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	(304031,29057,'PostTitle','Terminating and Replacing a Commercial Agent in the UAE'),
	(304032,29057,'PostStatus','publish'),
	(304033,29057,'PostType','law_update_articles'),
	(304034,29057,'PostDate','2018-09-04 08:03:49'),
	(304035,29057,'PostUrl','http://localhost:8888/tamimi/law-update-articles/terminating-and-replacing-a-commercial-agent-in-the-uae/'),
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As a result, he was terminated and the commercial agency struck off the Ministry of Economy’s register. The Federal Supreme Court found that the agent was unable to prove that the termination was unjustified and was not entitled to receive compensation from the principal. The agent was also unable to preclude the principals from registering a replacement agent.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Background</h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<p dir=\"LTR\" align=\"LEFT\">In the early 1980s, two principals (the \"Principals\") appointed an agent (the \"Original Agent\"), to represent them in the UAE. The Original Agent agreed to distribute, sell, and provide services on behalf of the two Principals in relation to three brands, two for Principal 1 and the third for Principal 2.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2004, problems arose when the Original Agent failed to pay for shipments within the timeframe agreed (30-90 days). As a result, the Principals obtained guarantees from the Original Agent and sent regular reminders to pay on time. The Principals continued to send shipments (because of the guarantees) and warned the Original Agent that he would be in breach of their commercial agency agreement if he continued to default. If he continued to be in default, the Principals would terminate the agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent defaulted under the agreement and a letter of termination was sent to him. The letter included a notice period for the Original Agent to improve and comply with the payment terms agreed upon and to settle all outstanding payments, failing which the agreement would be terminated. The parties attempted but failed to resolve their issues amicably and the Original Agent continued to breach the payment terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">According to the Commercial Agency Law, the Minister of Economy is permitted to cancel a commercial agency arrangement if material reasons exist to terminate. The Minister at the time cancelled the commercial agency arrangement based on the letter of termination. Three letters were sent (one for each brand) and the Principals encashed the guarantees in lieu of the outstanding invoices.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three administrative cases (two against Principal 1 and one against Principal 2) seeking a declaration that the Minister’s decision was null and void and asking for reinstatement as the agent in the Commercial Agency Register maintained by the Ministry of Economy. The agent argued that, according to Article 14 of the UAE Commercial Agency Law, a meeting should have been called first within 60 days of the letter of termination to address the Principals’ reasons for its request to deregister and to give the Original Agent an opportunity to respond to those reasons. However, the Ministry failed to call such meeting within the 60 day timeframe and the Original Agent argued that the requirements under the law were therefore not met.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Original Agent’s claim and held that the Ministry’s duty was satisfied because of the communications exchanged between the parties. The Original Agent appealed the decision to the Court of Appeal, where he argued that the Court of First Instance was incorrect. He argued that calling a meeting was merely a formality but it existed to protect the rights of the agent. The Principals appealed to the Supreme Court. The Supreme Court upheld the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">New agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">After the Ministry struck the Original Agent from the Commercial Agency Register, the Principals appointed new agents (the \"New Agents\"). Principal 1 appointed two agents for the emirate of Sharjah and the Northern Emirates and a second for the emirate of Abu Dhabi. Principal 2 appointed an agent for the whole of the UAE. Both New Agents were registered in the Commercial Agency Register.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of First Instance judgment on the Original Agent’s request to cancel the registration of the New Agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed an action to declare the Minister’s decision null and void and also to cancel the registrations of the New Agents. His request was rejected by the Court of First Instance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One of the remedies sought by the Original Agent in addition to the request to nullify the Ministry’s decision was the request to be reinstated in the Commercial Agency Register. However, the Court refused this on the basis that the New Agents had already been registered. The Court of First Instance did not issue a decision to cancel the new agency and the Original Agent then filed an appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of Appeal</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Court of Appeal. The Court of Appeal ruled in favour of the Original Agent and declared the Minister’s decision null and void.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the Court of Appeal refused to issue a decision on the deregistration of the New Agents on the basis that this issue was not addressed by the Court of First Instance at the time of issuing its judgment. The Court further ruled that, as this issue was overlooked by the Court of First Instance, the Original Agent could not appeal the Court of First Instance’s decision. He must therefore go back to the Court of First Instance to seek a remedy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court, who requested that the matter be referred to three experts (one for each brand). All three experts said that the Original Agent was in breach of his obligations and not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Original Agent won a judgment in its favour, the New Agents were still registered in the Commercial Agency Register. The Original Agent asked the Execution Court to enforce the Court of Appeal judgment and requested to be reinstated as agent, reiterating that the Minister’s decision was declared invalid and therefore the effect of its decision should also be declared null and void. This request was rejected.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 1</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three claims (one for each brand) against the Principals. The total claim amount was approximately AED 600 million (representing loss of earnings and expenses).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance referred the cases to a panel of experts. The new panel of experts (like the previous panel) concluded that the Original Agent was in breach of the agreements and caused substantial loss to the Principals. The three experts reported that the breaches had been brought to the attention of the Original Agent to no avail. Therefore, they were not entitled to compensation. The Court of First Instance dismissed the three claims and the Original Agent appealed to the Court of Appeal. The Court of Appeal upheld the Court of First Instance judgment. The Original Agent again went to the Supreme Court and the Supreme Court rejected his appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright size-full wp-image-8237\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_05_Image_0001.jpg\" alt=\"\" width=\"326\" height=\"906\" />Compensation claims by the Original Agent: Part 2</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In 2014, the Original Agent filed three new lawsuits. In the new cases, he claimed approximately a total of AED 5 billion. The Original Agent also included the Ministry, the New Agents and the Principals as defendants to the action.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Principals raised many defences including res judicata (as this new case was similar to the previous case already decided) and limitation on the grounds the claim was time-barred because the termination was in 2005 and the new claim was filed in 2014. In addition, the Principals also argued that the case should be rejected because of the Original Agent’s breach of his agreement and the fact that there is no standing to sue (there is no relationship between the New Agents and the Original Agent).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance accepted the New Agents’ defences and rejected the case against the Ministry. The Original Agent appealed to the Court of Appeal. The Court of Appeal rejected the Original Agent’s appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Supreme Court of Cassation (final time)</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court for the second time. The Supreme Court dismissed the appeal and upheld the Court of Appeal judgment based on the grounds set out in the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Summary of case</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In summary, the Court of Appeal in all matters filed by the Original Agent referred the matter to a panel of experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All three panels confirmed that the Original Agent had committed many breaches such as non-payment of invoices, poor management of the business, lack of customer service and therefore the agent was not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the Federal Supreme Court issued its judgment.</p>\r\n&nbsp;\r\n<ol>\r\n 	<li dir=\"LTR\">It rejected the appeal of the Original Agent and upheld the Court of First Instance judgment in its entirety.</li>\r\n 	<li dir=\"LTR\">It held that the cases should have been filed as a tort claim as it was a request for compensation for a wrongful act because of the alleged wrongful termination.</li>\r\n 	<li dir=\"LTR\">The Original Agent did not substantiate his claims and provide proof of damages allegedly suffered as a result of the agency being struck off the Commercial Agency Register.</li>\r\n 	<li dir=\"LTR\">The New Agents’ involvement in the dispute had no legal basis. The New Agents were not a party to the dispute nor was there any evidence of any damage caused by the New Agents’ appointment.</li>\r\n 	<li dir=\"LTR\">As confirmed by the panel of experts, the Original Agent had breached the terms of the agency agreement by failing to make timely payments to the Principals and did not report declining sales until the business incurred a major loss.</li>\r\n 	<li dir=\"LTR\">The Court of First Instance was correct in dismissing the action against the Principals.</li>\r\n</ol>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comments</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The outcome of the case was excellent for the Principals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The decision confirms that notwithstanding the protections afforded to agents, agents who choose not to perform as expected will not benefit from the protections provided under the Commercial Agency Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This case also demonstrates the importance of substantiating any claims against a non-performing agent to justify termination.</p>');

INSERT INTO `tm_wsal_metadata` (`id`, `occurrence_id`, `name`, `value`)
VALUES
	(304039,29057,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\">In the UAE, commercial agents are granted numerous statutory rights under the Commercial Agency Law (Federal Law No. 18 of 1981, as amended).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These rights are designed to protect an agent who may devote considerable effort and costs to build a profitable market for products or services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In many cases in the UAE, a terminated agent may use the Commercial Agency Law to prevent a foreign principal from registering a replacement agent unless the original agent is paid what is due under the original commercial agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In two recent cases, Federal Supreme Court Case 811 of 2017 and Federal Supreme Court Case 814 of 2017 both dated 27 March 2018, the agent’s performance was poor and it was clear that he was in breach of a commercial agency agreement. As a result, he was terminated and the commercial agency struck off the Ministry of Economy’s register. The Federal Supreme Court found that the agent was unable to prove that the termination was unjustified and was not entitled to receive compensation from the principal. The agent was also unable to preclude the principals from registering a replacement agent.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Background</h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<p dir=\"LTR\" align=\"LEFT\">In the early 1980s, two principals (the \"Principals\") appointed an agent (the \"Original Agent\"), to represent them in the UAE. The Original Agent agreed to distribute, sell, and provide services on behalf of the two Principals in relation to three brands, two for Principal 1 and the third for Principal 2.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2004, problems arose when the Original Agent failed to pay for shipments within the timeframe agreed (30-90 days). As a result, the Principals obtained guarantees from the Original Agent and sent regular reminders to pay on time. The Principals continued to send shipments (because of the guarantees) and warned the Original Agent that he would be in breach of their commercial agency agreement if he continued to default. If he continued to be in default, the Principals would terminate the agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent defaulted under the agreement and a letter of termination was sent to him. The letter included a notice period for the Original Agent to improve and comply with the payment terms agreed upon and to settle all outstanding payments, failing which the agreement would be terminated. The parties attempted but failed to resolve their issues amicably and the Original Agent continued to breach the payment terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">According to the Commercial Agency Law, the Minister of Economy is permitted to cancel a commercial agency arrangement if material reasons exist to terminate. The Minister at the time cancelled the commercial agency arrangement based on the letter of termination. Three letters were sent (one for each brand) and the Principals encashed the guarantees in lieu of the outstanding invoices.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three administrative cases (two against Principal 1 and one against Principal 2) seeking a declaration that the Minister’s decision was null and void and asking for reinstatement as the agent in the Commercial Agency Register maintained by the Ministry of Economy. The agent argued that, according to Article 14 of the UAE Commercial Agency Law, a meeting should have been called first within 60 days of the letter of termination to address the Principals’ reasons for its request to deregister and to give the Original Agent an opportunity to respond to those reasons. However, the Ministry failed to call such meeting within the 60 day timeframe and the Original Agent argued that the requirements under the law were therefore not met.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Original Agent’s claim and held that the Ministry’s duty was satisfied because of the communications exchanged between the parties. The Original Agent appealed the decision to the Court of Appeal, where he argued that the Court of First Instance was incorrect. He argued that calling a meeting was merely a formality but it existed to protect the rights of the agent. The Principals appealed to the Supreme Court. The Supreme Court upheld the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">New agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">After the Ministry struck the Original Agent from the Commercial Agency Register, the Principals appointed new agents (the \"New Agents\"). Principal 1 appointed two agents for the emirate of Sharjah and the Northern Emirates and a second for the emirate of Abu Dhabi. Principal 2 appointed an agent for the whole of the UAE. Both New Agents were registered in the Commercial Agency Register.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of First Instance judgment on the Original Agent’s request to cancel the registration of the New Agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed an action to declare the Minister’s decision null and void and also to cancel the registrations of the New Agents. His request was rejected by the Court of First Instance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One of the remedies sought by the Original Agent in addition to the request to nullify the Ministry’s decision was the request to be reinstated in the Commercial Agency Register. However, the Court refused this on the basis that the New Agents had already been registered. The Court of First Instance did not issue a decision to cancel the new agency and the Original Agent then filed an appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of Appeal</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Court of Appeal. The Court of Appeal ruled in favour of the Original Agent and declared the Minister’s decision null and void.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the Court of Appeal refused to issue a decision on the deregistration of the New Agents on the basis that this issue was not addressed by the Court of First Instance at the time of issuing its judgment. The Court further ruled that, as this issue was overlooked by the Court of First Instance, the Original Agent could not appeal the Court of First Instance’s decision. He must therefore go back to the Court of First Instance to seek a remedy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court, who requested that the matter be referred to three experts (one for each brand). All three experts said that the Original Agent was in breach of his obligations and not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Original Agent won a judgment in its favour, the New Agents were still registered in the Commercial Agency Register. The Original Agent asked the Execution Court to enforce the Court of Appeal judgment and requested to be reinstated as agent, reiterating that the Minister’s decision was declared invalid and therefore the effect of its decision should also be declared null and void. This request was rejected.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 1</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three claims (one for each brand) against the Principals. The total claim amount was approximately AED 600 million (representing loss of earnings and expenses).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance referred the cases to a panel of experts. The new panel of experts (like the previous panel) concluded that the Original Agent was in breach of the agreements and caused substantial loss to the Principals. The three experts reported that the breaches had been brought to the attention of the Original Agent to no avail. Therefore, they were not entitled to compensation. The Court of First Instance dismissed the three claims and the Original Agent appealed to the Court of Appeal. The Court of Appeal upheld the Court of First Instance judgment. The Original Agent again went to the Supreme Court and the Supreme Court rejected his appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 2</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In 2014, the Original Agent filed three new lawsuits. In the new cases, he claimed approximately a total of AED 5 billion. The Original Agent also included the Ministry, the New Agents and the Principals as defendants to the action.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Principals raised many defences including res judicata (as this new case was similar to the previous case already decided) and limitation on the grounds the claim was time-barred because the termination was in 2005 and the new claim was filed in 2014. In addition, the Principals also argued that the case should be rejected because of the Original Agent’s breach of his agreement and the fact that there is no standing to sue (there is no relationship between the New Agents and the Original Agent).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance accepted the New Agents’ defences and rejected the case against the Ministry. The Original Agent appealed to the Court of Appeal. The Court of Appeal rejected the Original Agent’s appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Supreme Court of Cassation (final time)</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court for the second time. The Supreme Court dismissed the appeal and upheld the Court of Appeal judgment based on the grounds set out in the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Summary of case</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In summary, the Court of Appeal in all matters filed by the Original Agent referred the matter to a panel of experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All three panels confirmed that the Original Agent had committed many breaches such as non-payment of invoices, poor management of the business, lack of customer service and therefore the agent was not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the Federal Supreme Court issued its judgment.</p>\r\n&nbsp;\r\n<ol>\r\n 	<li dir=\"LTR\">It rejected the appeal of the Original Agent and upheld the Court of First Instance judgment in its entirety.</li>\r\n 	<li dir=\"LTR\">It held that the cases should have been filed as a tort claim as it was a request for compensation for a wrongful act because of the alleged wrongful termination.</li>\r\n 	<li dir=\"LTR\">The Original Agent did not substantiate his claims and provide proof of damages allegedly suffered as a result of the agency being struck off the Commercial Agency Register.</li>\r\n 	<li dir=\"LTR\">The New Agents’ involvement in the dispute had no legal basis. The New Agents were not a party to the dispute nor was there any evidence of any damage caused by the New Agents’ appointment.</li>\r\n 	<li dir=\"LTR\">As confirmed by the panel of experts, the Original Agent had breached the terms of the agency agreement by failing to make timely payments to the Principals and did not report declining sales until the business incurred a major loss.</li>\r\n 	<li dir=\"LTR\">The Court of First Instance was correct in dismissing the action against the Principals.</li>\r\n</ol>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comments</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The outcome of the case was excellent for the Principals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The decision confirms that notwithstanding the protections afforded to agents, agents who choose not to perform as expected will not benefit from the protections provided under the Commercial Agency Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This case also demonstrates the importance of substantiating any claims against a non-performing agent to justify termination.</p>'),
	(304040,29057,'MetaLink','content'),
	(304041,29057,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8182&amp;action=edit'),
