention behind the exception is to allow for emergency medicines or medicines to treat rare conditions, which may not be registered due to the cost-prohibitive nature of registering a rarely consumed medicine. This system allows providers and patients to access treatments despite the lack of registration.\r\n\r\nThe importation of an unregistered medical product must be performed in conjunction with a hospital or clinic local purchase order and a justification letter from a medical consultant.  The letter should include the clinical reasons for using an unregistered medicine instead of a registered alternative.  Even so, the importation of unregistered medicines is still permitted only by a licensed UAE medical store. In order to obtain Ministry approval for the importation of an unregistered medicine, as a minimum, the following documents are required:\r\n<ul>\r\n 	<li>Ministry licence of the importer</li>\r\n 	<li>Valid trade licence</li>\r\n 	<li>Local purchase order from the hospital or clinic</li>\r\n 	<li>Declaration letter from the hospital or clinic</li>\r\n 	<li>Justification letter from the medical consultant.</li>\r\n</ul>\r\nIf the consignment exceeds the equivalent of a one-year supply for one patient, or if the total value for any single item exceeds $2,500, a ‘Certificate of Pharmaceutical Product’ must be provided before the consignment can be released. Additionally, the medicine should be registered with the competent drug regulatory authority in the country of origin. Further, the medicine may not contain a substance that is banned in the UAE and the product must be labelled in English, at a minimum.\r\n\r\nOnce in the UAE, unregistered medicines must be stored in a separate area within the medical store and clearly marked as unregistered medicines. Each medical store must keep a register of unregistered medicines to enable their recall if necessary. Hospitals and clinics must also keep a register of the unregistered medicines that they use and the patients who receive these medicines, to enable recall.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nIn order for a company to import pharmaceuticals and medical devices into the UAE, a company must: 1) both, incorporate in the UAE and obtain a medical importation and distribution licence from the Ministry, or 2) engage a local agent or distributor, who is already registered with the Ministry, to import the pharmaceuticals and medical devices on their behalf.\r\n\r\nUnless the medical product has been specifically ordered by a hospital or clinic and approved as a permissible unregistered medicine by the Ministry, it also is necessary for the medical product itself to be registered with the Ministry. While registration of a pharmaceutical or medical device takes longer than the registration of a company, they can be done simultaneously. We are able to provide guidance on each element of bringing a pharmaceutical product or medical device to market in the UAE, from establishing a local entity and providing contract drafting and review, to registering the medical products themselves.'),
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	(96630,5248,'content_description','In the April 2015 edition of Law Update, we discussed the requirements for registration of companies with the Ministry of Health (the “Ministry”) in order that these companies are able to import medical devices and pharmaceuticals into the UAE.  '),
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	(96632,5248,'pageSummary','In the April 2015 edition of Law Update, we discussed the requirements for registration of companies with the Ministry of Health (the “Ministry”) in order that these companies are able to import medical devices and pharmaceuticals into the UAE.'),
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	(96642,5248,'_yoast_wpseo_metadesc','In the April 2015 edition of Law Update, we discussed the requirements for registration of companies with the Ministry of Health (the “Ministry”) in order that these companies are able to import medical devices and pharmaceuticals into the UAE.'),
	(96643,5249,'content','October 2015\r\n\r\n<hr />\r\n\r\nAs all the Arab Gulf Cooperation Countries (“GCC”) are members of the WTO, the laws governing IP rights in the region have since been amended to become in tune with the TRIPS requirements. The promulgation of common laws regulating customs in the GCC, the Unified GCC Patent Regulation and the Unified GCC Patent Office were other steps forward towards unifying the IP practices in the GCC. Finally, the recent adoption of a GCC Common Trademarks Law, to which common implementing regulations are expected within a few months, is regarded as an impressive milestone in cooperation and harmonisation in the GCC.\r\n\r\nFollowing these unification developments, one would expect a degree of harmony in the practices of IP offices in the GCC region, or in the principles governing IP rights such as the ‘Well Known Marks’ concept, or ‘Confusing Similarity’ threshold. To the contrary, however, there is a great amount of variance in the practices of IP offices in the GCC region. It is not a secret that designs offices are not functioning in some countries, such as Qatar, while basic services such as trademark searches are not available in others, such as Kuwait. Nor is it unusual to receive conflicting decisions from GCC trademark offices as to whether a proposed mark is inherently capable of registration or whether a prior existing mark should bar it from being registered.\r\n\r\nEven on the practitioners’ side, many attorneys specifically stipulate that submission of trademark registration certificates in all or most the Arab states are evidence of ownership in one of the Arab countries. The reality is that a registration certificate in one GCC state will have no bearing on the decision on another state’s trademarks office or a judge in another state addressing an opposition matter.\r\n\r\nThe reality is that the level of capacity and expertise of IP offices vary drastically from one GCC office to another. Electronic filing for trademark prosecution was first rolled out in KSA and is now expected in the UAE. However, the systems are completely different from one another. The lack of coordination between the two administrations has lead to the implementation of very different software solutions and the modules to be rolled out for registration. Further, patent examination by the GCC Patent Office has been carried out through contracts with external, foreign patent offices that are different from the offices with whom the UAE Patents Office contracts. This creates vast variances in results of opinions and procedures.\r\n\r\n&nbsp;\r\n\r\nThe myth is that most brand owners deal with the Middle East as one region, and do set their expectations under the assumption that a degree of harmony exists between the countries of this region. In fact, company budgets are planned in the Middle East based on feedback of the business units, pressure from distributors, or to counter IP infringements. Yet, the reality is that there is no certainty as to IP registration and to IP enforcement in the region and each jurisdiction has to be addressed separately.\r\n\r\nThe reality is that, from a business standpoint, it is reasonable to expect that complete harmony, at least at the registration level, exists in the GCC states. As four out of the six GCC states are very small markets, it becomes a burden to plan for separate IP protections processes for each, individual market. Brand owners cannot afford to draw up a strategy for the smaller markets and therefore the activity of registration and enforcement is substantially lower in those jurisdictions.\r\n\r\nTime lines for the prosecution of IP rights in each GCC state are worlds apart. If a local or regional business was to launch in the region, as it is usually the case that brands or products intend to cover the GCC region as a whole, it would be a challenge in itself to clear the product, let alone register it. The clearance can range from one working day to ‘N/A’, depending on the country. On the other hand, the registration process can range from six months to 30 months, depending on the country. If anything, the harmony and cooperation between IP offices is a necessity for the local entrepreneurs more so than to global IP right holders.\r\n\r\nThe region lacks cohesiveness and cooperation in the field of IP and the prosecution and enforcement of IP rights. Unfortunately, the common area of cooperation and harmonisation seems to be in the area of increasing official costs for IP registration. The GCC contains some of the highest official fees in the world for IP prosecution, with other states in the region eager to follow the same ‘success’ in charging high fees. Further, it costs more money to register in the UAE or in KSA that it would to cover most of Europe through the Community Trade Mark system.\r\n\r\nThe reality is that the purported harmonisation in legislation in the GCC does not achieve business advantages for IP right holders or entrepreneurs. What is needed is cooperation and the sharing of experiences in the areas of registration and enforcement in order to achieve advancement in IP protections and overcome many of the existing challenges in the IP arena.'),
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	(96647,5249,'content_description','The global harmonisation of Intellectual Property (“IP”) laws dictated by TRIPS Agreement of 1995, to align the national legislation of the World Trade Organization (“WTO”) member states to a common standard, was the first step in harmonisation of legislation in the Arab region. '),
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	(96649,5249,'pageSummary','The global harmonisation of Intellectual Property (“IP”) laws dictated by TRIPS Agreement of 1995, to align the national legislation of the World Trade Organization (“WTO”) member states to a common standard, was the first step in harmonisation of legislation in the Arab region.'),
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	(96661,5249,'_yoast_wpseo_metadesc','The global harmonisation of Intellectual Property (“IP”) laws dictated by TRIPS Agreement of 1995, to align the national legislation of the World Trade Organization (“WTO”) member states to a common standard, was the first step in harmonisation of legislation in the Arab region.'),
	(96662,5250,'content','October 2015\r\n\r\n<hr />\r\n\r\nThe Property Law retains many existing core principles of existing Abu Dhabi real property law, such as the requirement for all dealings in property to be registered, and confirms much of the procedural market practice, for example, the information required in respect of mortgage registration.\r\n\r\nHowever, its scope has been expanded to many aspects which were previously either unclear or unaddressed. The Property Law now tackles many issues which had previously been of concern to property financiers and mortgagees within the Abu Dhabi market, particularly in the areas of off plan financing and mortgage enforcement.\r\n\r\nThis article provides a brief overview of the Property Law relevant to property financiers.\r\n\r\n<strong>Financing Of Off Plan Units</strong>\r\n\r\nPrior to the Property Law, there was no clear legislation to safeguard property financiers lending on off plan sales in Abu Dhabi. As a consequence, whenever financing the purchase of off plan property, lenders had to accept the credit risk of the property developer in addition to that of the end buyer. Lenders were dependent on the developers maintaining an accurate interim registry to register the real estate rights in the property, without the involvement of an independent third party or supervisory authority. Further, lenders were also reliant on the contractual agreements by the developers to register the off plan property upon completion, leaving the lenders in a position where they were contractual mortgagees but without the benefit of rights in rem over the financed property pending registration of their mortgage.  Another source of concern was the limited statutory safeguards for property financiers against the delay, non-completion or defects of the property.\r\n\r\nThe Property Law introduces stringent supervision over property developers, including various requirements to be complied with by a property developer before consent is granted by the Department of Municipal Affairs (“Department”), the regulatory and supervisory authority over property developers, for a property developer to be licensed and for a particular project to be approved.\r\n\r\nThe law introduces the requirement for the maintenance of an escrow account prior to approval being given for a property developer to commence a project and make off plan sales.  Escrow accounts are to be operated by a bank or a financial institution that has been approved by the Department. Therefore banks / financial institutions intending to act as escrow agents may need to enter into agreement with the Department, confirming the terms of their appointment.\r\n\r\nThere are limitations on circumstances in which withdrawals by the property developer may be made from the escrow account, including the condition that the developer must have first met a 20% milestone in the development project. In case of failure by the developer to complete a project, the escrow account bank is obligated to safeguard the depositors and ensure the successful completion of the project within a specified period (including, if necessary, the appointment of another developer), failing which property financier and end buyers are granted priority (after the deduction of the account trustee’s expenses) to the funds in the escrow account. A notable development that further strengthens the position of financiers of off plan units is the establishment of the Initial Real Estate Register. This register shall record all dispositions over units sold off plan, aimed to cover the construction period. The Property Law confirms that dispositions over off plan units shall not be binding on any of the parties involved or be valid with respect to third parties unless they are registered in the Initial Real Estate Register in accordance with the Property Law. All such disposals related to real estate units sold off the plan which have been made before the enforcement of the provisions of the Property Law shall be entered into the Initial Real Estate Register within six (6) months of the date of its commencement, which period may be extended by Department.\r\n\r\nThe purchaser of a real estate right may also mortgage his contractual right on the real estate unit, sold off plan, in order to pay the price of the real estate unit, provided that the real estate unit is registered in the Initial Real Estate Register and that the mortgagee shall pay the loan amount directly to the escrow account.\r\n\r\nThe Property Law has also imposed an obligation on the developer to inform the lender/mortgagee in the event of a default by the purchaser/mortgagor under the sale and purchase agreement, so that remedial actions may be taken by the lender/mortgagee to avoid termination of the sale and purchase agreement by the developer due to the purchaser’s/mortgagor’s default.\r\n\r\nUnder the previous regime, developers had a contractual right to impose fees for registering a mortgage or transfer over property, the cost of which can be prohibitive to the debtor. The Property Law has abolished the right of developers to collect fees other than administrative expenses paid to third parties (subject to a maximum set by the Department).\r\n\r\nIt is encouraging to note that the developer is now obliged to transfer the real estate units sold off plan to the purchasers registered in the Initial Real Estate Register to the Real Estate Register, provided that the purchasers shall have paid the full purchase price of their units to the developer (or as per agreement) and in accordance with the procedures issued by the Department. Previously, this was not an automatic right, but something to be negotiated with developers.\r\n\r\nIt is also pertinent to note that the Property Law makes it a material breach by a developer not to link purchase price payments to construction progress. Such a material breach allows the  purchaser of the off plan unit to terminate the purchase contract between it and the developer. Consequently, it is preferable for a financier to link the drawdown of a facility to construction milestones, which makes linking of payment to construction an important factor in determining the amount of each drawdown by the debtor.\r\n\r\nMany of the above aspects were previously determined through contractual arrangements or cooperation agreements between the banks and developers, leading to a large variance in approach. The Property Law now ascertains the accepted position, which should provide consistency to banks lending for off plan properties in the future.\r\n\r\n<strong>Development Finance</strong>\r\n\r\nFor financing the development of a project a developer is generally prohibited from mortgaging the project land or any real estate right related to it unless the mortgage is granted for the purpose of financing the building of the project and provided that (i) the loan amount is to paid directly into the escrow account; (ii) the developer informs the purchaser(s) about the mortgage through notification in the sale and purchase agreeement; and (iii) the developer and mortgagee undertake to release the mortgage over the sold unit(s) once fully paid.\r\n\r\n<strong>Mortgages</strong>\r\n\r\nThe Property Law sets out the requirements and formalities of a mortgage, which are mostly in line with the current practice.\r\n\r\nThe Property Law confirms that if the mortgagee is a bank, finance company or financial institution, it has to be duly licensed registered with the Central Bank of the United Arab Emirates (the “Central Bank”) to engage in real estate financing in Abu Dhabi. This implies that an entity that is not a bank or financial institution may also act as mortgagee (as the law only introduces the condition for a Central Bank licence for financial institutions, it does mandate that a mortgagee must be a licensed financial institution). This, however, would be a departure from usual practice and may not be accepted by the Department in reality.\r\n\r\nAny mortgage not registered in the Real Estate Register or Initial Real Estate Register, as the case may be, in accordance with the procedures prescribed by the Department, including any agreement to such effect, shall be void. In-kind surety mortgages (i.e. those granted by third party’s in support of the primary debtor’s obligations) are expressly permitted.\r\n\r\nThe priority of mortgages has been clarified (in order of the time and date registered), although interestingly, if multiple mortgage applications are received at the same time, the mortgage is to be assigned the same serial number and the relevant creditors are to rank equally amongst each other. This could prove useful where financiers agree to share security in respect of a project providing an alternative to the usual security agent/intercreditor arrangements.\r\n\r\nThe Property Law allows for the transfer or assignment of a mortgage to another creditor subject to the consent of the mortgagor. The transfer must be recorded in the original deed of title and registered. This diverges from the current practice that a mortgage cannot be transferred to another creditor, save by way of cancellation of the current mortgage and registration of the fresh mortgage, and it is anticipated to be welcomed by the banks.\r\n\r\nThe Property Law now clearly specifies that the mortgagor shall have the right to use and administer his mortgaged property and collect its yield and revenue until it is foreclosed and sold at a public auction upon default of paying the debt. However, as a safeguard to the mortgagee, the court can order that the revenue from the mortgaged property be frozen with effect from the date of filing of the action to enforce the mortgage if it finds that the mortgagor is delaying payment of his debt to the detriment of the mortgagee. In the case of early payment, the mortgagee may levy a fee or fine for early repayment, provided that such fee or fine is commensurate with the extra expenses actually incurred by the mortgagee due to early repayment, and subject to the limits specified in Central Bank regulations.\r\n\r\nFor musataha, usufruct and long term leases, the Property Law permits the creation of mortgage over such rights where they last for a period of 10 years or more, in case of a musataha or usufruct and for a period of 25 years or more, in case of long term lease. In connection with mortgage over musataha and usufruct rights, the Property Law confirms that: (a) such mortgage may be created without prior approval of the owner of the property; and (b) the owner of such property shall not be permitted to mortgage such rights again, without approval of the musataha or usufruct holder (although it is permissible to agree otherwise).\r\n\r\nThe Property Law generally confirms that a registered mortgage is an execution deed and can be directly executed/enforced before the execution court. A mortgagee must serve written notice to the mortgagor and the guarantor, if any, by registered mail with the acknowledgment of receipt informing them of the default and requiring payment within a period of no less than 30 days from the date of the notice. However the Property Law also provides that enforcement of a registered mortgage starts with an attachment application to be submitted to the competent summary court after giving notice to the debtor, without having to obtain a court judgment that the debtor owes the debt. It appears that the Property Law considers registered mortgages as execution deeds, but requires mortgagees to enforce such deeds through the summary court (and not the execution court). The Property Law further confirms that mortgage agreements with “self-help” provisions shall be valid, however, the condition of self-help shall be void and therefore not enforceable.\r\n\r\nWhile direct enforcements have been successfully obtained through Abu Dhabi courts previously, the legislative confirmation of this procedure should be well received by financial institutions, both for the resultant time and cost benefits.\r\n\r\n<strong>Final Thoughts:</strong>\r\n\r\nThe changes introduced by the Property Law provide a much clearer framework for both borrower and lender. Its introduction should likely encourage more lending in the real estate sector in Abu Dhabi accordingly. With the commencement date of the legislation fast approaching, lenders will need to review their documents and processes to ensure conformity with the new law so that they are ready to serve their customers.'),
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	(96666,5250,'content_description','The Law No. 3 of 2015 on the Regulation of Real Estate Sector in the Emirate of Abu Dhabi (the “Property Law”) will take effect from January 2016. '),
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	(96668,5250,'pageSummary','The Law No. 3 of 2015 on the Regulation of Real Estate Sector in the Emirate of Abu Dhabi (the “Property Law”) will take effect from January 2016.'),
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	(96672,5250,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Azlin Ahmad'),
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	(96684,5250,'_yoast_wpseo_metadesc','The Law No. 3 of 2015 on the Regulation of Real Estate Sector in the Emirate of Abu Dhabi (the “Property Law”) will take effect from January 2016. Al Tamimi & Company provides a brief overview of the Property Law relevant to property financiers.'),
	(96685,5251,'content','October 2015\r\n\r\n<hr />\r\n\r\nMany socio-political commentators have attempted to explain the reasons for sport’s universal appeal but the fact that it is seen as a medium which transcends class divide and generations is a theory that most have found it hard to argue with. Given the mass global appeal of some sports, certain sportspersons now sit in the same category as movie stars and celebrities.\r\n\r\nMany countries in the Gulf Cooperation Council (“GCC”) have excellent air travel routes, are strategically positioned, have good infrastructure and an abundance of enthusiasm to stage large sporting events so it is no surprise that the sports markets in these countries are accelerating at a phenomenal rate. The GCC is now part of an established sports calendar for various sports events including  Formula 1 Grand Prix (Abu Dhabi and Bahrain), horse racing’s Dubai World Cup, the Dubai and Abu Dhabi Tours to lesser known but equally ambitious events, such as the FINA Swimming World Cup and Class 1 Powerboat World Championships. In addition, an increasing number of companies originating from the region are also household names, thanks to the marketing mediums offered through sports and sports events.  So, how easy is it to actually import a sporting event which traditionally has its roots in a foreign land and transpose it in the region?\r\n\r\nFor a new entrant wishing to enter in to the market, there are various legal issues to consider and for those that are not familiar with hosting sports events in the region, there can be challenges. This article focuses on those common issues that an organiser should take into account when preparing a sports event in the region with particular focus on the UAE. Each event and sport is different however and specialist advice should always be taken prior to embarking on organising such a project for the first time in the region.\r\n\r\n<strong>Corporate Vehicles</strong>\r\n\r\nWhen staging a sports event in the UAE, an organiser (typically the rights holder) needs to give careful consideration to the type of corporate entity that will be established to operate the event. Typically, if any onshore business is being conducted in the UAE, a Limited Liability company (“LLC”) is commonly seen as the most appropriate vehicle. An LLC requires a local shareholder who must hold a minimum of 51% of the share capital of the company but it is possible to enter into nominee arrangements with such shareholders whereby the actual shareholding and control of a company may be agreed with the local shareholder. The LLC is able to enter into agreements relating to operating the event and can employ staff. Setting up companies can take several weeks before they can operate and this should be taken into account in relation to any planning. Consideration also needs to be given to how the intellectual property rights for an event are protected. It is possible to incorporate a separate corporate vehicle which owns the rights on behalf of the organiser.\r\n\r\n<strong>Approvals </strong>\r\n\r\nDepending upon the type of event that is being planned, approvals, permits and/or licenses from relevant governing bodies will be required. In the UAE, any organiser is encouraged to have these in place before commencing any operational work in relation to the event and particularly before making any media statements. It is recommended that the relevant sports council for a particular Emirate in the UAE, such as the Abu Dhabi Sports Council or the Dubai Sports Council, be involved at an early stage in order to ensure support and facilitate any approval process. Approval from the appropriate governing body for a sport should also be obtained. Further, depending on the global appeal that an organiser would want to generate for the event, the relevant tourism authority for the particular Emirate should be consulted. More importantly, approval from a particular venue is also required and an agreement will need to be entered into securing the booking of the venue and dealing with various issues including but not limited to ticketing, sponsorship rights and sale of merchandising. Various other contractual arrangements will need to be entered into with other third party service providers which is discussed further below. If an event is likely to attract large crowds, the relevant Road Traffic Association, police and emergency services need to be consulted.\r\n\r\n<strong>Common Contractual Arrangements</strong>\r\n\r\nIt is very important for an organiser to engage with third parties who are familiar with the local know-how when organising an event. The UAE now boasts some credible event management companies and public relations companies but care should still be taken when selecting a service provider and entering into contracts.\r\n\r\nBecause of the globalisation of certain sports and the entry of leading specialists in the UAE, many contractual arrangements relating to sports are increasingly conforming to internationals standards. An organiser however, is warned that local considerations must always be taken into account when drafting and negotiating contracts in the region. Generally, sports related commercial contracts that are used in the UAE will often include familiar framework provisions such as recitals, definitions, representations and warranties, compliance with law, termination, force majeure, notices, confidentiality provisions, choice of law and dispute resolution clauses amongst other standard requirements. There is generally no requirement to notarise most commercial agreements with service providers or have them written in the Arabic language but this should always be individually checked on a case by case basis.\r\n\r\n<strong>Event Management</strong>\r\n\r\nHigh profile events come with further logistical issues and often organisers will appoint an event management company to deal with these issues. Further, the event typically needs to be hosted so that various stakeholders associated with it can maximise their returns from involvement with the event. The event management agreement is therefore a very important agreement and offers the organiser the best contractual protection. Often a great deal of planning and detail goes into managing an event and the agreement should be tailored to the peculiarities of a specific event and the host country. The agreement should take into account the rules of a sport’s governing body. Disputes may arise between any service provider and an organiser if the scope of the service provider’s work is not properly defined.\r\n\r\nIn addition to the contractual framework mentioned above, one can expect to see familiar provisions in corresponding agreements used in western jurisdictions. For example, one would expect to see provisions dealing with budget for management and accounting purposes. In addition, intellectual property provisions would also need to be well drafted and provide proper protection for the organiser. It is very important to ensure that such provisions effectively safeguard the relevant commercial rights connected with the event as the brand associated with an event can become the one of the organiser’s main assets. Whilst it is obvious, it cannot be overstated that the agreement should clearly set out the acceptable use of any trademarks and other intellectual property rights. Consideration should also be given to registering any trademarks in the host country.\r\n\r\nA typical event management agreement would also include confidentiality requirements, especially where high profile athletes are involved, and a requirement for the event management company to take out insurance and impose various obligations in relation to the venue. In terms of the venue, it is common to define the “venue” broadly to take into account the immediate vicinity surrounding the venue itself. This is useful in combating ambush marketing and dealing with merchandising and ticketing issues that can arise around the event arena.\r\n\r\nOne would also expect to see various representations and warranties given by each of the organiser and the event manager. From the organiser’s perspective, it would want to see warranties from the event manager which include that it will provide the services in a competent and timely manner, carry out services with due skill and care and in accordance with best industry standards and not do anything that might prejudice the event or its stakeholders. The manager would also be expected to be responsible for any subcontractors it engages in fulfillment of its obligations.  An organiser should ensure that any personnel of the event manager or a subcontractor that is employed in relation to any part of an event has appropriate visas in place and that the event manager is responsible for them.\r\n\r\n<strong>Participants</strong>\r\n\r\nAn event cannot take place without participants and whilst this is obvious, particular consideration needs to be given to the type of event that is being staged. Where established events are transposed into the UAE, such events are usually expected to include some well known athletes as competitors. Obviously this significantly raises media profile for the event and attracts broadcasters and sponsors.\r\n\r\nAthletes can expect to enter into participation agreements within which, they may, amongst other things, be expected to assign various image rights to the organiser and agree to attend various press conferences. The athlete would also be expected to comply with any title and tournament sponsor conditions for the event. Further, the athlete would be expected to comply with the rules of the event and any morality clauses, which basically state how an athlete is expected to behave whilst attending at and participating in an event.  This is particularly important in the UAE as an athlete would be expected to behave in a way not to offend local cultural sensitivities and the morality clauses would need to address these points. The participant would also be expected to give warranties and obligations in relation to compliance with anti doping regulations and testing requirements and match fixing.\r\n\r\n<strong>Media Partners</strong>\r\n\r\nAs with most successful events, it is essential that media partners buy into the concept and, in return, media partners often want to see value in being associated with a particular sports event. When staging a sports event in the UAE, focus should be given to the type of sponsor and form of advertising. In the UAE, there are social and cultural issues to consider. In general, the publication or dissemination of materials that cause harm to the interests of the state, the values of society, are contrary to public morals or inconsistent with proper conduct are prohibited. The laws in the UAE do not specifically differentiate between sponsorship and advertising and sponsorship is in fact regarded as advertising.\r\n\r\nAdvertising in the UAE is regulated by the National Media Council’s Advertising Regulations (Resolution No. 35 of 2012 Concerning the Standards of Advertisement Content in Mass Media). The Printing and Publications Law (Federal Law No 15 of 1980 Regarding Printed Matters and Publications) is also important and also regulates advertising in the UAE. In addition, Federal Decree No. 5 of 2012 on Combating Cybercrimes; and, (iv) Federal Law No. 3 of 1987 (the Penal Code) are relevant, amongst others.\r\n\r\nThe main principles under the Advertising Regulations are generally:\r\n<ul>\r\n 	<li>Respect for religion and political institutions: Advertising content must be respectful of all divine religions and not offend Islamic beliefs. It must not disrespect the regime in the UAE, its symbols or political institutions. Further, no content broadcast or published by a media corporation or outlet may disrespect the local and international policies of the UAE or disrespect the cultural heritage of the UAE.</li>\r\n</ul>\r\n<ul>\r\n 	<li>Prohibited products/services:  Advertising alcoholic beverages, tobacco, smoking and all banned products or services (including banned narcotics) is prohibited.</li>\r\n</ul>\r\n<ul>\r\n 	<li>Prohibited content: The publication of words and pictures that breach public morals is prohibited, as is the spread and dissemination of information that may prejudice children, women or any other members of society.</li>\r\n</ul>\r\n<ul>\r\n 	<li>Consumer protection: Compliance with the laws governing consumer protection and commercial activities is mandatory particularly in relation to anti-competitive practices and illegal monopolies.</li>\r\n</ul>\r\n<ul>\r\n 	<li>Health regulations: Advertising content relating to medicines or pharmaceutical products must comply with the rules set out by Cabinet Resolution No. 7 of 2007 Regarding Health Advertisements Regulation.</li>\r\n</ul>\r\nIf a global event such as the Olympic Games or FIFA World Cup were to be hosted in the UAE, it would be expected as part of the bidding requirements for the host country to put in place new regulations specifically dealing with relaxation of certain prohibitions on certain types of advertising in order to take into account the interests of the main sponsors for such events. Such event specific regulations however would only last for the duration of the event.\r\n\r\n<strong>Criminal Concerns - Match Fixing, Anti Doping And Money Laundering</strong>\r\n\r\nCurrent events regarding doping have hit the sporting world hard and have inflicted a long lasting smear on some sports. WADA (World Anti Doping Agency) has increasingly been in the headlines over the last few months and all worldwide sporting events and athletes are therefore subject to closer scrutiny and that includes any new events held in the UAE.\r\n\r\nThe National Anti-Doping Agency in the UAE has been established to comply with the approach and the requirements of the International Agency for anti-doping and has adopted the rules of the National Anti-Doping Agency. The National Doping Agency is aware of doing scandals, including those affecting Emirati athletes in the past and has stated that it is ready to take the fight against doping.\r\n\r\nAny allegation of doping, corruption or money laundering could potentially ruin the image of a sport or event and sponsors can be very quick to disassociate themselves which such scandals. Often, sponsorship and participation agreements would expect to include termination clauses in them in favour of the sponsor or organiser in the event of such circumstances The laws and rules of a particular sport would also be expected to take into account these issues and would require participants to abide by them or face sanctions.  In addition to these, the UAE has in place certain legislation to deal with such actions and as the international community cracks down on these acts, the UAE has also seen fit to take action.\r\n\r\nMoney laundering is now a global worldwide concern. In recognition of this, the UAE implemented a comprehensive Anti-Money Laundering &amp; Counter-Terrorist Financing Law (Federal Law No. 4 of 2002 as amended, which was last amended in 2014 and is supported by Regulations and Circulars issued by the Federal Cabinet and the Ministry of Justice as necessary.\r\n\r\nBribery and gambling are addressed by Federal Law No. 3 of 1987 as amended (“Penal Code”). Bribery that occurs in either public or private sectors are criminalised, with bribery in the private sector carrying a penalty of up to 5 years’ imprisonment.\r\n\r\nGambling is also prohibited by the Penal Code and is punishable by up to 3 years’ imprisonment, with up to 10 years’ imprisonment for those who open or manage a gambling establishment. This is particularly important to bear in mind when an event like horse racing in the UK is associated hand in hand with betting but in the UAE, betting at the races is forbidden.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nAs mentioned above, there are various considerations to take into account when organising an event in the UAE and this article has attempted to provide an overview of the common issues that may arise. There is no doubt that the growth of sports in the region is continuing at a rapid rate and because of that, players in the market need to ensure that they do not rush into committing to an event to later find out that there are difficulties that they didn’t anticipate and cannot overcome. As with all projects, it is wise to undertake a due diligence process at the start and obtain specialist advice in relation to hosting a sporting event in the UAE. It is also important to select the right contractual partners for an event as, if there is fallout, there can be animosity and distractions from successfully hosting an event.\r\n\r\n<em>Raj Pahuja (r.pahuja@tamimi.com) is a Senior Associate in the Corporate Commercial Practice and a key member of Al Tamimi’s dedicated Sports Law practice.  He has previously acted for the Bahrain International Circuit for several years advising on various aspects of its operation including the F1 Grand Prix, V8 Supercars and other events at the circuit.  Raj has also advised on the setting up of the Arsenal Soccer School in Bahrain.  Raj brings valuable diverse legal experience to the team which he has gained from working in London, Bahrain and the UAE.</em>'),
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	(96689,5251,'content_description','The sports events market in the United Arab Emirates (“UAE”) and the wider Gulf region is growing at a tremendous pace with the introduction of new sports and competitions increasing year by year. '),
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	(96691,5251,'pageSummary','The sports events market in the United Arab Emirates (“UAE”) and the wider Gulf region is growing at a tremendous pace with the introduction of new sports and competitions increasing year by year.'),
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	(96700,5252,'content','October 2015\r\n\r\n<hr />\r\n\r\nThe practical effect of the judgment is that it is arguably harder for Claimants to oppose an application for security on certain grounds.  Al Tamimi represented the Defendant (the applicant) in this case.\r\n\r\nThe costs of litigation can be high and the prospect of the winning party not being able to recover its legal expenses makes for a shallow victory. Most common law jurisdictions allow a Defendant to secure a payment into court from a Claimant, as a precondition to being permitted to continue to pursue a claim. The purpose of granting security for costs is to provide costs protection to a Defendant who is forced into litigation at the election of another.\r\n\r\nThe rules governing the grant of security in DIFC Court litigation are contained in Part 25 of the Rules of the DIFC Courts (“RDC”) and are closely modelled on the English Civil Procedure Rules. Essentially an applicant for security, usually the Defendant in proceedings, must establish that the Claimant’s circumstances fit within one of the conditions set out under RDC 25.102, and, that in all the circumstances of the case it would be just to make an order for security. The latter effectively grants the Court an unfettered discretion as to whether or not it ought to order payment by the Claimant of the security requested. However, satisfying at least one of the RDC 25.102 conditions is a mandatory pre-requisite to the grant of security.\r\n\r\nOf the six conditions, the two most frequently relied upon are conditions (1) and (6), which provide:\r\n\r\n“(1)  the Claimant is resident outside of the UAE\r\n\r\n......\r\n\r\n(6) the Claimant has taken steps in relation to his assets that would make it difficult to enforce an order for costs against him.”\r\n\r\nThe conditions reflect the circumstances in which a Defendant may typically be concerned about the prospects of recovering its costs against a Claimant, namely, where the Claimant does not reside in the jurisdiction where litigation is taking place and/or where the Claimant has dissipated assets to ensure that they remain beyond the reach of a Defendant seeking to enforce a costs order made in its favour.\r\n\r\nPrior to Adil, it was unclear as to whether Claimants were entitled to rely on their UAE Residence Visas alone to establish that they were resident in the UAE. This meant that Claimants, who ordinarily resided abroad, but who had secured a UAE Residence Visa on the back of previous engagements or business interests within the jurisdiction, could arguably defeat an application for security by relying solely on their UAE Residence Visa as proof of their residence within the UAE, even though they did not actually reside in the UAE. In clarifying the correct approach to be taken, the Court of Appeal in Adil held that a person’s UAE Residence Visa was not determinative of their place of residence and that it was an error to wrongly confuse or conflate a person’s immigration status with the place in which he habitually resided.\r\n\r\nIn Adil, the Court of Appeal held that the test of residence was not whether a person held a valid UAE Residence Visa, but rather whether or not they actually resided in the UAE. The question was to be determined by looking at all the facts in the round and not just the basis on which a person was granted leave to enter or remain in the UAE.\r\n\r\nFollowing the decision in Adil, in deciding whether or not a person is resident outside the UAE, the DIFC Courts should take into account a multitude of factors, including a Claimant’s length of stay, ties, interests and purpose in the UAE. This clarification is welcome news for Defendants justifiably concerned about the prospect of not being able to recover their costs from an unsuccessful Claimant who has a UAE Residence Visa but who in fact resides outside of the UAE. Such individuals are now more likely to fall within condition (1) of RDC Part 25.102.\r\n\r\nThe Court of Appeal’s interpretation in Adil of condition (6) of RDC Part 25.102 is also of significant practical importance. At first glance condition (6) appears to be targeted at Claimants who sell or transfer their assets with the specific intention of defeating any attempts to enforce against their assets at a time when litigation is already underway or at least in the contemplation of the parties. In Adil, at first instance (CFI-015-2014-3) the Claimant argued that the transfer of the only property he owned in Dubai to his wife some 14 months prior to the commencement of litigation could not amount to a step taken in relation to his assets within the meaning of condition (6) because it was a step taken prior to any litigation being contemplated, let alone commenced. The Court of Appeal rejected this argument and held that condition (6) was drafted in objective terms and was not dependent on the subjective intention of the Claimant.\r\n\r\nThe Court of Appeal held that in order to fall within condition (6) it was not necessary to show that a Claimant had sold or transferred assets with the specific intention of putting their assets beyond the reach of a particular judgment creditor. In other words, the Court of Appeal held that a Claimant’s motive in dealing with his assets was irrelevant for the purposes of condition (6). All that was required to be established was that the Claimant in question took a step in relation to his assets at some point and that the taking of that step made it difficult to enforce a costs award against him.\r\n\r\nOnce again, this aspect of the judgment is welcome news for Defendants seeking to protect themselves against sophisticated businessmen who choose to make themselves judgment proof well in advance of any litigation, on the assumption that sooner or later they are likely to be involved in litigation with the attendant risks of enforcement.\r\n\r\nNotwithstanding the Court of Appeal’s clarification, parties should continue to bear in mind that the Court ultimately retains an unfettered discretion to grant an order for security. Accordingly, satisfying one of the conditions under Part 25.102 will not of itself guarantee the grant of an order for security.\r\n\r\nNevertheless the overall result is the strengthening of an important safeguard designed to protect Defendants from the risk of being unable to recover costs from Claimants who do not prevail at trial.'),
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	(96710,5252,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Zeeshan Dhar'),
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	(96718,5252,'_yoast_wpseo_metadesc','The recent decision of the Dubai International Financial Centre (“DIFC”) Court of Appeal in Asif Adil v Frontline Development Partners Limited CA 005/2015 (issued on 15 September 2015) has brought much needed clarity to the principles governing the grant of security for costs orders in DIFC Court litigation.'),
	(96719,5253,'content','October 2015\r\n\r\n<hr />\r\n\r\nThis article will provide a general overview and explanation of the UAE criminal process in using a question and answer format and discuss a case before the Dubai criminal court relating to defamation under the Cyber Crimes Law.\r\n\r\n<strong>How do victims of crimes commence a criminal case? </strong>\r\n\r\nThe first step to initiate a criminal action is for the victim to file a complaint against the offender before the police. The complaint needs to set out the incident that occurred and sequence of events pertaining to the criminal offence. The complaint may be formal (in writing) and by way of an oral statement before the police which will be recorded in Arabic and signed by the complainant.\r\n\r\nThe complainant is required to file the complaint before the police station which has jurisdiction to hear the complaint (i.e. where the criminal offence or unlawful act took place).\r\n\r\n<strong>Will the victim be able to bring witnesses?</strong>\r\n\r\nThe complainant will be given the opportunity to call upon witnesses to testify in his or her favour before the police.\r\n\r\n<strong>Will the accused be questioned by the police and be given the opportunity to bring witnesses?</strong>\r\n\r\nFollowing the statement of the complainant, the police will contact the accused and take his or her statement. During this process, the accused may inform the police of potential witnesses who can testify in the accused’s favour and the police may accordingly summon defense witnesses and record their statements.\r\n\r\n<strong>What happens next?</strong>\r\n\r\nThe police will refer the complaint to relevant departments within the police station that are responsible for reviewing and opining complaints (i.e. electronic crimes departments, forensic medicine department).\r\n\r\nOnce the police have taken the statements of all parties and finalized their task, the complaint will be referred to the public prosecution, a judicial authority empowered to refer cases to the criminal court in the event the responsible prosecutor assigned to review the case finds that a criminal offence has taken place under the UAE Penal Code (Federal Law No. 3 of 1987).\r\n\r\n<strong>Will any legal fees be incurred for filing a complaint before the police?</strong>\r\n\r\nNo fees will need to be paid for filing a criminal complaint before the police. However if the complainant seeks the legal services of an attorney, then professional legal fees will need to be paid to the attorney.\r\n\r\n<strong>What is the role of the public prosecution?</strong>\r\n\r\nOnce the police have referred the matter to the public prosecutor, the prosecutor will summon the complainant and the accused separately for an interview and both parties may also be given the opportunity to bring witnesses to testify in their favour before the prosecutor.\r\n\r\nThe statements of the parties involved in the complaint will also be recorded in Arabic by the clerk assisting the prosecutor and signed by the parties.\r\n\r\nIf the prosecution finds that the criminal action is ready to be lodged, it will summon the accused to appear before the competent criminal court and provide the competent court with details of the crime(s) the accused has been charged with. If on the contrary it deems that there is no reason to pursue the action, it shall order that it be archived.\r\n\r\n<strong>How are crimes categorized under UAE law?</strong>\r\n\r\nCrimes under the UAE Penal Code are divided into three categories depending on the seriousness of the punishment that may be applied: contraventions (violations), misdemeanours, and felonies (the most serious). Below is a description of some of the punishments that these different level of crimes attract.\r\n\r\n<strong>What is the punishment for contraventions?</strong>\r\n\r\nA contravention is any act or omission punishable under the laws or regulations, by one or both of the two following penalties:\r\n<ul>\r\n 	<li>Custody for not less than twenty four hours and not more than ten days.</li>\r\n 	<li>A fine not exceeding one thousand Dirhams.</li>\r\n</ul>\r\n&nbsp;\r\n\r\n<strong>What is the punishment for misdemeanours?</strong>\r\n\r\nA misdemeanour is an offence that is punishable by one or more of the following penalties:\r\n<ul>\r\n 	<li>Confinement.</li>\r\n 	<li>Fine of more than a thousand Dirhams.</li>\r\n 	<li>Diyat (payment of ‘blood money’)</li>\r\n</ul>\r\n&nbsp;\r\n\r\n<strong>What is the punishment for felonies? </strong>\r\n\r\nFelonies are crimes punishable by one of the following penalties:\r\n<ul>\r\n 	<li>Diyat (payment of ‘blood money’)</li>\r\n 	<li>Temporary imprisonment</li>\r\n 	<li>Life imprisonment</li>\r\n 	<li>The Death penalty</li>\r\n</ul>\r\n&nbsp;\r\n\r\n<strong>Are the fines imposed by the criminal court payable to the victim?</strong>\r\n\r\nFines imposed by the criminal court are payable to the UAE government. They are not compensation for the victim (save for blood money claims), nor do they indicate the level of compensation to be afforded to the victim in any civil claim.\r\n\r\n<strong>What is the practice, structure and scope of the criminal courts?</strong>\r\n\r\nThe Dubai criminal court is empowered to imprison, fine and acquit accused persons charged with criminal offences.\r\n\r\nAll proceedings before Dubai courts are conducted in Arabic. Accordingly all the court pleadings will be drafted in Arabic and official Arabic translations of all the documents upon which parties seek to rely will be necessary.\r\n\r\nThe court comprises of three stages, the Court of First Instance, the Court of Appeal and the Cassation court (final appeal court). The misdemeanour Court of First Instance consists of a single judge while the felony court comprises three judges.\r\n\r\n<strong>Are the parties (offender and victim) required to attend the court hearings?</strong>\r\n\r\nAll persons accused of criminal offences must personally appear before the court if the offence for which they are accused of carries a prison sentence. Victims of crimes are not required to appear before the courts and are permitted to have their legal representatives attend the hearings on their behalf.\r\n\r\n<strong>What happens in the court hearings?</strong>\r\n\r\nThe trial starts by the judge naming the parties to the case and the charge against the accused will be recited.\r\n\r\nThe public prosecution as well as the victim (or the victim’s legal representative) will subsequently present their respective claims at the first hearing.\r\n\r\nThe accused person will be asked whether he or she admits or denies the charges.\r\n\r\nIf there is no admission of guilt the court will then set another hearing date to allow the accused to respond to the charges.\r\n\r\nIf the accused person (legally summoned) fails to appear before the court on the day specified in the summons, the court will issue a judgment in absentia.\r\n\r\n<strong>How are pleadings made before the court?</strong>\r\n\r\nThe victim and the accused have the right to file memoranda (or pleadings) which set out the claim, defence and all other evidence upon which the parties rely. Normally all pleadings submitted to the court are made by written submission, however the parties to the criminal action also have the right to present evidence by way of oral testimonies (i.e. from witnesses).\r\n\r\n<strong>How long will the hearings take?</strong>\r\n\r\nThere will be a series of hearings approximately 2-3 weeks apart during which parties formally appear and file memoranda. The number of hearings and hence the time it will take to set the matter down for judgment will depend on the length of time taken to serve the defendants with notice of the court proceedings and the complexity of the issues and memoranda that are filed.\r\n\r\n<strong>Will a court expert be appointed?</strong>\r\n\r\nIf the court believes there are any sufficiently technical areas in the case it will appoint an expert to review the case documents, meet with the parties and provide an expert report to the court.\r\n\r\n<strong>When will a judgment be handed down by the court?</strong>\r\n\r\nOnce all the pleadings have been exchanged, oral testimonies of witnesses are heard and the expert report has been submitted where applicable, the court will set the matter down for judgment.\r\n\r\n<strong>Are judgments of the First Instance Court subject to an appeal?</strong>\r\n\r\nThere is a right of appeal from the Dubai Court of First Instance to the Dubai Court of Appeal There is also a right of appeal from the Dubai Court of Appeal to the Dubai Court of Cassation.\r\n\r\nThe accused has 15 days to challenge the First Instance Court’s judgment before the Appeal Court and 30 days to appeal against the Appeal Court’s verdict before the Court of Cassation.\r\n\r\n<strong>Can the victim file an appeal against the lower court’s judgment?</strong>\r\n\r\nVictims cannot formally appeal the criminal court’s judgment per se as they are in principle represented by the state, (i.e. the prosecution) who will need to lodge an appeal on behalf of the plaintiff, unless the plaintiff files a joint civil action in the criminal proceedings.\r\n\r\n<strong>Example of a Criminal Case</strong>\r\n\r\nIn order to illustrate how the criminal process works, we provide details of a recent criminal matter handled by Al Tamimi involving the crime of defamation under UAE law.\r\n\r\n<strong>Background</strong>\r\n\r\nUnder UAE law, a criminal complaint can be made against an individual for libel and slander under Articles 371 to 380 of the UAE Penal Code (Federal Law No. 3 of 1987).\r\n\r\nThe victim would also be able to bring a civil claim for damages resulting from the libellous actions under Articles 282 to 298 of the UAE Civil Code (Federal Law No. 5 of 1985).\r\n\r\nIt is possible to make a civil claim for defamation against an individual without obtaining a criminal conviction, however a civil claim for defamation is generally difficult to prove and a criminal conviction would provide strong evidence against the defendant upon which to base the civil action.\r\n\r\nIn the UAE, plaintiffs do not need to prove financial loss in a criminal complaint for defamation.\r\n\r\nHowever, to establish a civil claim for damages, the plaintiff would need to prove financial loss as a direct result of the slanderous acts.\r\n\r\nIn this particular case Al Tamimi &amp; Company successfully represented a company (the “Plaintiff”) in a case against one of its ex-employees (the “Accused” or the “Defendant”) for defaming the Plaintiff and its management through emails.\r\n\r\n<strong>The Claim</strong>\r\n\r\nIn February 2014, the Plaintiff filed a criminal complaint before the Dubai police against its former employee for making defamatory and derogatory statements against the Plaintiff through emails sent to the Plaintiff, its employees and other members of the public.\r\n\r\nThe police transferred the complaint to the public prosecution for its review.\r\n\r\nIn March 2014, the Public Prosecution found that a crime was committed under Articles 1, 20 &amp; 42 of the UAE Cyber Crimes Law (Federal Law No. 5 of 2012) and transferred the case to the Misdemeanour court.\r\n\r\nArticle 20 and 42 of the Cyber Crimes Law state that any person who, by using an information network or an information technology tool, insults a third party or attributes to the third party an incident that may make the third party subject to punishment or contempt by others shall be punished by imprisonment and a fine (between AED 250,000 and 500,000) or either of these penalties, and may be deported.\r\n\r\nIn June 2014, the criminal Court of First Instance found that the Defendant made derogatory and defamatory statements against the Plaintiff via electronic means (emails) and such slanderous statements contained in his communication would have made the Plaintiff subject to contempt.\r\n\r\nThe First Instance Court ordered the Defendant to pay a fine of AED 300,000 and to be deported from the UAE. The court also ordered that the Plaintiff be compensated in the civil claim (which was filed by the Plaintiff in the midst of the criminal proceedings).\r\n\r\nThe Defendant subsequently appealed the lower court’s judgment before the Appeal Court. In September 2014, the Court of Appeal affirmed the lower court’s judgment.\r\n\r\nThe Defendant further challenged the judgment before the Court of Cassation in October 2014 on the ground that the judgment entailed a misapplication of law, deficient causation and prejudiced his rights. The Defendant further argued that he did not intend to harm the Plaintiff’s reputation and made the statements in good faith.\r\n\r\nThe Cassation Court rejected the Defendant’s allegations of good faith and virtuous purpose in publishing such statements and upheld the Appeal Court’s judgment.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nCriminal proceedings in the UAE can be complex and daunting, especially for expats who may not speak Arabic. The above overview should assist those contemplating making a criminal complaint or those subject to one. Although the process may be very different to that found in other jurisdictions, many of the fundamentals will be the same, such as the right of the accused to present a defence and the right to appeal.'),