	(304042,29057,'ReportText','<p dir=\"LTR\" align=\"LEFT\">In the UAE, commercial agents are granted numerous statutory rights under the Commercial Agency Law (Federal Law No. 18 of 1981, as amended).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These rights are designed to protect an agent who may devote considerable effort and costs to build a profitable market for products or services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In many cases in the UAE, a terminated agent may use the Commercial Agency Law to prevent a foreign principal from registering a replacement agent unless the original agent is paid what is due under the original commercial agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In two recent cases, Federal Supreme Court Case 811 of 2017 and Federal Supreme Court Case 814 of 2017 both dated 27 March 2018, the agent’s performance was poor and it was clear that he was in breach of a commercial agency agreement. As a result, he was terminated and the commercial agency struck off the Ministry of Economy’s register. The Federal Supreme Court found that the agent was unable to prove that the termination was unjustified and was not entitled to receive compensation from the principal. The agent was also unable to preclude the principals from registering a replacement agent.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Background</h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<p dir=\"LTR\" align=\"LEFT\">In the early 1980s, two principals (the \"Principals\") appointed an agent (the \"Original Agent\"), to represent them in the UAE. The Original Agent agreed to distribute, sell, and provide services on behalf of the two Principals in relation to three brands, two for Principal 1 and the third for Principal 2.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2004, problems arose when the Original Agent failed to pay for shipments within the timeframe agreed (30-90 days). As a result, the Principals obtained guarantees from the Original Agent and sent regular reminders to pay on time. The Principals continued to send shipments (because of the guarantees) and warned the Original Agent that he would be in breach of their commercial agency agreement if he continued to default. If he continued to be in default, the Principals would terminate the agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent defaulted under the agreement and a letter of termination was sent to him. The letter included a notice period for the Original Agent to improve and comply with the payment terms agreed upon and to settle all outstanding payments, failing which the agreement would be terminated. The parties attempted but failed to resolve their issues amicably and the Original Agent continued to breach the payment terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">According to the Commercial Agency Law, the Minister of Economy is permitted to cancel a commercial agency arrangement if material reasons exist to terminate. The Minister at the time cancelled the commercial agency arrangement based on the letter of termination. Three letters were sent (one for each brand) and the Principals encashed the guarantees in lieu of the outstanding invoices.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three administrative cases (two against Principal 1 and one against Principal 2) seeking a declaration that the Minister’s decision was null and void and asking for reinstatement as the agent in the Commercial Agency Register maintained by the Ministry of Economy. The agent argued that, according to Article 14 of the UAE Commercial Agency Law, a meeting should have been called first within 60 days of the letter of termination to address the Principals’ reasons for its request to deregister and to give the Original Agent an opportunity to respond to those reasons. However, the Ministry failed to call such meeting within the 60 day timeframe and the Original Agent argued that the requirements under the law were therefore not met.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Original Agent’s claim and held that the Ministry’s duty was satisfied because of the communications exchanged between the parties. The Original Agent appealed the decision to the Court of Appeal, where he argued that the Court of First Instance was incorrect. He argued that calling a meeting was merely a formality but it existed to protect the rights of the agent. The Principals appealed to the Supreme Court. The Supreme Court upheld the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">New agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">After the Ministry struck the Original Agent from the Commercial Agency Register, the Principals appointed new agents (the \"New Agents\"). Principal 1 appointed two agents for the emirate of Sharjah and the Northern Emirates and a second for the emirate of Abu Dhabi. Principal 2 appointed an agent for the whole of the UAE. Both New Agents were registered in the Commercial Agency Register.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of First Instance judgment on the Original Agent’s request to cancel the registration of the New Agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed an action to declare the Minister’s decision null and void and also to cancel the registrations of the New Agents. His request was rejected by the Court of First Instance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One of the remedies sought by the Original Agent in addition to the request to nullify the Ministry’s decision was the request to be reinstated in the Commercial Agency Register. However, the Court refused this on the basis that the New Agents had already been registered. The Court of First Instance did not issue a decision to cancel the new agency and the Original Agent then filed an appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of Appeal</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Court of Appeal. The Court of Appeal ruled in favour of the Original Agent and declared the Minister’s decision null and void.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the Court of Appeal refused to issue a decision on the deregistration of the New Agents on the basis that this issue was not addressed by the Court of First Instance at the time of issuing its judgment. The Court further ruled that, as this issue was overlooked by the Court of First Instance, the Original Agent could not appeal the Court of First Instance’s decision. He must therefore go back to the Court of First Instance to seek a remedy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court, who requested that the matter be referred to three experts (one for each brand). All three experts said that the Original Agent was in breach of his obligations and not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Original Agent won a judgment in its favour, the New Agents were still registered in the Commercial Agency Register. The Original Agent asked the Execution Court to enforce the Court of Appeal judgment and requested to be reinstated as agent, reiterating that the Minister’s decision was declared invalid and therefore the effect of its decision should also be declared null and void. This request was rejected.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 1</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three claims (one for each brand) against the Principals. The total claim amount was approximately AED 600 million (representing loss of earnings and expenses).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance referred the cases to a panel of experts. The new panel of experts (like the previous panel) concluded that the Original Agent was in breach of the agreements and caused substantial loss to the Principals. The three experts reported that the breaches had been brought to the attention of the Original Agent to no avail. Therefore, they were not entitled to compensation. The Court of First Instance dismissed the three claims and the Original Agent appealed to the Court of Appeal. The Court of Appeal upheld the Court of First Instance judgment. The Original Agent again went to the Supreme Court and the Supreme Court rejected his appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 2</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In 2014, the Original Agent filed three new lawsuits. In the new cases, he claimed approximately a total of AED 5 billion. The Original Agent also included the Ministry, the New Agents and the Principals as defendants to the action.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Principals raised many defences including res judicata (as this new case was similar to the previous case already decided) and limitation on the grounds the claim was time-barred because the termination was in 2005 and the new claim was filed in 2014. In addition, the Principals also argued that the case should be rejected because of the Original Agent’s breach of his agreement and the fact that there is no standing to sue (there is no relationship between the New Agents and the Original Agent).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance accepted the New Agents’ defences and rejected the case against the Ministry. The Original Agent appealed to the Court of Appeal. The Court of Appeal rejected the Original Agent’s appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Supreme Court of Cassation (final time)</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court for the second time. The Supreme Court dismissed the appeal and upheld the Court of Appeal judgment based on the grounds set out in the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Summary of case</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In summary, the Court of Appeal in all matters filed by the Original Agent referred the matter to a panel of experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All three panels confirmed that the Original Agent had committed many breaches such as non-payment of invoices, poor management of the business, lack of customer service and therefore the agent was not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the Federal Supreme Court issued its judgment.</p>\r\n&nbsp;\r\n<ol>\r\n 	<li dir=\"LTR\">It rejected the appeal of the Original Agent and upheld the Court of First Instance judgment in its entirety.</li>\r\n 	<li dir=\"LTR\">It held that the cases should have been filed as a tort claim as it was a request for compensation for a wrongful act because of the alleged wrongful termination.</li>\r\n 	<li dir=\"LTR\">The Original Agent did not substantiate his claims and provide proof of damages allegedly suffered as a result of the agency being struck off the Commercial Agency Register.</li>\r\n 	<li dir=\"LTR\">The New Agents’ involvement in the dispute had no legal basis. The New Agents were not a party to the dispute nor was there any evidence of any damage caused by the New Agents’ appointment.</li>\r\n 	<li dir=\"LTR\">As confirmed by the panel of experts, the Original Agent had breached the terms of the agency agreement by failing to make timely payments to the Principals and did not report declining sales until the business incurred a major loss.</li>\r\n 	<li dir=\"LTR\">The Court of First Instance was correct in dismissing the action against the Principals.</li>\r\n</ol>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comments</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The outcome of the case was excellent for the Principals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The decision confirms that notwithstanding the protections afforded to agents, agents who choose not to perform as expected will not benefit from the protections provided under the Commercial Agency Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This case also demonstrates the importance of substantiating any claims against a non-performing agent to justify termination.</p>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"size-full wp-image-8236 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_04_Image_0003.jpg\" alt=\"\" width=\"671\" height=\"574\" />In the UAE, commercial agents are granted numerous statutory rights under the Commercial Agency Law (Federal Law No. 18 of 1981, as amended).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These rights are designed to protect an agent who may devote considerable effort and costs to build a profitable market for products or services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In many cases in the UAE, a terminated agent may use the Commercial Agency Law to prevent a foreign principal from registering a replacement agent unless the original agent is paid what is due under the original commercial agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In two recent cases, Federal Supreme Court Case 811 of 2017 and Federal Supreme Court Case 814 of 2017 both dated 27 March 2018, the agent’s performance was poor and it was clear that he was in breach of a commercial agency agreement. As a result, he was terminated and the commercial agency struck off the Ministry of Economy’s register. The Federal Supreme Court found that the agent was unable to prove that the termination was unjustified and was not entitled to receive compensation from the principal. The agent was also unable to preclude the principals from registering a replacement agent.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Background</h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<p dir=\"LTR\" align=\"LEFT\">In the early 1980s, two principals (the \"Principals\") appointed an agent (the \"Original Agent\"), to represent them in the UAE. The Original Agent agreed to distribute, sell, and provide services on behalf of the two Principals in relation to three brands, two for Principal 1 and the third for Principal 2.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2004, problems arose when the Original Agent failed to pay for shipments within the timeframe agreed (30-90 days). As a result, the Principals obtained guarantees from the Original Agent and sent regular reminders to pay on time. The Principals continued to send shipments (because of the guarantees) and warned the Original Agent that he would be in breach of their commercial agency agreement if he continued to default. If he continued to be in default, the Principals would terminate the agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent defaulted under the agreement and a letter of termination was sent to him. The letter included a notice period for the Original Agent to improve and comply with the payment terms agreed upon and to settle all outstanding payments, failing which the agreement would be terminated. The parties attempted but failed to resolve their issues amicably and the Original Agent continued to breach the payment terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">According to the Commercial Agency Law, the Minister of Economy is permitted to cancel a commercial agency arrangement if material reasons exist to terminate. The Minister at the time cancelled the commercial agency arrangement based on the letter of termination. Three letters were sent (one for each brand) and the Principals encashed the guarantees in lieu of the outstanding invoices.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three administrative cases (two against Principal 1 and one against Principal 2) seeking a declaration that the Minister’s decision was null and void and asking for reinstatement as the agent in the Commercial Agency Register maintained by the Ministry of Economy. The agent argued that, according to Article 14 of the UAE Commercial Agency Law, a meeting should have been called first within 60 days of the letter of termination to address the Principals’ reasons for its request to deregister and to give the Original Agent an opportunity to respond to those reasons. However, the Ministry failed to call such meeting within the 60 day timeframe and the Original Agent argued that the requirements under the law were therefore not met.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Original Agent’s claim and held that the Ministry’s duty was satisfied because of the communications exchanged between the parties. The Original Agent appealed the decision to the Court of Appeal, where he argued that the Court of First Instance was incorrect. He argued that calling a meeting was merely a formality but it existed to protect the rights of the agent. The Principals appealed to the Supreme Court. The Supreme Court upheld the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">New agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">After the Ministry struck the Original Agent from the Commercial Agency Register, the Principals appointed new agents (the \"New Agents\"). Principal 1 appointed two agents for the emirate of Sharjah and the Northern Emirates and a second for the emirate of Abu Dhabi. Principal 2 appointed an agent for the whole of the UAE. Both New Agents were registered in the Commercial Agency Register.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of First Instance judgment on the Original Agent’s request to cancel the registration of the New Agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed an action to declare the Minister’s decision null and void and also to cancel the registrations of the New Agents. His request was rejected by the Court of First Instance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One of the remedies sought by the Original Agent in addition to the request to nullify the Ministry’s decision was the request to be reinstated in the Commercial Agency Register. However, the Court refused this on the basis that the New Agents had already been registered. The Court of First Instance did not issue a decision to cancel the new agency and the Original Agent then filed an appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of Appeal</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Court of Appeal. The Court of Appeal ruled in favour of the Original Agent and declared the Minister’s decision null and void.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the Court of Appeal refused to issue a decision on the deregistration of the New Agents on the basis that this issue was not addressed by the Court of First Instance at the time of issuing its judgment. The Court further ruled that, as this issue was overlooked by the Court of First Instance, the Original Agent could not appeal the Court of First Instance’s decision. He must therefore go back to the Court of First Instance to seek a remedy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court, who requested that the matter be referred to three experts (one for each brand). All three experts said that the Original Agent was in breach of his obligations and not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Original Agent won a judgment in its favour, the New Agents were still registered in the Commercial Agency Register. The Original Agent asked the Execution Court to enforce the Court of Appeal judgment and requested to be reinstated as agent, reiterating that the Minister’s decision was declared invalid and therefore the effect of its decision should also be declared null and void. This request was rejected.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 1</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three claims (one for each brand) against the Principals. The total claim amount was approximately AED 600 million (representing loss of earnings and expenses).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance referred the cases to a panel of experts. The new panel of experts (like the previous panel) concluded that the Original Agent was in breach of the agreements and caused substantial loss to the Principals. The three experts reported that the breaches had been brought to the attention of the Original Agent to no avail. Therefore, they were not entitled to compensation. The Court of First Instance dismissed the three claims and the Original Agent appealed to the Court of Appeal. The Court of Appeal upheld the Court of First Instance judgment. The Original Agent again went to the Supreme Court and the Supreme Court rejected his appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright size-full wp-image-8237\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_05_Image_0001.jpg\" alt=\"\" width=\"326\" height=\"906\" />Compensation claims by the Original Agent: Part 2</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In 2014, the Original Agent filed three new lawsuits. In the new cases, he claimed approximately a total of AED 5 billion. The Original Agent also included the Ministry, the New Agents and the Principals as defendants to the action.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Principals raised many defences including res judicata (as this new case was similar to the previous case already decided) and limitation on the grounds the claim was time-barred because the termination was in 2005 and the new claim was filed in 2014. In addition, the Principals also argued that the case should be rejected because of the Original Agent’s breach of his agreement and the fact that there is no standing to sue (there is no relationship between the New Agents and the Original Agent).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance accepted the New Agents’ defences and rejected the case against the Ministry. The Original Agent appealed to the Court of Appeal. The Court of Appeal rejected the Original Agent’s appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Supreme Court of Cassation (final time)</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court for the second time. The Supreme Court dismissed the appeal and upheld the Court of Appeal judgment based on the grounds set out in the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Summary of case</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In summary, the Court of Appeal in all matters filed by the Original Agent referred the matter to a panel of experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All three panels confirmed that the Original Agent had committed many breaches such as non-payment of invoices, poor management of the business, lack of customer service and therefore the agent was not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the Federal Supreme Court issued its judgment.</p>\r\n&nbsp;\r\n<ol>\r\n 	<li dir=\"LTR\">It rejected the appeal of the Original Agent and upheld the Court of First Instance judgment in its entirety.</li>\r\n 	<li dir=\"LTR\">It held that the cases should have been filed as a tort claim as it was a request for compensation for a wrongful act because of the alleged wrongful termination.</li>\r\n 	<li dir=\"LTR\">The Original Agent did not substantiate his claims and provide proof of damages allegedly suffered as a result of the agency being struck off the Commercial Agency Register.</li>\r\n 	<li dir=\"LTR\">The New Agents’ involvement in the dispute had no legal basis. The New Agents were not a party to the dispute nor was there any evidence of any damage caused by the New Agents’ appointment.</li>\r\n 	<li dir=\"LTR\">As confirmed by the panel of experts, the Original Agent had breached the terms of the agency agreement by failing to make timely payments to the Principals and did not report declining sales until the business incurred a major loss.</li>\r\n 	<li dir=\"LTR\">The Court of First Instance was correct in dismissing the action against the Principals.</li>\r\n</ol>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comments</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The outcome of the case was excellent for the Principals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The decision confirms that notwithstanding the protections afforded to agents, agents who choose not to perform as expected will not benefit from the protections provided under the Commercial Agency Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This case also demonstrates the importance of substantiating any claims against a non-performing agent to justify termination.</p>'),
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	(304094,29061,'CurrentUserRoles','a:2:{i:0;s:13:\"administrator\";i:1;s:10:\"superadmin\";}'),
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	(304096,29062,'PostID','8182'),
	(304097,29062,'PostTitle','Terminating and Replacing a Commercial Agent in the UAE'),
	(304098,29062,'PostStatus','publish'),
	(304099,29062,'PostType','law_update_articles'),
	(304100,29062,'PostDate','2018-09-04 08:03:49'),