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	(96737,5253,'_yoast_wpseo_metadesc','Al Tamimi & Company provide a general overview and explanation of the UAE criminal process in using a question and answer format and discuss a case before the Dubai criminal court relating to defamation under the Cyber Crimes Law.'),
	(96738,5254,'content','October 2015\r\n\r\n<hr />\r\n\r\nPart Five of the Commercial Transactions Law sets out provisions dealing with the bankruptcy procedure for traders who cease to pay their debts. This article will take a look at the bankruptcy provisions of the Commercial Transactions Law.\r\n\r\n<strong>Definition of Bankruptcy </strong>\r\n\r\nSection 1 of Article 645 of the Commercial Transactions Law provides:\r\n\r\n“Subject to the provisions of preventive composition, any trader who ceases to pay his commercial debts when due because of financial distress and credit issues may be declared bankrupt.”\r\n\r\nAccordingly, bankruptcy can be defined as a situation where a trader ceases to pay his commercial debts when due because of financial distress.\r\n\r\n“Trader” means an individual or an entity (such as a commercial company).\r\n\r\nUAE Courts consistently uphold the definition of bankruptcy in Article 645. The Federal Supreme Court has held: “A trader is subject to bankruptcy provisions if he is unable to pay his debts.” i.e. his debts must exceed his financial capacity. The Federal Supreme Court has also confirmed that a trader’s financial distress would warrant a declaration of bankruptcy (Federal Supreme Court – Appeal 236 of Judicial Year 9 – 12.07.88, which preceded the Commercial Transactions Law and was issued at a time when the courts applied the principles of comparative jurisprudence. See also Federal Supreme Court - Appeal 493 of Judicial Year 18 – 26.10.97).\r\n\r\n<strong>Conditions for Bankruptcy</strong>\r\n\r\nSection 3 of Article 645 provides:\r\n\r\n“Bankruptcy shall be declared by order of the competent civil court.”\r\n\r\nThere are three conditions for bankruptcy:\r\n<ul>\r\n 	<li>the debtor filing for bankruptcy must be a trader;</li>\r\n 	<li>the debtor must have ceased paying his commercial debts; and</li>\r\n 	<li>bankruptcy must be declared by order of the court.</li>\r\n</ul>\r\nTherefore, the person filing for bankruptcy must be a trader in the sense of being engaged in a commercial activity either as an individual or as a corporate entity (e.g. a company).\r\n\r\nThis aspect is particularly crucial due to the fact that individuals who are not engaged in trade or a commercial activity may also become unable to pay their debts due to insufficient financial means. Being non-traders, these individuals are subject to the insolvency provisions of Law No. 5 of 1984 ‘Concerning Civil Transactions’, as amended. This is because a person, other than a trader, who is unable to pay his debts is considered to be in a state of insolvency, not bankruptcy.\r\n\r\n<strong>Types of Bankruptcy  </strong>\r\n\r\n1. Simple Bankruptcy\r\n\r\nSimple bankruptcy occurs when a trader is unable to pay his debts due to circumstances beyond his control.\r\n\r\n2. Negligent Bankruptcy\r\n\r\nNegligent bankruptcy occurs when the debtor is unable to pay his debts due to personal expenses or spending large amounts of money in fictitious speculations. This form of bankruptcy is a misdemeanour punishable by two years imprisonment or a fine of up to AED 2,000 under Article 880 of the Commercial Transactions Law. Furthermore, according to Section 1 of Article 649 of the Commercial Transactions Law, a trader will be guilty of an offence of negligent bankruptcy if he fails to file for bankruptcy within thirty days from the date on which that trader ceases to pay his debts. This was confirmed by the Federal Supreme Court in Appeal 242-2010 where it held: “A trader shall file for bankruptcy if the condition set forth in Article 649 of the Commercial Transactions Law is satisfied i.e. a trader in financial distress being required to file for bankruptcy within thirty days of ceasing to pay his debts or else be considered guilty of negligent bankruptcy.”\r\n\r\n3. Fraudulent Bankruptcy\r\n\r\nA debtor is said to be fraudulently bankrupt and liable for imprisonment for a term not exceeding five years in the following circumstances:\r\n<ul>\r\n 	<li>the debtor has concealed, destroyed or altered, in whole or in part, its books or business records;</li>\r\n 	<li>the debtor has misappropriated or concealed part of its funds to the prejudice of its creditors;</li>\r\n 	<li>the debtor has knowingly acknowledged undue debts whether such acknowledgement is made in writing, given verbally, stated in the balance sheet or by abstention from submitting certain papers or explanations; or</li>\r\n 	<li>the debtor has fraudulently secured an arrangement with its creditor.</li>\r\n</ul>\r\nIf a company that fraudulently filed for bankruptcy is declared bankrupt by final order of the court, its directors, managers, or liquidators shall be liable to imprisonment for a term not exceeding five years if they commit one of the following acts:\r\n<ul>\r\n 	<li>the books of the company are concealed, destroyed or altered;</li>\r\n 	<li>the company’s funds are misappropriated or concealed, in whole or in part;</li>\r\n 	<li>undue debts of the company are knowingly acknowledged or documents that need to be submitted are withheld even though they are in possession;</li>\r\n 	<li>an arrangement with creditors is obtained fraudulently; or</li>\r\n 	<li>false information is declared on the subscribed or paid up capital, or fictitious profits are distributed.</li>\r\n</ul>\r\nIt should be noted that the form of bankruptcy has no bearing on the provisions applicable to bankruptcy or its effects. All forms of bankruptcy are governed by the same rules and procedures found in the Commercial Transactions Law. However, as noted, negligent and fraudulent bankruptcy would subject the debtor to imprisonment or a fine.\r\n\r\n<strong>Bankruptcy Order and the Competent Court  </strong>\r\n\r\nAs noted earlier, the conditions for bankruptcy include bankruptcy being declared by order of the competent court pursuant to Section 3 of Article 645 of the Commercial Transactions Law. A debtor is not automatically bankrupt despite having ceased to pay its debts; to be made bankrupt a court has to issue a bankruptcy order against the debtor. The bankruptcy order establishes a state of bankruptcy as an exception to the general rule that court rulings enforce rights.\r\n\r\nFurthermore, according to Section 4 of Article 645 of the UAE Commercial Transactions Law, unless otherwise provided by law, the cessation of payment or the use, by a trader, of irregular or illegal means for payment of its debts, does not amount to bankruptcy unless a bankruptcy order is issued (although some jurisdictions do recognise the notion of actual bankruptcy, the UAE does not).\r\n\r\nThe Civil Court of First Instance has jurisdiction over bankruptcy matters, with the particular court being the local court of the domicile of the debtor or the place where the debtor carries out its commercial activities. If the debtor owns several commercial establishments, the local court of the debtor’s principal place of business would have jurisdiction.\r\n\r\nFinally, cases of negligent bankruptcy fall under the jurisdiction of the criminal courts, rather than the civil courts according to Articles 418 and 419 of Law No. (3) of 1987 ‘Promulgating the Penal Code’, as amended.\r\n\r\n<strong>Who May File a Bankruptcy Application?</strong>\r\n\r\nArticle 647 of the Commercial Transactions Law lists the persons who may file a bankruptcy application as follows:\r\n\r\n<strong>1. The Debtor</strong>\r\n\r\nThe debtor is in the best position to determine it financial state and should therefore consider filing for bankruptcy if it is unable to pay its commercial debts.\r\n\r\n<strong>2. Creditors   </strong>\r\n\r\nEvery creditor, regardless of the size of its claim, may also apply for its debtor to be declared bankrupt, provided that the creditor submits proof that the debtor has ceased payment of its commercial debts.\r\n\r\n<strong>3. The Court</strong>\r\n\r\nThe court, at the request of the public prosecution department or on its own motion, may declare a debtor bankrupt.\r\n\r\nTaking a departure from the legal rule that courts cannot give relief not sought by the parties, the Commercial Transactions Law, exceptionally, allows the competent court to declare a debtor bankrupt of its own accord as bankruptcy rules form part of public policy.\r\n\r\nWhen entering judgment declaring a debtor bankrupt on its own accord, the court should forthwith notify the debtor pursuant to Article 648 of the UAE Commercial Transactions Law.\r\n\r\n<strong>The Effect of a Bankruptcy Order</strong>\r\n\r\nA bankruptcy order will have consequences for the debtor and its assets as well as the creditors. In relation to the debtor:\r\n<ul>\r\n 	<li>The bankruptcy judge will, at the request of the public prosecution department or the bankruptcy trustee, or on the judge’s own motion, order an attachment against the debtor if it has deliberately concealed its assets or books or has failed to comply with the bankruptcy judge’s orders. The judge may also put the debtor under surveillance. The debtor has the right to appeal the bankruptcy judge’s order of imprisonment or surveillance although an appeal would not act to stay enforcement of the imprisonment or surveillance order, according to Sections 1 and 2 of Article 682 of the Commercial Transactions Law.</li>\r\n</ul>\r\n<ul>\r\n 	<li>The debtor is prevented from administering and disposing assets.</li>\r\n</ul>\r\n<ul>\r\n 	<li>The debtor loses some professional and civil privileges, i.e. capacity to vote and capacity to be elected to parliamentary councils and chambers of commerce and industry.</li>\r\n</ul>\r\nThe main implication for creditors is that as soon as the bankruptcy order is issued, a group of creditors is established by operation of law. The group of creditors consists of persons who had valid claims on the debtor before the bankruptcy order was issued.\r\n\r\nThe bankruptcy order also acts to suspend individual proceedings and actions brought against the debtor by ordinary creditors or preferred creditors.\r\n\r\n<strong>Termination of Bankruptcy</strong>\r\n\r\nArticle 762 of the Commercial Transactions Law stipulates that bankruptcy is terminated after the schedule of debts referred to in Article 757 of the law has been satisfied. These debts would be uncontested and evidenced by proper documentation. At this stage, the debtor may apply to the bankruptcy judge for the bankruptcy to be terminated.\r\n\r\nThe court cannot enter judgment terminating the bankruptcy on grounds that the group of creditors’ interest has ceased until it has reviewed the report of the bankruptcy judge confirming the satisfaction of either of the two conditions set forth in Article 762 of the Commercial Transactions Law. Those conditions are the debtor satisfying all creditor claims submitted against the assets of the bankruptcy or lodging with the court or the bankruptcy trustee money sufficient to discharge those claims (principal, interest due and bankruptcy costs).\r\n\r\nBankruptcy is also terminated on approval of a deed of arrangement, after the bankruptcy judge invites creditors whose debts have been provisionally or finally accepted to attend deliberations on the deed of arrangement under – Section 1 of Article 764 of the Commercial Transactions Law.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nIn closing, I would point out that bankruptcy rules form part of public policy as they promote creditworthiness. This means that bankruptcy rules apply immediately to effects that have not become finally established which arise after the rules come into force, even from pre-existing legal positions, without the need for this to be specifically stated by law. This has been confirmed by rulings of the Court of Cassation and the Federal Supreme Court in bankruptcy cases.\r\n\r\nIn a future Law Update issue, I will discuss arrangements and corporate bankruptcy in the context of the Commercial Transactions Law.'),
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	(102813,5588,'pageSummary','It is exactly one year on since the International Atomic Energy Agency (‘IAEA’), the United Nations’ nuclear watchdog, verified that Iran had met its nuclear commitments under the Joint Comprehensive Plan of Action (‘JCPOA’).'),
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	(102811,5588,'content_description','It is exactly one year on since the International Atomic Energy Agency (‘IAEA’), the United Nations’ nuclear watchdog, verified that Iran had met its nuclear commitments under the Joint Comprehensive Plan of Action (‘JCPOA’). '),
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	(102853,5590,'content_description','In its Vision 2030, the Kingdom of Saudi Arabia (“KSA”) announced that “the second pillar of our vision is our determination to become a global investment powerhouse”. '),
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	(102855,5590,'pageSummary','In its Vision 2030, the Kingdom of Saudi Arabia (“KSA”) announced that “the second pillar of our vision is our determination to become a global investment powerhouse”.'),
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	(102868,5591,'content','February 2017\r\n\r\n<hr />\r\n<p class=\"p1\">The Commercial Registration Law provides guidance on the process for registration of companies, branches and establishments at the Ministry of Economy and Commerce allowing them to carry out commercial activities in Qatar. No natural or legal person may trade or establish a commercial outlet until such person has been registered in the Commercial Register.</p>\r\n<p class=\"p1\">The Commercial Registration Law applies to several categories of natural and legal persons, including:</p>\r\n\r\n<ul>\r\n 	<li>Individuals desiring to trade;</li>\r\n 	<li>Commercial companies;</li>\r\n 	<li>Natural and corporate persons practicing a commercial agency business;</li>\r\n 	<li>Branches of foreign companies; and</li>\r\n 	<li>Commercial representation offices.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p4\">In late 2014, Law no. 20 of 2014 was issued amending certain provisions of the Commercial Registration Law. The 2014 amendment to the Commercial Registration Law modified some aspects of the application and registration process, as well as the period of validity of the commercial registration. However, the most notable, and arguably problematic, amendment to the Commercial Registration Law was the amendment made to Article 3, whereby the following additional paragraph was embedded in the text of Article 3:</p>\r\n<p class=\"p1\"><em>‘In all cases, it is prohibited to create branches of Company with Trade Names that differ from that of the Company’s Trade Name. It is also prohibited to add activities that differ from the activities of the Company as set out in its Memorandum of Incorporation’.</em></p>\r\n<p class=\"p1\">Law no. 20 of 2014 had set out a six month period during which companies would be required to rectify their position in accordance with these amendments, particularly that of Article 3. However, almost two years after the coming into force of the 2014 amendments, the grace period for companies to comply with the amended provisions is still being extended. The latest extension of the grace period ended on the 8 January 2017.</p>\r\n<p class=\"p1\"><span class=\"s1\"> The amendments made to Article 3 of the Commercial Registration Law have had major implications not only on branches of local companies registered in the Companies Registrar in Qatar, but also to foreign franchisors doing business in Qatar through their Qatari local agents. </span></p>\r\n<p class=\"p5\"><strong>The Previous Practice and the Implications of the Amendments to Article 3 </strong></p>\r\n<p class=\"p1\">Prior to the 2014 amendments to the Commercial Registration Law, foreign brand owners wishing to establish a presence in Qatar would often enter into a franchise or retail agreement with a local specialised Qatari agent or distributor, by virtue of which the Qatari agent or distributor would be able to establish a branch of its company in the name of the foreign brand and use the foreign brand’s trademark as a signboard for the branch’s retail shop or office. Such a branch would not have legal personality and could therefore cease to exist in the event of termination of the relevant franchise or retail agreement. The foregoing scheme offered foreign brand owners an efficient means of operating in Qatar without jeopardising the brand or its trademark.</p>\r\n<p class=\"p1\">With the 2014 amendments, the aforementioned scheme is no longer possible and a large number of Qatari agents or distributors, who had operated under this scheme for many years and established tens of branches, found themselves at a loss as to how to rectify their position in line with the amended Article 3. The reason being that once the trade name of the branch no longer holds the name of the foreign brand, the branch will not be able to use the brand’s trademark and signage on its signboards or in its publishing materials.</p>\r\n<p class=\"p6\"><span class=\"s2\"><strong>Proposed Solutions within the Parameters of the Law</strong></span></p>\r\n<p class=\"p1\">The Ministry has now provided companies with two options in order to comply with the prohibitions inserted in the text of the amended Article 3.</p>\r\n\r\n<ul>\r\n 	<li><strong>Setting up a new company in the name of the brand</strong></li>\r\n</ul>\r\n<p class=\"p4\"><span class=\"s3\">One of the options proposed by the Ministry is to transfer the assets of each branch to a newly established company registered with a trade name similar to that of the foreign brand. </span></p>\r\n<p class=\"p1\">The advantages of this option may include:</p>\r\n\r\n<ul>\r\n 	<li>The Company will have a separate legal personality, as opposed to a branch;</li>\r\n 	<li>The Company established with the trade name of the brand will be able to register branches of the same brand holding the same trade name.</li>\r\n</ul>\r\n<p class=\"p4\">On the other hand, this option has been criticised as being detrimental to the foreign brand and trademark owners. This is because foreign brand owners are reluctant to allow a company to be registered in Qatar under their name, since there is no guarantee that the Qatari agent or distributor using the trade name of the foreign brand will be dissolved and/or will cease to use the name and trademark of the brand owner once the contractual relationship between the foreign brand owner and the Qatari agent or distributor is terminated.</p>\r\n\r\n<ul>\r\n 	<li><strong>Registering the brand name of the branch in the name of the foreign brand</strong></li>\r\n</ul>\r\n<p class=\"p4\">The Ministry has now allowed companies to register a brand name of a company or branch that is different from that of the company or branch’s trade name. Under this scenario, the branch will hold the trade name of the Qatari agent or distributor’s company and a different brand name similar to the foreign brand.</p>\r\n<p class=\"p1\">In order to implement this option, the Qatari agent or distributor wishing to establish a branch with a brand name similar to that of a foreign brand must present:</p>\r\n\r\n<ul>\r\n 	<li>An authenticated license agreement for the use of the trademark of the foreign brand. Such an agreement must be entered into between the registered trademark owner in Qatar and the licensee (being the Qatari agent or distributor). This should be in line with the requirements set out in the Law No. 9 of 2002 with respect to trademarks, trade indications, trade names, geographical indications and industrial designs and templates (the “Trademarks Law”). Further, such a license agreement must be registered in the Intellectual Property Protection department at the Ministry as stipulated in the Trademarks Law.</li>\r\n 	<li>A no objection certificate issued from the trademark owner allowing the branch to use the trademark on the signboards of its retail outlet or office.</li>\r\n</ul>\r\n<p class=\"p4\">Whilst, obtaining the aforementioned license agreement and no objection certificate may be a costly and time consuming process; the license agreement may be terminated and revoked by the trademark owner at any time in accordance with its terms. Hence, the foreign brand will be afforded the necessary protection and will, therefore, more likely be willing to grant the rights to use the trademark to an experienced local Qatari company.</p>\r\n<p class=\"p1\"><span class=\"s1\"> While both options appear to be viable alternatives to replace the previous practice, there is still a level of uncertainty regarding the mechanism of implementation of either option. Agents and distributors who are operating several brands under one company will be faced with an overwhelming task in reconciling or restructuring their branches under either of the aforementioned options. </span></p>\r\n<p class=\"p1\"><em>Al Tamimi &amp; Company’s Corporate Structuring Team in Qatar team regularly advises on the efficient restructuring and remodelling of businesses . For further information please contact Ahmed Jaafir (a.jaafir@tamimi.com) or Tala Shomar (t.shomar@tamimi.com).</em></p>'),
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	(102848,5589,'_yoast_wpseo_metadesc','Kuwait’s aspirations to attract foreign investors commenced with the establishment of the Kuwait Direct Investment Promotion Authority (“KDIPA”), which allows for the issuance of an investment license permitting the establishment of a ‘wholly foreign-owned’ Kuwait entity.'),
	(102849,5590,'content','February 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\">This emphasizes that KSA is working to diversify its income resources to promote a sustainable economy as the country transitions away from dependence on oil. It also reflects KSA’s eagerness to open its investment doors to the international market. The Saudi Vision 2030 and the National Transformation Plan (launched by the Saudi Government as part of the implementation of the Saudi Vision 2030) include a strong emphasis on increased private sector involvement and direct foreign investment in KSA.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> However, the unsettled political environment around the Middle East, especially in Yemen, has caused some interested investors to re-evaluate their potential investment plans in KSA. Despite the challenges brought by low global energy prices, we consider that the KSA market continues to offer a wide range of business opportunities. By announcing Vision 2030 as its roadmap to diversify its economy, KSA has taken bold steps to address its dependence on oil, and also begin to open the market in relation to other business fields such as trade, renewable energy, manufacturing, education and engineering activities. </span></p>\r\n<p class=\"p1\">To support the aims of Vision 2030, the Saudi Arabian General Investment Authority (“SAGIA”) has been updating its policies and regulations concerning foreign investment, relaxing a number of barriers to direct foreign investment. Recently, SAGIA removed several foreign investment restrictions, and has expedited the procedures for obtaining foreign investment licenses.</p>\r\n<p class=\"p1\">This article will be divided into four sections. The first section provides an overview about foreign investment in KSA and the most recent updates in this respect. We then set out the criteria required for qualifying to obtain a foreign investment license within 10 minutes (the “Instant License”), which SAGIA has only recently instituted (in January this year). We then comment on the practical implications of the Instant License and provide some closing comments.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Foreign Investment Overview in KSA</strong></span></p>\r\n<p class=\"p1\">On April 2000, SAGIA was established to oversee foreign investment in KSA. The primary vision of SAGIA is “<em>empowering differentiated investments for a sustainable economy</em>”. SAGIA is usually the first regulatory authority that foreign investors would encounter, as it is the primary licensing authority for those investors seeking to establish a business in KSA.</p>\r\n<p class=\"p1\">SAGIA, in its efforts to promote the Vision 2030 goals, is actively trying to create a suitable licensing environment to encourage and help foreign investors successfully meet their business goals and ultimately contribute towards the KSA economy. Therefore, it has opened investment opportunities in many business fields for foreign investments (although there continue to be certain exceptions that are restricted to Saudi investors, such as oil exploration or real estate investment in Makkah and Medinah).</p>\r\n<p class=\"p1\">It has also opened the door for foreign investors to own 100% of the share capital of their investment in KSA across most business activities, subject to meeting certain criteria. For example, it recently announced that foreign investors could now establish 100% foreign owned trading entities if they meet SAGIA criteria. Prior to this, foreign investors were required to have a Saudi shareholder owning at least 25% of the share capital, which was not acceptable within the corporate structures of many foreign investors. SAGIA also announced that it would soon allow investors seeking to establish engineering consultancy firms to own 100% of their entities in KSA – the criteria for the engineering exemption have not been released yet by SAGIA.</p>\r\n<p class=\"p1\"><span class=\"s1\"> SAGIA’s progressive development has also included improvements to investment license procedures. The requirements and procedures for obtaining a foreign investment license used to be overly complicated and, in many cases, frustratingly lengthy. It was normal for foreign investment license approval to take over 6 months with hand submission of all documents to SAGIA being required. </span></p>\r\n<p class=\"p1\"><span class=\"s3\"> First SAGIA introduced the fast-track concept. Investors could pay a fee to enjoy a faster processing time for their investment license applications. After that, the fee was abolished and some investors were given preferential treatment at SAGIA’s discretion (usually for larger foreign investors with an excellent international reputation that could contribute skills and revenue into the Saudi economy). As SAGIA’s processing times have improved (the time from application to receipt of license is now usually around two weeks), the fast-track concept fell away. </span></p>\r\n<p class=\"p1\"><span class=\"s3\"> In January 2017, SAGIA initiated the Instant License service, announcing on its website as “<em>Instant License: Get Yours [the investment license] in Less than 10 Minutes</em>”. The Instant License service is reserved for large listed entities - the criteria is listed below. We would like to note that foreign investors that do not qualify for the Instant License can still apply for the normal foreign investment license.</span></p>\r\n<p class=\"p1\">Additionally, while SAGIA has not stipulated a particular business activity that could benefit from the Instant License, officials in SAGIA have confirmed to us that this service targets trading entities.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Criteria for Obtaining an Instant License </strong></span></p>\r\n<p class=\"p1\">To qualify for the Instant License, the investor must tick the following boxes:</p>\r\n\r\n<ul>\r\n 	<li>The investor or one of its shareholders is listed on an international or local stock market.</li>\r\n 	<li>In addition to 1 above, one of the following must also be achieved:</li>\r\n</ul>\r\n<ul>\r\n 	<li>The revenues for the investor or the parent company in the last two years should exceed Saudi Riyals 70 million (USD$18,66 million). Such revenues should be reflected in audited financial statements.</li>\r\n 	<li>The assets for the investor or one of its shareholders should exceed SAR100 million (USD$26,66 million).</li>\r\n 	<li>The net profit for the investor or the parent company should exceed SAR50 million (USD 13.33 million).</li>\r\n 	<li>The investor or the parent company should own three regional branches outside of its jurisdiction.</li>\r\n 	<li>The exported products by the investor in its country should be at least 50% of the total investor’s production.</li>\r\n 	<li>The investor should have over 10,000 employees.</li>\r\n 	<li>The investor should own a patent related to the activity, which the investor wishes to carry out in KSA.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p8\">To provide evidence in respect to revenues and net profit, submitting audited financial statements is sufficient. Applicants are also required to submit a company profile setting out ownership structure, remarkable achievements, etc. Additionally, a business plan should be submitted that should include, amongst other things, short and long term plans for the business, how the business could contribute to KSA economy growth, how the business will meet its Saudisation obligations, and how the business intends to train its Saudi workforce.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Conclusion</strong></span></p>\r\n<p class=\"p1\">From a practical perspective, it is apparent that SAGIA is targeting large entities to invest in KSA. This does not in any way suggest that small to medium size entities would be rejected, as smaller entities continue to establish a presence in the Kingdom.</p>\r\n<p class=\"p1\">SAGIA does not have a clear-cut definition of what is a “large entity”, although the criteria above give an indication of the revenues, assets and business size that are required.</p>\r\n<p class=\"p1\">SAGIA has also started giving due consideration to not only the immediate shareholders of the license applicant, but also of its respective shareholders and parent companies as applicable. This means that SAGIA can take other group companies into account, rather than just the immediate parent of the KSA entity, when assessing the business plans and ability of the foreign investor to contribute to the Saudi economy. As a result, presentation of the license application documents is extremely important. Moreover, it is important that the documents emphasize the history and achievements of the applicant, its shareholders, parent companies, and subsidiaries as being suitable. The documents must clearly outline the tangible contribution that the applicant, supported by those other indirectly related entities/individuals, would add to the Saudi economy.</p>\r\n<p class=\"p1\">In addition, from our daily interactions with SAGIA, it is clear that the authority conducts online research before approving any application to gather as much information as possible about the applicant. Once again, presentation of the application documents is a key component of the licensing process, and effort should be made to make this job as easy as possible for SAGIA.</p>\r\n<p class=\"p1\">In summary, SAGIA as a licensing authority is the gateway for foreign investors to enter KSA. Recently, SAGIA has reduced the restrictions that apply to foreign investors to enhance the investment environment. SAGIA is also focusing on attracting large foreign entities, leading to the establishment of the Instant License service that allow eligible investors to obtain their investment licenses expeditiously.</p>\r\n<p class=\"p1\">The presentation of complete, accurate and well thought out documents to SAGIA will assist the authority in its decision making process. It is recommended that investors obtain professional advice before making a submission to give the applicant the best chance of SAGIA approval.</p>\r\n<p class=\"p1\"><em>Al Tamimi &amp; Company’s Corporate Structuring team regularly advises on set up of foreign entities in KSA. For further information please contact Hesham Al Homoud, Head of Corporate Structuring in Saudi Arabia (h.alhomoud@tamimi.com), Matthew Kelleher, Senior Associate (m.Kelleher@tamimi.com) ; and, Ohod Wasfi, Associate (o.wasfi@tamimi.com), or any other member of Al Tamimi’s specialist corporate structuring team in KSA.</em></p>'),
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	(102836,5589,'pageSummary','Within the past decade, Kuwait has steadily issued new laws in a bid to modernise its legislative environment.'),
	(102835,5589,'_content_description','field_59b641c07f473'),
	(102832,5589,'lawUpdateArticleMonth','5563'),
	(102833,5589,'_lawUpdateArticleMonth','field_59da2a396b063'),
	(102834,5589,'content_description','Within the past decade, Kuwait has steadily issued new laws in a bid to modernise its legislative environment. '),
	(102830,5589,'content','February 2017\r\n\r\n<hr />\r\n<p class=\"p1\">Kuwait’s aspirations to attract foreign investors commenced with the establishment of the Kuwait Direct Investment Promotion Authority (“KDIPA”), which allows for the issuance of an investment license permitting the establishment of a ‘wholly foreign-owned’ Kuwait entity.</p>\r\n<p class=\"p1\"><span class=\"s2\"> This progressive trend has been sustained with the introduction of Law. No 49 of 2016 (the “New Tenders Law”) which superseded Law No. 37 of 1964. The modernization of Kuwait’s laws and regulations, together with increasing flexibility in welcoming foreign investors is facilitating the ease of doing business in Kuwait and has been a part of his Highness the Emir’s vision to develop Kuwait into a financial and commercial hub by the year 2040. </span></p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>Priority of the National Industry and Local Contractors</strong></span></p>\r\n<p class=\"p1\">Increasing foreign investment is not the sole concern for Kuwait, as this objective must be achieved also in coherence with the aim to progressing Kuwait both economically and technologically. The New Tenders Law, alongside Law No. 116 of 2013 (the “Direct Investment Law”), which focused on educating the local population and advancing the local economy, was introduced with this purpose in mind.</p>\r\n<p class=\"p1\">For example; Article 87 of the New Tenders Law provides that a foreign contractor is now obliged to purchase no less than 30% of its contractual requirements from the local market or from local suppliers registered in the ‘suppliers’ classification’ lists at the Public Tenders Central Bureau (the “Bureau”), formerly known as the Central Tenders Committee (the “CTC”). Moreover, it shall also manage compliance of foreign contractors by awarding not less than 30% of the contracting works awarded to local contractors registered in the contractors’ classification lists at the Bureau. These steps enhance the general position of the local market its local contractors.</p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>Bidding by a Foreign Entity</strong></span></p>\r\n<p class=\"p1\">Article 31 of the New Tenders Law states that the party submitting a bid for a public or limited tender or in the events of enquiries and direct contracting, must comply with the following requirements as set forth in Article 31 of the New Tenders Law:</p>\r\n<p class=\"p1\"><em>“First: To be a Kuwaiti, individual or company, registered in the commercial register.</em></p>\r\n<p class=\"p1\"><em> Second: to be registered in the suppliers or contractors register, or as per the nature of the tender, enquiry or direct contract.” </em></p>\r\n<p class=\"p1\">On the other hand, Article 31 of the New Tenders Law simulatenously provides for an exemption which changes the landscape of public tenders. According to Article 31 of the New Tenders Law, this article permits a foreigner to be a potential bidder. At present, Decree Law No.68 of 1980 (the “Commercial Law”) requires that a Kuwaiti partner or local agent facilitate such bids; in light of this, it remains yet to be seen, how this will fit in with the New Tenders Law which suggests the contrary. It is unclear how this new provision will be implemented and forthcoming issuance of the Executive Regulations pertaining to the New Tenders Law are awaited in anticipation of how any such conflicting provisions shall work in a practical context. It is worth noting that despite not needing an agent to bid, the foreign bidder is still in need of a local agent or partner for the execution phase of the project in order to sponsor the employees.</p>\r\n<p class=\"p1\">It should also be noted that the aforementioned Article 31 is subject to the offering being limited to Kuwaiti companies in the event of standard works or for which sufficient specializations are available in the local market. On the other hand, the offering may be confined to foreign companies if the concerned entity requests such and upon the need for executing specified works requiring technical specializations that are unavailable in sufficient numbers locally.</p>\r\n<p class=\"p1\"><span class=\"s1\"> Furthermore, under the previous Tenders Law, delays occurred due to complications arising from appointing an agent and registering such agencies in order to enable a foreign entity to tender for works. In the past, a foreign entity was required to have an agent (i) that was registered in the Commercial Register and with the Chamber of Commerce and Industry (the “MOCI”); (ii) that was registered with the CTC by an official notarized document; and (iii) that had completed the pre-qualification process for the tender in question. Pre-qualification was achieved by submitting documents to the CTC establishing the applicant company as being able to perform the contract. Whilst a prequalification procedure still takes place under the New Tenders Law, the New Tenders Law along with the Direct Investment Law seeks to increase flexibility within the tendering process.</span></p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>Exemptions</strong></span></p>\r\n<p class=\"p1\">Public entities that are subject to the provisions of the New Tenders Law may contract for any of the purposes set forth under this law without permission from the Public Tenders Central Bureau (the “Bureau”), as long as the contract value does not exceed KD 75,000 (Seventy Five Thousand Kuwaiti Dinar). The contract value of this exemption dramatically increased from KD 5,000 being the cap set out in the previous tenders law.</p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>Public Tenders Central Bureau Dynamics</strong></span></p>\r\n<p class=\"p1\">This Bureau is responsible for undertaking the procedures concerned with the public procurement process, starting with its planning up to the completion of the contract all in accordance with the New Tenders Law.</p>\r\n<p class=\"p1\">The Bureau will consist of seven members, from whom the chairman and his deputy will be elected. <strong> </strong></p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>Bidder Grievances</strong></span></p>\r\n<p class=\"p1\">Pursuant to the New Tenders Law, any bidder who sustains loss or damage as a result of a breach by any tenderer or the entity managing the procurement process, may submit a complaint to the entity managing the procurement process at any stage, requesting that it reconsider the procedure causing the damage or that remedial action be taken.</p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>Criteria for Public Tenders</strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">With the establishment of the New Tenders Law, Kuwait has established an organised criteria for potential bidders to follow. However, any company which appears to have issues with completing existing projects will not be awarded new projects until such issues are resolved and the project as a whole is completed. </span></p>\r\n<p class=\"p1\"><span class=\"s2\"> In addition, the previous tenders law did not recognize or regulate the technical evaluation of the various project tenders. Now, under the New Tenders Law, a ‘points system’ is now used by the Bureau in allocating project work of a technical nature to a selected bidder based upon successful attainment against a specified ‘points based’ criterion. </span></p>\r\n<p class=\"p3\"><span class=\"s3\"><strong>Conclusion</strong></span></p>\r\n<p class=\"p1\">The New Tenders Law illustrates Kuwait’s ambitions to expand within the international commercial market by allowing more opportunity for foreign investors while simultaneously providing a dependable market for the local population to cultivate growth potential. Kuwait eagerly awaits issuance of the Executive Regulations that shall further elucidate how these goals shall be met in a more practical context.</p>'),
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	(102829,5588,'_yoast_wpseo_metadesc','It is exactly one year on since the International Atomic Energy Agency (‘IAEA’), the United Nations’ nuclear watchdog, verified that Iran had met its nuclear commitments under the Joint Comprehensive Plan of Action (‘JCPOA’).'),
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	(96593,5246,'_content','field_59b649b5c8b2b'),
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	(96596,5246,'content_description','Bank finance is often required to fund construction projects and this means that both the contractor and the construction contract must be ‘bankable’.'),
	(96597,5246,'_content_description','field_59b641c07f473'),
	(96598,5246,'pageSummary','Bank finance is often required to fund construction projects and this means that both the contractor and the construction contract must be ‘bankable’.'),
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	(96600,5246,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-11/october-5/what-makes-a-construction-contract-bankable.html'),
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	(96610,5246,'_yoast_wpseo_metadesc','Al Tamimi & Company sets out some generic but key requirements that owners should ensure their construction contract possess, and which lenders should look for when deciding to lend, to ensure that the construction contract properly protects their investment.'),
	(96611,5247,'content','October 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">The thrust of the changes, which come into effect on 1<sup>st</sup> January 2016, is to provide for a more flexible work environment for employees. In addition greater protection is provided to new employees to ensure that what they are promised by way of a pay offer is actually delivered when they commence work.</p>\r\n<p class=\"MsoNormal\">This article examines the main aspects of the new regulations and the likely impact they will have on employers.</p>\r\n<strong>Employment contract consistent with offer letter</strong>\r\n<p class=\"MsoNoSpacing\">Ministerial Decree 764 of 2015 provides that MOL approval to admit a non-national employee (i.e. the first step in obtaining an entry permit to enter the UAE and obtain a residency visa) will not be granted until an ‘employment offer that conforms with the Standard Employment Contract’ is signed by the employee and lodged with the MOL prior to arrival/commencement.</p>\r\n<p class=\"MsoNoSpacing\">It is our understanding that the MOL will issue a template offer letter (“<strong>Offer Letter</strong>”) to be used for these purposes and that the existing MOL labour contract- the short two page contract (“<strong>MOL Contract</strong>”)- will not be modified.</p>\r\n<p class=\"MsoNoSpacing\">The decree goes on to state that the terms as per the Offer Letter may not be altered when completing the MOL Contract unless the terms are more beneficial to the employee. It also states that no additional terms can be included in the MOL Contract unless they are consistent with the MOL’s requirements and do not conflict with other clauses in the MOL Contract.</p>\r\n<p class=\"MsoNoSpacing\">The clear aim of this decree is to ensure that employees recruited abroad are not enticed to the UAE on false promises- the entry visa will not be issued until the Offer Letter is signed by the employee and submitted to the MOL and thereafter the MOL Contract will have to match the Offer Letter. Due to the operation of the Wage Protection System (which is managed by the MOL) the employer is obliged to pay the salary as per the MOL Contract (or a greater amount) to the employee’s bank account each month. So the MOL can now effectively ensure that the salary terms offered to an employee will be delivered when he gets to the UAE.</p>\r\n<p class=\"MsoNoSpacing\">It is envisaged that the Offer Letter will be quite minimalist and contain just the key terms- salary, notice, annual leave and termination provisions. Many employers will probably wish to issue their own offer letter setting out further details (e.g. references, other working conditions, Company ethos) which is acceptable save that any provision that conflicts with the Offer Letter will have no effect.</p>\r\n<p class=\"MsoNoSpacing\">An interesting question arises in relation to terms not included in the Offer Letter which place an added obligation on the employee but which are not conflicting with the key Offer Letter terms- e.g. post termination restrictions on the employee, intellectual property and confidentiality provisions.  Currently it is normal to include such terms in the employer’s own contract (“<strong>Company Contract</strong>”) and in some cases to insert a non-compete clause in the MOL Contract.</p>\r\n<p class=\"MsoNoSpacing\">On the basis that the MOL decree appears to be focused on salary and benefits and the fact that the Labour Court will consider both the MOL Contract and the Company Contract together, it is our view that an employer can continue to place these additional obligations on an employee by use of a Company Contract.</p>\r\n<p class=\"MsoNormal\"><strong>Termination</strong></p>\r\n<p class=\"MsoNoSpacing\">The second decree (765 of 2015) deals with termination of employment.</p>\r\n<p class=\"MsoNoSpacing\">The main points to note are as follows with the existing position in brackets for comparison purposes:</p>\r\n\r\n<table class=\"MsoTableGrid\" border=\"1\" cellspacing=\"0\" cellpadding=\"0\">\r\n<tbody>\r\n<tr>\r\n<td valign=\"top\" width=\"161\">\r\n<p class=\"MsoNoSpacing\"><strong>Item</strong></p>\r\n</td>\r\n<td valign=\"top\" width=\"170\">\r\n<p class=\"MsoNoSpacing\"><strong>Fixed term contract</strong></p>\r\n</td>\r\n<td valign=\"top\" width=\"147\">\r\n<p class=\"MsoNoSpacing\"><strong>Unlimited term contract</strong></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"161\">\r\n<p class=\"MsoNoSpacing\">Maximum duration</p>\r\n<p class=\"MsoNoSpacing\"></p>\r\n</td>\r\n<td valign=\"top\" width=\"170\">\r\n<p class=\"MsoNoSpacing\">2 years (4 years)</p>\r\n</td>\r\n<td valign=\"top\" width=\"147\">\r\n<p class=\"MsoNoSpacing\">N/A</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"161\">\r\n<p class=\"MsoNoSpacing\">Notice period</p>\r\n</td>\r\n<td valign=\"top\" width=\"170\">\r\n<p class=\"MsoNoSpacing\">1-3 months (none required)</p>\r\n</td>\r\n<td valign=\"top\" width=\"147\">\r\n<p class=\"MsoNoSpacing\">1-3 months (1 month minimum, no maximum)</p>\r\n<p class=\"MsoNoSpacing\"></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"161\">\r\n<p class=\"MsoNoSpacing\">Compensation for early termination of fixed term contract</p>\r\n</td>\r\n<td valign=\"top\" width=\"170\">\r\n<p class=\"MsoNoSpacing\">As agreed between the parties but not more than 3 months’ salary where employer terminates, 1.5 months where employee terminates*.</p>\r\n<p class=\"MsoNoSpacing\">(The employer is liable to pay compensation to the employee equal to three months salary or for the remaining period of contract whichever is shorter; the employee is liable to pay half the amount that the employer would have to pay)</p>\r\n</td>\r\n<td valign=\"top\" width=\"147\">\r\n<p class=\"MsoNoSpacing\">N/A</p>\r\n</td>\r\n</tr>\r\n</tbody>\r\n</table>\r\n<p class=\"MsoNoSpacing\"><em>*Article I.4(c) of the decree states that the parties shall agree the compensation for early termination at the outset of the employment relationship (by means of the Offer Letter and MOL Contract), up to a maximum of 3 months’ salary. Under the Labour Law (article 116) the maximum compensation that an employee would pay for early termination of a fixed term contract is 45 days salary. As there is a potential conflict between the Labour Law and the decree on this point the Labour Law will prevail.</em></p>\r\n<p class=\"MsoNoSpacing\">In all cases termination is allowed by mutual consent, where the contract period expires or where one party fundamentally breaches the contract (e.g. gross misconduct by employee or failure to pay salary by employer).</p>\r\n<p class=\"MsoNoSpacing\"><em>Long Notice</em></p>\r\n<p class=\"MsoNoSpacing\">It is interesting that the longest notice period allowed is 3 months which may cause concern for some companies in respect of their senior management who may ordinarily have 6 month notice periods. Educational institutions typically have long notice periods (in order to discourage staff turnover during the academic term) and again this will be of practical concern to them.</p>\r\n<p class=\"MsoNoSpacing\"><em>Due Process</em></p>\r\n<p class=\"MsoNoSpacing\">The decree goes on to state that a termination not in accordance with due process occurs when either the employer or employee terminates the employment relationship without complying with ‘legally mandated procedures’.</p>\r\n<p class=\"MsoNoSpacing\">Currently the due process requirements under the Labour Law (articles 110 and 111) are as follows:</p>\r\n\r\n<ul>\r\n 	<li class=\"MsoNormal\">the employee must be notified of the charge against him, within 30 days of the disclosure of the alleged offence</li>\r\n 	<li class=\"MsoNormal\">he must be provided with an opportunity to state his defence</li>\r\n 	<li class=\"MsoNormal\">his defence must be investigated</li>\r\n 	<li class=\"MsoNormal\">all the above should be recorded in his personal file</li>\r\n 	<li class=\"MsoNormal\">the employee should be notified in writing of the penalty, the reason for same and the action taken against him in case of repetition of the offence. The penalty may not be imposed after the lapse of sixty days from the date of the disciplinary finding.</li>\r\n</ul>\r\n<p class=\"MsoNoSpacing\">It is our understanding that the MOL will issue guidance on the ‘legally mandated procedures’ but given the primacy of the Labour Law it is unlikely in our view that they will differ in any material way.</p>\r\n<p class=\"MsoNormal\"><strong>Work Permits/Labour bans</strong></p>\r\n<p class=\"MsoNoSpacing\">Ministerial Decree 766 of 2015 sets out new rules on work permits with resultant easing of labour bans.</p>\r\n<p class=\"MsoNoSpacing\">A new work permit will be issued (and hence no labour ban arises) in the following circumstances (applicability to each type of contract illustrated in the relevant columns):</p>\r\n\r\n<table class=\"MsoTableGrid\" border=\"1\" width=\"487\" cellspacing=\"0\" cellpadding=\"0\">\r\n<thead>\r\n<tr>\r\n<td valign=\"top\" width=\"27\">\r\n<p class=\"MsoNoSpacing\"><strong>No.</strong></p>\r\n</td>\r\n<td valign=\"top\" width=\"336\">\r\n<p class=\"MsoNoSpacing\"><strong>Circumstance </strong></p>\r\n</td>\r\n<td valign=\"top\" width=\"61\">\r\n<p class=\"MsoNoSpacing\"><strong>Fixed term contract</strong></p>\r\n</td>\r\n<td valign=\"top\" width=\"64\">\r\n<p class=\"MsoNoSpacing\"><strong>Unlimited term contract</strong></p>\r\n</td>\r\n</tr>\r\n</thead>\r\n<tbody>\r\n<tr>\r\n<td valign=\"top\" width=\"27\">1</td>\r\n<td valign=\"top\" width=\"336\">The term of the contract has expired and not renewed.\r\n\r\n&nbsp;</td>\r\n<td valign=\"top\" width=\"61\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n<td valign=\"top\" width=\"64\"></td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"27\">2</td>\r\n<td valign=\"top\" width=\"336\">Either party unilaterally terminates the employment relationship after the expiry of the first fixed term contractprovided that:\r\n\r\na)     The terminating party gives notice to the other party as per the MOL Contract;\r\n\r\nb)     The terminating party continues to honour the contractual obligations for the duration of the notice period; and\r\n\r\nc)     The terminating party indemnifies the other party in the amount that was agreed to in the MOL Contract.\r\n\r\n<em>This provision  appears to have been written purely with intention of addressing where an employee resigns during the term of the contract (as otherwise an employee would not be entitled to a new work permit if the employer was in breach of (b) which does not appear to be the intention of the legislation).</em>\r\n\r\n<em> </em></td>\r\n<td valign=\"top\" width=\"61\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n<td valign=\"top\" width=\"64\"></td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"27\">\r\n<p class=\"MsoNoSpacing\">3</p>\r\n</td>\r\n<td valign=\"top\" width=\"336\">Either party unilaterally terminates the employment relationship provided that:\r\n\r\na)     The terminating party gives notice to the other party as per the MOL Contract;\r\n\r\nb)     The terminating party continues to honour the contractual obligations for the duration of the notice period; and\r\n\r\nc)     The employee has completed a period of no less than six months (if the employee has a high school diploma or higher the 6 month period is waived).</td>\r\n<td valign=\"top\" width=\"61\"></td>\r\n<td valign=\"top\" width=\"64\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"27\">\r\n<p class=\"MsoNoSpacing\">4</p>\r\n</td>\r\n<td valign=\"top\" width=\"336\">The parties mutually agree to terminate the contract during the course of its term, provided the employee has completed a period of no less than six months (if the employee has a high school diploma or higher the 6 month period is waived).\r\n\r\n&nbsp;</td>\r\n<td valign=\"top\" width=\"61\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n<td valign=\"top\" width=\"64\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"27\">\r\n<p class=\"MsoNoSpacing\">5</p>\r\n</td>\r\n<td valign=\"top\" width=\"336\">Where the employment is terminated by the employer through no fault of the employee; provided the employee has completed a period of no less than six months (again if the employee has a high school diploma or higher the 6 month period is waived).\r\n\r\n&nbsp;</td>\r\n<td valign=\"top\" width=\"61\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n<td valign=\"top\" width=\"64\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"27\">\r\n<p class=\"MsoNoSpacing\">6</p>\r\n</td>\r\n<td valign=\"top\" width=\"336\">Where the employer has failed to meet his legal or contractual obligations, including but not limited to when the employer fails to pay the employee’s wages for more than 60 days.</td>\r\n<td valign=\"top\" width=\"61\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n<td valign=\"top\" width=\"64\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"27\">\r\n<p class=\"MsoNoSpacing\">7</p>\r\n</td>\r\n<td valign=\"top\" width=\"336\">Where the employer is shutting down\r\n\r\n&nbsp;</td>\r\n<td valign=\"top\" width=\"61\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n<td valign=\"top\" width=\"64\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"27\">\r\n<p class=\"MsoNoSpacing\">8</p>\r\n</td>\r\n<td valign=\"top\" width=\"336\">Where the labour court provides a final ruling in favour of the employee that attests that is entitled to:\r\n<ul>\r\n 	<li>accrued wages for no less than two months of work</li>\r\n 	<li>arbitrary or early termination compensation, or</li>\r\n 	<li>any other entitlements that the employer has abstained from granting including end-of-service gratuity.</li>\r\n</ul>\r\n&nbsp;</td>\r\n<td valign=\"top\" width=\"61\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n<td valign=\"top\" width=\"64\">\r\n<p class=\"MsoNoSpacing\">x</p>\r\n</td>\r\n</tr>\r\n</tbody>\r\n</table>\r\n<p class=\"MsoNoSpacing\">Clearly the changes provide for a more fluid labour market and greater employee mobility. The circumstances in which labour bans can be issued are so radically.</p>\r\n<p class=\"MsoNoSpacing\">The Minister has publically stated that healthy employment relations are predicated on voluntary engagement, trust and the right of either party to opt out of the relationship.</p>\r\n<p class=\"MsoNoSpacing\"><strong>Conclusion</strong></p>\r\n<p class=\"MsoNoSpacing\">The new changes certainly add transparency and clarity on issues such as offer letters and termination provisions. The greater workplace mobility provisions are likely to have an immediate impact on the labour market.</p>\r\n<p class=\"MsoNoSpacing\">The main beneficiaries of the changes will be blue collar workers and those recruited from aboard by unscrupulous companies offering terms and conditions that are not then honoured in the UAE.</p>\r\n<p class=\"MsoNoSpacing\">Al Tamimi will monitor the implementation of the new regulations and provide further updates on the Offer Letter and the MOL ‘legally mandated procedures’ as soon as they are published.</p>'),