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	(304104,29062,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\" wp-image-8236 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_04_Image_0003.jpg\" alt=\"\" width=\"428\" height=\"366\" />In the UAE, commercial agents are granted numerous statutory rights under the Commercial Agency Law (Federal Law No. 18 of 1981, as amended).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These rights are designed to protect an agent who may devote considerable effort and costs to build a profitable market for products or services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In many cases in the UAE, a terminated agent may use the Commercial Agency Law to prevent a foreign principal from registering a replacement agent unless the original agent is paid what is due under the original commercial agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In two recent cases, Federal Supreme Court Case 811 of 2017 and Federal Supreme Court Case 814 of 2017 both dated 27 March 2018, the agent’s performance was poor and it was clear that he was in breach of a commercial agency agreement. As a result, he was terminated and the commercial agency struck off the Ministry of Economy’s register. The Federal Supreme Court found that the agent was unable to prove that the termination was unjustified and was not entitled to receive compensation from the principal. The agent was also unable to preclude the principals from registering a replacement agent.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Background</h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<p dir=\"LTR\" align=\"LEFT\">In the early 1980s, two principals (the \"Principals\") appointed an agent (the \"Original Agent\"), to represent them in the UAE. The Original Agent agreed to distribute, sell, and provide services on behalf of the two Principals in relation to three brands, two for Principal 1 and the third for Principal 2.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2004, problems arose when the Original Agent failed to pay for shipments within the timeframe agreed (30-90 days). As a result, the Principals obtained guarantees from the Original Agent and sent regular reminders to pay on time. The Principals continued to send shipments (because of the guarantees) and warned the Original Agent that he would be in breach of their commercial agency agreement if he continued to default. If he continued to be in default, the Principals would terminate the agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent defaulted under the agreement and a letter of termination was sent to him. The letter included a notice period for the Original Agent to improve and comply with the payment terms agreed upon and to settle all outstanding payments, failing which the agreement would be terminated. The parties attempted but failed to resolve their issues amicably and the Original Agent continued to breach the payment terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">According to the Commercial Agency Law, the Minister of Economy is permitted to cancel a commercial agency arrangement if material reasons exist to terminate. The Minister at the time cancelled the commercial agency arrangement based on the letter of termination. Three letters were sent (one for each brand) and the Principals encashed the guarantees in lieu of the outstanding invoices.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three administrative cases (two against Principal 1 and one against Principal 2) seeking a declaration that the Minister’s decision was null and void and asking for reinstatement as the agent in the Commercial Agency Register maintained by the Ministry of Economy. The agent argued that, according to Article 14 of the UAE Commercial Agency Law, a meeting should have been called first within 60 days of the letter of termination to address the Principals’ reasons for its request to deregister and to give the Original Agent an opportunity to respond to those reasons. However, the Ministry failed to call such meeting within the 60 day timeframe and the Original Agent argued that the requirements under the law were therefore not met.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Original Agent’s claim and held that the Ministry’s duty was satisfied because of the communications exchanged between the parties. The Original Agent appealed the decision to the Court of Appeal, where he argued that the Court of First Instance was incorrect. He argued that calling a meeting was merely a formality but it existed to protect the rights of the agent. The Principals appealed to the Supreme Court. The Supreme Court upheld the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">New agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">After the Ministry struck the Original Agent from the Commercial Agency Register, the Principals appointed new agents (the \"New Agents\"). Principal 1 appointed two agents for the emirate of Sharjah and the Northern Emirates and a second for the emirate of Abu Dhabi. Principal 2 appointed an agent for the whole of the UAE. Both New Agents were registered in the Commercial Agency Register.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of First Instance judgment on the Original Agent’s request to cancel the registration of the New Agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed an action to declare the Minister’s decision null and void and also to cancel the registrations of the New Agents. His request was rejected by the Court of First Instance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One of the remedies sought by the Original Agent in addition to the request to nullify the Ministry’s decision was the request to be reinstated in the Commercial Agency Register. However, the Court refused this on the basis that the New Agents had already been registered. The Court of First Instance did not issue a decision to cancel the new agency and the Original Agent then filed an appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of Appeal</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Court of Appeal. The Court of Appeal ruled in favour of the Original Agent and declared the Minister’s decision null and void.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the Court of Appeal refused to issue a decision on the deregistration of the New Agents on the basis that this issue was not addressed by the Court of First Instance at the time of issuing its judgment. The Court further ruled that, as this issue was overlooked by the Court of First Instance, the Original Agent could not appeal the Court of First Instance’s decision. He must therefore go back to the Court of First Instance to seek a remedy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court, who requested that the matter be referred to three experts (one for each brand). All three experts said that the Original Agent was in breach of his obligations and not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Original Agent won a judgment in its favour, the New Agents were still registered in the Commercial Agency Register. The Original Agent asked the Execution Court to enforce the Court of Appeal judgment and requested to be reinstated as agent, reiterating that the Minister’s decision was declared invalid and therefore the effect of its decision should also be declared null and void. This request was rejected.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 1</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three claims (one for each brand) against the Principals. The total claim amount was approximately AED 600 million (representing loss of earnings and expenses).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance referred the cases to a panel of experts. The new panel of experts (like the previous panel) concluded that the Original Agent was in breach of the agreements and caused substantial loss to the Principals. The three experts reported that the breaches had been brought to the attention of the Original Agent to no avail. Therefore, they were not entitled to compensation. The Court of First Instance dismissed the three claims and the Original Agent appealed to the Court of Appeal. The Court of Appeal upheld the Court of First Instance judgment. The Original Agent again went to the Supreme Court and the Supreme Court rejected his appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright  wp-image-8237\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_05_Image_0001.jpg\" alt=\"\" width=\"298\" height=\"828\" />Compensation claims by the Original Agent: Part 2</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In 2014, the Original Agent filed three new lawsuits. In the new cases, he claimed approximately a total of AED 5 billion. The Original Agent also included the Ministry, the New Agents and the Principals as defendants to the action.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Principals raised many defences including res judicata (as this new case was similar to the previous case already decided) and limitation on the grounds the claim was time-barred because the termination was in 2005 and the new claim was filed in 2014. In addition, the Principals also argued that the case should be rejected because of the Original Agent’s breach of his agreement and the fact that there is no standing to sue (there is no relationship between the New Agents and the Original Agent).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance accepted the New Agents’ defences and rejected the case against the Ministry. The Original Agent appealed to the Court of Appeal. The Court of Appeal rejected the Original Agent’s appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Supreme Court of Cassation (final time)</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court for the second time. The Supreme Court dismissed the appeal and upheld the Court of Appeal judgment based on the grounds set out in the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Summary of case</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In summary, the Court of Appeal in all matters filed by the Original Agent referred the matter to a panel of experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All three panels confirmed that the Original Agent had committed many breaches such as non-payment of invoices, poor management of the business, lack of customer service and therefore the agent was not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the Federal Supreme Court issued its judgment.</p>\r\n&nbsp;\r\n<ol>\r\n 	<li dir=\"LTR\">It rejected the appeal of the Original Agent and upheld the Court of First Instance judgment in its entirety.</li>\r\n 	<li dir=\"LTR\">It held that the cases should have been filed as a tort claim as it was a request for compensation for a wrongful act because of the alleged wrongful termination.</li>\r\n 	<li dir=\"LTR\">The Original Agent did not substantiate his claims and provide proof of damages allegedly suffered as a result of the agency being struck off the Commercial Agency Register.</li>\r\n 	<li dir=\"LTR\">The New Agents’ involvement in the dispute had no legal basis. The New Agents were not a party to the dispute nor was there any evidence of any damage caused by the New Agents’ appointment.</li>\r\n 	<li dir=\"LTR\">As confirmed by the panel of experts, the Original Agent had breached the terms of the agency agreement by failing to make timely payments to the Principals and did not report declining sales until the business incurred a major loss.</li>\r\n 	<li dir=\"LTR\">The Court of First Instance was correct in dismissing the action against the Principals.</li>\r\n</ol>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comments</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The outcome of the case was excellent for the Principals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The decision confirms that notwithstanding the protections afforded to agents, agents who choose not to perform as expected will not benefit from the protections provided under the Commercial Agency Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This case also demonstrates the importance of substantiating any claims against a non-performing agent to justify termination.</p>'),
	(304105,29062,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"size-full wp-image-8236 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_04_Image_0003.jpg\" alt=\"\" width=\"671\" height=\"574\" />In the UAE, commercial agents are granted numerous statutory rights under the Commercial Agency Law (Federal Law No. 18 of 1981, as amended).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These rights are designed to protect an agent who may devote considerable effort and costs to build a profitable market for products or services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In many cases in the UAE, a terminated agent may use the Commercial Agency Law to prevent a foreign principal from registering a replacement agent unless the original agent is paid what is due under the original commercial agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In two recent cases, Federal Supreme Court Case 811 of 2017 and Federal Supreme Court Case 814 of 2017 both dated 27 March 2018, the agent’s performance was poor and it was clear that he was in breach of a commercial agency agreement. As a result, he was terminated and the commercial agency struck off the Ministry of Economy’s register. The Federal Supreme Court found that the agent was unable to prove that the termination was unjustified and was not entitled to receive compensation from the principal. The agent was also unable to preclude the principals from registering a replacement agent.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Background</h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<p dir=\"LTR\" align=\"LEFT\">In the early 1980s, two principals (the \"Principals\") appointed an agent (the \"Original Agent\"), to represent them in the UAE. The Original Agent agreed to distribute, sell, and provide services on behalf of the two Principals in relation to three brands, two for Principal 1 and the third for Principal 2.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2004, problems arose when the Original Agent failed to pay for shipments within the timeframe agreed (30-90 days). As a result, the Principals obtained guarantees from the Original Agent and sent regular reminders to pay on time. The Principals continued to send shipments (because of the guarantees) and warned the Original Agent that he would be in breach of their commercial agency agreement if he continued to default. If he continued to be in default, the Principals would terminate the agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent defaulted under the agreement and a letter of termination was sent to him. The letter included a notice period for the Original Agent to improve and comply with the payment terms agreed upon and to settle all outstanding payments, failing which the agreement would be terminated. The parties attempted but failed to resolve their issues amicably and the Original Agent continued to breach the payment terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">According to the Commercial Agency Law, the Minister of Economy is permitted to cancel a commercial agency arrangement if material reasons exist to terminate. The Minister at the time cancelled the commercial agency arrangement based on the letter of termination. Three letters were sent (one for each brand) and the Principals encashed the guarantees in lieu of the outstanding invoices.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three administrative cases (two against Principal 1 and one against Principal 2) seeking a declaration that the Minister’s decision was null and void and asking for reinstatement as the agent in the Commercial Agency Register maintained by the Ministry of Economy. The agent argued that, according to Article 14 of the UAE Commercial Agency Law, a meeting should have been called first within 60 days of the letter of termination to address the Principals’ reasons for its request to deregister and to give the Original Agent an opportunity to respond to those reasons. However, the Ministry failed to call such meeting within the 60 day timeframe and the Original Agent argued that the requirements under the law were therefore not met.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Original Agent’s claim and held that the Ministry’s duty was satisfied because of the communications exchanged between the parties. The Original Agent appealed the decision to the Court of Appeal, where he argued that the Court of First Instance was incorrect. He argued that calling a meeting was merely a formality but it existed to protect the rights of the agent. The Principals appealed to the Supreme Court. The Supreme Court upheld the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">New agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">After the Ministry struck the Original Agent from the Commercial Agency Register, the Principals appointed new agents (the \"New Agents\"). Principal 1 appointed two agents for the emirate of Sharjah and the Northern Emirates and a second for the emirate of Abu Dhabi. Principal 2 appointed an agent for the whole of the UAE. Both New Agents were registered in the Commercial Agency Register.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of First Instance judgment on the Original Agent’s request to cancel the registration of the New Agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed an action to declare the Minister’s decision null and void and also to cancel the registrations of the New Agents. His request was rejected by the Court of First Instance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One of the remedies sought by the Original Agent in addition to the request to nullify the Ministry’s decision was the request to be reinstated in the Commercial Agency Register. However, the Court refused this on the basis that the New Agents had already been registered. The Court of First Instance did not issue a decision to cancel the new agency and the Original Agent then filed an appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of Appeal</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Court of Appeal. The Court of Appeal ruled in favour of the Original Agent and declared the Minister’s decision null and void.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the Court of Appeal refused to issue a decision on the deregistration of the New Agents on the basis that this issue was not addressed by the Court of First Instance at the time of issuing its judgment. The Court further ruled that, as this issue was overlooked by the Court of First Instance, the Original Agent could not appeal the Court of First Instance’s decision. He must therefore go back to the Court of First Instance to seek a remedy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court, who requested that the matter be referred to three experts (one for each brand). All three experts said that the Original Agent was in breach of his obligations and not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Original Agent won a judgment in its favour, the New Agents were still registered in the Commercial Agency Register. The Original Agent asked the Execution Court to enforce the Court of Appeal judgment and requested to be reinstated as agent, reiterating that the Minister’s decision was declared invalid and therefore the effect of its decision should also be declared null and void. This request was rejected.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 1</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three claims (one for each brand) against the Principals. The total claim amount was approximately AED 600 million (representing loss of earnings and expenses).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance referred the cases to a panel of experts. The new panel of experts (like the previous panel) concluded that the Original Agent was in breach of the agreements and caused substantial loss to the Principals. The three experts reported that the breaches had been brought to the attention of the Original Agent to no avail. Therefore, they were not entitled to compensation. The Court of First Instance dismissed the three claims and the Original Agent appealed to the Court of Appeal. The Court of Appeal upheld the Court of First Instance judgment. The Original Agent again went to the Supreme Court and the Supreme Court rejected his appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright size-full wp-image-8237\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_05_Image_0001.jpg\" alt=\"\" width=\"326\" height=\"906\" />Compensation claims by the Original Agent: Part 2</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In 2014, the Original Agent filed three new lawsuits. In the new cases, he claimed approximately a total of AED 5 billion. The Original Agent also included the Ministry, the New Agents and the Principals as defendants to the action.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Principals raised many defences including res judicata (as this new case was similar to the previous case already decided) and limitation on the grounds the claim was time-barred because the termination was in 2005 and the new claim was filed in 2014. In addition, the Principals also argued that the case should be rejected because of the Original Agent’s breach of his agreement and the fact that there is no standing to sue (there is no relationship between the New Agents and the Original Agent).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance accepted the New Agents’ defences and rejected the case against the Ministry. The Original Agent appealed to the Court of Appeal. The Court of Appeal rejected the Original Agent’s appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Supreme Court of Cassation (final time)</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court for the second time. The Supreme Court dismissed the appeal and upheld the Court of Appeal judgment based on the grounds set out in the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Summary of case</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In summary, the Court of Appeal in all matters filed by the Original Agent referred the matter to a panel of experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All three panels confirmed that the Original Agent had committed many breaches such as non-payment of invoices, poor management of the business, lack of customer service and therefore the agent was not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the Federal Supreme Court issued its judgment.</p>\r\n&nbsp;\r\n<ol>\r\n 	<li dir=\"LTR\">It rejected the appeal of the Original Agent and upheld the Court of First Instance judgment in its entirety.</li>\r\n 	<li dir=\"LTR\">It held that the cases should have been filed as a tort claim as it was a request for compensation for a wrongful act because of the alleged wrongful termination.</li>\r\n 	<li dir=\"LTR\">The Original Agent did not substantiate his claims and provide proof of damages allegedly suffered as a result of the agency being struck off the Commercial Agency Register.</li>\r\n 	<li dir=\"LTR\">The New Agents’ involvement in the dispute had no legal basis. The New Agents were not a party to the dispute nor was there any evidence of any damage caused by the New Agents’ appointment.</li>\r\n 	<li dir=\"LTR\">As confirmed by the panel of experts, the Original Agent had breached the terms of the agency agreement by failing to make timely payments to the Principals and did not report declining sales until the business incurred a major loss.</li>\r\n 	<li dir=\"LTR\">The Court of First Instance was correct in dismissing the action against the Principals.</li>\r\n</ol>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comments</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The outcome of the case was excellent for the Principals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The decision confirms that notwithstanding the protections afforded to agents, agents who choose not to perform as expected will not benefit from the protections provided under the Commercial Agency Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This case also demonstrates the importance of substantiating any claims against a non-performing agent to justify termination.</p>'),
	(304106,29062,'MetaLink','content'),
	(304107,29062,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8182&amp;action=edit'),
	(304108,29062,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"size-full wp-image-8236 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_04_Image_0003.jpg\" alt=\"\" width=\"671\" height=\"574\" />In the UAE, commercial agents are granted numerous statutory rights under the Commercial Agency Law (Federal Law No. 18 of 1981, as amended).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These rights are designed to protect an agent who may devote considerable effort and costs to build a profitable market for products or services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In many cases in the UAE, a terminated agent may use the Commercial Agency Law to prevent a foreign principal from registering a replacement agent unless the original agent is paid what is due under the original commercial agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In two recent cases, Federal Supreme Court Case 811 of 2017 and Federal Supreme Court Case 814 of 2017 both dated 27 March 2018, the agent’s performance was poor and it was clear that he was in breach of a commercial agency agreement. As a result, he was terminated and the commercial agency struck off the Ministry of Economy’s register. The Federal Supreme Court found that the agent was unable to prove that the termination was unjustified and was not entitled to receive compensation from the principal. The agent was also unable to preclude the principals from registering a replacement agent.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Background</h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<p dir=\"LTR\" align=\"LEFT\">In the early 1980s, two principals (the \"Principals\") appointed an agent (the \"Original Agent\"), to represent them in the UAE. The Original Agent agreed to distribute, sell, and provide services on behalf of the two Principals in relation to three brands, two for Principal 1 and the third for Principal 2.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2004, problems arose when the Original Agent failed to pay for shipments within the timeframe agreed (30-90 days). As a result, the Principals obtained guarantees from the Original Agent and sent regular reminders to pay on time. The Principals continued to send shipments (because of the guarantees) and warned the Original Agent that he would be in breach of their commercial agency agreement if he continued to default. If he continued to be in default, the Principals would terminate the agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent defaulted under the agreement and a letter of termination was sent to him. The letter included a notice period for the Original Agent to improve and comply with the payment terms agreed upon and to settle all outstanding payments, failing which the agreement would be terminated. The parties attempted but failed to resolve their issues amicably and the Original Agent continued to breach the payment terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">According to the Commercial Agency Law, the Minister of Economy is permitted to cancel a commercial agency arrangement if material reasons exist to terminate. The Minister at the time cancelled the commercial agency arrangement based on the letter of termination. Three letters were sent (one for each brand) and the Principals encashed the guarantees in lieu of the outstanding invoices.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three administrative cases (two against Principal 1 and one against Principal 2) seeking a declaration that the Minister’s decision was null and void and asking for reinstatement as the agent in the Commercial Agency Register maintained by the Ministry of Economy. The agent argued that, according to Article 14 of the UAE Commercial Agency Law, a meeting should have been called first within 60 days of the letter of termination to address the Principals’ reasons for its request to deregister and to give the Original Agent an opportunity to respond to those reasons. However, the Ministry failed to call such meeting within the 60 day timeframe and the Original Agent argued that the requirements under the law were therefore not met.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Original Agent’s claim and held that the Ministry’s duty was satisfied because of the communications exchanged between the parties. The Original Agent appealed the decision to the Court of Appeal, where he argued that the Court of First Instance was incorrect. He argued that calling a meeting was merely a formality but it existed to protect the rights of the agent. The Principals appealed to the Supreme Court. The Supreme Court upheld the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">New agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">After the Ministry struck the Original Agent from the Commercial Agency Register, the Principals appointed new agents (the \"New Agents\"). Principal 1 appointed two agents for the emirate of Sharjah and the Northern Emirates and a second for the emirate of Abu Dhabi. Principal 2 appointed an agent for the whole of the UAE. Both New Agents were registered in the Commercial Agency Register.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of First Instance judgment on the Original Agent’s request to cancel the registration of the New Agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed an action to declare the Minister’s decision null and void and also to cancel the registrations of the New Agents. His request was rejected by the Court of First Instance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One of the remedies sought by the Original Agent in addition to the request to nullify the Ministry’s decision was the request to be reinstated in the Commercial Agency Register. However, the Court refused this on the basis that the New Agents had already been registered. The Court of First Instance did not issue a decision to cancel the new agency and the Original Agent then filed an appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of Appeal</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Court of Appeal. The Court of Appeal ruled in favour of the Original Agent and declared the Minister’s decision null and void.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the Court of Appeal refused to issue a decision on the deregistration of the New Agents on the basis that this issue was not addressed by the Court of First Instance at the time of issuing its judgment. The Court further ruled that, as this issue was overlooked by the Court of First Instance, the Original Agent could not appeal the Court of First Instance’s decision. He must therefore go back to the Court of First Instance to seek a remedy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court, who requested that the matter be referred to three experts (one for each brand). All three experts said that the Original Agent was in breach of his obligations and not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Original Agent won a judgment in its favour, the New Agents were still registered in the Commercial Agency Register. The Original Agent asked the Execution Court to enforce the Court of Appeal judgment and requested to be reinstated as agent, reiterating that the Minister’s decision was declared invalid and therefore the effect of its decision should also be declared null and void. This request was rejected.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 1</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three claims (one for each brand) against the Principals. The total claim amount was approximately AED 600 million (representing loss of earnings and expenses).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance referred the cases to a panel of experts. The new panel of experts (like the previous panel) concluded that the Original Agent was in breach of the agreements and caused substantial loss to the Principals. The three experts reported that the breaches had been brought to the attention of the Original Agent to no avail. Therefore, they were not entitled to compensation. The Court of First Instance dismissed the three claims and the Original Agent appealed to the Court of Appeal. The Court of Appeal upheld the Court of First Instance judgment. The Original Agent again went to the Supreme Court and the Supreme Court rejected his appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright size-full wp-image-8237\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_05_Image_0001.jpg\" alt=\"\" width=\"326\" height=\"906\" />Compensation claims by the Original Agent: Part 2</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In 2014, the Original Agent filed three new lawsuits. In the new cases, he claimed approximately a total of AED 5 billion. The Original Agent also included the Ministry, the New Agents and the Principals as defendants to the action.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Principals raised many defences including res judicata (as this new case was similar to the previous case already decided) and limitation on the grounds the claim was time-barred because the termination was in 2005 and the new claim was filed in 2014. In addition, the Principals also argued that the case should be rejected because of the Original Agent’s breach of his agreement and the fact that there is no standing to sue (there is no relationship between the New Agents and the Original Agent).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance accepted the New Agents’ defences and rejected the case against the Ministry. The Original Agent appealed to the Court of Appeal. The Court of Appeal rejected the Original Agent’s appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Supreme Court of Cassation (final time)</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court for the second time. The Supreme Court dismissed the appeal and upheld the Court of Appeal judgment based on the grounds set out in the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Summary of case</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In summary, the Court of Appeal in all matters filed by the Original Agent referred the matter to a panel of experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All three panels confirmed that the Original Agent had committed many breaches such as non-payment of invoices, poor management of the business, lack of customer service and therefore the agent was not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the Federal Supreme Court issued its judgment.</p>\r\n&nbsp;\r\n<ol>\r\n 	<li dir=\"LTR\">It rejected the appeal of the Original Agent and upheld the Court of First Instance judgment in its entirety.</li>\r\n 	<li dir=\"LTR\">It held that the cases should have been filed as a tort claim as it was a request for compensation for a wrongful act because of the alleged wrongful termination.</li>\r\n 	<li dir=\"LTR\">The Original Agent did not substantiate his claims and provide proof of damages allegedly suffered as a result of the agency being struck off the Commercial Agency Register.</li>\r\n 	<li dir=\"LTR\">The New Agents’ involvement in the dispute had no legal basis. The New Agents were not a party to the dispute nor was there any evidence of any damage caused by the New Agents’ appointment.</li>\r\n 	<li dir=\"LTR\">As confirmed by the panel of experts, the Original Agent had breached the terms of the agency agreement by failing to make timely payments to the Principals and did not report declining sales until the business incurred a major loss.</li>\r\n 	<li dir=\"LTR\">The Court of First Instance was correct in dismissing the action against the Principals.</li>\r\n</ol>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comments</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The outcome of the case was excellent for the Principals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The decision confirms that notwithstanding the protections afforded to agents, agents who choose not to perform as expected will not benefit from the protections provided under the Commercial Agency Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This case also demonstrates the importance of substantiating any claims against a non-performing agent to justify termination.</p>|<p dir=\"LTR\" align=\"LEFT\"><img class=\" wp-image-8236 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_04_Image_0003.jpg\" alt=\"\" width=\"428\" height=\"366\" />In the UAE, commercial agents are granted numerous statutory rights under the Commercial Agency Law (Federal Law No. 18 of 1981, as amended).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These rights are designed to protect an agent who may devote considerable effort and costs to build a profitable market for products or services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In many cases in the UAE, a terminated agent may use the Commercial Agency Law to prevent a foreign principal from registering a replacement agent unless the original agent is paid what is due under the original commercial agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In two recent cases, Federal Supreme Court Case 811 of 2017 and Federal Supreme Court Case 814 of 2017 both dated 27 March 2018, the agent’s performance was poor and it was clear that he was in breach of a commercial agency agreement. As a result, he was terminated and the commercial agency struck off the Ministry of Economy’s register. The Federal Supreme Court found that the agent was unable to prove that the termination was unjustified and was not entitled to receive compensation from the principal. The agent was also unable to preclude the principals from registering a replacement agent.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Background</h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<p dir=\"LTR\" align=\"LEFT\">In the early 1980s, two principals (the \"Principals\") appointed an agent (the \"Original Agent\"), to represent them in the UAE. The Original Agent agreed to distribute, sell, and provide services on behalf of the two Principals in relation to three brands, two for Principal 1 and the third for Principal 2.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2004, problems arose when the Original Agent failed to pay for shipments within the timeframe agreed (30-90 days). As a result, the Principals obtained guarantees from the Original Agent and sent regular reminders to pay on time. The Principals continued to send shipments (because of the guarantees) and warned the Original Agent that he would be in breach of their commercial agency agreement if he continued to default. If he continued to be in default, the Principals would terminate the agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent defaulted under the agreement and a letter of termination was sent to him. The letter included a notice period for the Original Agent to improve and comply with the payment terms agreed upon and to settle all outstanding payments, failing which the agreement would be terminated. The parties attempted but failed to resolve their issues amicably and the Original Agent continued to breach the payment terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">According to the Commercial Agency Law, the Minister of Economy is permitted to cancel a commercial agency arrangement if material reasons exist to terminate. The Minister at the time cancelled the commercial agency arrangement based on the letter of termination. Three letters were sent (one for each brand) and the Principals encashed the guarantees in lieu of the outstanding invoices.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three administrative cases (two against Principal 1 and one against Principal 2) seeking a declaration that the Minister’s decision was null and void and asking for reinstatement as the agent in the Commercial Agency Register maintained by the Ministry of Economy. The agent argued that, according to Article 14 of the UAE Commercial Agency Law, a meeting should have been called first within 60 days of the letter of termination to address the Principals’ reasons for its request to deregister and to give the Original Agent an opportunity to respond to those reasons. However, the Ministry failed to call such meeting within the 60 day timeframe and the Original Agent argued that the requirements under the law were therefore not met.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Original Agent’s claim and held that the Ministry’s duty was satisfied because of the communications exchanged between the parties. The Original Agent appealed the decision to the Court of Appeal, where he argued that the Court of First Instance was incorrect. He argued that calling a meeting was merely a formality but it existed to protect the rights of the agent. The Principals appealed to the Supreme Court. The Supreme Court upheld the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">New agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">After the Ministry struck the Original Agent from the Commercial Agency Register, the Principals appointed new agents (the \"New Agents\"). Principal 1 appointed two agents for the emirate of Sharjah and the Northern Emirates and a second for the emirate of Abu Dhabi. Principal 2 appointed an agent for the whole of the UAE. Both New Agents were registered in the Commercial Agency Register.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of First Instance judgment on the Original Agent’s request to cancel the registration of the New Agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed an action to declare the Minister’s decision null and void and also to cancel the registrations of the New Agents. His request was rejected by the Court of First Instance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One of the remedies sought by the Original Agent in addition to the request to nullify the Ministry’s decision was the request to be reinstated in the Commercial Agency Register. However, the Court refused this on the basis that the New Agents had already been registered. The Court of First Instance did not issue a decision to cancel the new agency and the Original Agent then filed an appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of Appeal</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Court of Appeal. The Court of Appeal ruled in favour of the Original Agent and declared the Minister’s decision null and void.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the Court of Appeal refused to issue a decision on the deregistration of the New Agents on the basis that this issue was not addressed by the Court of First Instance at the time of issuing its judgment. The Court further ruled that, as this issue was overlooked by the Court of First Instance, the Original Agent could not appeal the Court of First Instance’s decision. He must therefore go back to the Court of First Instance to seek a remedy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court, who requested that the matter be referred to three experts (one for each brand). All three experts said that the Original Agent was in breach of his obligations and not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Original Agent won a judgment in its favour, the New Agents were still registered in the Commercial Agency Register. The Original Agent asked the Execution Court to enforce the Court of Appeal judgment and requested to be reinstated as agent, reiterating that the Minister’s decision was declared invalid and therefore the effect of its decision should also be declared null and void. This request was rejected.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 1</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three claims (one for each brand) against the Principals. The total claim amount was approximately AED 600 million (representing loss of earnings and expenses).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance referred the cases to a panel of experts. The new panel of experts (like the previous panel) concluded that the Original Agent was in breach of the agreements and caused substantial loss to the Principals. The three experts reported that the breaches had been brought to the attention of the Original Agent to no avail. Therefore, they were not entitled to compensation. The Court of First Instance dismissed the three claims and the Original Agent appealed to the Court of Appeal. The Court of Appeal upheld the Court of First Instance judgment. The Original Agent again went to the Supreme Court and the Supreme Court rejected his appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright  wp-image-8237\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_05_Image_0001.jpg\" alt=\"\" width=\"298\" height=\"828\" />Compensation claims by the Original Agent: Part 2</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In 2014, the Original Agent filed three new lawsuits. In the new cases, he claimed approximately a total of AED 5 billion. The Original Agent also included the Ministry, the New Agents and the Principals as defendants to the action.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Principals raised many defences including res judicata (as this new case was similar to the previous case already decided) and limitation on the grounds the claim was time-barred because the termination was in 2005 and the new claim was filed in 2014. In addition, the Principals also argued that the case should be rejected because of the Original Agent’s breach of his agreement and the fact that there is no standing to sue (there is no relationship between the New Agents and the Original Agent).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance accepted the New Agents’ defences and rejected the case against the Ministry. The Original Agent appealed to the Court of Appeal. The Court of Appeal rejected the Original Agent’s appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Supreme Court of Cassation (final time)</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court for the second time. The Supreme Court dismissed the appeal and upheld the Court of Appeal judgment based on the grounds set out in the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Summary of case</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In summary, the Court of Appeal in all matters filed by the Original Agent referred the matter to a panel of experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All three panels confirmed that the Original Agent had committed many breaches such as non-payment of invoices, poor management of the business, lack of customer service and therefore the agent was not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the Federal Supreme Court issued its judgment.</p>\r\n&nbsp;\r\n<ol>\r\n 	<li dir=\"LTR\">It rejected the appeal of the Original Agent and upheld the Court of First Instance judgment in its entirety.</li>\r\n 	<li dir=\"LTR\">It held that the cases should have been filed as a tort claim as it was a request for compensation for a wrongful act because of the alleged wrongful termination.</li>\r\n 	<li dir=\"LTR\">The Original Agent did not substantiate his claims and provide proof of damages allegedly suffered as a result of the agency being struck off the Commercial Agency Register.</li>\r\n 	<li dir=\"LTR\">The New Agents’ involvement in the dispute had no legal basis. The New Agents were not a party to the dispute nor was there any evidence of any damage caused by the New Agents’ appointment.</li>\r\n 	<li dir=\"LTR\">As confirmed by the panel of experts, the Original Agent had breached the terms of the agency agreement by failing to make timely payments to the Principals and did not report declining sales until the business incurred a major loss.</li>\r\n 	<li dir=\"LTR\">The Court of First Instance was correct in dismissing the action against the Principals.</li>\r\n</ol>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comments</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The outcome of the case was excellent for the Principals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The decision confirms that notwithstanding the protections afforded to agents, agents who choose not to perform as expected will not benefit from the protections provided under the Commercial Agency Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This case also demonstrates the importance of substantiating any claims against a non-performing agent to justify termination.</p>'),