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	(102792,5587,'content_description','The Jordanian Companies Law (Law No. 22 of 1997) (the ‘Companies Law’) provides for several types of entities, which can mainly be categorised into (i) Jordanian entities holding a Jordanian nationality, where the entity has a separate legal liability from its shareholders (the ‘Jordanian Entity’) and (ii) foreign entities (whether operating or non-operating) holding the nationality of the parent company, where the concerned entity will be deemed as an extension of the parent company and where both entities will not have separate legal liability (the ‘Foreign Entity’). '),
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	(102794,5587,'pageSummary','The Jordanian Companies Law (Law No. 22 of 1997) (the ‘Companies Law’) provides for several types of entities, which can mainly be categorised into (i) Jordanian entities holding a Jordanian nationality, where the entity has a separate legal liability from its shareholders (the ‘Jordanian Entity’) and (ii) foreign entities (whether operating or non-operating) holding the nationality of the parent company, where the concerned entity will be deemed as an extension of the parent company and where both entities will not have separate legal liability (the ‘Foreign Entity’).'),
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	(102806,5587,'_yoast_wpseo_metadesc','The Companies Law provides for a number of different types of Jordanian companies that can be established in Jordan. The most common types of Jordanian companies established are Private Shareholding Companies (‘PSC’) and Limited Liability Companies (‘LLC’).'),
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	(102807,5588,'content','February 2017\r\n\r\n<hr />\r\n<p class=\"p1\">This paved the way for the lifting of a number of international sanctions that had for a number years crippled the Iranian economy and had imposed a tremendous hardship on the Iranian economy and the country’s population. Perhaps it is now an opportune time to look back with hindsight and consider the actual efficacy of the agreement and the measurable results including the trickle-down effects of the agreement on the Iranian economy.</p>\r\n<p class=\"p1\">Has Iran actually opened for sustainable business and has the international and regional business community taken sufficient comfort in that frontier market to engage? While the UN report indicated a slide of foreign direct investment in Iran until 2015, a more recent report by the Financial Times reveals that the removal of nuclear-related sanctions in fact made Iran a top destination for foreign investment in the Middle East in the first quarter of 2016. That trend continues in a cross section of industries with regional and international companies seeking to either re-establish their business in Iran or enter and engage with the region’s second largest economy for the first time.</p>\r\n<p class=\"p1\">There are still key obstacles that must be addressed if the objective of President Rouhani and his current administration can be fully realised. Namely, the curbing of the role of the armed forces in the country’s economy and an effective decentralisation of economic power, as well as encouraging an increased transparency in both the regulatory and judicial sectors of the country. Furthermore, notwithstanding the easing of the sanctions regime on Iran, the international financial community, including most financial institutions and banks, are still reluctant to fully engage with Iran. Meaningful cross border business with Iran, without the support of the financial services sector, has therefore been made almost impossible, despite ’creativity’ in transacting. Despite all the criticism of President Rouhani, his government has been able to attract a significant amount of foreign investment compared with previous years and is taking new measures to encourage further investment of $250 billion in a number of key sectors. The recent delivery of the first Airbus passenger aircraft, after almost 4 decades, to Iran’s national carrier, Iran Air, is a testament to that success, albeit incremental.</p>\r\n<p class=\"p1\">While it will certainly take some time for the trickle-down effects of the changes and for the ordinary Iranians to actually be able to see the impact of these new projects on their daily lives, Iran will likely continue to be the most attractive investment destination in the region, and perhaps one of the few remaining untapped markets that offers a great potential to foreign investment, albeit with certain inherent risks that can only be mitigated. With tens of billions of dollars worth of Iranian assets now unfrozen and many international companies that have been barred from doing business there now able to tap into a market with a young, well-educated population of just under 80 million and some of the world’s largest energy reserves, Iran is set to be the biggest economy to rejoin the global trading and financial system since the break-up of the Soviet Union more than two decades ago.The latter will stand true despite the recent ’upset’ in the US presidential election and the rhetoric that is heard from certain corners of Washington and Tehran. With the latter in mind, the objective of this article is to provide an overview of the Iranian legal regime and the ways that regional and international entities may enter and establish a presence in Iran. While this note is not intended to be treated as definitive legal advice that may be specific to any particular sector, it should provide certain key guidelines for an optimal market entry.</p>\r\n<p class=\"p2\"><strong>Setting-up in Iran</strong></p>\r\n<p class=\"p1\"><span class=\"s2\">In accordance with the Iranian Act on Registration of Companies (ratified in 1932) and the Provision of the Foreign Investment Promotion of Protection Act (‘FIPPA’) of 2002, foreign corporations are now authorised to set up a business and have economic activities in Iran. It should be noted that, with an exception of certain sectors within the economy, there are largely no restrictions on direct foreign ownership in Iran, whether via the establishment of a limited liability company or a branch on shore. We note here the marked difference between the latter and the prevailing on shore corporate structures in the UAE, where foreign ownership of on shore business is in almost all instances is limited to 49 per cent with the balance held by a UAE national entity in an actual or nominee capacity. </span></p>\r\n<p class=\"p1\">The following are the principle means of market entry:</p>\r\n\r\n<ul>\r\n 	<li>Directly (Setting up a new company in the form of fully-owned or partnership);</li>\r\n 	<li>Buying existing Iranian companies;</li>\r\n 	<li>Having a branch or a representative office;</li>\r\n 	<li>Acquiring partnership and have a contractual joint venture;</li>\r\n 	<li>Merging or amalgamating companies.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\">The Commercial Code of Iran enacted on 03 March 1933, provides a number of ways to establish a legal presence in Iran (seven in particular), but most foreign investment in the country adopts the following two corporate structures:</p>\r\n\r\n<ul>\r\n 	<li>Private Joint Stock Company (Sherkat-e-Sahami);</li>\r\n 	<li>Limited Liability Company (Sherkat ba masouliate mahdoud);</li>\r\n</ul>\r\n<p class=\"p6\">The above-mentioned commercial companies have legal personality and should be represented by a natural person while doing business in Iran. The foreign investor can, of course, appoint a manager for the entity based locally in Iran. As there are no foreign ownership restrictions, with the exception of certain sectors and activities, and most foreign investors likely fall within the exemption, the actual ownership structure of either one of the two above forms can be non-Iranian. The investor can choose to have the shareholders of the Iranian entity as either its current parent entity in the home jurisdiction or to establish a ‘de novo’ entity solely for the purpose of holding the shares of the Iranian entity and to, in effect, ‘ring fence’ the new Iranian operation. Alternatively, depending on the structure and certain tax considerations, the investor may consider establishing an offshore shell entity, in jurisdictions such as the BVI, and have that entity act as the shareholder for the Iranian company. However, once formed, either of the two structures will be considered an Iranian entity subject to the Commercial Code of Iran, irrespective of ownership.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Private Joint Stock Company and Limited Liability Company </strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">Under Iranian law, a Private Joint Stock Company is considered a corporate vehicle whose capital is divided into shares, and the liability of shareholders is limited to the par value of their shares. Joint stock companies are divided into two categories: public joint stock companies and private joint stock companies. Between these two types of joint stock companies, the private joint stock company is, in our opinion, the preferred vehicle for most foreign investors, subject to their proposed business model for Iran. In accordance with the Commercial Code of Iran, the minimum capital for establishment of a private joint stock company is IRR 1,000,000 (which at today’s current exchange rate, is rather minimal) and the minimum number of shareholders for forming this company is three. There is no maximum share capital. Capital must be fully subscribed to and at least 35 per cent should be paid up at the time of incorporation. Non-monetary assets must be fully contributed prior to formation. If capital contribution is in the form of non-monetary assets, the value of such assets must be assessed by an official appraiser of the Ministry of Justice, or the Organization for Investment and Economic and Technical Assistance of Iran. Shareholders must pay the balance of their subscribed share capital, within five years. </span></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Limited Liability Company </strong></span></p>\r\n<p class=\"p1\">In general, under Iranian Commercial Code, a ‘limited liability company’ (‘LLC’) is defined as the company formed for the purpose of trading by a minimum of two persons, and there is no specified maximum limit. In a limited liability company, partners’ liabilities are limited. The liability is based on the contribution of shareholders to the company capital. Again, we note that the proposed shareholder of the LLC in Iran can be non-Iranian and the foreign investor should consider the corporate vehicle to use as the shareholder for this onshore entity.</p>\r\n<p class=\"p1\"><span class=\"s2\"> With respect to the initial capital, the Commercial Code of Iran does not require a minimum amount of contribution. The contribution of the shareholders to the limited liability company’s capital should be either in cash or in kind. In case of a contribution in kind, the value of such contributions should be specified in the company’s articles of association and assessed by one or several experts. Shareholders may choose non-official experts for assessment of contributions. Shareholders in a limited liability company will be jointly and severally responsible for assessment of contributions in kind. A limited liability company is not duly incorporated under Iranian law until all capital in cash has been fully contributed and non-cash contributions have been assessed and delivered by partners. </span></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Comparative assessment of a Joint Stock Company and Limited Liability Company</strong></span></p>\r\n\r\n<ul>\r\n 	<li>One or more managers of the Joint Stock Company (‘JSC’) are typically appointed from the shareholders. In addition, two directors have to be chosen for this type of company. But, the LLC is managed by one or two directors and they might be appointed either from the shareholders or outside.</li>\r\n 	<li>The minimum number of shareholders for forming JSC is three, and for LLC is two.</li>\r\n 	<li>In JSC, the general manager is typically appointed for a two year period while, in the case of an LLC, it can be for a limited or unlimited period of time.</li>\r\n 	<li>JSC are required to publish their corporate announcements in an official newspaper (Gazette) but no such explicit requirement exists for an LLC.</li>\r\n 	<li>Participation in capital increase is optional for shareholders in both companies.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\"><span class=\"s2\">In practical terms, there are no material differences between the two corporate vehicles and the differences are structural in nature and are related to the legal framework and not the efficiency of the business activities they may undertake. The regulatory framework and required corporate filing requirements for a private joint stock company may also be unduly onerous, particularly given the limited nature and scope of the foreign investors’ initial activity in Iran. We should note, however, that, historically with respect to public sector tenders, the government has tended to favor JSCs, over LLCs. </span></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Foreign Investment in FZs </strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">Iran does have a number of Free Zones (‘FZ’) and Special Economic Zones where a foreign investment vehicle can be established. However, given that Iran in most sectors does not have foreign ownership restrictions of the sort that we are familiar with in the rest of the region, the logic, at least for that reason alone, in establishing in a FZ quickly dissipates. Nevertheless, we will briefly outline the differences and likely advantages. With respect to the establishment of a FZ entity in the Kish Free Zone (‘KFZ’) of Iran the following should be noted. These features of KFZ would be also in common with other seven FZ’s in Iran.</span></p>\r\n\r\n<ul>\r\n 	<li>Twenty-year tax exemptions for economic activities from the date of the commencement of the operation;</li>\r\n 	<li>Upon approval by the Board of Ministers, importation of goods produced in a FZ to other parts of the country are exempt from payment of all, or a part of, customs duties and commercial benefits tax up to the added value thereof in the FZ;</li>\r\n 	<li>Importation of goods produced in a FZ into the other parts of the country, whose raw materials are wholly or partly supplied domestically, are exempt (proportionally) from all or a part of the customs duties and commercial benefit tax;</li>\r\n 	<li>Goods transported from the rest of the country for use and consumption in a FZ will be constituted as the domestic movement of goods, but their exportation from a FZ abroad will be subject to the general Export–Import Regulations;</li>\r\n 	<li>Inflow and outflow of capital and expatriation of profits generated by economic activities in each FZ are permitted;</li>\r\n 	<li>Legal guarantee and protection extended to foreign investment: The legal rights of investors, the acceptance of whose capital investment has been decreed by the Board of Ministers, are guaranteed and protected. Should the capital of such investors be nationalised to the favor of the public, or their properties being dispossessed of, a fair compensation is to be paid by the government;</li>\r\n 	<li>Renting of land to foreign nationals is permitted, but its sale thereto is strictly forbidden;</li>\r\n 	<li>There are no visa requirements for foreign nationals seeking to enter the FZ. Non-Iranian nationals entering the KFZ do not require a pre-arranged entry visa and the entry permit is issued on arrival. Entering the mainland from the KFZ, however, does require an entry visa, unless the individual is a national of the countries exempt from obtaining a pre-arranged visa and can obtain visa on arrival at approved ports of entry (such as Tehran International Airport, IKA). Nationals of 11 countries, including the UK, Canada, and USA, among others, are not exempt from the visa regulations to the main land and must obtain a pre-arranged visa; and</li>\r\n 	<li>No limitation on transfer of foreign currency to other Iranian FZ or to other countries and efficient, fast, and a board range of services provided by state/private banks and insurance companies.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\">Given that KFZ is close to the GCC and a short distance north of Dubai with a well established infrastructure and historical trade relations with Iran and other major commercial hubs of the region, it can be a viable gateway compared to other FZ jurisdictions within Iran. In relative terms, KFZ offers better facilities and more developed infrastructures, such as hotels, flights, and commercial facilities (buildings for offices). The largest Iranian Island in the Gulf, which also operates a FZ, is Qeshm Island and that too is suitable for industrial activities due to the existence of large infrastructures such as pier, tanks, and warehouses.</p>\r\n<p class=\"p1\">Alternatively, the foreign investor can also establish a branch of its parent entity in Iran. As in other jurisdictions, the liability of the branch will rest with the parent company. There is a requirement to appoint a general manager for the branch and the general manager can be a non-Iranian national provided he / she is properly employed and has a residency visa.</p>\r\n<p class=\"p1\">The regulatory requirements for establishing a branch in Iran are not particularly difficult and the documentation is seamless. The branch can, in some instances, act as an initial incubator type entity with a limited activity scope in Iran.</p>\r\n<p class=\"p1\">Regardless of which corporate vehicle is considered to be the optimal one for market entry into Iran, the peculiar nature of that market and the very fact that to most uninitiated foreign investors the seemingly opaque nature of the Iranian business landscape and the existence of inherent risks would mandate that sophisticated local knowledge and expertise is paramount. Our Iran Practice Group, acting as part of a regional integrated practice, is well positioned to provide the local expertise and support for a successful and sustainable market entry into Iran.</p>'),
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	(100297,5454,'content_description','The Abu Dhabi Court of Cassation recently ruled (in Civil Appeal 30 of 2015) that a UAE-national shareholder who knowingly sells his shares in violation of the UAE Companies Law and public policy will not have the right to subsequently claim back the profit of the company if he had voluntarily served as a service agent (and not as an active shareholder) once the side agreement is nullified. '),
	(100298,5454,'_content_description','field_59b641c07f473'),
	(100299,5454,'pageSummary','The Abu Dhabi Court of Cassation recently ruled (in Civil Appeal 30 of 2015) that a UAE-national shareholder who knowingly sells his shares in violation of the UAE Companies Law and public policy will not have the right to subsequently claim back the profit of the company if he had voluntarily served as a service agent (and not as an active shareholder) once the side agreement is nullified. '),
	(100300,5454,'_pageSummary','field_59e59b307dec8'),
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	(100307,5454,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','Abu Dhabi, UAE'),
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	(100309,5454,'lawUpdateArticleNoWriters_1_lawUpdateAuthorName','Zane Anani'),
	(100310,5454,'_lawUpdateArticleNoWriters_1_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(100311,5454,'lawUpdateArticleNoWriters_1_lawUpdateAuthorEmail','z.anani@tamimi.com'),
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	(100313,5454,'lawUpdateArticleNoWriters_1_lawUpdateAuthorLocation','Dubai, UAE'),
	(100314,5454,'_lawUpdateArticleNoWriters_1_lawUpdateAuthorLocation','field_59e59b05d15df'),
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	(100317,5454,'_yoast_wpseo_metadesc','The Abu Dhabi Court of Cassation recently ruled (in Civil Appeal 30 of 2015) that a UAE-national shareholder who knowingly sells his shares in violation of the UAE Companies Law and public policy will not have the right to subsequently claim back the profit of the company if he had voluntarily served as a service agent (and not as an active shareholder) once the side agreement is nullified.'),
	(100318,5455,'content','<p class=\"p1\"><strong>Title Search</strong></p>\r\n<p class=\"p4\">The first and most obvious is that a title search should be undertaken. The potential buyer must request a copy of the property title deed and site plan from the seller. A title search at Dubai Land Department will confirm the seller’s ownership of the property and any existing mortgage over it which could prevent sale. It will also help identify whether the property is attached to a court order, if there is any freezing order on the property, for example if there is a real estate project registered over the land at Dubai Land Department, and provide confirmation on the property’s specifications such as the unit’s area, common area entitlement, unit restrictions which could result from a master community declaration and jointly owned property declaration. However, it is important to remember that the buyer will not be able to conduct such title search without presenting a valid power of attorney from the seller authorising the buyer to carry out the investigation on the property or in the presence of the seller in Dubai.</p>\r\n<p class=\"p3\"></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Investigation with the Developer</strong></span></p>\r\n<p class=\"p4\">Potential buyers may investigate with the master developer (applicable for properties which are located within a master community) about the property that they wish to purchase and attend at their offices to ensure that all service charges or community fees have been paid to date. This will also include checking if any penalties have been levied by the developer and successful clearance by the seller. Once again, the buyer will not be able to conduct such investigation without presenting a valid power of attorney from the seller authorizing the buyer to carry out the investigation on the property or in the presence of the seller in Dubai. Without clearance on the master developer charges, a no objection certificate approving the resale by the master developer cannot be obtained.</p>\r\n<p class=\"p2\"></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Investigation with Dubai Municipality</strong></span></p>\r\n<p class=\"p4\">It is also advisable to undertake an investigation at the Dubai Municipality to ensure there are no pending violations or penalties relating to property’s construction and zoning and to confirm the permitted use of the property. Again, a power of attorney is needed from the seller authorising the buyer or the seller needs to be present in order to carry out these investigations.</p>\r\n<p class=\"p2\"></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Special Authorities</strong></span></p>\r\n<p class=\"p4\">In certain cases, a special Government authority may be involved in relation to the property and investigations with this authority is also recommended. For example, in the case of the purchase of school premises in Dubai, investigations need to be carried out with the Knowledge and Human Development Authority to ensure the requisite permissions were obtained for construction of the school over the plot and Road and Transport Authority to enquire about the traffic impact study affecting the property.</p>\r\n<p class=\"p2\"></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Financial Due Diligence</strong></span></p>\r\n<p class=\"p4\">As well as carrying out legal due diligence with the relevant authorities, a potential buyer may also want to obtain an independent valuation of the property from a valuer to ensure the correctness of the asking purchase price. Such valuations can be done by the Dubai Land Department for a specified fee or through third party licensed companies.</p>\r\n<p class=\"p2\"></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Technical Inspection</strong></span></p>\r\n<p class=\"p4\">Buyers can also use a licensed technical inspection company who can verify the area measurement and dimensions of the property and check for presence of any defect in the property.</p>\r\n<p class=\"p4\"></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Sale and Purchase Contract</strong></span></p>\r\n<p class=\"p4\">Once a buyer has completed these checks, they can proceed to execute a sale and purchase agreement which is commonly known as the memorandum of understanding to record the key terms of the property sale and purchase. In Dubai, the parties are required to sign a mandatory Dubai Land Department ‘Form F’ and any additional terms are attached as an addendum to the Form F. In the case of resale of off-plan property purchases, having an additional tri-partite assignment agreement between the original purchaser, new buyer and developer is a common market practice as the original purchaser is released from its obligations and the new buyer assumes the original purchaser’s obligations and agrees to comply with the developer’s terms and conditions including completion of payment of the purchase price.</p>\r\n<p class=\"p4\"></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Completion</strong></span></p>\r\n<p class=\"p4\">The parties would need to attend before the Dubai Land Department or at the Registration Trustee offices with the requisite documents recommended by the Dubai Land Department to carry out the actual transfer. In the case of corporate purchasers, all the key corporate documents (i.e. trade license, certificate of incorporation, memorandum and articles of association, certificate of incumbency, good standing certificate, power of attorney of the authorised signatory etc) would need to be duly notarised and attested and translated into Arabic and must reveal the ultimate beneficiary of the buyer entity. In case that the purchaser entity has corporate shareholder (s), all the corporate documents of each shareholder would need to be attested, translated and presented to Dubai Land Department for assessment of the ultimate beneficiary. The seller would surrender its original title deed and the buyer would receive a new title deed in its name upon completion. This process usually takes no more than one to two hours provided all the requisite documents are ready and available.</p>\r\n<p class=\"p1\">Although prior due diligence by the buyer gives some assurance that the property has a good and clear title, it is possible for the seller to cause any changes to the property after the completion of the due diligence exercise and the buyer could choose to confirm the findings of the investigation closer to the transfer date, to the extent possible, to ensure that the property status remains unchanged.</p>\r\n<p class=\"p1\"></p>\r\n<p class=\"p5\"><em>This article has been prepared for Lexis Middle East Law Alert magazine and will also appear in their October 2016 Edition</em></p>'),
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	(102773,5586,'content_description','Before the Arab Spring uprising in 2011, foreign investment in Egypt was consistently booming. However, in the aftermath of the events, the State has been in a shaky position, which has had a negative impact on foreign investment. '),
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	(102775,5586,'pageSummary','Before the Arab Spring uprising in 2011, foreign investment in Egypt was consistently booming. However, in the aftermath of the events, the State has been in a shaky position, which has had a negative impact on foreign investment.'),
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	(102787,5586,'_yoast_wpseo_metadesc','By the end of 2016, a new Egyptian investment law draft (the ‘Draft Law’) was being drafted. It plans to introduce new incentives for investors and is intended to replace the Investment Law.'),