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	(304140,29065,'PostTitle','Terminating and Replacing a Commercial Agent in the UAE'),
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	(304142,29065,'PostDate','2018-09-04 08:03:49'),
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	(304147,29065,'CurrentUserID','5'),
	(304148,29065,'CurrentUserRoles','a:2:{i:0;s:13:\"administrator\";i:1;s:10:\"superadmin\";}'),
	(304149,29065,'SessionID','3eea04a09d4e3cdd1fe6c70377c574db138b0e23ebe7b0dd06abdc4b42051811'),
	(304150,29066,'PostID','8182'),
	(304151,29066,'PostTitle','Terminating and Replacing a Commercial Agent in the UAE'),
	(304152,29066,'PostStatus','publish'),
	(304153,29066,'PostType','law_update_articles'),
	(304154,29066,'PostDate','2018-09-04 08:03:49'),
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	(304158,29066,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\" wp-image-8236 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_04_Image_0003.jpg\" alt=\"\" width=\"440\" height=\"376\" />In the UAE, commercial agents are granted numerous statutory rights under the Commercial Agency Law (Federal Law No. 18 of 1981, as amended).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These rights are designed to protect an agent who may devote considerable effort and costs to build a profitable market for products or services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In many cases in the UAE, a terminated agent may use the Commercial Agency Law to prevent a foreign principal from registering a replacement agent unless the original agent is paid what is due under the original commercial agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In two recent cases, Federal Supreme Court Case 811 of 2017 and Federal Supreme Court Case 814 of 2017 both dated 27 March 2018, the agent’s performance was poor and it was clear that he was in breach of a commercial agency agreement. As a result, he was terminated and the commercial agency struck off the Ministry of Economy’s register. The Federal Supreme Court found that the agent was unable to prove that the termination was unjustified and was not entitled to receive compensation from the principal. The agent was also unable to preclude the principals from registering a replacement agent.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Background</h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<p dir=\"LTR\" align=\"LEFT\">In the early 1980s, two principals (the \"Principals\") appointed an agent (the \"Original Agent\"), to represent them in the UAE. The Original Agent agreed to distribute, sell, and provide services on behalf of the two Principals in relation to three brands, two for Principal 1 and the third for Principal 2.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2004, problems arose when the Original Agent failed to pay for shipments within the timeframe agreed (30-90 days). As a result, the Principals obtained guarantees from the Original Agent and sent regular reminders to pay on time. The Principals continued to send shipments (because of the guarantees) and warned the Original Agent that he would be in breach of their commercial agency agreement if he continued to default. If he continued to be in default, the Principals would terminate the agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent defaulted under the agreement and a letter of termination was sent to him. The letter included a notice period for the Original Agent to improve and comply with the payment terms agreed upon and to settle all outstanding payments, failing which the agreement would be terminated. The parties attempted but failed to resolve their issues amicably and the Original Agent continued to breach the payment terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">According to the Commercial Agency Law, the Minister of Economy is permitted to cancel a commercial agency arrangement if material reasons exist to terminate. The Minister at the time cancelled the commercial agency arrangement based on the letter of termination. Three letters were sent (one for each brand) and the Principals encashed the guarantees in lieu of the outstanding invoices.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three administrative cases (two against Principal 1 and one against Principal 2) seeking a declaration that the Minister’s decision was null and void and asking for reinstatement as the agent in the Commercial Agency Register maintained by the Ministry of Economy. The agent argued that, according to Article 14 of the UAE Commercial Agency Law, a meeting should have been called first within 60 days of the letter of termination to address the Principals’ reasons for its request to deregister and to give the Original Agent an opportunity to respond to those reasons. However, the Ministry failed to call such meeting within the 60 day timeframe and the Original Agent argued that the requirements under the law were therefore not met.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Original Agent’s claim and held that the Ministry’s duty was satisfied because of the communications exchanged between the parties. The Original Agent appealed the decision to the Court of Appeal, where he argued that the Court of First Instance was incorrect. He argued that calling a meeting was merely a formality but it existed to protect the rights of the agent. The Principals appealed to the Supreme Court. The Supreme Court upheld the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">New agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">After the Ministry struck the Original Agent from the Commercial Agency Register, the Principals appointed new agents (the \"New Agents\"). Principal 1 appointed two agents for the emirate of Sharjah and the Northern Emirates and a second for the emirate of Abu Dhabi. Principal 2 appointed an agent for the whole of the UAE. Both New Agents were registered in the Commercial Agency Register.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of First Instance judgment on the Original Agent’s request to cancel the registration of the New Agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed an action to declare the Minister’s decision null and void and also to cancel the registrations of the New Agents. His request was rejected by the Court of First Instance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One of the remedies sought by the Original Agent in addition to the request to nullify the Ministry’s decision was the request to be reinstated in the Commercial Agency Register. However, the Court refused this on the basis that the New Agents had already been registered. The Court of First Instance did not issue a decision to cancel the new agency and the Original Agent then filed an appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of Appeal</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Court of Appeal. The Court of Appeal ruled in favour of the Original Agent and declared the Minister’s decision null and void.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the Court of Appeal refused to issue a decision on the deregistration of the New Agents on the basis that this issue was not addressed by the Court of First Instance at the time of issuing its judgment. The Court further ruled that, as this issue was overlooked by the Court of First Instance, the Original Agent could not appeal the Court of First Instance’s decision. He must therefore go back to the Court of First Instance to seek a remedy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court, who requested that the matter be referred to three experts (one for each brand). All three experts said that the Original Agent was in breach of his obligations and not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Original Agent won a judgment in its favour, the New Agents were still registered in the Commercial Agency Register. The Original Agent asked the Execution Court to enforce the Court of Appeal judgment and requested to be reinstated as agent, reiterating that the Minister’s decision was declared invalid and therefore the effect of its decision should also be declared null and void. This request was rejected.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 1</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three claims (one for each brand) against the Principals. The total claim amount was approximately AED 600 million (representing loss of earnings and expenses).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance referred the cases to a panel of experts. The new panel of experts (like the previous panel) concluded that the Original Agent was in breach of the agreements and caused substantial loss to the Principals. The three experts reported that the breaches had been brought to the attention of the Original Agent to no avail. Therefore, they were not entitled to compensation. The Court of First Instance dismissed the three claims and the Original Agent appealed to the Court of Appeal. The Court of Appeal upheld the Court of First Instance judgment. The Original Agent again went to the Supreme Court and the Supreme Court rejected his appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8237\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_05_Image_0001.jpg\" alt=\"\" width=\"304\" height=\"846\" />Compensation claims by the Original Agent: Part 2</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In 2014, the Original Agent filed three new lawsuits. In the new cases, he claimed approximately a total of AED 5 billion. The Original Agent also included the Ministry, the New Agents and the Principals as defendants to the action.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Principals raised many defences including res judicata (as this new case was similar to the previous case already decided) and limitation on the grounds the claim was time-barred because the termination was in 2005 and the new claim was filed in 2014. In addition, the Principals also argued that the case should be rejected because of the Original Agent’s breach of his agreement and the fact that there is no standing to sue (there is no relationship between the New Agents and the Original Agent).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance accepted the New Agents’ defences and rejected the case against the Ministry. The Original Agent appealed to the Court of Appeal. The Court of Appeal rejected the Original Agent’s appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Supreme Court of Cassation (final time)</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court for the second time. The Supreme Court dismissed the appeal and upheld the Court of Appeal judgment based on the grounds set out in the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Summary of case</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In summary, the Court of Appeal in all matters filed by the Original Agent referred the matter to a panel of experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All three panels confirmed that the Original Agent had committed many breaches such as non-payment of invoices, poor management of the business, lack of customer service and therefore the agent was not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the Federal Supreme Court issued its judgment.</p>\r\n&nbsp;\r\n<ol>\r\n 	<li dir=\"LTR\">It rejected the appeal of the Original Agent and upheld the Court of First Instance judgment in its entirety.</li>\r\n 	<li dir=\"LTR\">It held that the cases should have been filed as a tort claim as it was a request for compensation for a wrongful act because of the alleged wrongful termination.</li>\r\n 	<li dir=\"LTR\">The Original Agent did not substantiate his claims and provide proof of damages allegedly suffered as a result of the agency being struck off the Commercial Agency Register.</li>\r\n 	<li dir=\"LTR\">The New Agents’ involvement in the dispute had no legal basis. The New Agents were not a party to the dispute nor was there any evidence of any damage caused by the New Agents’ appointment.</li>\r\n 	<li dir=\"LTR\">As confirmed by the panel of experts, the Original Agent had breached the terms of the agency agreement by failing to make timely payments to the Principals and did not report declining sales until the business incurred a major loss.</li>\r\n 	<li dir=\"LTR\">The Court of First Instance was correct in dismissing the action against the Principals.</li>\r\n</ol>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comments</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The outcome of the case was excellent for the Principals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The decision confirms that notwithstanding the protections afforded to agents, agents who choose not to perform as expected will not benefit from the protections provided under the Commercial Agency Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This case also demonstrates the importance of substantiating any claims against a non-performing agent to justify termination.</p>'),
	(304159,29066,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\" wp-image-8236 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_04_Image_0003.jpg\" alt=\"\" width=\"428\" height=\"366\" />In the UAE, commercial agents are granted numerous statutory rights under the Commercial Agency Law (Federal Law No. 18 of 1981, as amended).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These rights are designed to protect an agent who may devote considerable effort and costs to build a profitable market for products or services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In many cases in the UAE, a terminated agent may use the Commercial Agency Law to prevent a foreign principal from registering a replacement agent unless the original agent is paid what is due under the original commercial agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In two recent cases, Federal Supreme Court Case 811 of 2017 and Federal Supreme Court Case 814 of 2017 both dated 27 March 2018, the agent’s performance was poor and it was clear that he was in breach of a commercial agency agreement. As a result, he was terminated and the commercial agency struck off the Ministry of Economy’s register. The Federal Supreme Court found that the agent was unable to prove that the termination was unjustified and was not entitled to receive compensation from the principal. The agent was also unable to preclude the principals from registering a replacement agent.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Background</h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<p dir=\"LTR\" align=\"LEFT\">In the early 1980s, two principals (the \"Principals\") appointed an agent (the \"Original Agent\"), to represent them in the UAE. The Original Agent agreed to distribute, sell, and provide services on behalf of the two Principals in relation to three brands, two for Principal 1 and the third for Principal 2.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2004, problems arose when the Original Agent failed to pay for shipments within the timeframe agreed (30-90 days). As a result, the Principals obtained guarantees from the Original Agent and sent regular reminders to pay on time. The Principals continued to send shipments (because of the guarantees) and warned the Original Agent that he would be in breach of their commercial agency agreement if he continued to default. If he continued to be in default, the Principals would terminate the agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent defaulted under the agreement and a letter of termination was sent to him. The letter included a notice period for the Original Agent to improve and comply with the payment terms agreed upon and to settle all outstanding payments, failing which the agreement would be terminated. The parties attempted but failed to resolve their issues amicably and the Original Agent continued to breach the payment terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">According to the Commercial Agency Law, the Minister of Economy is permitted to cancel a commercial agency arrangement if material reasons exist to terminate. The Minister at the time cancelled the commercial agency arrangement based on the letter of termination. Three letters were sent (one for each brand) and the Principals encashed the guarantees in lieu of the outstanding invoices.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three administrative cases (two against Principal 1 and one against Principal 2) seeking a declaration that the Minister’s decision was null and void and asking for reinstatement as the agent in the Commercial Agency Register maintained by the Ministry of Economy. The agent argued that, according to Article 14 of the UAE Commercial Agency Law, a meeting should have been called first within 60 days of the letter of termination to address the Principals’ reasons for its request to deregister and to give the Original Agent an opportunity to respond to those reasons. However, the Ministry failed to call such meeting within the 60 day timeframe and the Original Agent argued that the requirements under the law were therefore not met.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Original Agent’s claim and held that the Ministry’s duty was satisfied because of the communications exchanged between the parties. The Original Agent appealed the decision to the Court of Appeal, where he argued that the Court of First Instance was incorrect. He argued that calling a meeting was merely a formality but it existed to protect the rights of the agent. The Principals appealed to the Supreme Court. The Supreme Court upheld the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">New agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">After the Ministry struck the Original Agent from the Commercial Agency Register, the Principals appointed new agents (the \"New Agents\"). Principal 1 appointed two agents for the emirate of Sharjah and the Northern Emirates and a second for the emirate of Abu Dhabi. Principal 2 appointed an agent for the whole of the UAE. Both New Agents were registered in the Commercial Agency Register.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of First Instance judgment on the Original Agent’s request to cancel the registration of the New Agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed an action to declare the Minister’s decision null and void and also to cancel the registrations of the New Agents. His request was rejected by the Court of First Instance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One of the remedies sought by the Original Agent in addition to the request to nullify the Ministry’s decision was the request to be reinstated in the Commercial Agency Register. However, the Court refused this on the basis that the New Agents had already been registered. The Court of First Instance did not issue a decision to cancel the new agency and the Original Agent then filed an appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of Appeal</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Court of Appeal. The Court of Appeal ruled in favour of the Original Agent and declared the Minister’s decision null and void.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the Court of Appeal refused to issue a decision on the deregistration of the New Agents on the basis that this issue was not addressed by the Court of First Instance at the time of issuing its judgment. The Court further ruled that, as this issue was overlooked by the Court of First Instance, the Original Agent could not appeal the Court of First Instance’s decision. He must therefore go back to the Court of First Instance to seek a remedy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court, who requested that the matter be referred to three experts (one for each brand). All three experts said that the Original Agent was in breach of his obligations and not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Original Agent won a judgment in its favour, the New Agents were still registered in the Commercial Agency Register. The Original Agent asked the Execution Court to enforce the Court of Appeal judgment and requested to be reinstated as agent, reiterating that the Minister’s decision was declared invalid and therefore the effect of its decision should also be declared null and void. This request was rejected.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 1</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three claims (one for each brand) against the Principals. The total claim amount was approximately AED 600 million (representing loss of earnings and expenses).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance referred the cases to a panel of experts. The new panel of experts (like the previous panel) concluded that the Original Agent was in breach of the agreements and caused substantial loss to the Principals. The three experts reported that the breaches had been brought to the attention of the Original Agent to no avail. Therefore, they were not entitled to compensation. The Court of First Instance dismissed the three claims and the Original Agent appealed to the Court of Appeal. The Court of Appeal upheld the Court of First Instance judgment. The Original Agent again went to the Supreme Court and the Supreme Court rejected his appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright  wp-image-8237\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_05_Image_0001.jpg\" alt=\"\" width=\"298\" height=\"828\" />Compensation claims by the Original Agent: Part 2</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In 2014, the Original Agent filed three new lawsuits. In the new cases, he claimed approximately a total of AED 5 billion. The Original Agent also included the Ministry, the New Agents and the Principals as defendants to the action.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Principals raised many defences including res judicata (as this new case was similar to the previous case already decided) and limitation on the grounds the claim was time-barred because the termination was in 2005 and the new claim was filed in 2014. In addition, the Principals also argued that the case should be rejected because of the Original Agent’s breach of his agreement and the fact that there is no standing to sue (there is no relationship between the New Agents and the Original Agent).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance accepted the New Agents’ defences and rejected the case against the Ministry. The Original Agent appealed to the Court of Appeal. The Court of Appeal rejected the Original Agent’s appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Supreme Court of Cassation (final time)</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court for the second time. The Supreme Court dismissed the appeal and upheld the Court of Appeal judgment based on the grounds set out in the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Summary of case</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In summary, the Court of Appeal in all matters filed by the Original Agent referred the matter to a panel of experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All three panels confirmed that the Original Agent had committed many breaches such as non-payment of invoices, poor management of the business, lack of customer service and therefore the agent was not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the Federal Supreme Court issued its judgment.</p>\r\n&nbsp;\r\n<ol>\r\n 	<li dir=\"LTR\">It rejected the appeal of the Original Agent and upheld the Court of First Instance judgment in its entirety.</li>\r\n 	<li dir=\"LTR\">It held that the cases should have been filed as a tort claim as it was a request for compensation for a wrongful act because of the alleged wrongful termination.</li>\r\n 	<li dir=\"LTR\">The Original Agent did not substantiate his claims and provide proof of damages allegedly suffered as a result of the agency being struck off the Commercial Agency Register.</li>\r\n 	<li dir=\"LTR\">The New Agents’ involvement in the dispute had no legal basis. The New Agents were not a party to the dispute nor was there any evidence of any damage caused by the New Agents’ appointment.</li>\r\n 	<li dir=\"LTR\">As confirmed by the panel of experts, the Original Agent had breached the terms of the agency agreement by failing to make timely payments to the Principals and did not report declining sales until the business incurred a major loss.</li>\r\n 	<li dir=\"LTR\">The Court of First Instance was correct in dismissing the action against the Principals.</li>\r\n</ol>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comments</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The outcome of the case was excellent for the Principals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The decision confirms that notwithstanding the protections afforded to agents, agents who choose not to perform as expected will not benefit from the protections provided under the Commercial Agency Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This case also demonstrates the importance of substantiating any claims against a non-performing agent to justify termination.</p>'),