	(102788,5587,'content','February 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><strong>The Jordanian Entity</strong></p>\r\n<p class=\"p2\">The Companies Law provides for a number of different types of Jordanian companies that can be established in Jordan. The most common types of Jordanian companies established are Private Shareholding Companies (‘PSC’) and Limited Liability Companies (‘LLC’).</p>\r\n<p class=\"p1\">PSCs and LLCs may operate on a permanent basis and perform any of the activities that are provided for under their incorporation documents. The difference between PSCs and LLCs, however, is mainly in the minimum share capital requirements. Whereas the minimum share capital requirement of PSCs is 50,000 Jordanian Dinars, LLCs are permitted low share capital requirement of not less than One Jordanian Dinar. This LLC feature, however, comes with a barrier of required standard-form, and fairly strict, articles and memorandum of association, as provided for under the Companies Law, the shareholders of which are obliged to adhere. PSCs, on the other hand, are recognised for the flexibility their shareholders enjoy by being able, to the extent permitted by the Companies Law, to tailor the articles and memorandum of association of the same to suit their needs, as the shareholders deem fitting. This feature is mainly utilised by foreign shareholders wishing to invest in Jordan and who are required, by virtue of foreign ownership restrictions, to engage with a Jordanian partner.</p>\r\n<p class=\"p1\">To clarify further, the Regulation Regulating Non-Jordanian Investments (Regulation No. 77 of 2016) (the ‘FI Regulation’) provides for ownership barriers depending on the economic sectors in which LLCs or PSCs operate. These ownership restrictions are divided into the following categories:</p>\r\n\r\n<ul>\r\n 	<li>Companies in which foreign ownership is completely prohibited;</li>\r\n 	<li>Companies in which foreign ownership is limited to a maximum of 50%; and</li>\r\n 	<li>Companies in which foreign ownership is limited to a maximum of 49%.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\"><span class=\"s2\">Previously, non-Jordanian investors were required to have a minimum share capital of 50,000 Jordanian Dinars whether investing in a PSC or an LLC. Nonetheless, the amended FI Regulation discarded such requirement and non-Jordanian investors are now entitled to invest in any Jordanian Entity (whether LLCs or PSCs) without a specific minimum share capital required to be paid by the non-Jordanian investor (except if legally required by virtue of other applicable laws), depending on the activity of the Jordanian Entity. For instance, a company intending to carry out export and import activities is required by virtue of the respective laws and regulations to have a minimum share capital of 5,000 Jordanian Dinars.</span></p>\r\n<p class=\"p2\"><strong>Now, Do I Have to Establish My Company in a Normal Customs Area? Or Does Jordan Afford a Special Zone?</strong></p>\r\n<p class=\"p1\">The Jordanian Investment Law (Law No. 30 of 2014) (the ‘Investment Law’) aims to encourage and bolster investments in Jordan as it recognises the benefits derived therefrom. By doing so, the Investment Law provides for provisions that encourage foreign, as well as domestic, entrepreneurs to invest in Jordan by designating certain zones throughout Jordan where an investor may carry out its business and enjoy various privileges.</p>\r\n<p class=\"p1\"><span class=\"s3\"> There are different zones that serve as enabling platforms by offering differentiated advantages to investors in Jordan, including, but not limited to, the Development Zones (‘DZ;) and the Free Zones (the ‘FZ’). Upon registration with the regulatory authorities at the said zones (depending on the activities that the investor will carry out in Jordan), the investor can benefit from an array of advantages and benefits that are provided by virtue of the applicable laws, such as the removal of the requirement to engage a local partner, along with reduced tax rates. </span></p>\r\n<p class=\"p1\">Companies (whether a Jordanian Entity or Foreign Entity) may only be able to register in the specific economic zones and, consequently, benefit from the specified exemptions in the event their objectives/activities permit such registration. Any company wishing to register with a DZ or a FZ can only carry out the activities within the perimeters of the DZ and/or the FZ in order to take advantage of the specific privileges. In other words, should any company registered with a DZ or FZ carry out the activities outside the DZ or the FZ (even if the activities carried out by the concerned company are permitted), then the concerned company will be subject to the normal applicable laws.</p>\r\n<p class=\"p1\">Other than the ultimate release from the application of foreign ownership restrictions onto investors wishing to invest within the DZ and/or the FZ, the Investment Law affords an array of exemptions and benefits to those investors. The same make the DZ and the FZ one of the top desired zones in which to invest within Jordan. Such exemptions and benefits differ as to whether the Jordanian Entity or the Foreign Entity is registered within the DZ or within the FZ. Such exemptions and benefits include, among other things, the following:</p>\r\n\r\n<table class=\"t1\" cellspacing=\"0\" cellpadding=\"0\">\r\n<tbody>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p7\"><span class=\"s1\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s1\"><strong>DA</strong></span></p>\r\n<p class=\"p9\"><span class=\"s4\"> </span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p7\"><span class=\"s1\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s1\"><strong>FZ</strong></span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p11\">Preferential income tax rate of five per cent applicable to all entities, except banks, financial companies, insurance and reinsurance companies, and land transport companies;</p>\r\n<p class=\"p5\">Zero per cent sales tax on goods and services purchased or imported by the entity registered in the DZ;</p>\r\n<p class=\"p5\">Tax exemptions on the export of goods and services from Jordan, in accordance with the exemptions on exports that are in effect at the time;</p>\r\n<p class=\"p5\">Exemption from dividends tax on shares and equity;</p>\r\n<p class=\"p5\">Inapplicability of the restrictions relating to the ratio of foreign ownership; and</p>\r\n<p class=\"p5\">Exempting all materials, instruments, machines and appliances relating to the construction, establishment, equipment and furnishing of all projects initiated by entities registered in the DZ from all customs, duties and other fees, and taxes.</p>\r\n<p class=\"p12\"></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p11\">Income tax exemptions on profits generated from (i) exporting goods outside Jordan; (ii) transit trade profits; and (iii) selling or transferring goods within the FZ;</p>\r\n<p class=\"p5\">Income tax exemptions on the salaries and allowances of non-Jordanian employees working within the FZ;</p>\r\n<p class=\"p5\">Exemptions from import fees and custom duties, including all taxes and duties applicable on goods imported to or exported from the FZ; and</p>\r\n<p class=\"p5\">Exemptions from licensing fees, building taxes, and land taxes apply to building and real estate constructions completed within the FZ.</p>\r\n</td>\r\n</tr>\r\n</tbody>\r\n</table>\r\n<p class=\"p2\">In addition to the above, the non-Jordanian investor is entitled, by virtue of the Investment Law, to the following:</p>\r\n\r\n<ul>\r\n 	<li>Remittance abroad of all or part of the invested foreign capital, in a convertible currency, that was brought into Jordan for the purposes of investment, in accordance with the relevant laws and regulations;</li>\r\n 	<li>Repatriation of revenues and profits, in a convertible currency, earned by virtue of the investment; and</li>\r\n 	<li>Liquidation of its investment, selling its economic activity or shares or stocks, or otherwise disposing thereof, on the condition that the non-Jordanian investor has settled all outstanding debts to third parties.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\"><span class=\"s3\">In order to enjoy the privileges mentioned under the Investment Law, registering with the relevant authorities, however, is contingent upon the satisfaction of certain requirements. As clarified above, the investor should be carrying out specific activities within a specific ‘permitted sector’ to be able to be licensed by the Jordanian Investment Commission<sup>1</sup> to enjoy the privileges bestowed by virtue of the Investment Law. Therefore, in other words, entities that perform work outside the permitted sectors are not permitted the tax exemptions and privileges and may require the engagement of a local partner </span></p>\r\n<p class=\"p2\"><strong>Are These the Only Choices I have?</strong></p>\r\n<p class=\"p2\">The investor will not run out of options if registration within the DZ or the FZ was not possible. Other than the DZ and the FZ, the investor is provided with other options, depending on the activities such investor is intending to carry out in Jordan. One of the most desired options for the investor is establishing an entity in the Aqaba Special Economic Zone and registering same with the Aqaba Special Economic Zone Authority (‘ASEZA’). The location of the ASEZA makes it a regional hub for a number of transportation facilities, as it encompasses a full-serviced port and an international airport where the investors can export and import products to and from Jordan, hassle free.</p>\r\n<p class=\"p1\"><span class=\"s3\"> The Aqaba Special Economic Zone Law (Law No. 32 of 2000) has been enacted with the intention of enhancing the economic capabilities of Jordan within the ASEZA. Similar to the entities to be registered within the DZ and the FZ, investments within the ASEZA are not subject to any foreign ownership restrictions. All entities registered within the ASEZA enjoy the following incentives and benefits:</span></p>\r\n\r\n<ul>\r\n 	<li>A reduced income tax rate of five per cent on the net income generated from any project, except for projects in the insurance, banking, and land transport sectors;</li>\r\n 	<li>All imports into the ASEZA region are exempt from customs duties;</li>\r\n 	<li>Exemption from building and land taxes applicable onto real estate owned by such entities within the ASEZA region;</li>\r\n 	<li>Simplified employment and immigration procedures; and</li>\r\n 	<li>Exemption from sales tax, with the exception of a seven per cent sales tax applicable to the hospitality sectors, car-rental services, and tobacco and alcoholic products.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\">In light of the above, making the decision with regards to the best choice of entity or with regards to the best zone of establishment would depend on several factors. Looking ahead, the Jordanian laws relating to best corporate structure will continue to mold Jordan’s future, making it easier and a more friendly environment for the investor to invest therein, without any hurdles.</p>\r\n<p class=\"p1\">Notes:</p>\r\n<p class=\"p14\"><span class=\"s2\"><sup>1</sup> By virtue of the Investment Law, the Jordanian Investment Commission is supposed to be the regulatory body responsible for the registration and licensing of entities wishing to carry out activities within the DA and the FZ as it has been declared that legal successor to each of the Jordan Investment Board, the Development and Free Zones Commission and the Export Promotion Directorate of the Jordan Enterprise Development Corporation. In practice, nonetheless, the Jordanian Investment Commission is only responsible for registration of entities wishing to carry out activities within the DA, as the Free Zone Corporation remains the entity responsible for registration of entities wishing to carry out activities within the FZ.</span></p>'),
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	(102758,5585,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','d.alghareeb@tamimi.com'),
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	(102760,5585,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','Manama, Bahrain'),
	(102761,5585,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
	(102762,5585,'lawUpdateArticleNoWriters','1'),
	(102763,5585,'_lawUpdateArticleNoWriters','field_59e59aaed15dc'),
	(102764,5585,'lawUpdateArticlePractices_0_lawUpdateArticlePractice','542'),
	(102765,5585,'_lawUpdateArticlePractices_0_lawUpdateArticlePractice','field_59dc79c8e10ce'),
	(102766,5585,'lawUpdateArticlePractices','1'),
	(102767,5585,'_lawUpdateArticlePractices','field_59dc7918de021'),
	(102768,5585,'_yoast_wpseo_metadesc','The past twelve months have proved to be a busy time in the arena of corporate formations in Bahrain with the implementation of a raft of procedural and legal changes, as well as the introduction of various exciting new initiatives. We have set out a summary of some of these key developments.'),
	(102769,5586,'content','February 2017\r\n\r\n<hr />\r\n<p class=\"p1\">In 2015, a presidential decree (Law No. 17 of 2015) (the ‘Presidential Decree’), amending provisions of existing laws including the Law of Investment Guarantees and Incentives (Law No. 8 for 1997) (the ‘Investment Law’), was enacted, unfortunately, without much impact on the economy or investment</p>\r\n<p class=\"p1\">Further, by the end of 2016, a new Egyptian investment law draft (the ‘Draft Law’) was being drafted. It plans to introduce new incentives for investors and is intended to replace the Investment Law.</p>\r\n<p class=\"p1\">The Draft Law aims to provide a clearer view and a better understanding, free from established misconceptions. It proposes to provide investment guarantees and incentives to investors, including foreigners. It aims to provide the investor with opportunities to advance their business by minimising the obstacles that currently exist. The Draft Law is being drafted mainly to foster a setting that would encourage foreign investment and remove difficulties that foreigners currently face when investing in Egypt.</p>\r\n<p class=\"p1\">Some of the additions currently included in the Draft Law are as follows. In cases where the disposition of the real estate properties is pursuant to usufruct authorisation against consideration, the authorisation is proposed to be for a period not exceeding 50 years, renewable according to the terms agreed upon so long as the project continues to operate. Such duration is proposed to be increased from 30 years under the current Investment Law.</p>\r\n<p class=\"p1\"><span class=\"s1\"> Further, The Draft Law provides that the General Authority for Investment and Free Zones (‘GAFI’) controls the allocation of lands and follows up on the implementation of projects. Moreover, it prohibits the importation of hazardous substances and wastes into the free zones, whether the aim is to transfer them or dispose thereof in accordance with the Egyptian environmental law.</span></p>\r\n<p class=\"p1\">The Draft Law also proposes to require the competent authorities to review the investment applications submitted thereto through the investment window and verify the satisfaction of the conditions required for its acceptance, in the manner outlined in the Draft Law. The applications are to be decided on within a period not exceeding 60 days from the date of submission of the completed application.</p>\r\n<p class=\"p1\"><span class=\"s1\"> It is expected that these amendments aiming to clarify the requirements for investment in Egypt, and the additions made to provide better investment opportunities, would encourage investors, whether local or foreign, to invest in Egypt. We see that the new additions and amendments to the Draft Law aim to widen the investment opportunities in Egypt, by removing previous obstacles and vagueness, and trust it will be undertaken to further promote investment opportunities in Egypt. </span></p>'),
	(156391,5586,'core_values',''),
	(156392,5586,'_core_values','field_59b64ab071de4'),
	(102716,5584,'_content','field_59b649b5c8b2b'),
	(102717,5584,'lawUpdateArticleMonth','5563'),
	(102718,5584,'_lawUpdateArticleMonth','field_59da2a396b063'),
	(102719,5584,'content_description','The Federal Law No. 8 of 1984 and its amending laws concerning commercial companies in the UAE (“Former Law”) have been repealed by the enactment of the Federal Law No. 2 of 2015 on Commercial Companies (“2015 law”). '),
	(102720,5584,'_content_description','field_59b641c07f473'),
	(102721,5584,'pageSummary','The Federal Law No. 8 of 1984 and its amending laws concerning commercial companies in the UAE (“Former Law”) have been repealed by the enactment of the Federal Law No. 2 of 2015 on Commercial Companies (“2015 law”).'),
	(102722,5584,'_pageSummary','field_59e59b307dec8'),
	(102723,5584,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/february-9/the-amendments-introduced-by-the-uae-commercial-companies-law-of-2015-in-relation-to-share-pledges-a.html'),
	(102724,5584,'_currentURL','field_59d35123ab1e7'),
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	(102728,5584,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(102729,5584,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Bashayer Al Obeidli'),
	(102730,5584,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(102731,5584,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','b.alobeidli@tamimi.com'),
	(102732,5584,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','field_59e59afcd15de'),
	(102733,5584,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','Sharjah, UAE'),
	(102734,5584,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
	(102735,5584,'lawUpdateArticleNoWriters','1'),
	(102736,5584,'_lawUpdateArticleNoWriters','field_59e59aaed15dc'),
	(102737,5584,'lawUpdateArticlePractices_0_lawUpdateArticlePractice','542'),
	(102738,5584,'_lawUpdateArticlePractices_0_lawUpdateArticlePractice','field_59dc79c8e10ce'),
	(102739,5584,'lawUpdateArticlePractices','1'),
	(102740,5584,'_lawUpdateArticlePractices','field_59dc7918de021'),
	(102741,5584,'_yoast_wpseo_metadesc','This article will focus on the legal amendments under the 2015 Law in relation to share pledges and execution against partners’ shares in an LLC, with practical examples on its application in the Emirate of Sharjah.'),
	(102742,5585,'content','<p class=\"p1\">February 2017</p>\r\n\r\n\r\n<hr />\r\n<p class=\"p1\">The past twelve months have proved to be a busy time in the arena of corporate formations in Bahrain with the implementation of a raft of procedural and legal changes, as well as the introduction of various exciting new initiatives. We have set out below a summary of some of these key developments.</p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>E-Key system: your business venture just a click away</strong></span></p>\r\n<p class=\"p3\"><span class=\"s2\">Commencing in 2007, the government of Bahrain committed itself to launching its eGovernment strategy. The aim was to establish an online ‘one-stop-shop’ to link all the relevant government agencies and entities together to provide better and faster services, and to facilitate the online completion of all government services through the development and implementation of an electronic E-Key System. </span></p>\r\n<p class=\"p3\">Connected to these changes and in line with the increasing shift towards a ‘paperless’ government, the Ministry of Industry, Commerce &amp; Tourism (“MOICT”) took the further step of introducing the ‘Sijilat’ system in 2016. The Sijilat system comprises an online portal accessed through the use of an E-Key containing details all the existing commercial entities and individual establishments in Bahrain. The portal allows suitably registered individuals to search for records of existing commercial registrations and to initiate applications to register commercial entities as well as the ability to complete many more commercial services electronically, eliminating the burden of physically attending the various ministries to complete such procedures.</p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Incorporating companies in Bahrain: a two stage process</strong></span></p>\r\n<p class=\"p3\">When applying to establish a new entity utilising the Sijilat system, the application now undergoes a simplified two stage process.</p>\r\n<p class=\"p3\"><span class=\"s3\"> Stage one involves the submission of the key information relating to the new entity including its proposed legal form, shareholder details, commercial name, share capital, proposed commercial activities and details of managers/directors. The MOICT will verify the details, approve the same, and issue an inactive provisional commercial registration (CR) certificate, without any active licenses. The effect of this is that the entity is deemed to have initiated its establishment in Bahrain, and is treated as being ‘under formation’. The entity is then able to complete various formalities, including entering into a lease agreement and the registration of the same with the MOICT as part of the process to reach the final stage whereby the permanent CR is issued enabling the company to commence commercial operations. </span></p>\r\n<p class=\"p3\">Stage two involves the submission of applications for all required licenses and approvals which, once completed, should result in the issuance of the final CR, rendering the company legally operational. The nature of the licenses and approvals will vary depending on the proposed commercial activities of the entity. It is essential that the entity’s legal advisors guide it through this process carefully as delays in the timely submission of the various documents and information to the various competent authorities can result in considerable delays in the issuance of the final CR.</p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Commercial activities: ISIC4 Codes</strong></span></p>\r\n<p class=\"p3\">When incorporating an entity in Bahrain with the MOICT, relevant commercial activities need to be selected. Depending on the types of activities selected, certain conditions may apply and/or approvals may be required.</p>\r\n<p class=\"p3\">In April 2016 the MOICT made changes to the list of available commercial activities. The changes are a result of Bahrain adopting the International Standard Industrial Classification of All Economic Activities (“ISIC”) Rev. 4. These standards have been developed by the Department of Economic and Social Affairs of the United Nations Secretariat. As a result, the MOICT streamlined the list of commercial activities from over 1800 to approximately 381 by consolidating various activities. More information in relation to the activities can be found on the MOICT’s online Sijilat database. On the face of it this change had the effect of lifting various foreign ownership restrictions allowing for greater foreign direct investment and a more competitive market.</p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Bahrain Chamber of Commerce registration</strong></span></p>\r\n<p class=\"p3\"><span class=\"s3\">The Bahrain Chamber of Commerce (‘BCCI’), in close co-operation with the MOICT, has also implemented its own initiatives relevant to corporate structuring in Bahrain.</span></p>\r\n<p class=\"p3\"><span class=\"s2\"> Historically, membership of the BCCI has been entirely voluntary. However, commencing in 2017 it is now a mandatory requirement that any new establishment in Bahrain be registered as a member of the BCCI. Said registration is completed automatically, and the membership fees are collected upon completion of the online incorporation process or upon the renewal of the registration of any existing entity.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Encouraging Bahraini Start Ups: ‘Sijili’ CR</strong></span></p>\r\n<p class=\"p3\"><span class=\"s2\">Late 2016 saw the roll out by the MOICT of a new form of commercial registration aimed specifically at aspiring Bahraini start ups. The ‘Sijili’ system (Sijili meaning ‘my registration’ in Arabic) has been launched by the MOICT to support and encourage Bahraini citizens in launching start ups without the burden of the usual red tape associated with starting a business. There are currently 39 commercial activities (mostly related to arts and design, photography, translation, computer programming,) to choose from, involving a streamlined application process. Significantly, under the Sijili process the Bahraini owner is not required to sign a lease over commercial premises. </span></p>\r\n<p class=\"p3\"><span class=\"s3\"> Once a Sijili CR has been obtained, the owner is able to sign contracts with companies that demand a commercial registration and to engage in commercial activities. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Change to certain local ownership requirements: GCC ownership</strong></span></p>\r\n<p class=\"p3\">Whilst it has long been possible for foreign investors to own 100% of the legal interest in various Bahrain based businesses, certain sector-related restrictions apply. Some commercial activities are only allowed to be undertaken by Bahraini nationals (or entities fully owned by Bahraini nationals); whilst other commercial activities are restricted to Bahraini nationals and/or nationals of the Gulf Co-Operation Council (GCC) states, and/or nationals of the United States (in line with the United States-Bahrain Free Trade Agreement).</p>\r\n<p class=\"p3\">Additionally, it has long been the case that certain commercial activities require a minimum Bahraini investment, typically 51%. Examples of such commercial activities include (subject to some exceptions):-</p>\r\n\r\n<ul>\r\n 	<li>Construction;</li>\r\n 	<li>Selling and/or trading in items;</li>\r\n 	<li>Import and export of items;</li>\r\n 	<li>Internet based retail sales;</li>\r\n 	<li>Catering and food transportation;</li>\r\n 	<li>Printing; and</li>\r\n 	<li>Waste collection, treatment and disposal activities</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p2\">For such commercial activities, historically, it has not been possible for the 51% Bahraini ownership requirement to be satisfied by way of the shares being owned by a non-Bahraini GCC national. Rather, a non-Bahraini GCC national would be required to own no less than 100% of the shares in the business vehicle.</p>\r\n<p class=\"p3\">We now informally understand, via the Head of Licences and Approvals of MOICT,, that where any given commercial activity necessitates a minimum 51% ownership by a Bahraini national, that requirement may be satisfied by a GCC shareholder owning 51% of the entity’s shares (i.e. the previous requirement that a non-Bahraini GCC national should, in these circumstances, own 100% of the entity’s shares has been deleted).</p>\r\n<p class=\"p3\">Whilst this position remains subject to formal confirmation by MOICT, such a development may be of particular interest to businesses based in other GCC jurisdictions which are owned 51% by local citizens (for example, in the United Arab Emirates or Qatar) who wish to establish a business presence in Bahrain to engage in a commercial activity which traditionally requires 51% Bahraini ownership. Upon formal confirmation of the position, such businesses will now be able to establish a presence in Bahrain together with their existing non-Bahraini GCC partner, rather than being required to partner with a Bahraini national.</p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Changes to government fees and charges</strong></span></p>\r\n<p class=\"p2\">The past year has also seen a variety of changes to the type and level of government fees and charges implemented in connection with the corporate formation process in Bahrain. Whilst these charges will vary from time to time, the following list contains details of the relevant fees correct as of the date of publishing.</p>\r\n\r\n<table class=\"t1\" cellspacing=\"0\" cellpadding=\"0\">\r\n<tbody>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p6\"><span class=\"s5\"><strong>Transaction Licence / Approval</strong></span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p6\"><span class=\"s5\"><strong>Government Fee</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p6\"><span class=\"s5\"><strong>Government Authority</strong></span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Renewal/Issuance of New CR</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD50</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Ministry of Industry Commerce &amp; Tourism</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Membership of BCCI</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD30</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Bahrain Chamber of Commerce and Industry</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Renewal of BCCI membership</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD20</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Bahrain Chamber of Commerce and Industry</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Municipality Site approval</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD10</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Municipality</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Health Certificate</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD50-150</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Ministry of Health</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Fire safety approval</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD30</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Ministry of Interior - General Directorate of Civil Defence</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">COEPP license</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD50</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">The Council of Regulating the Practice of Engineering Profession</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Civil Aviation Affairs licenses</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD100-2000</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Civil Aviation</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Coast guard directorate approvals</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD25</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Coast Guard</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Ministry of Works final approvals</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD10</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Ministry of Works</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">International Transport of goods license</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD1000</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Ministry of Transportation and Telecommunication</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">International Transport of goods licence renewal</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD100</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Ministry of Transportation and Telecommunication</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Gas bottling and distribution license</span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD1200</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">National Oil and Gas Authority</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Ministry of Education approvals</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">BHD40-50</span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"top\">\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p8\"><span class=\"s6\">Ministry of Education</span></p>\r\n<p class=\"p5\"><span class=\"s4\"><strong> </strong></span></p>\r\n<p class=\"p7\"><span class=\"s6\"> </span></p>\r\n</td>\r\n</tr>\r\n</tbody>\r\n</table>\r\n<p class=\"p3\">It is anticipated that the fees and charges will be further updated in accordance with new regulations being issued by the MOICT which we understand to be due for implementation in September 2017.</p>\r\n<p class=\"p3\">Whilst the changes on the whole represent an increase in fees and/or the introduction of fees for services which were not previously chargeable, the fees remain competitive in comparison to the level of governmental fees imposed by neighbouring jurisdictions. Additionally, in line with its liberal business environment spirit, Bahrain continues to impose zero taxation for private companies, has few indirect taxes for private enterprises and individuals, and continues to allow the free repatriation of capital to foreign jurisdictions.</p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Conclusion </strong></span></p>\r\n<p class=\"p3\">The above changes are, by and large welcomed as facilitating more efficient and faster corporate formations in Bahrain, streamlining the administration process, further minimising the restrictions on foreign ownership in Bahrain, and encouraging start-up businesses in the Kingdom. Accordingly, such developments further demonstrate the Bahraini government’s continued commitment to ensuring Bahrain retains its position as one of the most flexible and business friendly jurisdictions in the region.</p>\r\n<p class=\"p3\"><em>Al Tamimi &amp; Company’s Corporate Structuring team regularly advises on all forms of corporate formations in Bahrain and is registered with the MOICT. For further information please contact Rad El Treki (r.eltreki@tamimi.com) or Dana Al Ghareeb (d.alghareeb@tamimi.com). </em></p>'),
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	(102622,5579,'lawUpdateArticleWriters_0_lawUpdateArticleWriter','943'),
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	(102626,5579,'_yoast_wpseo_metadesc','Here\'s the New and Repealed Governance Rules and some of the provisions that are related to ‘Shareholders Rights’, ‘General Assembly Meetings’, ‘Auditors’, ‘Code of Professional Conduct’ and ‘Penalties for Violating the New Governance Rules’ that we consider would benefit from clarification from SCA.'),
	(102627,5580,'content','February 2017\r\n\r\n<hr />\r\n<p class=\"p1\">Speaking at the Healthcare Business Forum held during Arab Health, Dr Ramadan Al Blooshi, the Chief Executive Officer of Dubai Healthcare City Authority, highlighted the freezone’s regulations alongside legal seminars discussing how UAE regulatory and licensing frameworks offer a positive opportunity for business.</p>\r\n<p class=\"p1\">A highlight of the Leaders in Healthcare Conference held during Arab Health was HRH Princess Haya bint Al Hussein’s presentation concerning the commitment of the UAE government to improving population health and boosting medical tourism by having the latest state-of-the-art healthcare services available. Other future-looking themes included the delivery of personalised medicine, the use of drones to deliver blood samples and blood products in remote locations, and enhancing medical outcomes through 3D medical printing. Funding for innovating technology was also highlighted as a focus of the UAE, with presentations from those currently based in the region who are using crowd sourced frameworks to launch new innovations in healthcare.</p>\r\n<p class=\"p1\">On the back of Arab Health, a number of new initiatives and changes to healthcare regulations and practices are typically announced. Below, we provide a few UAE healthcare industry updates and predictions for 2017.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Ministry of Health and Prevention Updates Fees</strong></span></p>\r\n<p class=\"p1\"><span class=\"s2\">The Ministry of Health and Prevention has changed their fees for certain services following the issuance of a 2016 decree. While a number of fees remain the same, several new fees have been added, such as an AED 500 fee for the classification of a product. Such classification requests are used to determine whether the product in question will be regulated by the Ministry or must be submitted to another authority, if applicable, for registration prior to importation.</span></p>\r\n<p class=\"p1\">These fees have been changed as of 29th January 2017. Of particular interest are the following fees:</p>\r\n\r\n<ul>\r\n 	<li>For the registration or renewal of registration for a medical products manufacturer: AED 10,000</li>\r\n 	<li>Registration of a new General Sale List product: AED 5,000</li>\r\n 	<li>Registration of new medical device product: AED 2,500</li>\r\n 	<li>Request for classification of product: AED 500</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\">In addition to these fees, each certificate issued may be charged an AED 1,000 issuing fee along with the service payment. This does not apply to classification requests, however.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Ministry of Health and Prevention Updates Classification Guidelines</strong></span></p>\r\n<p class=\"p1\">The Ministry of Health and Prevention, in addition to now charging AED 500 for a classification of medical products request, has updated their classification guidelines to make the classification procedures clearer and more efficient. For products having varying sizes, one classification request can be submitted for all sizes. On the other hand, each item in a First Aid set will be considered as a separate item for classification. Further, it has been the Ministry’s practice recently, but has now been confirmed in the guidelines, that products for dental healthcare professional use, if they are of the same type, will be considered as one item for classification. Yet, dental cements, fillers, etc. will be considered as each a single item.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Dubai Health Authority Focuses on 3D Printing</strong></span></p>\r\n<p class=\"p1\">During Arab Health, the Dubai Health Authority (‘DHA’) demonstrated its prioritisation of fostering the development of future technologies, such as 3D printing in healthcare. The DHA held roundtable discussions and showcased interactive demonstrations of 3D models to Arab Health visitors. The focus of DHA’s initiative is to create meaningful discussion and action concerning the three core pillars of 3D printing: awareness, regulation and implementation.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Dubai Healthcare City Authority Undergoes Updates</strong></span></p>\r\n<p class=\"p1\">The Dubai Healthcare City Authority – Regulatory (‘DHCR’) announced a new e-services platform, Masaar, designed to improve the ease of doing business in the Dubai Healthcare City (‘DHCC’). The platform is designed to be a one-stop e-services system offering comprehensive applicant services, including commercial set-ups, renewals, healthcare professional and clinical licensing, as well as other governmental services.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Predictions for 2017</strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">While the region is expecting to see healthcare spending increases, the market must also improve operational efficiency for clinical and administrative services. We see providers undertaking:</span></p>\r\n\r\n<ul>\r\n 	<li>cost containment measures and the use of financial modelling and data analytics to drive better value of services and to be more efficient;</li>\r\n 	<li>feasibility studies to review consolidation with partners, merger and acquisition activity;</li>\r\n 	<li>revenue diversification, unbundling of services and moving to retail centres, and community or home-based care, with increased use of tele-health services as these activities become better regulated and the ‘norm’ as the first line of options for patients;</li>\r\n 	<li>standardisation of processes, policies, and organisational frameworks to better coordinate and deliver services and use resources more efficiently;</li>\r\n 	<li>more investment in prevention and health education promotion programmes and campaigns;</li>\r\n 	<li>further public private partnership; and</li>\r\n 	<li>the use of innovative technology, artificial intelligence, point-of-care diagnostics, and the offering of biosensors and trackers to patients.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\">The healthcare sector is a highly regulated space. Increased regulation is inevitable in an emerging market where global providers compete to introduce new services, medicines, and devices. Regulators can learn from other jurisdictions, but this is not a one-size-fits-all solution. Local, cultural, demographic, and geographical considerations dictate the need for bespoke solutions in the healthcare industry, which will continue to present challenges for all stakeholders.</p>\r\n<p class=\"p6\"><em>Al Tamimi &amp; Company’s  Healthcare Practice Group regularly advises the healthcare industry clients ranging from medical products providers to hospitals and healthcare private equity firms. For further information please contact Andrea Tithecott (a.tithecott@tamimi.com) or Christina Sochacki (c.sochacki@tamimi.com).</em></p>'),
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	(102620,5579,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/february-9/an-overview-of-the-new-governance-rules-in-the-uae-part-iv.html'),
	(102619,5579,'_pageSummary','field_59e59b307dec8'),
	(102618,5579,'pageSummary','The Chairman of the Securities and Commodities Authority of the United Arab Emirates (‘SCA’) issued, on 28 April 2016, the Resolution on Corporate Discipline and Governance Standards of Public Joint Stock Companies (Resolution No. 7 R.M. of 2016) (‘New Governance Rules’) in order to:'),
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	(102614,5579,'lawUpdateArticleMonth','5563'),
	(102615,5579,'_lawUpdateArticleMonth','field_59da2a396b063'),
	(102616,5579,'content_description','The Chairman of the Securities and Commodities Authority of the United Arab Emirates (‘SCA’) issued, on 28 April 2016, the Resolution on Corporate Discipline and Governance Standards of Public Joint Stock Companies (Resolution No. 7 R.M. of 2016) (‘New Governance Rules’) in order to:'),
	(102699,5583,'_pageSummary','field_59e59b307dec8'),
	(102700,5583,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/february-9/introduction-to-the-new-uae-intermediate-spv-regime-within-the-difc.html'),
	(102701,5583,'_currentURL','field_59d35123ab1e7'),
	(102702,5583,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Noff Al-Khafaji'),
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	(102704,5583,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','n.alkhafaji@tamimi.com'),
	(102705,5583,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','field_59e59afcd15de'),
	(102706,5583,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','Dubai, UAE'),
	(102707,5583,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
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	(102709,5583,'_lawUpdateArticleNoWriters','field_59e59aaed15dc'),
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	(102714,5583,'_yoast_wpseo_metadesc','The DIFC Authority approved a new regime for the establishment of Intermediate Special Purpose Vehicle (‘Intermediate SPV‘) on 19th September 2016.'),
	(102715,5584,'content','February 2017\r\n\r\n<hr />\r\n<p class=\"p1\">The legal position governing share pledges and execution against partners’ shares in a limited liability company (“LLC”) has stood as a very debatable topic during the application of the Former Law.</p>\r\n<p class=\"p1\">This article will focus on the legal amendments under the 2015 Law in relation to share pledges and execution against partners’ shares in an LLC, with practical examples on its application in the Emirate of Sharjah. The first section of this article will tackle the share pledge concept, and the second section will focus on the execution against a partner’s share in an LLC.</p>\r\n<p class=\"p2\"><span class=\"s1\"><strong>Share Pledge</strong></span></p>\r\n<p class=\"p3\">This section will discuss the legal provisions governing share pledges, and will present the procedures for execution and registration of a share pledge agreement as per the practice in Sharjah.</p>\r\n<p class=\"p3\"><strong>1. Share Pledge Regulation under the 2015 Law</strong></p>\r\n<p class=\"p3\">The principle of a pledge of shares is found at Article 79 of the 2015 Law, titled “Assignment or Pledge of the Share of a Partner in the Company”. Article 79 provides that:</p>\r\n<p class=\"p5\"><em>“1- A partner may assign or pledge its share in the company to another partner or to a third party. Such assignment or pledge shall be made in accordance with the terms of the Memorandum of Association of the company under an official document, in accordance with the provisions of this Law. Such assignment or pledge shall not be valid against the company or third parties until the date of its entry in the Commercial Register with the competent authority.</em></p>\r\n<p class=\"p7\"><em>2- The company shall not reject the entry of such assignment or pledge in the register unless the transfer or pledge violates the provisions of the Memorandum of Association or this Law.”</em></p>\r\n<p class=\"p1\">Article 79 is a substitute for Article 230 under the Former Law. Compared to Article 230, Article 79 differs from Article 230 in that Article 230 was dealing solely with the topic of the assignment of shares, whereas Article 79 addresses the pledge of shares as well and stipulates that the Partner may “assign or pledge its shares in the company”. In doing so, Article 79 has resolved the debate which arose under the Former Law in relation to the possibility of pledging shares in an LLC. Article 79 is explicit in stating that shares can be pledged to another partner or a third party.</p>\r\n<p class=\"p4\"><span class=\"s1\"><strong>2. Share Pledge Procedures in Sharjah</strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">The main procedure for executing and registering a share pledge agreement in Sharjah can be summarized as follows:</span></p>\r\n\r\n<ul>\r\n 	<li>Notarization of the Share Pledge Agreement:</li>\r\n</ul>\r\n<p class=\"p5\">The share pledge agreement (“Agreement”) should be drafted in accordance with the terms of the Memorandum of Association of the relevant company and the provisions of the 2015 Law, and should be executed as an official document (i.e. notarized). In order to notarize the Agreement at a notary public, the parties (pledgor and pledgee) either personally or through an authorized Power of Attorney holder, must attend the Notary Public office to sign the Agreement before the notary. In the Emirate of Sharjah a fee of 0.4% (with a maximum fee of AED 10,000) of the monetary amount mentioned in the agreement must then be paid and the Agreement shall be notarized.</p>\r\n\r\n<ul>\r\n 	<li>Registration of the Share Pledge Agreement at Economic Development Department:</li>\r\n</ul>\r\n<p class=\"p5\">Upon completing the notarization process, either party may personally or through an authorized person visit the competent Economic Development Department in Sharjah (SEDD) with the notarized Agreement to apply for the registration of the share pledge in the commercial register. The application fee is AED 1500 in Sharjah, and the fee may differ from one emirate to another. The registration would then take place by entering the Agreement into the electronic register at the SEDD, and a letter certifying the entry is then handed to the applicant.</p>\r\n<p class=\"p2\"><span class=\"s1\"><strong>Execution Against a Pledged Share</strong></span></p>\r\n<p class=\"p3\">As explained in section I above, the share in an LLC can be pledged in security for a debt. If the pledgor fails to pay the debt secured when due, the pledgee has the right to enforce the pledge. In this section we deal with the regulations governing the execution against a partner’s share in an LLC and the execution procedures in practice.</p>\r\n<p class=\"p3\"><strong>1. Legal Provision Related to Execution under the 2015 Law</strong></p>\r\n<p class=\"p1\">Article 20 of the 2015 Law states that:</p>\r\n<p class=\"p6\"><em>“1- A creditor of a partner may not claim his right from the share of his debtor in the capital of the company, but he may claim his right from his debtor’s portion of the profits. If the company is dissolved, the creditor may collect his right from the share of his debtor upon the liquidation of the company.”</em></p>\r\n<p class=\"p1\">Article 20 of the 2015 Law mirrors Article 17 of the Former Law. Compared to Article 17, Article 20 has almost the same content but comes with some changes in the legal drafting, and provides that a creditor may not satisfy his debt directly from the shares of his creditor, but may do so from the profits that his debtor attains as per the debtor’s shares.</p>\r\n<p class=\"p1\">However, Article 20 of the 2015 Law is under Chapter 2 which deals with the formation and management of companies in general, and the said article sets a general principle that must be followed in the case of any type of company, unless a special article provides differently for certain types of companies. In this regard, Article 81 of 2015 (under Title 3 on Limited Liability Companies) gives an additional right to the creditor of a partner in an LLC and provides that:</p>\r\n<p class=\"p6\"><span class=\"s2\"><em>“If a partner’s creditor commences the execution procedures against the share proceeds of its debtor, the creditor may agree with the debtor and the company to the method and the terms of the sale. Otherwise, the share shall be offered for sale at a public auction, upon a request submitted to the competent Court. One or more partners may recover the sold share at the same terms as awarded at the auction, within 15 days from the date on which the auction is awarded. These provisions shall apply in the event of bankruptcy of a partner.”</em></span></p>\r\n<p class=\"p1\">Article 81 of the 2015 Law is titled “Execution against a Partner’s Share in the Company” and replaces Article 234 of the Former Law. Compared to Article 234, Article 81 differs in three main respects:</p>\r\n\r\n<ul>\r\n 	<li>Article 234 talked about the execution procedures that may be taken by the creditor against the “share”, whereas Article 81 clarifies that the action can be taken against the “share proceeds”.</li>\r\n 	<li>In respect of the sale of the shares at public auction, Article 234 provided that the “company” may recover the sold share at the same terms as awarded at the auction, but Article 81 is more accurate in stating that “one or more partners” (not the “company”) may directly recover the sold share at the same terms as awarded at the auction.</li>\r\n 	<li>Apart from the above two changes, Article (81) contained a content similar to Article (234); with some amendments in terms of the legal drafting of the article, specifically by adding that the offer for sale at public auction should be “upon a request submitted to the competent Court”.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p11\">It can be understood from the above mentioned regulations that the creditor of a partner in an LLC has an additional right represented by the execution against the share proceeds in general (in addition to the right to satisfy his debt from the profits of the share as provided for in Article 20).</p>\r\n<p class=\"p4\"><span class=\"s1\"><strong>2. Procedures Related to Execution against a Partner’s Share.</strong></span></p>\r\n<p class=\"p1\">In order to proceed with execution, the first step is for the pledgee/creditor to commence execution proceedings against the proceeds (including the profits) of the pledged share. This step is in line with the terms of Article 20, which allows the pledge/creditor to first target the profit of the pledged share, before targeting the actual share.</p>\r\n<p class=\"p1\"><span class=\"s2\"> Secondly, if the pledge/creditor is unable to satisfy the debit from the profit of the share, the pledge/creditor may then target the sale of the share. This is to be carried out by negotiating with the debtor and the company to reach an agreement on the method and terms of the sale of the share. If this negotiation is successful, the share is to be sold as per the aforesaid parties’ agreement, and the sum in exchange for it is to be used to satisfy the creditor’s debt.</span></p>\r\n<p class=\"p1\"><span class=\"s4\"> Thirdly, if the parties fail to reach any agreement with regards to the sale of the share, the pledge/creditor must submit a request to the competent court seeking the sale of the share through a public auction. The partners in the company would have the right to participate in this auction, and where the share is sold to a third party, the partners may also recover the sold share within 15 days from the date on which the auction is awarded. The price that the share is sold for shall also be used here to satisfy the debt.</span></p>\r\n<p class=\"p1\">For the avoidance of doubt, it should be noted that:</p>\r\n\r\n<ul>\r\n 	<li>The creditor who is a pledgee (i.e. has a share pledge) shall have precedence, over both ordinary creditors and creditors subsequent to him in ranking, in satisfying his debt from the proceeds of the sale of the pledged share.</li>\r\n 	<li>Where the creditor participated in the auction and won, the court may accept the creditor’s request to adjust the amount that should be paid by the creditor as price against the amount of the debt which is outstanding to the debtor. This would result in the debtor paying the remaining amount of the price of the share (if any remains) after adjusting the amount of the debt from the price.</li>\r\n</ul>\r\n<p class=\"p3\"><strong>Conclusion</strong></p>\r\n<p class=\"p1\">The 2015 Law has clearly resolved the legal debate regarding the possibility of pledging shares in an LLC by introducing express provisions in Article 79. However, the right to pledge shares has not been added to the provisions relating to Joint Liability Companies and Limited Partnerships (Simple Commandite Companies). In addition, unlike the pledge of a sole establishment under the commercial transactions law, the 2015 Law does not limit the right to offer pledges to banks and financial institutions.</p>'),
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	(102694,5583,'lawUpdateArticleMonth','5563'),
	(102693,5583,'_content','field_59b649b5c8b2b'),
	(102692,5583,'content','February 2017\r\n\r\n<hr />\r\n<p class=\"p1\">The DIFC Authority approved a new regime for the establishment of Intermediate Special Purpose Vehicle (‘Intermediate SPV‘) on 19th September 2016.</p>\r\n<p class=\"p3\">It is envisaged that the Intermediate SPV regime will be structured and explained within the new versions of the DIFC Companies Law and DIFC Companies Regulations, which are currently undergoing revision. However, as an interim measure pending the completion of legislative review, the Intermediate SPV regime was given immediate force by the DIFC Authority by way of a waiver and amendment of certain provisions to the existing DIFC Company Regulations and DIFC Operating Regulations.</p>\r\n<p class=\"p3\">The rationale behind the introduction of the Intermediate SPV regime is that, except for the Special Purpose Company (‘SPC‘) regime, which is predominately restricted to applicants conducting financing transactions, the DIFC Authority did not have a simplified and cost efficient special purpose vehicle structure in place that is comparable to other structures found in many other offshore jurisdictions.</p>\r\n<p class=\"p3\">The DIFC had explained that the term ‘Intermediate’ is used to imply that it is neither the primary holding entity nor is it the operating entity, but more so used as a transitional company as part of a wider structure.</p>\r\n<p class=\"p3\">It is worth noting that the Intermediate SPV structure is only applicable to entities that are already registered within the DIFC.</p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>The Benefits </strong></span></p>\r\n<p class=\"p2\">One of the predominate advantages of the regime is that the incorporation process is far more simplified and cost efficient in comparison to the set up of a typical holding company within the DIFC. This is mainly due to a less exhaustive list of requirements, specifically the business plan, which is shorter and requires less detail compared to the standard template for limited liability companies and companies limited by shares. Also, where more than one Intermediate SPV is applied for in an investment structure, a single business plan will suffice, but separate application forms will be required for each entity.</p>\r\n<p class=\"p3\">The incorporation costs are also far less compared to a typical holding company in the DIFC, with the application fee reduced to USD 1,000 (instead of USD 8,000) and the annual licence fee at USD 3,000 (as opposed to USD 12,000).</p>\r\n<p class=\"p3\"><span class=\"s2\"> Another benefit worth noting is that the DIFC allows the Intermediate SPV to utilise their existing presence in the DIFC by sharing the same office address so that no additional office is required for the incorporation of the Intermediate SPV, which again minimises the overall cost aspect. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"><strong>Eligibility Requirements </strong></span></p>\r\n<p class=\"p3\">The DIFC have defined what they call a ’Qualifying Applicant’ within their initial guidelines, which address the eligibility requirements for the incorporation of an Intermediate SPV. At present, an applicant intending to set up an Intermediate SPV within the DIFC must be one of the following:</p>\r\n\r\n<ul>\r\n 	<li>a holding/proprietary investment company or single family office already registered within the DIFC;</li>\r\n 	<li>a collective investment scheme established in the DIFC;</li>\r\n 	<li>a collective investment scheme established outside of the DIFC but managed by a fund manager or asset manager that is regulated by the Dubai Financial Services Authority (‘DFSA‘).</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p2\"><strong>Conclusion </strong></p>\r\n<p class=\"p2\">Despite the main limitation of only being available to applicants who are already established within the DIFC, the Intermediate SPV regime is attractive to many private equity houses, family offices, and corporates. The simplified incorporation requirements and procedure, along with the cost efficient set up fees, results in a business-friendly structure that makes the DIFC an even more attractive place to do business.</p>\r\n<p class=\"p3\"><em>Al Tamimi &amp; Company’s Corporate Structuring team regularly advises on corporate structures and incorporation requirements. For further information please contact Samer Qudah (s.qudah@tamimi.com). </em></p>'),
	(156483,5583,'core_values',''),
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	(102670,5582,'_content','field_59b649b5c8b2b'),
	(102671,5582,'lawUpdateArticleMonth','5563'),
	(102672,5582,'_lawUpdateArticleMonth','field_59da2a396b063'),
	(102673,5582,'content_description','On 23 May 2016, the Jebel Ali Free Zone (“JAFZA”) issued new company regulations known as the Jebel Ali Free Zone Companies Implementing Regulations 2016 (“Regulations”). '),
	(102674,5582,'_content_description','field_59b641c07f473'),
	(102675,5582,'pageSummary','On 23 May 2016, the Jebel Ali Free Zone (“JAFZA”) issued new company regulations known as the Jebel Ali Free Zone Companies Implementing Regulations 2016 (“Regulations”).'),
	(102676,5582,'_pageSummary','field_59e59b307dec8'),
	(102677,5582,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/february-9/an-overview-of-the-new-jebel-ali-free-zone-company-regulations.html'),
	(102678,5582,'_currentURL','field_59d35123ab1e7'),
	(102679,5582,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Samer Hamzeh'),
	(102680,5582,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(102681,5582,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','s.hamzeh@tamimi.com'),
	(102682,5582,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','field_59e59afcd15de'),
	(102683,5582,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','Dubai, UAE'),
	(102684,5582,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
	(102685,5582,'lawUpdateArticleNoWriters','1'),
	(102686,5582,'_lawUpdateArticleNoWriters','field_59e59aaed15dc'),
	(102687,5582,'lawUpdateArticlePractices_0_lawUpdateArticlePractice','542'),
	(102688,5582,'_lawUpdateArticlePractices_0_lawUpdateArticlePractice','field_59dc79c8e10ce'),