	(304160,29066,'MetaLink','content'),
	(304161,29066,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8182&amp;action=edit'),
	(304162,29066,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\" wp-image-8236 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_04_Image_0003.jpg\" alt=\"\" width=\"428\" height=\"366\" />In the UAE, commercial agents are granted numerous statutory rights under the Commercial Agency Law (Federal Law No. 18 of 1981, as amended).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These rights are designed to protect an agent who may devote considerable effort and costs to build a profitable market for products or services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In many cases in the UAE, a terminated agent may use the Commercial Agency Law to prevent a foreign principal from registering a replacement agent unless the original agent is paid what is due under the original commercial agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In two recent cases, Federal Supreme Court Case 811 of 2017 and Federal Supreme Court Case 814 of 2017 both dated 27 March 2018, the agent’s performance was poor and it was clear that he was in breach of a commercial agency agreement. As a result, he was terminated and the commercial agency struck off the Ministry of Economy’s register. The Federal Supreme Court found that the agent was unable to prove that the termination was unjustified and was not entitled to receive compensation from the principal. The agent was also unable to preclude the principals from registering a replacement agent.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Background</h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<p dir=\"LTR\" align=\"LEFT\">In the early 1980s, two principals (the \"Principals\") appointed an agent (the \"Original Agent\"), to represent them in the UAE. The Original Agent agreed to distribute, sell, and provide services on behalf of the two Principals in relation to three brands, two for Principal 1 and the third for Principal 2.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2004, problems arose when the Original Agent failed to pay for shipments within the timeframe agreed (30-90 days). As a result, the Principals obtained guarantees from the Original Agent and sent regular reminders to pay on time. The Principals continued to send shipments (because of the guarantees) and warned the Original Agent that he would be in breach of their commercial agency agreement if he continued to default. If he continued to be in default, the Principals would terminate the agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent defaulted under the agreement and a letter of termination was sent to him. The letter included a notice period for the Original Agent to improve and comply with the payment terms agreed upon and to settle all outstanding payments, failing which the agreement would be terminated. The parties attempted but failed to resolve their issues amicably and the Original Agent continued to breach the payment terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">According to the Commercial Agency Law, the Minister of Economy is permitted to cancel a commercial agency arrangement if material reasons exist to terminate. The Minister at the time cancelled the commercial agency arrangement based on the letter of termination. Three letters were sent (one for each brand) and the Principals encashed the guarantees in lieu of the outstanding invoices.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three administrative cases (two against Principal 1 and one against Principal 2) seeking a declaration that the Minister’s decision was null and void and asking for reinstatement as the agent in the Commercial Agency Register maintained by the Ministry of Economy. The agent argued that, according to Article 14 of the UAE Commercial Agency Law, a meeting should have been called first within 60 days of the letter of termination to address the Principals’ reasons for its request to deregister and to give the Original Agent an opportunity to respond to those reasons. However, the Ministry failed to call such meeting within the 60 day timeframe and the Original Agent argued that the requirements under the law were therefore not met.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Original Agent’s claim and held that the Ministry’s duty was satisfied because of the communications exchanged between the parties. The Original Agent appealed the decision to the Court of Appeal, where he argued that the Court of First Instance was incorrect. He argued that calling a meeting was merely a formality but it existed to protect the rights of the agent. The Principals appealed to the Supreme Court. The Supreme Court upheld the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">New agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">After the Ministry struck the Original Agent from the Commercial Agency Register, the Principals appointed new agents (the \"New Agents\"). Principal 1 appointed two agents for the emirate of Sharjah and the Northern Emirates and a second for the emirate of Abu Dhabi. Principal 2 appointed an agent for the whole of the UAE. Both New Agents were registered in the Commercial Agency Register.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of First Instance judgment on the Original Agent’s request to cancel the registration of the New Agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed an action to declare the Minister’s decision null and void and also to cancel the registrations of the New Agents. His request was rejected by the Court of First Instance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One of the remedies sought by the Original Agent in addition to the request to nullify the Ministry’s decision was the request to be reinstated in the Commercial Agency Register. However, the Court refused this on the basis that the New Agents had already been registered. The Court of First Instance did not issue a decision to cancel the new agency and the Original Agent then filed an appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of Appeal</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Court of Appeal. The Court of Appeal ruled in favour of the Original Agent and declared the Minister’s decision null and void.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the Court of Appeal refused to issue a decision on the deregistration of the New Agents on the basis that this issue was not addressed by the Court of First Instance at the time of issuing its judgment. The Court further ruled that, as this issue was overlooked by the Court of First Instance, the Original Agent could not appeal the Court of First Instance’s decision. He must therefore go back to the Court of First Instance to seek a remedy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court, who requested that the matter be referred to three experts (one for each brand). All three experts said that the Original Agent was in breach of his obligations and not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Original Agent won a judgment in its favour, the New Agents were still registered in the Commercial Agency Register. The Original Agent asked the Execution Court to enforce the Court of Appeal judgment and requested to be reinstated as agent, reiterating that the Minister’s decision was declared invalid and therefore the effect of its decision should also be declared null and void. This request was rejected.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 1</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three claims (one for each brand) against the Principals. The total claim amount was approximately AED 600 million (representing loss of earnings and expenses).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance referred the cases to a panel of experts. The new panel of experts (like the previous panel) concluded that the Original Agent was in breach of the agreements and caused substantial loss to the Principals. The three experts reported that the breaches had been brought to the attention of the Original Agent to no avail. Therefore, they were not entitled to compensation. The Court of First Instance dismissed the three claims and the Original Agent appealed to the Court of Appeal. The Court of Appeal upheld the Court of First Instance judgment. The Original Agent again went to the Supreme Court and the Supreme Court rejected his appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright  wp-image-8237\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_05_Image_0001.jpg\" alt=\"\" width=\"298\" height=\"828\" />Compensation claims by the Original Agent: Part 2</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In 2014, the Original Agent filed three new lawsuits. In the new cases, he claimed approximately a total of AED 5 billion. The Original Agent also included the Ministry, the New Agents and the Principals as defendants to the action.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Principals raised many defences including res judicata (as this new case was similar to the previous case already decided) and limitation on the grounds the claim was time-barred because the termination was in 2005 and the new claim was filed in 2014. In addition, the Principals also argued that the case should be rejected because of the Original Agent’s breach of his agreement and the fact that there is no standing to sue (there is no relationship between the New Agents and the Original Agent).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance accepted the New Agents’ defences and rejected the case against the Ministry. The Original Agent appealed to the Court of Appeal. The Court of Appeal rejected the Original Agent’s appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Supreme Court of Cassation (final time)</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court for the second time. The Supreme Court dismissed the appeal and upheld the Court of Appeal judgment based on the grounds set out in the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Summary of case</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In summary, the Court of Appeal in all matters filed by the Original Agent referred the matter to a panel of experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All three panels confirmed that the Original Agent had committed many breaches such as non-payment of invoices, poor management of the business, lack of customer service and therefore the agent was not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the Federal Supreme Court issued its judgment.</p>\r\n&nbsp;\r\n<ol>\r\n 	<li dir=\"LTR\">It rejected the appeal of the Original Agent and upheld the Court of First Instance judgment in its entirety.</li>\r\n 	<li dir=\"LTR\">It held that the cases should have been filed as a tort claim as it was a request for compensation for a wrongful act because of the alleged wrongful termination.</li>\r\n 	<li dir=\"LTR\">The Original Agent did not substantiate his claims and provide proof of damages allegedly suffered as a result of the agency being struck off the Commercial Agency Register.</li>\r\n 	<li dir=\"LTR\">The New Agents’ involvement in the dispute had no legal basis. The New Agents were not a party to the dispute nor was there any evidence of any damage caused by the New Agents’ appointment.</li>\r\n 	<li dir=\"LTR\">As confirmed by the panel of experts, the Original Agent had breached the terms of the agency agreement by failing to make timely payments to the Principals and did not report declining sales until the business incurred a major loss.</li>\r\n 	<li dir=\"LTR\">The Court of First Instance was correct in dismissing the action against the Principals.</li>\r\n</ol>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comments</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The outcome of the case was excellent for the Principals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The decision confirms that notwithstanding the protections afforded to agents, agents who choose not to perform as expected will not benefit from the protections provided under the Commercial Agency Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This case also demonstrates the importance of substantiating any claims against a non-performing agent to justify termination.</p>|<p dir=\"LTR\" align=\"LEFT\"><img class=\" wp-image-8236 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_04_Image_0003.jpg\" alt=\"\" width=\"440\" height=\"376\" />In the UAE, commercial agents are granted numerous statutory rights under the Commercial Agency Law (Federal Law No. 18 of 1981, as amended).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These rights are designed to protect an agent who may devote considerable effort and costs to build a profitable market for products or services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In many cases in the UAE, a terminated agent may use the Commercial Agency Law to prevent a foreign principal from registering a replacement agent unless the original agent is paid what is due under the original commercial agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In two recent cases, Federal Supreme Court Case 811 of 2017 and Federal Supreme Court Case 814 of 2017 both dated 27 March 2018, the agent’s performance was poor and it was clear that he was in breach of a commercial agency agreement. As a result, he was terminated and the commercial agency struck off the Ministry of Economy’s register. The Federal Supreme Court found that the agent was unable to prove that the termination was unjustified and was not entitled to receive compensation from the principal. The agent was also unable to preclude the principals from registering a replacement agent.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Background</h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<p dir=\"LTR\" align=\"LEFT\">In the early 1980s, two principals (the \"Principals\") appointed an agent (the \"Original Agent\"), to represent them in the UAE. The Original Agent agreed to distribute, sell, and provide services on behalf of the two Principals in relation to three brands, two for Principal 1 and the third for Principal 2.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2004, problems arose when the Original Agent failed to pay for shipments within the timeframe agreed (30-90 days). As a result, the Principals obtained guarantees from the Original Agent and sent regular reminders to pay on time. The Principals continued to send shipments (because of the guarantees) and warned the Original Agent that he would be in breach of their commercial agency agreement if he continued to default. If he continued to be in default, the Principals would terminate the agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent defaulted under the agreement and a letter of termination was sent to him. The letter included a notice period for the Original Agent to improve and comply with the payment terms agreed upon and to settle all outstanding payments, failing which the agreement would be terminated. The parties attempted but failed to resolve their issues amicably and the Original Agent continued to breach the payment terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">According to the Commercial Agency Law, the Minister of Economy is permitted to cancel a commercial agency arrangement if material reasons exist to terminate. The Minister at the time cancelled the commercial agency arrangement based on the letter of termination. Three letters were sent (one for each brand) and the Principals encashed the guarantees in lieu of the outstanding invoices.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three administrative cases (two against Principal 1 and one against Principal 2) seeking a declaration that the Minister’s decision was null and void and asking for reinstatement as the agent in the Commercial Agency Register maintained by the Ministry of Economy. The agent argued that, according to Article 14 of the UAE Commercial Agency Law, a meeting should have been called first within 60 days of the letter of termination to address the Principals’ reasons for its request to deregister and to give the Original Agent an opportunity to respond to those reasons. However, the Ministry failed to call such meeting within the 60 day timeframe and the Original Agent argued that the requirements under the law were therefore not met.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Original Agent’s claim and held that the Ministry’s duty was satisfied because of the communications exchanged between the parties. The Original Agent appealed the decision to the Court of Appeal, where he argued that the Court of First Instance was incorrect. He argued that calling a meeting was merely a formality but it existed to protect the rights of the agent. The Principals appealed to the Supreme Court. The Supreme Court upheld the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">New agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">After the Ministry struck the Original Agent from the Commercial Agency Register, the Principals appointed new agents (the \"New Agents\"). Principal 1 appointed two agents for the emirate of Sharjah and the Northern Emirates and a second for the emirate of Abu Dhabi. Principal 2 appointed an agent for the whole of the UAE. Both New Agents were registered in the Commercial Agency Register.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of First Instance judgment on the Original Agent’s request to cancel the registration of the New Agents</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed an action to declare the Minister’s decision null and void and also to cancel the registrations of the New Agents. His request was rejected by the Court of First Instance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One of the remedies sought by the Original Agent in addition to the request to nullify the Ministry’s decision was the request to be reinstated in the Commercial Agency Register. However, the Court refused this on the basis that the New Agents had already been registered. The Court of First Instance did not issue a decision to cancel the new agency and the Original Agent then filed an appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Court of Appeal</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Court of Appeal. The Court of Appeal ruled in favour of the Original Agent and declared the Minister’s decision null and void.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the Court of Appeal refused to issue a decision on the deregistration of the New Agents on the basis that this issue was not addressed by the Court of First Instance at the time of issuing its judgment. The Court further ruled that, as this issue was overlooked by the Court of First Instance, the Original Agent could not appeal the Court of First Instance’s decision. He must therefore go back to the Court of First Instance to seek a remedy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court, who requested that the matter be referred to three experts (one for each brand). All three experts said that the Original Agent was in breach of his obligations and not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Original Agent won a judgment in its favour, the New Agents were still registered in the Commercial Agency Register. The Original Agent asked the Execution Court to enforce the Court of Appeal judgment and requested to be reinstated as agent, reiterating that the Minister’s decision was declared invalid and therefore the effect of its decision should also be declared null and void. This request was rejected.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Compensation claims by the Original Agent: Part 1</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent filed three claims (one for each brand) against the Principals. The total claim amount was approximately AED 600 million (representing loss of earnings and expenses).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance referred the cases to a panel of experts. The new panel of experts (like the previous panel) concluded that the Original Agent was in breach of the agreements and caused substantial loss to the Principals. The three experts reported that the breaches had been brought to the attention of the Original Agent to no avail. Therefore, they were not entitled to compensation. The Court of First Instance dismissed the three claims and the Original Agent appealed to the Court of Appeal. The Court of Appeal upheld the Court of First Instance judgment. The Original Agent again went to the Supreme Court and the Supreme Court rejected his appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8237\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_05_Image_0001.jpg\" alt=\"\" width=\"304\" height=\"846\" />Compensation claims by the Original Agent: Part 2</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In 2014, the Original Agent filed three new lawsuits. In the new cases, he claimed approximately a total of AED 5 billion. The Original Agent also included the Ministry, the New Agents and the Principals as defendants to the action.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Principals raised many defences including res judicata (as this new case was similar to the previous case already decided) and limitation on the grounds the claim was time-barred because the termination was in 2005 and the new claim was filed in 2014. In addition, the Principals also argued that the case should be rejected because of the Original Agent’s breach of his agreement and the fact that there is no standing to sue (there is no relationship between the New Agents and the Original Agent).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance accepted the New Agents’ defences and rejected the case against the Ministry. The Original Agent appealed to the Court of Appeal. The Court of Appeal rejected the Original Agent’s appeal.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Supreme Court of Cassation (final time)</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Original Agent appealed to the Supreme Court for the second time. The Supreme Court dismissed the appeal and upheld the Court of Appeal judgment based on the grounds set out in the Court of Appeal decision.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Summary of case</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In summary, the Court of Appeal in all matters filed by the Original Agent referred the matter to a panel of experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All three panels confirmed that the Original Agent had committed many breaches such as non-payment of invoices, poor management of the business, lack of customer service and therefore the agent was not entitled to any compensation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the Federal Supreme Court issued its judgment.</p>\r\n&nbsp;\r\n<ol>\r\n 	<li dir=\"LTR\">It rejected the appeal of the Original Agent and upheld the Court of First Instance judgment in its entirety.</li>\r\n 	<li dir=\"LTR\">It held that the cases should have been filed as a tort claim as it was a request for compensation for a wrongful act because of the alleged wrongful termination.</li>\r\n 	<li dir=\"LTR\">The Original Agent did not substantiate his claims and provide proof of damages allegedly suffered as a result of the agency being struck off the Commercial Agency Register.</li>\r\n 	<li dir=\"LTR\">The New Agents’ involvement in the dispute had no legal basis. The New Agents were not a party to the dispute nor was there any evidence of any damage caused by the New Agents’ appointment.</li>\r\n 	<li dir=\"LTR\">As confirmed by the panel of experts, the Original Agent had breached the terms of the agency agreement by failing to make timely payments to the Principals and did not report declining sales until the business incurred a major loss.</li>\r\n 	<li dir=\"LTR\">The Court of First Instance was correct in dismissing the action against the Principals.</li>\r\n</ol>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comments</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The outcome of the case was excellent for the Principals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The decision confirms that notwithstanding the protections afforded to agents, agents who choose not to perform as expected will not benefit from the protections provided under the Commercial Agency Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This case also demonstrates the importance of substantiating any claims against a non-performing agent to justify termination.</p>'),