	(102669,5582,'content','February 2017\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\">The Regulations came into force on 24 August 2016. According to a statement made by Sultan Ahmed Bin Sulayem, Group Chairman and Chief Executive Officer of DP World, Chairman of Ports, Customs and Free Zone Corporation, the Regulations “<em>reflect the needs of an ever evolving market in terms of providing facilities that are prompt, secure and form the best international practice</em>”. </span></p>\r\n<p class=\"p1\">Whilst JAFZA has previously had separate set of regulations governing free zone establishments and free zone companies, it varied this approach by bringing all types of company within JAFZA under one regulation. Thus, the Regulations repeal and replace the Free Zone Establishment Implementing Regulations No.1 of 1992 and the Free Zone Company Implementing Regulations No. 1 of 1999.</p>\r\n<p class=\"p1\">The Regulations constitute a major reform of the JAFZA company regulations and bring about some new principles and key legislatives changes. This article provides an overview of the features and key changes that were introduced by the Regulations.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Application of the UAE Companies Law to companies within JAFZA</strong></span></p>\r\n<p class=\"p1\"><span class=\"s3\">Although the federal laws of the UAE are stated in the Regulations to apply to a company and a branch within JAFZA, the Regulations have excluded Law No. 2 of 2015 concerning Commercial Companies from the application to a company or a branch in the free zone. However, according to the Regulations, the company registrar of JAFZA (“Registrar”) may apply certain provisions of the UAE Companies Law where the Regulations are silent on a certain matter. </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Types of company recognised by the Regulations</strong></span></p>\r\n<p class=\"p1\">The types of entity that were permitted prior to the enactment of the Regulations were the Free Zone Establishment (FZE), the Free Zone Company (FZCO) and the branch of a company. With the introduction of the Regulations, JAFZA has maintained these forms but also recognised Public Listed Companies (PLC) as a new type of company that can be established within JAFZA. A PLC within JAFZA can have two or more shareholders and may offer its shares to the public in accordance with the markets law of the relevant stock market. According to the Regulations, a PLC must list its shares on a stock exchange within nine months from the date of incorporation of the PLC, unless such time frame is extended by the Registrar.</p>\r\n<p class=\"p1\">As a further notable change in the Regulations, a civil company that is set up under the rules of the UAE Civil Transactions Law (Federal Law No. 5 of 1985) may be incorporated within the free zone. The regulations give the Registrar the authority to prescribe guidelines for the incorporation and operation of a civil company in the free zone in addition to the rules that are contained in the UAE Civil Transactions Law. Accordingly, the types of entity that are currently recognised by JAFZA are now expanded and comprise; the FZE, FZCO, PLC, civil partnership and the branch.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>No minimum share capital requirement</strong></span></p>\r\n<p class=\"p1\">Not too long ago, an FZE within JAFZA was required to have a minimum share capital of AED1,000,000 and an FZCO AED500,000. This has changed under the Regulations as they do not prescribe a minimum share capital for an FZE or FZCO, but require that a company must have a share capital that is sufficient for the activities for which it is licensed. This is in line with the UAE Commercial Companies Law which also requires a limited liability company to have capital that is sufficient for fulfilling its activities, although the UAE Commercial Companies Law does give the UAE Cabinet the right to prescribe a minimum share capital based on a recommendation from the Minister of Economy.</p>\r\n<p class=\"p1\">As for a PLC, it is required to have an amount of a share capital that is either sufficient for the activities permitted under its licence or the amount of capital required under the relevant markets law.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Non-cash consideration for shares </strong></span></p>\r\n<p class=\"p1\">Under the old JAFZA regulations for an FZE or FZCO, the contribution in kind for shares was not recognised and in practice it was not possible to subscribe in shares other than for cash. However, under the Regulations, it is now possible for shares to be issued in an FZE, FZCO (and PLC) for a non-cash consideration if a resolution is passed by the shareholders at a general meeting by more than 75% of the votes of shareholders or any greater majority as may be prescribed by the memorandum of association. The value of the consideration must be supported by an auditor’s letter and the resolution and the auditor’s letter must be filed with the registrar within four days from the date of passing the resolution. The introduction of this principle is beneficial to businesses as it gives them flexibility and options for subscription of shares or increasing the share capital of a company.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Different classes of shares</strong></span></p>\r\n<p class=\"p1\">Other than in some free zones, such as the Dubai International Financial Centre and the Dubai Creative Clusters Free Zone, companies are generally not allowed to have different classes of shares in the UAE. As a result of the Regulations, different classes of shares are now available for businesses within JAFZA.</p>\r\n<p class=\"p1\">According to the Regulations, an FZCO may create different classes of shares subject to the approval of the Registrar. Rights attached to the shares may be varied by an amendment to the memorandum of association of the company if approved by a resolution of more than 75% of the votes of shareholders or by a resolution of all the shareholders holding the shares of the class whose share is being varied. A PLC may also have different classes of shares in accordance with its memorandum and articles of association.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Change of domicile and continuation of business</strong></span></p>\r\n<p class=\"p2\">Pursuant to the Regulations, it is possible for a foreign company to apply to the Registrar for the continuation of the foreign company as a company within JAFZA, whether as an FZE or FZCO. In other words, companies may transfer operations in the free zone without having to establish a new entity.</p>\r\n<p class=\"p1\">The application must include certain information and supported by documents that are set out in the Regulations which include among other documents a resolution of the foreign company resolving to transfer the foreign company into JAFZA as an FZE or FZCO. On acceptance of the application, the free zone will issue the foreign company with a licence and a continuation certificate. The date of the incorporation that will be reflected in the continuation certificate is the date of incorporation of the foreign company in its jurisdiction.</p>\r\n<p class=\"p1\">The above are some of the key changes that were introduced by the Regulations. Other changes include the recognition of electronic documents and signature, giving an FZCO and PLC the right to purchase its own shares as treasury shares and prohibiting financial assistance to the directors of an FZCO and PLC.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Conclusion</strong></span></p>\r\n<p class=\"p1\">The Regulations mark a step forward for JAFZA as they bring company legislation in the free zone in line with global best practices and standards. The modernisation of the company regulations will, in our view, benefit JAFZA and enable it to attract further foreign business and investments. However, given that the Regulations are still in its infancy, it remains to be seen how certain aspects of the Regulations will be implemented in practice, particularly the incorporation of a PLC and change of domicile of companies.</p>\r\n<p class=\"p1\"><em>Al Tamimi &amp; Company’s corporate structuring team regularly advises on corporate structuring and company set up matters. For further information please contact Samer Qudah (s.qudah@tamimi.com) or Samer Hamzeh (s.hamzeh@tamimi.com).</em></p>'),
	(156567,5582,'core_values',''),
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	(102651,5581,'_content','field_59b649b5c8b2b'),
	(102652,5581,'lawUpdateArticleMonth','5563'),
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	(102654,5581,'content_description','In keeping with the tradition of development and with the intention of maintaining a developed society and protecting that society on an individual and institutional level, the UAE has issued Emiri Decree No. 7 of 2016, amending the UAE Penal Code (Law No. 3 of 1987).'),
	(102655,5581,'_content_description','field_59b641c07f473'),
	(102656,5581,'pageSummary','In keeping with the tradition of development and with the intention of maintaining a developed society and protecting that society on an individual and institutional level, the UAE has issued Emiri Decree No. 7 of 2016, amending the UAE Penal Code (Law No. 3 of 1987).'),
	(102628,5580,'_content','field_59b649b5c8b2b'),
	(102629,5580,'lawUpdateArticleMonth','5563'),
	(102630,5580,'_lawUpdateArticleMonth','field_59da2a396b063'),
	(102631,5580,'content_description','The Arab Health Exhibition & Congress took place this year from 30 January – 2 February 2017. During the event, the health authorities in the UAE expressed their commitment to innovation and fostering advancements in healthcare. '),
	(102632,5580,'_content_description','field_59b641c07f473'),
	(102633,5580,'pageSummary','The Arab Health Exhibition &amp; Congress took place this year from 30 January – 2 February 2017. During the event, the health authorities in the UAE expressed their commitment to innovation and fostering advancements in healthcare.'),
	(102634,5580,'_pageSummary','field_59e59b307dec8'),
	(102635,5580,'currentURL','http://localhost:8888/tamimi/en/magazine/law-update/section-15/february-9/arab-health-2017-uae-healthcare-updates.html'),
	(102636,5580,'_currentURL','field_59d35123ab1e7'),
	(102637,5580,'lawUpdateArticleWriters_0_lawUpdateArticleWriter','507'),
	(102638,5580,'_lawUpdateArticleWriters_0_lawUpdateArticleWriter','field_59da2ac06b065'),
	(102639,5580,'lawUpdateArticleWriters','1'),
	(102640,5580,'_lawUpdateArticleWriters','field_59da2a866b064'),
	(102641,5580,'lawUpdateArticleNoWriters_0_lawUpdateAuthorName','Christina Sochaki'),
	(102642,5580,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorName','field_59e59ad5d15dd'),
	(102643,5580,'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','c.sochaki@tamimi.com'),
	(102644,5580,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail','field_59e59afcd15de'),
	(102645,5580,'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','Dubai, UAE'),
	(102646,5580,'_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation','field_59e59b05d15df'),
	(102647,5580,'lawUpdateArticleNoWriters','1'),
	(102648,5580,'_lawUpdateArticleNoWriters','field_59e59aaed15dc'),
	(102649,5580,'_yoast_wpseo_metadesc','On the back of Arab Health, a number of new initiatives and changes to healthcare regulations and practices are typically announced. Al Tamimi & Company provides a few UAE healthcare industry updates and predictions for 2017.'),
	(102650,5581,'content','February 2017\r\n\r\n<hr />\r\n<p class=\"p1\">In this article we aim to set out the important amendments UAE federal penal code and the potential drastic impact they may have on the wide range of clients we have previously serviced We wish to cast light on some of these new provisions the significant of the changes to the wording and how they affect the legal classification of certain actions as well as the criminal legal responsibility which can potentially arise there from.</p>\r\n<p class=\"p1\">We first look at the amendments provisions, before considering the new provisions and noting those that have been repealed.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Amended Provisions</strong></span></p>\r\n<p class=\"p1\"><em>Article 5</em></p>\r\n<p class=\"p1\"><em>‘A public official as per the provisions of this Law shall mean any person occupying a federal or local job, whether legislative, executive, administrative or judicial, and whether he is appointed or elected; this includes:</em></p>\r\n\r\n<ul>\r\n 	<li><em>Persons entrusted with the public authority and employees working in ministries and governmental departments.</em></li>\r\n 	<li><em>Members of the Armed Forces.</em></li>\r\n 	<li><em>Security authorities’ employees.</em></li>\r\n 	<li><em>Members of judicial authorities and Chairmen and members of legislative, consultative and municipal councils.</em></li>\r\n 	<li><em>Whoever is delegated by any of the public authorities to perform a specific assignment within the limits of the work entrusted to him.</em></li>\r\n 	<li><em>Chairmen and members of boards of directors, managers and all other employees working in associations, public corporations and companies partially or wholly owned by the federal government or the local governments.</em></li>\r\n 	<li><em>Chairmen and members of boards of directors, managers and all other employees working in associations and public welfare institutions.</em></li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p7\"><em>Whoever is not included in the categories stated in the preceding paragraphs and performs work connected to public service in accordance with instructions issued to him from a public official having the authority to give such an instruction according to prescribed laws or regulations, concerning the work assigned to him, shall be considered ipso jure to be entrusted with public service functions.</em></p>\r\n<p class=\"p7\">The amendments to this provision expands the definition of those who are deemed to be a “public officials” to include, in addition to those who work in the security apparatus and the judiciary, all those employees of companies that are either wholly or partly owned by the federal or local governments. This has been done with the aim of providing greater protection to public funds and those funds linked to public officials. The amendments which were carried out had been done with the aim for protecting the status and integrity that people expect when dealing with the public office as a representative of the state. To do so the draftsman has sought through the changes to increase the seriousness and penalties in relation to offences committed against what the law deems to be public funds such as misappropriation, embezzlement, fraud or unjust enrichment, which may also be committed by a deemed public official who takes advantage of his employment.</p>\r\n<p class=\"p1\"><em>Legal persons, with the exception of the government’s associations and their official departments and public organizations and corporations, shall be criminally responsible for crimes committed by their representatives, directors or agents acting in favour of or on behalf of them.</em></p>\r\n<p class=\"p1\"><em> No sentence shall be imposed on them other than a fine, forfeiture and criminal measures provided for the crime by law; however, if the law provides for the crime a principal penalty other than a fine, the penalty shall be limited to the fine, which shall not exceed five hundred thousand Dirhams. This, however, shall not prevent personally punishing the offender with the penalties prescribed for the crime by law.</em></p>\r\n<p class=\"p7\">In this amendment the legislator has increased the punitive sanctions for legal/corporate entities. The fine has now been raised from AED 50,000 to AED 500,000 in the event that the company is convicted for offenses committed by its representatives, management or agents and which was done for the company’s benefit or on its behalf. This is a dramatic increase and will force companies to take more forceful action to prevent their employees committing crimes.</p>\r\n<p class=\"p4\"><em>Article 227</em></p>\r\n<p class=\"p1\"><em>Punishment by temporary imprisonment shall be inflicted upon any public official or person entrusted with public service functions who willfully harms the properties or interests of the authority where he works, or the properties or interests of a third party entrusted to such an authority.</em></p>\r\n<p class=\"p1\"><em> A penalty of imprisonment and a fine not exceeding ten thousand Dirhams or either of these two penalties shall be imposed on any public official or person entrusted with public service functions who harmed, as a result of his fault, properties or interests of the authority where he works, or the properties or interests of a third party entrusted to such an authority.</em></p>\r\n<p class=\"p7\">In the amendment to Article 227, the legislator has created a new offence of causing loss to public funds by dereliction or negligence bordering on intent (or what is known in common law as basic intent). It has been drafted in this way with a view to provide extra protection to public funds which have been entrusted to a public official as a result of his employment and ensures that the official diligently upholds his fiduciary duty with regards to the funds of the state and the community, and prevents negligent or erroneous dealings.</p>\r\n<p class=\"p1\"><em>Article 234 of the Penal Code</em></p>\r\n<p class=\"p1\"><em>A penalty of temporary imprisonment shall be imposed upon any public official or person entrusted with public service functions, or a foreign public official, or an employee of an international organization, who solicits or accepts or promises, directly or indirectly, for himself or for another person or entity or establishment, any undeserved gift or privilege or grant, in return for the performance of or the refrainment from the performance of an act while carrying out his job duties, even if he has in mind not to effect the act or to refrain from performing it, or if the demand or acceptance or promise comes subsequent to the performance of the act or the refrainment from the performance thereof.</em></p>\r\n<p class=\"p7\">The amendment is intended to close a lacuna which had previously existed in the offence of bribery. Under the provisions of the old law the definition of public officials only included those persons deemed to be UAE public officials, and therefore foreign public officials could not be prosecuted even if their criminality had adverse impact on the UAE This addition has been made with the view of buttressing the importance of public service for the community and its interests and anticipates the potential roles that those who provide such services in taking advantage of their position by advancing their own personal interests at the expense of the interests of the state or society. It also brings the UAE laws in line with International Standards and the UN treaty on the combat of corruption to which the UAE is a signatory.</p>\r\n<p class=\"p1\"><em>Article 236 (bis)</em></p>\r\n<p class=\"p1\">There is a slight amendment to the wording in Article 236 (bis), which clarifies the definition from the previous offence, where now the offence of bribery of a private employee is more clearly defined and in express than had previously been the case. It now expressly includes, as being subject to the anti-bribery laws, all private sector entities or those related to it, and all employees as well as their management.</p>\r\n<p class=\"p1\"><em>Article 238</em></p>\r\n<p class=\"p1\"><span class=\"s2\"><em>A convict shall be ordered to pay a fine equivalent to what has been demanded or offered or accepted, in all cases shown in the preceding Articles of this chapter, provided that the fine shall not be less than five thousand Dirhams. A judgment shall also be passed for the confiscation of a gift accepted by or offered to the public official or the person entrusted with public service functions.</em></span></p>\r\n<p class=\"p7\">Article 238 increases the penalty for the offence of bribery, raising the minimum fine from AED 1,000 to AED 5,000 in order to increase the deterrent effect of the law.<strong> </strong></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>New Provisions in the Law</strong></span></p>\r\n<p class=\"p4\"><em>Article 6 (bis) (1) </em></p>\r\n<p class=\"p1\"><em>A foreigner public official in accordance with this Law shall be: any person who occupies a legislative, executive, administrative or judicial position in another country, whether permanent or temporary, and whether he is elected or appointed, with or without a salary, and any person entrusted with public service functions.</em></p>\r\n<p class=\"p1\"><em> An employee of an international organization in accordance with this Law shall be: any person who occupies a position in an international organization or is authorized by such organization to act on its behalf.</em></p>\r\n<p class=\"p7\">As explained above the draftsman had intended to close a lacuna in the old provisions of the Penal code. Therefore to in order to expand the scope of bribery to include foreign public officials, a definition of that had to be enacted. Article 6 bis 1 gives that express definition. As a consequence of the new Article the draftsman was able to extend the scope of Articles 236 and 237 to include Foreign public officials by adopting the new definition in the wording of those offences.</p>\r\n<p class=\"p1\"><span class=\"s3\"> Note that Article 6 bis 1 explicitly includes employees of international organisations or those who undertake services on their behalf as well. This addition underscores the growing importance to the community of these organisations. The Penal Code now extends the bribery provisions to all those foreign officials and employees of international NGOs who work in the UAE. The same definition has also been added to Articles 236 and 237.</span></p>\r\n<p class=\"p4\"><em>Article 6 (bis) (2) </em></p>\r\n<p class=\"p1\"><em>Public property in accordance with this Law shall be:</em></p>\r\n<p class=\"p5\"><em>The properties owned, in part or in whole, by a federal or local authority, or the federal or local public associations and corporations, or the companies that are partially or wholly owned by the federal government or the local government or the associations or the public benefit institutions.</em></p>\r\n<p class=\"p6\"><em>The properties that are subject to the management or supervision of one of the entities provided for in Paragraph (1) of this Article or if such an entity has the right to utilize it and benefit there from.</em></p>\r\n<p class=\"p7\">The aim here is to protect public funds in all of its different guises and in whatever proportion, hence the use of the words “partially or wholly owned by the federal government or the local government or the associations or the public benefit institutions”. This is a new concept designed to protect the public interest and the individual’s interests. This will have far reaching consequences when applied to certain offences relating to companies and entities in which the government invests, or is subject to the supervision of one of the branches/departments of government listed in Article 6(1) (bis). By way of an example, funds of banks can now be deemed to be public funds under the Penal Code, and this and ensures that offences which had previously been deemed misdemeanours now become felonies. This enactment exists even when banks are private entities and the government is not a shareholder. This is due to the fact that by reason of all banks being subject to the supervision of the Central Bank they are all now, in law, deemed to be public funds. The change, on the face of it, is to the benefit of the victims of crime in that it provides extra protection to the funds of the banks irrelevant of State ownership. However, it is necessary to wait and see how the courts will apply and interpret the new provisions.</p>\r\n<p class=\"p1\"><em>Article 225 (bis) </em></p>\r\n<p class=\"p1\"><em>Any public official or person entrusted with public service functions who receives or attempts to unrightfully receive, for himself or another person, an advantage or a gain from the duties of his position shall be punished by temporary imprisonment</em>.</p>\r\n<p class=\"p7\">This enacts a free-standing offence for any public official who takes advantage of his employment for his own personal gain, irrespective of whether or not a loss is caused to the public funds. This amends what had previously been the case under Article 227. In addition, it is now an offence to attempt to unjustly enrich oneself whereas previously such an offence had not existed.</p>\r\n<p class=\"p1\"><em>Article 230 (bis) </em><em> </em></p>\r\n<p class=\"p1\"><em>The provisions of this law shall apply to whoever commits one of the crimes set forth in this Chapter and Chapter One of Section Two of Book Two of this Law outside the State, if the perpetrator or the victim is a national of the country or if it is committed by an employee of the private or public sector of the State or if it affects a public property.</em></p>\r\n<p class=\"p7\"><span class=\"s3\">This new provision attempts to give further protection to public funds in all its guises and also hinder those who would think about transgressing the financial interests of the State whether inside or outside the jurisdiction. It expands the offences relating to offences under Chapter Six of Part One of Book Two (Embezzlement and Misappropriation of Public Funds) and also those offences under Chapter One of Part Two of Book Two (Bribery) and departs from the general principle that an offence is punishable in the jurisdiction where it takes place or the offender/victim is a citizen of the State which seeks jurisdiction. The provision now gives the UAE authorities extraterritorial jurisdiction over all offences relating to public funds, public employees, or, in the case of bribery, even private employees. </span></p>\r\n<p class=\"p1\"><em>Article 236 (bis) </em></p>\r\n<p class=\"p1\"><em>An imprisonment for a period not exceeding five years shall be imposed on whoever manages an entity or establishment of the private sector, or works therein in any capacity, who solicits or accepts or promises, directly or indirectly, for himself or for another person, any undeserved gift or privilege or grant, in exchange for any undeserved gift or privilege or grant, for himself or for another person, in return for the performance of or the refrainment from the performance of an act of his duties or defaulting on his job duties, even if he has in mind not to effect the act or not to refrain from it, or if the demand or acceptance or promise comes subsequent to the performance of the act or the refrainment from the performance thereof.</em></p>\r\n<p class=\"p7\">This provision expands the offence of bribery into the private sector to encompass all employees in conformity with the amendments to Article 234, and has resulted in the repeal of the old article 236 where the offence was limited to members of the board and management.</p>\r\n<p class=\"p1\"><em>Article 237(2)(bis) </em></p>\r\n<p class=\"p1\">It is to be noted that despite the expansion of the provisions of the offences of bribery to included foreign public officials, the punishment for those who are convicted has remained unchanged.</p>\r\n<p class=\"p1\"><em>Article 239 (1) (bis) </em></p>\r\n<p class=\"p1\"><em>The provisions of this Law shall apply on whoever commits one of the crimes set forth in this Chapter outside the State, or if the perpetrator or the victim is a national of the country, or if the crime is committed by an employee of the public or private sector of the State or affects a public property.</em></p>\r\n<p class=\"p7\">As with Article 230 (bis) but with a wider application, this article gives the authorities extraterritorial jurisdiction over all offences of bribery even if committed outside of the UAE.</p>\r\n<p class=\"p1\"><em>Article 239 (2) (bis)</em></p>\r\n<p class=\"p1\"><em>The criminal action shall not abate upon the lapse of the term in one of the crimes provided for in this Chapter and the adjudged sentence shall not abate. The civil actions that arise from or are connected to such action shall not abate upon the lapse of the term.</em></p>\r\n<p class=\"p7\">This provision departs from the general principles which apply to the statute of limitations relating to all offences and expands its scope to encompass civil claims arising from these offences. The article removes all time bars in relation to all offences of bribery so that there is no longer a time limit by which an investigation or a civil claim needs to be brought against those involved. Nor can any punishment be unenforceable by reason of the passage of time. This creates a strong deterrent by ensuring that those who commit these types of offences will be held to account and punished no matter when the crime was committed.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Repealed Provisions</strong></span></p>\r\n<p class=\"p1\">The provisions 235 and 236 have been repealed, as they were rendered redundant by other amendments to the law.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Conclusion </strong></span></p>\r\n<p class=\"p1\">The changes to the Penal Code highlighted above have a direct bearing on the offences of bribery and the misappropriation of public funds. The scope of who the offences apply to has been significantly broadened, together with the removal of any limitation period for the bringing of criminal or civil actions in relation to them. The changes will have a positive impact on the interests of all those who do business in the UAE, as they help protect the integrity of the country’s business and government sectors, thereby protecting the financial interests of all.</p>\r\n<p class=\"p1\"><em>Al Tamimi &amp; Company’s Financial Crime team regularly advises on the new amendments of Penal Code and its impact on the individuals and companies in relation to bribery and public funds. For further information please contact Waleed Shalabi (W.Shalabi@tamimi.com)</em></p>');