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	(304252,29075,'PostID','8185'),
	(304253,29075,'PostTitle','The Commercial Agency Register: Not as conclusive as you think…'),
	(304254,29075,'PostStatus','publish'),
	(304255,29075,'PostType','law_update_articles'),
	(304256,29075,'PostDate','2018-09-04 07:54:15'),
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	(304260,29075,'MetaValueNew','<img class=\"aligncenter size-full wp-image-8238\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_06_Image_0003.jpg\" alt=\"\" width=\"1188\" height=\"250\" />\r\n<p dir=\"LTR\" align=\"LEFT\">The Commercial Agency Register (the \"Register\") is renowned in Qatar for the role it plays when it comes to governing the validity of (or lack of) the relationship between agent and principal. It is a double-edged sword, on the one end allowing registered commercial agents to believe that they can kick back, relax and enjoy their supposedly indissoluble commercial agency rights, and on the other, causing principals to be bound to supposedly inextinguishable agency agreements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A recent judgment by the Court of First Instance has clarified the laws on commercial agency, potentially stirring up the position of principal and agent. In this case, it was held that registration on the Register is a sign of confirmation, and not creation, of an agency agreement. The determinative factor as to whether or not an agency agreement exists falls on, primarily, the legal and factual existence of the agreement itself.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The Facts</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant initially entered into a limited duration exclusive agency agreement (the \"Initial Agreement\") as agent for the sale of cars manufactured by the principal mother company (\"Principal\") and was registered as a commercial agent of the Principal on the Register. Subsequently, the Claimant and the Principal entered into a limited duration non-exclusive distribution agreement (\"the Second Agreement\"), in which it was expressly agreed that the Second Agreement terminated and nullified all previous agreements existing between the Claimant and the Principal including the Initial Agreement. The Second Agreement was not renewed at the end of its term and accordingly expired.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Thereafter, the Principal entered into a similar non-exclusive distribution agreement with the Defendant. The Defendant went on to carry out promotional, marketing and sale activities of the Principal’s products, and in doing so, made public announcements about being the new agent of the Principal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This came to the attention of the Claimant who brought a case against the Defendant. The Claimant alleged that the Defendant was unlawfully portraying itself as the new distributor of the Principal’s goods and indeed acting as the distributor, when in fact the Claimant was the only registered exclusive agent of the Principal. The Claimant relied solely on the fact that it was still registered as the exclusive agent of the Principal on the Register. The Claimant argued that as long as such registration remained, the Claimant would be the sole party possessing the exclusive agency rights to promote market and sell the Principal’s products, regardless of the existing dispute over the expiry of the Second Agreement.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Judgment of the Court of First Instance</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Claimant’s submissions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court stated that registration on the Register is only the result of an agency agreement created and concluded between the agent and principal in question and it is not the source of such a relationship. Once an agency agreement is entered into between the relevant parties, the registration of the agent on the Register gives it effect from a more official administrative perspective.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In its judgment, the Court, redirected the focus on the contractual relationship between the parties. It emphasised that the determinative basis upon which an agency can be deemed existent or non-existent is the agency agreement entered into between the parties. Once an agency agreement is concluded, this can be registered on the Register as evidence of such an agreement. Consequently, and imperatively, the same applies to the cessation of an agency agreement. Where the agreement in question comes to an end due to termination or expiry, the agency relationship and the effect of the registration on the Register similarly ends. In other words, the fate of the agency, its operation and its cancellation does not depend on the continuing registration of such agency. On the contrary, the status of the registration depends on the terms of the agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In noting the above, the Court consequently dismissed the Claimant’s case. The Court explained that in order for the Claimant to assert its rights as the exclusive agent of the Principal’s products, the Claimant would have to prove that the agency agreement itself still exists and remains in force. It is upon the validity of the agency agreement that the Claimant would have to build its case. Only then would the Claimant be able to allege that the Defendant had acted unlawfully and against the Claimant’s rights by acting as the agent of the Principal. Therefore, reliance entirely on the registration of the Claimant as a commercial agent of the Principal on the Register was deemed insufficient.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion: Back to basics</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The judgment, albeit one of the Court of First Instance and hence subject to appeal, may be a promising first step for tackling the current situation concerning commercial agency agreements. Previously, steadfast reliance on the Register suggested to principals that the Register is an inescapable trap, and to agents that it is a safe haven, trumping all else. The judgment discredits this belief by diverting attention back to where it originally, and legally, belongs – the contractual relationship between the relevant parties. The Court re-clarified the purpose of the Register in that it is a mechanism for recording what is agreed between a principal and its agent - it does not on its own create or maintain any commercial agency rights of the registrants. Should the judgment be upheld, the priority governing agency relationships could be re-organised: first comes the agreement, then comes the Register.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In alignment with the judgment is a recent measure adopted by the Ministry of Economy and Commerce (the \"Ministry\"), whereby it was announced that current agents who are registered on the Register but whose commercial agencies are expired must renew their agencies via agency renewal applications and the required documentation for the same. Otherwise, such agencies would be cancelled off the register in accordance with Article 20 of the Commercial Agency Law No. (8) Of 2002. This approach by the Ministry reflects the same principle as that expressly reinstated in the judgment: appearance on the Register did not by default render the agencies of commercial agents as continued or renewed – the agency agreement itself had to be renewed in order for the registrations to be valid.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of course, that is not to imply that the registration or cancellation of commercial agents from the Register can be done away with altogether, for it still holds vital importance for other reasons. While the judgment does not alter the fundamentals of the same, it clarifies the role of the Register, refocusing the spotlight on the contractual relationship of the relevant parties as the definitive factor for the creation, continuity and cancellation of agency agreements.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s litigation team regularly advises on the application of Qatari laws to various legal matters, on both technical application as well as practical implications.</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/roy-georgiades/\">Roy Georgiades</a> (<a href=\"mailto:r.georgiades@tamimi.com\">r.georgiades@tamimi.com</a>) or Reem Khader (<a href=\"mailto:r.khader@tamimi.com\">r.khader@tamimi.com</a>)</em></p>'),
	(304261,29075,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\">The Commercial Agency Register (the \"Register\") is renowned in Qatar for the role it plays when it comes to governing the validity of (or lack of) the relationship between agent and principal. It is a double-edged sword, on the one end allowing registered commercial agents to believe that they can kick back, relax and enjoy their supposedly indissoluble commercial agency rights, and on the other, causing principals to be bound to supposedly inextinguishable agency agreements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A recent judgment by the Court of First Instance has clarified the laws on commercial agency, potentially stirring up the position of principal and agent. In this case, it was held that registration on the Register is a sign of confirmation, and not creation, of an agency agreement. The determinative factor as to whether or not an agency agreement exists falls on, primarily, the legal and factual existence of the agreement itself.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The Facts</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant initially entered into a limited duration exclusive agency agreement (the \"Initial Agreement\") as agent for the sale of cars manufactured by the principal mother company (\"Principal\") and was registered as a commercial agent of the Principal on the Register. Subsequently, the Claimant and the Principal entered into a limited duration non-exclusive distribution agreement (\"the Second Agreement\"), in which it was expressly agreed that the Second Agreement terminated and nullified all previous agreements existing between the Claimant and the Principal including the Initial Agreement. The Second Agreement was not renewed at the end of its term and accordingly expired.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Thereafter, the Principal entered into a similar non-exclusive distribution agreement with the Defendant. The Defendant went on to carry out promotional, marketing and sale activities of the Principal’s products, and in doing so, made public announcements about being the new agent of the Principal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This came to the attention of the Claimant who brought a case against the Defendant. The Claimant alleged that the Defendant was unlawfully portraying itself as the new distributor of the Principal’s goods and indeed acting as the distributor, when in fact the Claimant was the only registered exclusive agent of the Principal. The Claimant relied solely on the fact that it was still registered as the exclusive agent of the Principal on the Register. The Claimant argued that as long as such registration remained, the Claimant would be the sole party possessing the exclusive agency rights to promote market and sell the Principal’s products, regardless of the existing dispute over the expiry of the Second Agreement.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Judgment of the Court of First Instance</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Claimant’s submissions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court stated that registration on the Register is only the result of an agency agreement created and concluded between the agent and principal in question and it is not the source of such a relationship. Once an agency agreement is entered into between the relevant parties, the registration of the agent on the Register gives it effect from a more official administrative perspective.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In its judgment, the Court, redirected the focus on the contractual relationship between the parties. It emphasised that the determinative basis upon which an agency can be deemed existent or non-existent is the agency agreement entered into between the parties. Once an agency agreement is concluded, this can be registered on the Register as evidence of such an agreement. Consequently, and imperatively, the same applies to the cessation of an agency agreement. Where the agreement in question comes to an end due to termination or expiry, the agency relationship and the effect of the registration on the Register similarly ends. In other words, the fate of the agency, its operation and its cancellation does not depend on the continuing registration of such agency. On the contrary, the status of the registration depends on the terms of the agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In noting the above, the Court consequently dismissed the Claimant’s case. The Court explained that in order for the Claimant to assert its rights as the exclusive agent of the Principal’s products, the Claimant would have to prove that the agency agreement itself still exists and remains in force. It is upon the validity of the agency agreement that the Claimant would have to build its case. Only then would the Claimant be able to allege that the Defendant had acted unlawfully and against the Claimant’s rights by acting as the agent of the Principal. Therefore, reliance entirely on the registration of the Claimant as a commercial agent of the Principal on the Register was deemed insufficient.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion: Back to basics</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The judgment, albeit one of the Court of First Instance and hence subject to appeal, may be a promising first step for tackling the current situation concerning commercial agency agreements. Previously, steadfast reliance on the Register suggested to principals that the Register is an inescapable trap, and to agents that it is a safe haven, trumping all else. The judgment discredits this belief by diverting attention back to where it originally, and legally, belongs – the contractual relationship between the relevant parties. The Court re-clarified the purpose of the Register in that it is a mechanism for recording what is agreed between a principal and its agent - it does not on its own create or maintain any commercial agency rights of the registrants. Should the judgment be upheld, the priority governing agency relationships could be re-organised: first comes the agreement, then comes the Register.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In alignment with the judgment is a recent measure adopted by the Ministry of Economy and Commerce (the \"Ministry\"), whereby it was announced that current agents who are registered on the Register but whose commercial agencies are expired must renew their agencies via agency renewal applications and the required documentation for the same. Otherwise, such agencies would be cancelled off the register in accordance with Article 20 of the Commercial Agency Law No. (8) Of 2002. This approach by the Ministry reflects the same principle as that expressly reinstated in the judgment: appearance on the Register did not by default render the agencies of commercial agents as continued or renewed – the agency agreement itself had to be renewed in order for the registrations to be valid.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of course, that is not to imply that the registration or cancellation of commercial agents from the Register can be done away with altogether, for it still holds vital importance for other reasons. While the judgment does not alter the fundamentals of the same, it clarifies the role of the Register, refocusing the spotlight on the contractual relationship of the relevant parties as the definitive factor for the creation, continuity and cancellation of agency agreements.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s litigation team regularly advises on the application of Qatari laws to various legal matters, on both technical application as well as practical implications.</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/roy-georgiades/\">Roy Georgiades</a> (<a href=\"mailto:r.georgiades@tamimi.com\">r.georgiades@tamimi.com</a>) or Reem Khader (<a href=\"mailto:r.khader@tamimi.com\">r.khader@tamimi.com</a>)</em></p>'),
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	(304264,29075,'ReportText','<p dir=\"LTR\" align=\"LEFT\">The Commercial Agency Register (the \"Register\") is renowned in Qatar for the role it plays when it comes to governing the validity of (or lack of) the relationship between agent and principal. It is a double-edged sword, on the one end allowing registered commercial agents to believe that they can kick back, relax and enjoy their supposedly indissoluble commercial agency rights, and on the other, causing principals to be bound to supposedly inextinguishable agency agreements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A recent judgment by the Court of First Instance has clarified the laws on commercial agency, potentially stirring up the position of principal and agent. In this case, it was held that registration on the Register is a sign of confirmation, and not creation, of an agency agreement. The determinative factor as to whether or not an agency agreement exists falls on, primarily, the legal and factual existence of the agreement itself.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The Facts</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant initially entered into a limited duration exclusive agency agreement (the \"Initial Agreement\") as agent for the sale of cars manufactured by the principal mother company (\"Principal\") and was registered as a commercial agent of the Principal on the Register. Subsequently, the Claimant and the Principal entered into a limited duration non-exclusive distribution agreement (\"the Second Agreement\"), in which it was expressly agreed that the Second Agreement terminated and nullified all previous agreements existing between the Claimant and the Principal including the Initial Agreement. The Second Agreement was not renewed at the end of its term and accordingly expired.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Thereafter, the Principal entered into a similar non-exclusive distribution agreement with the Defendant. The Defendant went on to carry out promotional, marketing and sale activities of the Principal’s products, and in doing so, made public announcements about being the new agent of the Principal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This came to the attention of the Claimant who brought a case against the Defendant. The Claimant alleged that the Defendant was unlawfully portraying itself as the new distributor of the Principal’s goods and indeed acting as the distributor, when in fact the Claimant was the only registered exclusive agent of the Principal. The Claimant relied solely on the fact that it was still registered as the exclusive agent of the Principal on the Register. The Claimant argued that as long as such registration remained, the Claimant would be the sole party possessing the exclusive agency rights to promote market and sell the Principal’s products, regardless of the existing dispute over the expiry of the Second Agreement.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Judgment of the Court of First Instance</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Claimant’s submissions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court stated that registration on the Register is only the result of an agency agreement created and concluded between the agent and principal in question and it is not the source of such a relationship. Once an agency agreement is entered into between the relevant parties, the registration of the agent on the Register gives it effect from a more official administrative perspective.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In its judgment, the Court, redirected the focus on the contractual relationship between the parties. It emphasised that the determinative basis upon which an agency can be deemed existent or non-existent is the agency agreement entered into between the parties. Once an agency agreement is concluded, this can be registered on the Register as evidence of such an agreement. Consequently, and imperatively, the same applies to the cessation of an agency agreement. Where the agreement in question comes to an end due to termination or expiry, the agency relationship and the effect of the registration on the Register similarly ends. In other words, the fate of the agency, its operation and its cancellation does not depend on the continuing registration of such agency. On the contrary, the status of the registration depends on the terms of the agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In noting the above, the Court consequently dismissed the Claimant’s case. The Court explained that in order for the Claimant to assert its rights as the exclusive agent of the Principal’s products, the Claimant would have to prove that the agency agreement itself still exists and remains in force. It is upon the validity of the agency agreement that the Claimant would have to build its case. Only then would the Claimant be able to allege that the Defendant had acted unlawfully and against the Claimant’s rights by acting as the agent of the Principal. Therefore, reliance entirely on the registration of the Claimant as a commercial agent of the Principal on the Register was deemed insufficient.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion: Back to basics</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The judgment, albeit one of the Court of First Instance and hence subject to appeal, may be a promising first step for tackling the current situation concerning commercial agency agreements. Previously, steadfast reliance on the Register suggested to principals that the Register is an inescapable trap, and to agents that it is a safe haven, trumping all else. The judgment discredits this belief by diverting attention back to where it originally, and legally, belongs – the contractual relationship between the relevant parties. The Court re-clarified the purpose of the Register in that it is a mechanism for recording what is agreed between a principal and its agent - it does not on its own create or maintain any commercial agency rights of the registrants. Should the judgment be upheld, the priority governing agency relationships could be re-organised: first comes the agreement, then comes the Register.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In alignment with the judgment is a recent measure adopted by the Ministry of Economy and Commerce (the \"Ministry\"), whereby it was announced that current agents who are registered on the Register but whose commercial agencies are expired must renew their agencies via agency renewal applications and the required documentation for the same. Otherwise, such agencies would be cancelled off the register in accordance with Article 20 of the Commercial Agency Law No. (8) Of 2002. This approach by the Ministry reflects the same principle as that expressly reinstated in the judgment: appearance on the Register did not by default render the agencies of commercial agents as continued or renewed – the agency agreement itself had to be renewed in order for the registrations to be valid.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of course, that is not to imply that the registration or cancellation of commercial agents from the Register can be done away with altogether, for it still holds vital importance for other reasons. While the judgment does not alter the fundamentals of the same, it clarifies the role of the Register, refocusing the spotlight on the contractual relationship of the relevant parties as the definitive factor for the creation, continuity and cancellation of agency agreements.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s litigation team regularly advises on the application of Qatari laws to various legal matters, on both technical application as well as practical implications.</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/roy-georgiades/\">Roy Georgiades</a> (<a href=\"mailto:r.georgiades@tamimi.com\">r.georgiades@tamimi.com</a>) or Reem Khader (<a href=\"mailto:r.khader@tamimi.com\">r.khader@tamimi.com</a>)</em></p>|<img class=\"aligncenter size-full wp-image-8238\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_06_Image_0003.jpg\" alt=\"\" width=\"1188\" height=\"250\" />\r\n<p dir=\"LTR\" align=\"LEFT\">The Commercial Agency Register (the \"Register\") is renowned in Qatar for the role it plays when it comes to governing the validity of (or lack of) the relationship between agent and principal. It is a double-edged sword, on the one end allowing registered commercial agents to believe that they can kick back, relax and enjoy their supposedly indissoluble commercial agency rights, and on the other, causing principals to be bound to supposedly inextinguishable agency agreements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A recent judgment by the Court of First Instance has clarified the laws on commercial agency, potentially stirring up the position of principal and agent. In this case, it was held that registration on the Register is a sign of confirmation, and not creation, of an agency agreement. The determinative factor as to whether or not an agency agreement exists falls on, primarily, the legal and factual existence of the agreement itself.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The Facts</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant initially entered into a limited duration exclusive agency agreement (the \"Initial Agreement\") as agent for the sale of cars manufactured by the principal mother company (\"Principal\") and was registered as a commercial agent of the Principal on the Register. Subsequently, the Claimant and the Principal entered into a limited duration non-exclusive distribution agreement (\"the Second Agreement\"), in which it was expressly agreed that the Second Agreement terminated and nullified all previous agreements existing between the Claimant and the Principal including the Initial Agreement. The Second Agreement was not renewed at the end of its term and accordingly expired.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Thereafter, the Principal entered into a similar non-exclusive distribution agreement with the Defendant. The Defendant went on to carry out promotional, marketing and sale activities of the Principal’s products, and in doing so, made public announcements about being the new agent of the Principal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This came to the attention of the Claimant who brought a case against the Defendant. The Claimant alleged that the Defendant was unlawfully portraying itself as the new distributor of the Principal’s goods and indeed acting as the distributor, when in fact the Claimant was the only registered exclusive agent of the Principal. The Claimant relied solely on the fact that it was still registered as the exclusive agent of the Principal on the Register. The Claimant argued that as long as such registration remained, the Claimant would be the sole party possessing the exclusive agency rights to promote market and sell the Principal’s products, regardless of the existing dispute over the expiry of the Second Agreement.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Judgment of the Court of First Instance</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance rejected the Claimant’s submissions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court stated that registration on the Register is only the result of an agency agreement created and concluded between the agent and principal in question and it is not the source of such a relationship. Once an agency agreement is entered into between the relevant parties, the registration of the agent on the Register gives it effect from a more official administrative perspective.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In its judgment, the Court, redirected the focus on the contractual relationship between the parties. It emphasised that the determinative basis upon which an agency can be deemed existent or non-existent is the agency agreement entered into between the parties. Once an agency agreement is concluded, this can be registered on the Register as evidence of such an agreement. Consequently, and imperatively, the same applies to the cessation of an agency agreement. Where the agreement in question comes to an end due to termination or expiry, the agency relationship and the effect of the registration on the Register similarly ends. In other words, the fate of the agency, its operation and its cancellation does not depend on the continuing registration of such agency. On the contrary, the status of the registration depends on the terms of the agency agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In noting the above, the Court consequently dismissed the Claimant’s case. The Court explained that in order for the Claimant to assert its rights as the exclusive agent of the Principal’s products, the Claimant would have to prove that the agency agreement itself still exists and remains in force. It is upon the validity of the agency agreement that the Claimant would have to build its case. Only then would the Claimant be able to allege that the Defendant had acted unlawfully and against the Claimant’s rights by acting as the agent of the Principal. Therefore, reliance entirely on the registration of the Claimant as a commercial agent of the Principal on the Register was deemed insufficient.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion: Back to basics</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The judgment, albeit one of the Court of First Instance and hence subject to appeal, may be a promising first step for tackling the current situation concerning commercial agency agreements. Previously, steadfast reliance on the Register suggested to principals that the Register is an inescapable trap, and to agents that it is a safe haven, trumping all else. The judgment discredits this belief by diverting attention back to where it originally, and legally, belongs – the contractual relationship between the relevant parties. The Court re-clarified the purpose of the Register in that it is a mechanism for recording what is agreed between a principal and its agent - it does not on its own create or maintain any commercial agency rights of the registrants. Should the judgment be upheld, the priority governing agency relationships could be re-organised: first comes the agreement, then comes the Register.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In alignment with the judgment is a recent measure adopted by the Ministry of Economy and Commerce (the \"Ministry\"), whereby it was announced that current agents who are registered on the Register but whose commercial agencies are expired must renew their agencies via agency renewal applications and the required documentation for the same. Otherwise, such agencies would be cancelled off the register in accordance with Article 20 of the Commercial Agency Law No. (8) Of 2002. This approach by the Ministry reflects the same principle as that expressly reinstated in the judgment: appearance on the Register did not by default render the agencies of commercial agents as continued or renewed – the agency agreement itself had to be renewed in order for the registrations to be valid.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of course, that is not to imply that the registration or cancellation of commercial agents from the Register can be done away with altogether, for it still holds vital importance for other reasons. While the judgment does not alter the fundamentals of the same, it clarifies the role of the Register, refocusing the spotlight on the contractual relationship of the relevant parties as the definitive factor for the creation, continuity and cancellation of agency agreements.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s litigation team regularly advises on the application of Qatari laws to various legal matters, on both technical application as well as practical implications.</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/roy-georgiades/\">Roy Georgiades</a> (<a href=\"mailto:r.georgiades@tamimi.com\">r.georgiades@tamimi.com</a>) or Reem Khader (<a href=\"mailto:r.khader@tamimi.com\">r.khader@tamimi.com</a>)</em></p>'),
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	(304386,29087,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright  wp-image-8240\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"538\" height=\"415\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
	(304387,29087,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\">Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
	(304388,29087,'MetaLink','content'),
	(304389,29087,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8187&amp;action=edit'),
	(304390,29087,'ReportText','<p dir=\"LTR\" align=\"LEFT\">Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright  wp-image-8240\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"538\" height=\"415\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
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	(304436,29091,'PostDate','2018-09-04 07:52:06'),
	(304437,29091,'PostUrl','http://localhost:8888/tamimi/law-update-articles/cross-border-deal-risks/'),
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	(304440,29091,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"538\" height=\"415\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
	(304441,29091,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright  wp-image-8240\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"538\" height=\"415\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>');

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	(304444,29091,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright  wp-image-8240\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"538\" height=\"415\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"538\" height=\"415\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
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	(304490,29095,'PostDate','2018-09-04 07:52:06'),
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	(304494,29095,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"606\" height=\"468\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
	(304495,29095,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"538\" height=\"415\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
	(304496,29095,'MetaLink','content'),
	(304497,29095,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8187&amp;action=edit'),
	(304498,29095,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"538\" height=\"415\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"606\" height=\"468\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
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	(304540,29099,'PostID','8187'),
	(304541,29099,'PostTitle','Cross-Border Deal Risks'),
	(304542,29099,'PostStatus','publish'),
	(304543,29099,'PostType','law_update_articles'),
	(304544,29099,'PostDate','2018-09-04 07:52:06'),
	(304545,29099,'PostUrl','http://localhost:8888/tamimi/law-update-articles/cross-border-deal-risks/'),
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	(304548,29099,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"624\" height=\"482\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
	(304549,29099,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"606\" height=\"468\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. 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Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
	(304550,29099,'MetaLink','content'),
	(304551,29099,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8187&amp;action=edit'),
	(304552,29099,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"606\" height=\"468\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"624\" height=\"482\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
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	(304614,29105,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\">Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n<img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"624\" height=\"482\" />\r\n\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
	(304615,29105,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"624\" height=\"482\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
	(304616,29105,'MetaLink','content'),
	(304617,29105,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8187&amp;action=edit'),
	(304618,29105,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"624\" height=\"482\" />Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>|<p dir=\"LTR\" align=\"LEFT\">Most business transactions involve degrees of risk, which can never be eliminated entirely. An additional layer of risk inevitably accompanies any cross-border deal, and this article addresses the best way to manage these particular risks.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cross-Border Deals and Legal Risks</h3>\r\n<img class=\"wp-image-8240 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/August-Edition-DPS_Page_09_Image_0001.jpg\" alt=\"\" width=\"624\" height=\"482\" />\r\n\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">a. Choice of Law and Forum:</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In cross-border deals, choice of law and forum clauses deserve enhanced scrutiny and negotiation. If any dispute flares up, you will find that these choices will have already been locked in. Suddenly, they will loom large, and poor choices may cost you considerable money and time. Choice of law is quite distinct from the choice of forum. The choice of law is the set of laws which governs the substance of the contract, whilst forum is concerned with the dispute resolution body and the processes for final resolution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(i) Choice of Law:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main factor in deciding which governing law should govern a contract is ease of enforcement of those contractual terms allocating risks between the parties. Some jurisdictions have less developed substantive legal rules and their laws do not fit comfortably with sophisticated transaction structures commonly seen in major financial centres. In such instances, local law may either override or fail to support the agreed contract terms, rendering the outcome of any dispute unpredictable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, parties to a contract should choose a jurisdiction with a well-developed body of legal rules. Many international players prefer common law systems, mainly because they are accustomed to working within these legal systems. Moreover, common law systems carry with them a wealth of recognised precedents which can render dispute outcomes more predictable.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>(ii) Choice of Forum:</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Selecting a forum involves two different choices. Firstly, whether the parties wish to submit to arbitration or a court process. Secondly, a choice as to the legal environment in which the dispute process will be conducted, a choice which needs to take into account supervision of the arbitration and/or access to an appellate court system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolution by official courts can save the parties substantial costs associated with arbitration. Any arbitration has to be funded privately, including the fees of the arbitrators. Also, it is usually quicker and easier for courts to secure interim remedies and to compel disclosure of documents or information; in arbitrations, it is often necessary to go to court to secure these remedies anyway. Courts also allow for appeal processes from their judgements, a safeguard against capricious findings or error. Arbitration, on the other hand, gives the parties an opportunity to ensure that a dispute is determined by a technical expert, rather than a legally trained judge. The expert can act as the arbitrator and resolve the dispute without the successful party being exposed to drawn-out appeals. Nevertheless, the possibility of the arbitrator requiring correction or supervision will also be relevant to any choice of forum. In some jurisdictions, arbitrations move faster than court processes, in others they move more slowly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When choosing the legal environment for the forum, a neutral jurisdiction has advantages, and usually gives confidence to foreign-based counterparties, particularly in cases where one of the transaction parties is a governmental entity or has strong ties to the government. Meanwhile, selecting the jurisdiction which hosts the deal assets also has its advantages, as the dispute resolution forum will have power to make orders affecting those assets and may be convenient and accessible for involved experts or witnesses. Decisions of a court where the deal assets are located are usually more readily enforceable against those assets.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A key point to consider in advance is whether a court of the jurisdiction hosting the deal assets will recognize and respect the parties’ contractual choice of forum. For example, courts in GCC countries sometimes consider it appropriate to assume jurisdiction over a case filed before them which involves local assets (particularly land); and to apply local law regardless.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.\"</h2>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">b. Enforcement of Securities</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Lenders must carefully study and assess the enforceability of their security in the event of default. In some jurisdictions which impose fees or taxes, taking security over the deal assets, especially real property, may be costly. In these cases, a more practical security may take the form of a preferential claim to cash balances and revenues of the target/assets.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">c. Force Majeure Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Force majeure is a legal term of art describing the occurrence of an unexpected event outside the control of the affected party, as a result of which it becomes difficult or impossible for that party to perform obligations under a contract. Examples of force majeure include wars, riots, fires, floods and hurricanes. Such events also affect domestic deals, but force majeure events are less predictable for foreign counterparties in any cross-border deal.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Common law jurisdictions usually refuse to grant relief for force majeure events unless this is expressly provided for in the contract. In contrast, civil law jurisdictions usually grant the court the authority to alter the contract to restore its balance where there is a force majeure event. In all cases, courts in both systems will be influenced by, and consider, the express terms of the contract before making a decision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some force majeure risks are commercially insurable events. Others are uninsurable events. Commercially insurable events include fires, floods or storms and in these scenarios their risk may be mitigated by obtaining the necessary insurance policies. In contrast, riots and political disruptions are usually uninsurable. Hence, the parties should take into account insurance cover and allocate contractual risks accordingly, particularly as the inclusion of an indemnity in the deal contract can sometimes nullify insurance arrangements.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">d. Currency Fluctuations</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Currency fluctuations are common risks encountered with international transactions. Even with the most careful monitoring, fluctuations can be unpredictable and can greatly affect the economics of a project, the business and its profits. To mitigate this risk, it is ideal to contract with all parties in the transaction chain in the same currency, if possible. Another way to mitigate any exchange risk, is to hedge the currency risk. This method may incur hedging costs and also sacrifice gains from favourable fluctuations – but, if the tables are turned, it also mitigates any significant losses.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">e. Sovereign Risk</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Sovereign risk is an inherit risk that is more heightened in some countries. One way to mitigate sovereign risk is by structuring investments in such a way that investment protection treaties with the host country can be triggered. An example of such is the use of acquisition vehicles to which investment protection treaties apply.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">f. Market Demand Risks</h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A product or service which proves successful in one country may not be successful in another. Many businesses have had to adapt their products or services significantly in order to conform to the cultural, religious traditions or realities of a new market. For example, online sales platforms work only if a large percentage of the target market holds credit cards. A thorough market study must be conducted before introducing a new product or service fresh to a jurisdiction to validate the introduction, assumptions or projections made by the party introducing it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The deal \"risk list\" above is by no means exhaustive. But it highlights the fact that risk allocations between the parties in any cross-border deal should be clearly documented and the main risks addressed. Transactions always carry risks, but they can be managed successfully if the right care and judgment is exercised.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s Corporate Commercial team regularly advises on commercial matters. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/alex-saleh/\">Alex Saleh</a> (<a href=\"mailto:alex.saleh@tamimi.com\">alex.saleh@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/rana-el-nahal/\">Rana Elnahal</a> (<a href=\"mailto:r.elnahal@tamimi.com\">r.elnahal@tamimi.com</a>).</em></p>'),
